Conatus Pharmaceuticals Inc. (CNAT)

[staccani]

An interesting article about compensated and decompensated Cirrhosis. There are ca 50M+ people globally suffering from LC. The article estimates ca 11% of these each year decompensate, ie I estimate more than 5M people globally suffering from decompensated cirrhosis, who as avg live 55 months, with ca 20% death probability per annum. Emricasan is most effective in these patients, at high risk of death. The only alternative is liver transplant, but globally you have less than 50,000 transplants each year due to lack of donors, risks, cost, etc etc. Ca 1.2M people globally die each year, Emricasan might end up saving most of them, who could become patients for the rest of their lives or until liver returns to normal functioning (it would probably take years anyway) or until they get a transplant.
A life saving therapy like Emricasan could have a price tag of $100K per annum per patient, like for cancer drugs. So in decompensated LC the potential global market is 5M x $100K = $500B. a 10% penetration in that market could mean $50B rev/annum or $10B in annual royalties to CNAT as per NVS deal, ie $100B market cap. Assuming 35M OS (only small dilution given that everything is paid by NVS), this would mean ca $3,000 PPS or 600 time current share price, and this could happen within 5 years from now., also because very little, if not null competition, is out there


http://www.medscape.com/viewarticle/737296