Akero's NASH miss drags a few peers down, spurring deja vu in long-challenging indication

Things were going pretty well in the NASH landscape with Madrigal Therapeutics finally submitting a request to approve a treatment, but yesterday the space came crashing back down to reality with the failure of Akero Therapeutics’ med.

The phase 2b miss was a familiar experience for those in drug development for nonalcoholic steatohepatitis, a disease that has refused to yield to treatments developed by companies big and small over the years. Akero’s FGF21 analog efruxifermin (EFX) failed to significantly reduce fibrosis in cirrhotic NASH patients. The treatment had shown efficacy in earlier-stage patients but Akero was hoping to show a reduction in fibrosis in more advanced patients.

Mizuho analysts suspect that the patients may have just been too advanced in their disease for the treatment to be effective—similar to Alzheimer’s disease or cancer. And Akero’s interim readout could also just be too early at 36 weeks, while the total study period is 96 weeks.

Leerink Partners, however, saw a positive to the results given the advanced state of disease being tested.

“Despite the disappointing statistical miss on the fibrosis improvement primary endpoint, this is the strongest efficacy dataset that has been reported to date in this difficult-to-treat patient population,” the firm wrote in a Tuesday note. Leerink noted fibrosis improvement and NASH resolution benefit that was observed in the short 36-week timeframe.

While Akero bore the brunt—its shares plummeting from $48.58 on Monday to $17 as the markets opened Wednesday—other companies in the space felt the sting. Madrigal’s shares hit $150 apiece on Tuesday but fell to $144 at open today. 89bio’s stock was dragged down from $15.51 on Monday to $9.38 this morning.

“The interim data unfortunately represent yet another late-stage setback for the NASH space, with potential, we believe, to again dim overall investor interest in NASH,” wrote Mizuho analysts Graig Suvannavejh, Ph.D., and Avantika Joshi, in a Wednesday note.

Mizuho noted that 89bio’s lead asset pegozafermin shares a mechanism of action with EFX, which is why the company dove with Akero. They both target the metabolic hormone FGF21, which regulates energy expenditure and glucose and lipid metabolism. Targeting FGF21 is believed to lower liver fat and prevent the formation of new fat while reducing triglycerides. These agents have shown the ability to reduce fibrosis in the liver.  

Leerink saw the sharp stock reaction for Akero and 89bio as a bit overblown, as there are still opportunities for the FGF21 class in advanced fibrotic and compensated cirrhotic NASH.

“The NASH resolution benefit remains clear and is further supportive of approvability in the advanced fibrotic population where both Akero and 89bio have already reported strong phase 2b data,” Leerink wrote.

Viking Therapeutics and Terns Pharmaceuticals, other companies in the NASH race, had more volatile days on the market, mostly breaking even. Mizuho does not see any readthrough for Tern’s TERN-501, which is a THR-beta agonist, representing a different mechanism of action. The company is also not planning to study it in such advanced patients at this time.

With that said, Mizuho acknowledged that development of TERN-501 will require significant investment and the biotech may need to partner up to keep going. Therefore, the firm recommended that Tern prioritize its oral GLP-1R agonist for obesity TERN-601 and the allosteric BCR-ABL1 inhibitor TERN-701 for chronic myeloid leukemia. Phase 1 plans are expected this quarter.

Another challenge for the entire space is the sudden arrival of GLP-1 drugs, which have shown they can reduce weight overall and potentially address early cases of NASH. But they still can't fix fibrosis, which is key to the disease. The future may mean combination approaches to tackle all angles of the disease. 

Meanwhile, Madrigal's resmetirom is being considered for approval by the FDA, which, if approved, would be the first treatment on the market.