Department of primary care health sciences, University of Oxford: winner, service delivery innovation award

Daniel Lasserson, senior clinical researcher, and Maggie Webb, unit manager, in the emergency multidisciplinary unit.

An emergency unit designed exclusively for old and frail patients is keeping them out of acute hospital and helping to prevent bed-blocking.

The emergency multidisciplinary unit (EMU) established at Abingdon community hospital in Oxfordshire is hoped to become the national model for the future of emergency care for older people.

Patients can be referred to the EMU, which is seen as an alternative to an acute hospital A&E, by either their own GP, a community nurse or ambulance paramedic.

The unit, which is open seven days a week from 8am-8pm on weekdays and 10am-4pm on weekends, is not available for patients who have suffered a stroke or a heart attack, who would still be taken to the local acute hospital's A&E. The majority of the 5,500 patients it has seen arrive with chest or bladder infection or heart failure. The average patient age is 89.

Staffed by elderly care physicians, GPs, nurses, healthcare assistants, therapists and social workers, the unit can quickly assess a patient. It has point of care blood testing with rapid results and X-ray facilities so the unit can guarantee speedy diagnosis.

The EMU has five hospital beds available for patients who may need to be kept in for a maximum 72 hours. A "hospital at home" nursing team is also available to provide support to patients who are sent home to recover.

"I would say that the EMU is more than just a casualty for older frail patients – it's more intensive because we aim to provide care for the episode at the time or for a number of days," says Dr Daniel Lasserson, a GP and senior clinical researcher at the department of primary care health sciences, University of Oxford, who helped design this new model of care.

Lasserson adds: "Its aims to deliver an acute care pathway for frail older patients that does not rely on bed-based care, yet can still provide appropriate medical, nursing and therapist treatments within an individually tailored care plan as close to the patient's home as possible.

"It was designed to challenge the existing urgent care pathway of admission to an acute hospital with its associated harms of unfamiliar and physically challenging environment and loss of independence."

The EMU, he says, addresses the dilemmas of how to best care for a growing elderly population with complex needs and multiple chronic conditions and to provide an alternative to "office hours" general practice or acute hospital bed-based care.

According to the EMU audit, 65% of patients who are assessed by the unit are able to stay in their own home – only 17% of patients need acute hospital care.

Lasserson says this new way of working, known as "interface medicine", is challenging the traditional medical training and care. Oxford has created an Interface Medicines Fellowship and is in discussions with Health Education England about how it can be developed nationally.

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Sussex partnership NHS trust: winner, hospital admissions award

Dr Lisa Page says the way the trust uses mental health triage nurses is unique. Photograph: Sussex Partnership NHS Trust

A year ago people with mental health problems turning up at A&E in Brighton often had to wait four hours to be seen. Around 12% of patients would get fed up waiting and leave; those who were prepared to sit it out frequently ended up being inappropriately admitted to the hospital's observation ward, where they stayed until being assessed by the specialist mental health team.

But today, the number of patients with mental health problems being admitted to the observation ward at the Royal Sussex county hospital through A&E has dropped by 50%. More than 85% of patients are seen and assessed by the mental health team within four hours. Anybody turning up and A&E with a mental health problem is automatically referred to a specialist mental health triage nurse within an hour – something which Dr Lisa Page, consultant in liaison psychiatry at Sussex partnership NHS trust, says is unique. "I don't know of any other hospital which uses the triage nurse in the way that we do, although others do have proactive teams in A&E."

The improvement in waiting times and the introduction of the mental health triage nurse is part of the Brighton Urgent Response Service (Burs), which was introduced in January to tackle the 30% year-on-year rise in unscheduled mental health attendances at the East Sussex seaside town's A&E.

Page says the reduction in observation ward admissions is good news for patients and A&E staff but also for the clinical commissioning group (CCG) because of the high tariff associated with this kind of admission. "That is where the savings are coming from as we are no longer having that large number of patients admitted," she says.

Burs, set up by Sussex partnership NHS trust in collaboration with Brighton CCG and the acute trust, also includes a 24-hour urgent phone line for GPs, mental health patients and carers who are new to the system. GPs can book a patient a next-day appointment at the mental health clinic – rather than the previous minimum five-day referral. Patients and carers are offered telephone advice from a Burs practitioner and are referred as necessary. A dedicated mental health nurse is also available in the community between 8am and 8pm Monday to Friday and from 8am to 6pm at weekends. A new waiting room for people with mental health problems, which provides a calm and quiet environment has also been established at the Royal Sussex as part of the scheme.

Page says her mental health team is busier than ever and that it is too soon to say whether the number of people turning up at A&E has pulled back from its 30% year-on-year rise. But she feels Burs is ensuring that people are seen more appropriately and more quickly. She says: "Referrals to our team have gone up by a third because we are now seeing people who in the past would have come to A&E and left. We haven't curtailed the 30% but we have made some inroads – it would have been even busier without Burs."

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Southern health NHS foundation trust: winner, leadership award

Clinical psychologist Claire Corbridge brainstorming examples of how to deliver integration at a Going Viral session. Photograph: Southern health foundation trust

Southern health NHS foundation trust is one of the largest mental health and learning disability trusts in England. It has a staff of 9,000 working across 150 sites, spanning five counties and was created following the merger of Hampshire partnership NHS foundation trust and Hampshire community healthcare NHS trust in 2011.

A key challenge for the new trust was how to ensure that everybody felt part of the same organisation and shared the same values, behaviours and goals. Part of the solution was its Going Viral leadership development programme which, since its launch in June last year, has coached, developed and supported 550 staff. Another 240 will join the programme this autumn.

Richard House, interim head of leadership and management development, says Going Viral has its roots in the trust's organisational and people development strategies which define the attitudes, values and behaviours expected from its workforce in achieving its core aims. He says: "The NHS Constitution goes some way towards doing that but it isn't specific about behavioural expectations."

The Going Viral programme has three modules that tie in with the trust's core objectives – how to redesign services to improve quality and provide better value for money; how to integrate health and social care with partners and how to provide better outcomes and experiences for patients. The course, which takes place over six months, is delivered in nine-and-a-half day sessions. The learning groups are deliberately made up of staff from different departments so they can develop together.

House says the programme is different from others because it does not select employees according to their NHS banding, but by the amount of influence and responsibility they have. He says: "We have tried to include people, not by their pay band or whether they have management responsibility, but by how influential they are in their multi-disciplinary team. For example, a consultant physician who is only responsible for him or herself."

The programme was introduced before the publication this February of the damning Francis report into the Mid Staffordshire NHS foundation trust.

That report identified how an "insidious negative culture" and "disengagement from managerial and leadership responsibilities" contributed to Mid Staffs' failings. Going Viral, says House, is confronting those leadership challenges identified by Francis.

He says: "I think people feel more listened to and empowered and involved in the processes and realise what is expected of them. It's been transformational for people. One medic said to me 'I wanted to hate the programme and went in with that attitude; but I realise now it was one of the best learning opportunities I have ever had.'"

Health Education England and other trusts from around the country have already taken an interest in Going Viral. The trust, which has its headquarters in Southampton, is organising an open event for later this autumn about the leadership programme and how it fits into its organisational development work. House says: "This is too important not to share with others – to enable them to take on this grand scale change."

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Office of the Chief Scientific Officer: winner, workforce innovation award

The new electron linear accelerator facility, which offers an independent radiotherapy calibration service and a unique research facility.

The NHS's healthcare scientists punch above their weight. Although they account for just 5% of the health service workforce, their work is linked to 80% of patients' clinical diagnoses.

Historically though, the career paths and education and training of the 50,000 NHS scientists who come from 45 different scientific backgrounds, has been adhoc.

But now the healthcare scientists have their own defined career paths, which can take somebody starting off in a staff support role right to the top to become a consultant clinical scientist.

The pathways, backed up by a training and education framework, are part of Modernising Scientific Careers (MSC), which has already been three years in the making and is still being implemented. The intention is that, once fully introduced, healthcare scientists will be a sustainable and flexible workforce that can meet the future demands of the NHS and respond to changes brought about by science and technology.

Chief scientific officer professor Sue Hill says: "We recruit some of the best science graduates in the country but we were not developing them to their full potential.

"I think we now know the value of healthcare scientists working in the health system – we have pulled this valuable resource out of the shadows and placed them centre stage so that their knowledge, skills and expertise is more explicit and they can fully make their contribution.

"I think through this programme we have also ensured the sustainability and fitness for purpose in the future of the healthcare scientists' workforce to respond in a health system which is going to be driven by science and technology."

The MSC allows scientists to move between different scientific specialities, broadening their experience and creating a more flexible workforce.

MSC, which has been described as an ambitious and "complex workforce change programme", had to take into account NHS staff and patients, as well as all four UK countries, two Whitehall departments, the higher education sector, professional bodies, the royal colleges and sector skills councils.

Hill says one of the key obstacles was building new relationships with higher education: "We had to enter into and establish new partnerships between higher education and the NHS in particular, which weren't there before.

"We also had to make sure that people understood what they were letting go of, what they had before, and how this would be better and more flexible and was more about the future."

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Rivington and Blackrod and Ladybridge high schools: winner, partnership innovation award

Pupils have also been trained as 'health ambassadors' and hold theme-led assemblies on a range of health issues. Photograph: Rivington and Blackrod high school

It could easily have been a bureaucratic nightmare that failed at the first hurdle. The dilemma was how do you bring together the NHS, local government, education and sports centres to deliver a school-based health project that the students would be happy to use?

The answer, according to Michelle Howard, director of business development at Rivington and Blackrod high school in Lancashire, was to be committed to the vision and have the confidence and trust in each other to share information and best practice.

"We worked with all our partners to ensure that all our procedures and practices worked well together," she says. "We learned so much more about each other and how we could best use our skills, resources and specialisms to deliver the best outcomes for us all. It was also about sharing that responsibility."

The teenage health project at Rivington and Blackrod high school and the Active Health scheme at its linked federated school, Ladybridge high school, has gone from strength to strength since it was first established in 2007.

The intention, following wide consultation with parents, young people, the local community and public services, was to create a student-friendly accessible health and wellbeing service offering advice, guidance and information on the school site. "It started out when we were looking at Every Child Matters, which was on everybody's minds at the time," says Howard. "It was about looking at what we could do to help young people stay healthy and safe."

A steering party was set up, which included representatives from parents, pupils, schools, the local authority and leisure providers to design and develop the project, which had £450,000 of Big Lottery Fund money.

Today more than 3,000 young people have made use of the project, which offers them a range of advice and information including healthy eating, sexual health and contraception and drug and alcohol awareness.

Support for emotional wellbeing and advice about how to cope with stress is also offered by the project, which is run by school nurses alongside a project co-ordinator who can refer students to different services as required. "There isn't one aspect of health that we shy away from," says Howard.

School students have also been trained as "health ambassadors" – taking the healthy message to their classmates by holding theme-led assemblies and teaching them how to carry out CPR and other lifesaving first aid skills.

At the same time, 13 members of staff have learned about healthy eating and nutrition and are now passing on their knowledge to students across the school.

The project, says Howard, has generally improved the students' physical and emotional health. But there have been more tangible results: the behaviour of 81% of children who attended its anger management programme has improved; the local teenage pregnancy rate has started to fall and 87% of children who received counselling said they were feeling better.

Howard attributes the success of the project to the depth of the relationships between the different partners. She says: "It's about trust and acknowledging that 'I am really good at this' and saying 'how can we work together to get the best outcomes?'. We also had a very strong vision, which we all focused on and never lost sight of."

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Intelesant: winner, technology innovation award

With the End of Life Monitoring and Assessment tool, GPs can be notified of care home residents' end of life wishes.

An app-like tool that has the potential to change the culture around advanced plans for frail and older people in care homes has been developed in Trafford, Greater Manchester.

The End of Life Monitoring and Assessment (Elma) tool allows care homes to electronically send a resident's advanced plan – a statement of their end of life wishes – via a handheld device direct to the individual's GP computer system. The plan, which is Read-coded and compatible with the practice system, can then be accessed around the clock by other NHS staff from ambulance teams to A&E doctors and community nurses.

It means that for the first time care home staff can directly share their knowledge about a resident with the wider NHS. Crucially, Elma also allows GPs and other NHS staff to be kept up-to-date with the advanced plan of an older person living in the residential care system whom they may rarely see and may be little known to them.

With the resident's consent, Elma can also be accessed by their family or friends using a secure two-factor authentication. Uniquely, Elma has also been designed to be used as an experiential training tool by care home staff to teach them how to create and develop an advanced plan with a resident.

Before Elma was introduced, care homes that did promote advanced plans for residents used paper versions, which then had to be faxed to the GP surgery. The time-consuming process was open to error and the information the plans held was often inconsistent, says physiotherapist Louise Rogerson, director of service development at Intelesant – the company behind Elma.

Because of Elma, it is hoped that eventually all people living in Trafford – not just care home residents – will have an advanced plan, which can be securely accessed by healthcare professionals and the individual's family. Rogerson said: "Any of us who have an advanced plan can use this system; it's not just for people in the last years of their life, it's for anybody who wants an advanced plan."

Additional coded data about the resident, which has been added by the care home staff can also be accessed via Elma by healthcare professionals, if necessary. That data includes latest information about a resident's usual level of consciousness; their mobility; their diet and their weight.

Rogerson says: "These are key indicators about how well a patient is, about how frail they are, and was something which the doctors in A&E said would be useful. It's the kind of information which the care home staff would have."

The electronic tool, developed by Intelesant, Trafford clinical commissioning group and the local hospice, has already been used by one local care home and is in the process of being rolled out to another nine.

The data Elma captures also reflects that required by the electronic palliative care co-ordination system, which is part of the national end of life care programme in England.

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Does Conatus Pharmaceuticals Have A Winner With Emricasan?

In the human body, 50 billion to 70 billion cells die every day to make room for an equivalent number of new cells that are produced through cell division. Every year, the human body produces and kills a mass of cells equal to its entire body weight.

Scientists are studying apopsotis, a sort of "suicide mechanism" that instructs cells when it is time to die. Researchers are finding that a growing number of diseases occur when the regulation of this cell suicide program is defective.

San Diego-based Conatus Pharmaceuticals (CNAT) is at the forefront of studying the role of apoptosis in liver disease, The 150M market cap biotechnology company is focused on the development of emricasan.

There are many positives about the company. Conatus has an experienced and highly competent management team. The company has identified target markets that could not only prove to be very lucrative, but also serve a significant unmet need. Emricasan has demonstrated promising results in several studies, and could prove to be an effective treatment for not only liver disease, but also diabetes.

What I don't like about Conatus is that the company is dependent on the success of a single drug candidate. Emricasan must undergo significant additional clinical testing before the company can seek regulatory approval for the drug. In the event that emricasan succeeds in these trials, Conatus could be a big ticket buy for a larger pharmaceutical company. If emricasan fails, I do not think the company could recover. I have seen too many drugs that had stellar results in early and mid-stage trials fail in advanced studies due to a lack of safety or efficacy.

Background

Conatus was founded by the executive management team of Idun Pharmaceuticals following the sale of Idun to Pfizer, Inc. (PFE) in July 2005. Conatus is led by Steven J. Mento, Ph.D., who is one of the company's co-founders and serves as its President and Chief Executive Officer (CEO). Mento was also the President and CEO of Idun Pharmaceuticals from 1997 to 2005.

Idun Pharmaceuticals was a private biotechnology company pioneering the development of drugs that target apoptosis (mediated cell death) in diseases related to cancer and inflammation.

Apoptosis plays an important role in the development and stability of all multi-cellular organisms. In humans, both excessive and insufficient apoptosis can result in severe pathological consequences. Excessive cell death is associated with stroke, heart failure, Alzheimer's disease, Parkinson's disease and acquired immune deficiency syndrome (AIDS). Too little cell death (cell accumulation) can cause cancer.

Caspases are the key agent that cause apoptosis. They exist in most of our cells as inactive precursors, known as zymogens, that kill the cell once it is activated. Capsase inhibition is being studied as a treatment for acute and chronic diseases of the heart, liver and nervous system, as well as autoimmune and infectious diseases. During its heyday, Idun was years ahead of the competition in capsase inhibition research. Today, a growing numer of companies are developing capsase inhibitors, including Gilead Sciences (GILD), Merck (MRK) and Sunesis Pharmaceuticals (SNSS).

In 1993, two highly respected scientists researching apoptosis, Robert Horvitz, a Massachusetts Institute of Technology biology professor, and John C. Reed, the scientific director of the Burnham Institute, founded Idun with Larry Bock and Lawrence Fritz, after big pharmaceutical companies rejected apoptosis technologies as too risky. While Horvitz's expertise focused on the development of drugs to stop the death of cells due to injury or disease, Reed's specialty involved developing drugs that expedited the death of cancer cells.

In 2002, Horvitz won the 2002 Nobel Prize in medicine/physiology for "discoveries concerning genetic regulation of organ development and programmed cell death." For many investors, the Nobel Prize validated the Idun's credibility and raised expectations about its pipeline.

The Conatus management team is comprised of former senior Idun executives, and its Chief Medical Officer was the clinical program leader for emricasan during its development at Pfizer. At Idun, these senior executives discovered and led the development of emricasan, which was also Idun's lead asset, until the company was sold to Pfizer for approximately $298 million.

Why did Pfizer buy Idun?

"The acquisition of Idun is a further step in our strategy to augment Pfizer's internal research and development efforts with high-potential, externally sourced product candidates and technologies," said Martin Mackay, Senior Vice President Worldwide Research and Technology for Pfizer. "Idun has built a leading technology platform in controlling caspase activity and we see potential broad application of this technology in treating liver damage associated with viral and non-viral diseases plus other areas of significant unmet medical need."

In July 2010, Conatus acquired the Pfizer subsidiary, Idun Pharmaceuticals, along with global rights to emricasan for an undisclosed sum.

Five years later, why did Pfizer sell Idun?

When Conatus acquired emricasan from Pfizer in 2010, emricasan was on clinical hold in the United States after Pfizer scientists observed inflammatory infiltrates in mice in a preclinical study of the investigational drug. They reported the infiltrates to the US Food and Drug Administration (FDA) in 2007. The agency placed a clinical hold on emricasan.

Pfizer performed additional preclinical studies attempting to characterize the nature of the infiltrates, but did not conduct a formal carcinogenicity study to evaluate whether or not the infiltrates progressed to cancer. These infiltrates, observed in mice, were not observed in any other species. In 2008, Pfizer stopped work on the program.

After acquiring emricasan, Conatus conducted a thorough internal review of emricasan studies, commissioned several independent experts to review the data and, based on guidance from the FDA, conducted a 6-month carcinogenicity study in the Tg.rasH2 transgenic mouse model, which is known to be predisposed toward tumor development. This study, which was completed in 2012, found there was no evidence of drug-related tumorgenicity in emricasan. After further discussions with the FDA, Conatus was cleared in January 2013 to proceed with its planned HCV-POLT trial, whuch formally lifted emricasan from clinical hold in the United States. Emricasan was never placed on clinical hold outside the United States.

Prior to its acquisition of emricasan, the company's lead program was CTS-1027, an oral small molecule hepatitis C investigational drug, that Conatus licensed from Hoffmann-La Roche (RHHBY.OB) in 2006. On October 25, 2011, Conatus announced the termination of its Phase 2 clinical trial of CTS-1027 in hepatitis C patients due to laboratory abnormalities and adverse events in a subset of clinical trial participants. In early 2012, the rights to this drug candidate reverted to Roche. Conatus spent $31.3 million to develop the drug.

Emricasan

Emricasan is a first-in-class, orally active caspase protease inhibitor designed to reduce the activity of enzymes that mediate inflammation and cell death. Conatus believes that by reducing the activity of these enzymes, emricasan has the potential to interrupt the progression of liver disease.

At both Idun and Pfizer, emricasan was being developed for the treatment of liver fibrosis. As a result of their collective experience, Conatus' executive management team believes it can successfully develop emricasan.

Emricasan has been administered to over 500 subjects in six Phase 1 and four Phase 2 clinical trials, and has been generally well-tolerated in both healthy volunteers and patients with liver disease. Emricasan has also been extensively profiled in in vitro tests and studied in many preclinical models of human disease.

Several Phase 1 clinical trials to assess safety, tolerability and pharmacokinetics of emricasan have been completed. One trial studied the IV formulation of the drug and five of the oral trials investigated the formulation. In its clinical summary of emricasan, Conatus reports that " emricasan was well tolerated, and a maximum tolerated dose was not identified." Emricasan did not reduce liver enzyme levels in normal volunteers. However, emricasan administration in liver impaired patients resulted in reductions in liver enzyme levels alanine transaminase (ALT) and aspartate transaminase (AST).

Conatus has designed a comprehensive clinical program to demonstrate the therapeutic benefit of emricasan across the spectrum of fibrotic liver disease. The company plans to study emricasan in patients with rapidly progressing fibrosis, such as those patients who have developed liver fibrosis post-orthotopic liver transplant due to Hepatitis C virus infection (HCV-POLT), as well as in patients with established liver cirrhosis and decompensated disease, such as those with acute-on-chronic liver failure (ACLF) and chronic liver failure. (CLF).

Emricasan has been found to have a beneficial effect on serological biomarkers in patients with chronic liver disease independent of the cause of disease. Favorable changes have been observed in functional biomarkers of liver damage and inflammation, such as alanine aminotransferase (ALT) and aspartate aminotransferase (AST), and mechanistic biomarkers, such as cleaved Cytokeratin 18 (cCK18) and caspase activity, indicating that emricasan works by the presumed mechanism of action of inhibiting apoptosis of liver cells. Researchers have also found that emricasan does not inhibit normal levels of caspase activity in healthy individuals.

Emricasan Development Strategy

The company's initial development strategy targets indications for emricasan with high unmet clinical need in orphan patient populations, such as patients with:

Conatus expects to initiate a Phase 2b ACLF trial and a Phase 3 HCV-POLT trial, which is currently designated a Phase 3 registration study in the European Union (EU) and a Phase 2b study in the United States in the second half of 2013 and a Phase 2b CLF trial in the second half of 2014.

Liver Disease

The US National Institutes of Health (NIH) estimates that 5.5 million Americans have chronic liver disease or cirrhosis. Liver disease is the 12th leading cause of death in the United States. According to the European Association for the Study of the Liver, 29 million Europeans have chronic liver disease.

According to the US Centers for Disease Control and Prevention (CDC), there were 101,000 discharges with chronic liver disease and cirrhosis as the first-listed diagnosis in the United States in 2010, and nearly 32,000 died as a result of these disorders.

In the United States, more than 5,000 liver transplants are performed in adults and more than 500 in children annually, with approximately 17,000 people awaiting transplant. Conatus plans to study the effectiveness of emricasan in defined subsets of patients with liver disease. ACLF, CLF and HCV-POLT are potential orphan indications in both the United States and European Union (EU).

Conatus estimates that the target populations for emricasan in these indications in the United States and the EU are approximately 150,000 ACLF patients, 10,000 CLF patients and 50,000 HCV-POLT patients.

Conatus originally applied for orphan drug designation for emricasan for the treatment of fibrosis in HCV-POLT patients in the United States and the EU. The company has not received the requested orphan designation from the FDA. In the EU, Conatus withdrew the application based on feedback that emricasan may have efficacy in fibrosis outside of the HCV-POLT patient population.

According to Transparency Market Research, the global liver diseases therapeutics market was worth $6.5 billion in 2011 and is expected to reach $10.9 billion in 2018, growing at a compound annual growth rate (CAGR) of 8.6% from 2012 to 2018.

Transparency researchers found that the major drivers of the global liver disease therapeutics market are increasing aging population inducing chronic diseases such as hepatitis and liver cancer, increasing global prevalence of liver disorder, high unmet needs existing in liver cancer and increased vaccination in emerging economies. However side effects and risks associated with the medication, strict FDA approval norms and other government regulations and availability of alternate treatment procedures may act as the barrier for this market. Strong pipeline drugs and consolidation opportunities in the healthcare industry will pose future growth prospect for this market.

Acute-on-Chronic Liver Failure

In recent years, acute-on-chronic liver failure (ACLF) has been recognized as a specific clinical form of liver failure associated with cirrhosis. The syndrome refers to an acute deterioration of liver function and subsequently of other organs over a period of weeks. The short-term mortality for this condition is more than 50%.

Fibrosis, if allowed to progress, usually leads to cirrhosis, or excessive scarring of the liver, which may result in reduced liver function. Some patients with liver cirrhosis have a partially functioning liver and may appear asymptomatic for long periods of time. This condition is compensated liver disease. In decompensated liver disease, the liver is unable to perform its normal functions. ACLF occurs in patients who have compensated or decompensated cirrhosis, but are in relatively stable condition until an acute event causes a rapid exacerbation of liver function.

Among liver diseases, cirrhosis is the most frequent reason for hospital admission or liver transplantation. The World Health Organization (WHO) projects that cirrhosis will become the ninth most common cause of death in the western world by 2015. Only 20% of patients with advanced cirrhosis globally can be treated with liver transplantation owing to the great imbalance between donation and potential recipients.

According to the research and advisory firm, GlobalData, the global liver cirrhosis market was estimated to be valued at $1.56 billion in 2010. GlobalData expects this market to grow to $2.03 billion with a CAGR of 3.8% by 2017. This growth is primarily attributed to the increasing prevalence of the disease due to increase in alcoholic liver disease, nonalcoholic steatohepatitis (NASH) and the large group of patients who were originally infected with hepatitis virus, who will be entering their third decade of chronic liver infection.

On September 11, 2013, Conatus announced the initiation of active patient recruitment in a Phase 2b clinical trial of emricasan in patients with ACLF. The trial is designed to assess the pharmacokinetics and pharmacodynamics of emricasan in patients who have compensated or stable liver cirrhosis and who, at the time of study entry have been hospitalized for at least 24 hours due to acute deterioration of liver function.

"This study marks an important milestone in the development of emricasan and we are excited about the potential of emricasan to address this underserved population in high medical need of an efficacious and well-tolerated therapy to prevent progression to multi-organ failure and, ultimately, premature death," said Gary C. Burgess, MD, Chief Medical Officer of Conatus.

Conatus plans to use this trial to determine the dose of emricasan to be studied in the planned Phase 3 trial in ACLF. Safety of emricasan in the patient population will be evaluated, and key biomarkers and clinical outcomes will also be explored. The Phase 2b trial is being conducted at approximately 15 centers in the United Kingdom.

There are currently no approved therapies with a specific indication for the treatment of ACLF, which occurs in patients who have compensated or decompensated cirrhosis but are usually relatively stable. In these patients, some acute event sets off a rapid deterioration of liver function. The cause of this acute episode of decompensation may include toxins, such as alcohol, metabolic abnormalities and infections.

The morbidity and mortality of the patient population Conatus plans to study is high, and up to 45% of the patients may die, develop multi-organ failure, or require a liver transplant as a result of the decompensation episode within 28 days of hospitalization. The rapid deterioration in liver function, which may be exacerbated by an altered immune response, leads to life-threatening complications such as renal failure, increased susceptibility to infection, hepatic coma and systemic hemodynamic dysfunction. Liver transplantation is required in some subjects to improve survival and quality of life.

In addition to the Phase 2b trial in patients with ACLF, Conatus expects to initiate its planned Phase 2b/3 clinical trial of emricasan in patients who have developed liver fibrosis post-orthotopic liver transplant due to Hepatitis C virus infection (HCV-POLT) in the second half of 2013.

Chronic Liver Failure

Patients with chronic liver failure (CLF) suffer from continual disease progression may eventually need orthotopic liver transplantation. In 2004, liver failure resulted in over 26,000 deaths, making it the twelfth leading cause of death in the United States. Patients with compensated chronic liver failure have a median survival of 12 years. After decompensation, median survival drops to ~ 2 years.

Conatus plans to initiate a Phase 2b study comprised of approximately 100 patients with CLF in the second half of 2014 after completion of the ACLF Phase 2b trial. Conatus expects that emricasan will be dosed for one to three months and the endpoints in this study will include TTCW as well as changes in ALT, AST and cCK18 levels. The data from the ACLF dose ranging study is expected to serve as the basis for dose selection in this study.

HCV-POLT

Study A8491003, also known as the "003 trial," was a Phase 2b trial designed to evaluate the safety and efficacy of emricasan in 204 chronic HCV patients who were unresponsive to antiviral therapy and who had compensated liver disease with or without fibrosis. Patients with cirrhosis or hepatocellular carcinoma were excluded from the trial.

The primary endpoint in the study was changed from baseline in ALT and AST levels over a period of 12 weeks. This study also measured cCK18 levels, and caspase 3 and 7 activity as exploratory biomarkers. In this trial, emricasan treatment resulted in statistically significant reductions in the primary endpoints of ALT and AST levels as well as statistically significant reductions in cCK18 levels and caspase 3 and 7 activity.

The changes in ALT demonstrated in the 003 trial were statistically significant in each of the emricasan treatment groups compared with the placebo group. The decreases in ALT were seen by day 7, the first time post-dosing that ALT was measured, and the decreases were maintained throughout the treatment period (up to 12 weeks) in all emricasan treatment groups. Discontinuation of emricasan at the end of the treatment period was followed by a gradual return of ALT toward baseline levels.

A Phase 2a clinical trial of an oral formulation of emricasan was completed in patients infected with hepatitis C virus (HCV), most of whom had failed existing approved treatments. Various doses and dosing regimens ranging from 25 milligrams to 200 milligrams once a day, and 50 to 100 milligrams twice a day (BID) were examined during a two-week dosing period. The study found that all doses of the drug lowered ALT and AST by the end of the treatment period and were well tolerated.

Similar results were obtained in a trial which dosed patients for three months.

A small group of patients with fatty liver disease and a group with hepatitis B virus (HBV) were evaluated as supplemental cohorts of the Phase 2a HCV clinical trial. Aminotransferase reductions were observed during treatment with emricasan in both groups.

A Phase 2 trial was conducted to assess the utility of emricasan on cold ischemia/warm reperfusion (CI/W) injury during human liver transplantation. Researchers found that when emricasan was administered in cold storage and flush solutions during liver transplantation, offered local protection against CI/WR-mediated apoptosis and injury, but this was not observed when emricasan was administered to the patient. No safety signals of concern were seen in the study and the adverse events were generally reflective of the patient population under study.

In a randomized Phase 2b clinical trial in patients with liver disease, emricasan demonstrated a statistically significant, consistent, rapid and sustained reduction in elevated levels of two key biomarkers of inflammation and cell death, ALT and cCK18, both of which are implicated in the severity and progression of liver disease.

Conatus is planning to study emricasan in a 260-patient, Phase 3 HCV-POLT trial, which is currently designated a Phase 3 registration study in the European Union and a Phase 2b study in the United States during the second half of 2013, as well as a Phase 2b CLF trial in the second half of 2014.

The study is designed to demonstrate emricasan's ability to stabilize or slow the progression of liver fibrosis. If emricasan demonstrates the ability to halt the progression of fibrosis, Conatus believes this data could serve as a basis to study emricasan in additional indications in liver disease in the future. In addition, the safety data from this study will be part of the overall safety database required for approval of emricasan in other indications.

The study will be a two-year dosing study with a three-year follow-up. The primary endpoint will be the presence or absence of disease progression as measured by the standard Ishak Fibrosis Score, which stages the severity of fibrosis and/or cirrhosis on a 0-6 scale. Changes in ALT, AST and cCK18 will also be measured in this study.

If the results of clinical trials are positive and emricasan receives FDA or another country's approval, Conatus anticipates that emricasan would be prescribed by physicians to be dosed for 28 days, but potentially as long as six months, in the ACLF patient population, one to three months in the CLF patient population and up to two years in the HCV-POLT patient population.

Severe Alcoholic Hepatitis

On September 10, 2013, Conatus announced initiation of dosing in the Phase 2 clinical trial of emricasan in patients with severe alcoholic hepatitis. This study is being conducted by the Translational Research and Evolving Alcoholic Hepatitis Treatment (TREAT) Consortium consisting of the Mayo Clinic Rochester, Indiana University, and Virginia Commonwealth University in collaboration with the National Institute on Alcohol Abuse and Alcoholism (NIAAA).

"We are very excited by this trial initiation of emricasan in patients with severe alcoholic hepatitis," Conatus President and CEO Mento stated. "We are developing emricasan as a first-in-class orally active treatment for chronic liver disease and acute exacerbations of chronic liver disease. Due to emricasan's mechanism of action and the presence of apoptosis and inflammation in many liver diseases, we believe there may be several patient populations that could potentially benefit from emricasan and have designed a comprehensive clinical program to demonstrate the therapeutic benefit of emricasan across the spectrum of fibrotic liver disease."

The trial is a placebo-controlled, double-blind, multi-center study that is designed to assess whether emricasan improves the 28-day survival in patients with chronic liver disease caused by alcohol and contraindicated to receive corticosteroid therapy for their alcoholic hepatitis. The study is designed to also evaluate the role of apoptosis and sterile necrosis in alcoholic hepatitis, the safety and tolerability of emricasan, overall clinical outcomes, and pharmacokinetics in this patient population.

"We are looking forward to studying the potential beneficial effects of emricasan in patients afflicted by this severe disease," said Vijay Shah, MD, a hepatologist and principal investigator with the Mayo Clinic Rochester. "Alcohol-related liver disease is a major cause of morbidity and mortality in the U.S. and excessive alcohol consumption is the third leading preventable cause of death in the U.S."

In the United States, alcoholic liver disease affects more than 2 million people, representing approximately 1% of the population. The true prevalence of alcoholic hepatitis, especially of its milder forms, is unknown, because patients may be asymptomatic and never seek medical attention. Women are more susceptible than men to the adverse effects of alcohol. Women develop alcoholic hepatitis after a shorter period and smaller amounts of alcohol abuse than men, and alcoholic hepatitis progresses more rapidly in women than in men. For patients who continue to drink after a diagnosis of alcoholic liver disease, the 5-year survival rate is approximately 30% for women compared with 70% for men.

Alcoholic liver disease encompasses a clinical/histological spectrum of disease including fatty liver, alcoholic hepatitis and cirrhosis. Alcoholic hepatitis is a syndrome of progressive inflammatory liver injury associated with long-term heavy intake of ethanol. Severely affected patients show signs of retaining large amounts of fluid in the abdominal cavity (ascites), as well as kidney and liver failure.

Type 1 Diabetes

In addition to liver disease, emricasan may also show promise in diabetes.

On July 19, 2012, Conatus and the University of Alberta announced the treatment of the first patient in an investigator-initiated islet cell transplant Phase 1/Phase 2 clinical trial of emricasan to determine safety, achievement and maintenance of insulin independence and to obtain preliminary data on the efficacy of emricasan to maintain adequate immunological protection against both allo- and autoimmunity of islet cell transplant recipients.

Islet cell transplantation places cells from an organ donor into the body of another person. It is used experimentally to treat type 1 diabetes. Islets are cells found in clusters throughout the pancreas.

In type 1 diabetes, the beta cells of the pancreas no longer make insulin. A person who has type 1 diabetes must take insulin daily to live. Transplanted islet cells, however, can assume the work of the destroyed cells. Once they are implanted, the beta cells in these islets begin to make and release insulin. Researchers hope islet transplantation will help people with type 1 diabetes live without daily insulin injections.

Over 750 islet transplantations are conducted each year in 30 centers worldwide. Diabetologists, funding organizations and regulatory agencies recognize islet transplantation as an effective therapy to prevent episodic hypoglycemia, correct glycated hemoglobin and reduce risk of secondary diabetic complication.

"As Conatus pursues the development of emricasan on our own in liver disease, I am pleased to support new treatment paradigms in diabetes. If the results in humans are similar to the preclinical data, many more patients will benefit from islet cell transplantation," Conatus CEO Mento stated.

The trial will be conducted in two sequential pilot study groups of six patients each with two different dosages of emricasan for 14 days. Once optimal dosing has been determined from these pilot studies, the next proposed study would be a randomized, placebo-controlled study to explore the safety and efficacy of emricasan combined with other islet transplant treatment medications.

Finances

On September 9, 2013, Conatus announced financial results for the quarter ended June 30, 2013.

The net loss for the second quarter of 2013 was $4.9 million, compared to $1.8 million for the second quarter of 2012. Net loss for the six months ended June 30, 2013, was $7.2 million compared to $3.7 million for the comparable period in 2012.

Research and development expenses were $1.1 million for each of the second quarter of 2013 and 2012. General and administrative expenses were $0.7 million for the second quarter of 2013, compared to $0.6 million for the second quarter of 2012. Research and development expenses were $2.1 million for the six months ended June 30, 2013, compared to $2.3 million for the comparable period in 2012. General and administrative expenses were $1.4 million for each of the six months ended June 30, 2013 and 2012.

At June 30, 2013, cash, cash equivalents and short-term investments were $3.5 million, compared to $8.0 million at December 31, 2012. After giving effect to the net proceeds from Conatus' initial public offering and borrowings under Conatus' credit facility, at June 30, 2013, pro forma cash, cash equivalents and short-term investments were $63.5 million.

Conatus believes the company has sufficient funds for operations for at least the next 18 months, including the completion of its planned Phase 2b ACLF trial, Phase 2b/3 HCV-POLT trial and Phase 2b CLF trial.

As of June 30, 2013, Conatus had an accumulated deficit of $66 million.

"Conatus has made significant progress in recent months, including our successful initial public offering, which generated approximately $59 million in net proceeds," Mento stated. "With our enhanced balance sheet, we are focused on further developing emricasan, our first-in-class, orally active treatment for chronic liver disease and acute exacerbations of chronic liver disease, in three orphan populations with high unmet medical need."

Mento continued, "We anticipate a number of important upcoming clinical development milestones. In the second half of this year, we expect to initiate our Phase 2b study of emricasan in patients with acute-on-chronic liver failure and our Phase 2b/3 study in patients who have developed liver fibrosis post-orthotopic liver transplant due to Hepatitis C virus infection. Furthermore, we are supporting a Phase 2 study funded by National Institute on Alcohol Abuse and Alcoholism in patients with alcoholic hepatitis, with enrollment currently underway."

Conclusion

On July 25, 2013, the initial public offering (IPO) for Conatus opened for trading at $11.06 after pricing six million shares at $11. On its first day of trading, Conatus stock hit an all-time high of $11.24 before sliding to $9.50 at market close. Over 3.4 million shares were exchanged on that day.

Over the past three months, Conatus stock has been in the $9 per share range, until recently, when it climbed over $10.

Most analysts are optimistic about Conatus. On August 19, 2013, Sun Trust Robinson Humphrey initiated coverage of Conatus with a Buy rating and a $17 price target. JMP Securities began coverage with an Outperform rating. Stifel Nicolaus started coverage with a Buy rating and a $16 price target, Piper Jaffray initiated coverage with an Overweight rating and a $16 price target. Zacks gave Conatus a 3 Hold rating,

Major shareholders include entities affiliated with Aberdare Ventures 2,177,192 shares (13.9%), entities affiliated with Advent Private Equity 1,986,071 shares (12.7%), and Coöperative Gilde Healthcare II U.A 1,348,773 shares (8.6%).

Although there are currently no therapeutic products approved for the treatment of ACLF, CLF or HCV-POLT, Galectin Therapeutics (GALT), Ocera Therapeutics (OCRX) and others are developing potentially promising therapies. Researchers are also finding stem cell therapy effective in liver cirrhosis.

In April 2013, one of Idun's founders, John C. Reed, became the head of Roche's pharmaceutical research and early development group, where he will oversee research as well as early stage and middle stage clinical trials with a budget in the billions. Will Reed bring a cutting edge apoptosis and cell death research program to Roche? If so, how would such a program impact Conatus?

Some investors have lost much of their enthusiasm for caspase inhibitors, including emricasan, especially after Gilead Sciences' decision in April 2010 to terminate its Phase 2 clinical trial of GS 9450, an investigational caspase inhibitor, in patients with chronic hepatitis C due to reports of significant laboratory abnormalities and adverse events in a number of clinical study participants.

With positive results coming out of several middle stage trials, there is a lot to like about Conatus, What I don't like about the company is that it has only one drug in its pipeline. Although emricasan looks promising, there is always too much risk when one puts "all of one's eggs in one basket." I believe that idiom to be true if you are a small-time investor or a 150M market cap biopharmaceutical company.

Disclosure: I am long GILD, MRK, SNSS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

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