Conatus Pharmaceuticals has agreed to merge with another San Diego biotech, Histogen, it was announced Jan. 28.

The deal comes after Conatus last summer announced it would cut its staff by 40% and explore “strategic alternatives” after its liver drug flopped in a clinical trial.

While Conatus has focused on liver disease, Histogen has long toiled on male and female pattern baldness.

Privately held Histogen would gain a Nasdaq listing through the deal, a so-called reverse merger that offers a quicker path to going public than an initial public offering.

The boards of each company approved the deal, which still needs an OK from shareholders.

Under the proposed all-stock transaction, Conatus will issue new shares to Histogen, whose shareholders would own 74% of the combined company. Conatus investors would hold the rest.

Histogen's management team would lead the company.

Histogen developed a hair loss treatment, HST 001, which recently entered a phase 1b clinical trial, an early phase of testing in humans. If successful, Histogen’s program will have to go through one or two more clinical trials before being considered for regulatory approval.

The formulation is injected into the scalp to stimulate hair follicle growth.

In 2018, the San Diego Union-Tribune reported that another Histogen hair regrowth program, HSC660, had begun a late-stage or phase 3 clinical trial in Mexico. Histogen did not respond to a request for comment on the status of HSC660, which isn’t listed under drug development programs on its website.

Among Histogen’s other programs, it’s in early-stage clinical testing to treat cartilage damage in the joints and smooth wrinkles.

It's expected the merged company will operate as Histogen, and trade under a ticker symbol still to be determined, according to the companies.

“This merger is transformative for Histogen as we look to advance our novel regenerative medicine pipeline,” said Richard Pascoe, chairman and CEO of Histogen, in a statement.

“We believe the target product profile of our product candidates combined with their market potential provides an opportunity for Histogen to become a leader in the aesthetics and orthopedic medicine markets.”

Conatus CEO Steven Mento said in a statement that, “After completing a comprehensive review of multiple strategic alternatives, we determined that the proposed merger with Histogen would provide the best opportunity for Conatus shareholders moving forward.”

Last June, Conatus’ drug candidate, emricasan, missed its main target in midstage clinical trials. Emricasan was aimed at nonalcoholic steatohepatitis, or NASH, a fatty liver disease that can cause liver cirrhosis, cardiac complications and liver failure.

A drug has yet to be approved for NASH. But a host of new treatments are expected in the coming years as promising drug candidates finish up clinical testing.

In San Diego, those in the NASH race include MediciNova, Viking Therapeutics, Cirius Therapeutics and Metacrine.

The merger valued Histogen at $100 million. Conatus received a $35.1 million valuation, a 155% premium on its stock price.