Akero shares soar as NASH drug succeeds in mid-stage trial

Akero Therapeutics’ shares more than doubled in early trading on Tuesday after the company said an experimental medicine reduced the internal scarring of patients with the fatty liver disease nonalcoholic steatohepatitis in a mid-stage clinical trial.

Both tested doses of Akero’s drug, known as efruxifermin, met the study’s main goal, producing a statistically significant improvement in liver scarring compared to a placebo and keeping patients’ disease from getting worse. After six months of treatment, 39% of patients on a low dose and 41% of those on a higher dose had a meaningful reduction of liver fibrosis and no worsening of NASH, versus 20% of placebo patients, the company said in a statement.  

Additionally, 47% of patients on a low dose and 76% on a higher dose of efruxifermin had NASH “resolution” — meaning little, if any evidence of liver inflammation was detected on a biopsy — while scarring didn’t get worse. Only 15% of placebo patients hit that mark, which was a key secondary study objective. The drug also improved markers of heart health.

A pooled analysis of patients with NASH resolution and improvement in fibrosis also favored Akero’s drug: 29% of those who received a low dose and 41% of patients on a high dose achieved those results, versus 5% of placebo patients. 

The most frequent side effects were gastrointestinal problems such as diarrhea and nausea that were graded as mild to moderate and short-lived. One serious adverse event, inflammation of the esophagus, was deemed by study investigators to be drug-related and occurred in a high-dose recipient with a history of gastroesophageal reflux disease. Five patients receiving Akero’s drug dropped out of the trial due to side effects. 

“We believe the data are unambiguous,” Akero President and CEO Andrew Cheng said on a conference call with analysts. The results “exceeded” the company’s expectations and “contribute to a growing body of data that shows efruxifermin has what it takes to treat the core facets of NASH,” he added. 

Prior to the results, Jefferies analysts wrote a “best case” scenario for Akero would be if 40% to 50% of treated patients had evidence of an improvement in liver scarring. The company’s shares surged more than twofold to $28 apiece in morning trading.

The findings show “the drug is clearly active and [has] some of the strongest data reported” in NASH, wrote Jefferies analyst Michael Yee. 

Akero is one of several companies to form in recent years with plans to develop a drug for NASH, a leading cause of liver disease in the U.S. and a condition that leads to scarring and eventually liver transplants if left unchecked.

However, the disease has proven a tough target for drugmakers. Several closely watched medicines have failed key clinical trials and the only one to succeed in a Phase 3 study, a drug from Intercept Pharmaceuticals, hasn’t yet been approved by the Food and Drug Administration. Late-stage results for another drug candidate from Madrigal Pharmaceuticals are expected later this year. 

Akero’s drug works differently than Intercept and Madrigal’s medicines. It’s meant to mimic the activity of a protein, FGF21, that regulates the metabolism of lipids and carbohydrates and as a result, reduce liver fat as well as improve blood sugar control in NASH patients. (Another biotech, 89bio, has a similar drug in clinical testing. Its shares climbed 33% Tuesday.) 

Cheng claimed that the magnitude of the benefit Akero has reported in multiple early studies so far makes the drug “unique” compared to other NASH drugs in development. The company enrolled 128 patients at high risk of disease progression in its latest study and the majority of them already had Type 2 diabetes, NASH and significant liver scarring. 

“I’m unaware of any other compound that really has that level of effect size,” he said.  

The company currently is finalizing the design of its Phase 3 development program and “getting in alignment” with regulators in the U.S. and Europe, Chief Development Officer Catriona Yale said on the conference call. The goal is to begin testing “as early as we can next year,” she added. 

Akero also is running another mid-stage study in a different group of NASH patients, with results expected in 2023. 

The biotech company went public in June 2019 at $16 per share.  

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