December 2, 2013, 5:42 p.m. ET
By John Kell
Conatus Pharmaceuticals Inc.'s (CNAT) shares jumped Monday after the biotechnology firm said its treatment for chronic liver disease has been granted a status that could mean quicker approval.
The company disclosed the U.S. Food and Drug Administration has granted orphan status to its treatment for liver-transplant patients. Orphan drugs, defined as experimental treatments for diseases with fewer than 200,000 patients at any one time, can mean quicker approval, tax benefits for the developer and seven years' protection from competition after approval.
Investors cheered the news, sending shares up 14% to $6.99 in after-hours trading.
The FDA's orphan-drug designation was granted for emricasan, a treatment Conatus has studied in over 500 subjects across 10 clinical trials. The company's initial development strategy targets patients with acute-on-chronic liver failure, chronic liver failure, and patients who have developed liver fibrosis postorthotopic liver transplant due to Hepatitis C virus infection.
The company expects to conduct further trials in 2014.
The National Institutes of Health estimates that 5.5 million Americans have chronic liver disease or cirrhosis. According to the European Association for the Study of the Liver, 29 million Europeans have chronic liver disease.
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