Metacrine shares halved as NASH program nixed on mixed bag data and early safety issue

Liver
Metacrine shares were down 56% as the markets opened Friday to $1.64. (magicmine/Getty Images)

Metacrine has a full house of problems: The biotech is dumping work on an experimental fatty liver disease drug program after a phase 2 mixed bag result, resetting its clinical focus for the drug and also investigating a potential safety issue.

Let’s start with NASH, a form of fatty liver disease that if left untreated for many years can cause liver damage, cancer and liver failure. It's common in obese and/or type 2 diabetic patients.

Many companies have gone after this target, which analysts have said could bring in billions per drug each year, but most efforts have been beset by setbacks and failures.

Metacrine now joins that unenviable list. Interim results from a small, 60-patient phase 2a of MET642, a farnesoid X receptor (FXR) agonist used over four months, saw reduced liver fat in the lower dose but didn’t appear to have a dose-dependant response.

The company's CEO Preston Klassen, M.D., MHS, explained: “In this small interim analysis, the [higher dose] 6 mg cohort displayed a non-normal distribution in liver fat changes, as evidenced by differences between the mean and median results."

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Metacrine plans to examine the entire set of data to clarify the effect on liver fat, with analysis ready in the first half of 2022. 

"NASH is a complex and chronic disease that we believe will likely require combination regimes to most effectively treat patients. MET642 can potentially serve as an important part of these novel combination approaches," Klassen said. 

MET642 also didn’t seem to do better than Metacrine's earlier-stage NASH asset, MX409, which has been in phase 1 tests. Analysts at Jefferies said in a note to clients that the biotech “could justifiably” move ‘409 forward in NASH given its “good fat reduction” and only minor safety issues, or put '642 in combo with the asset.

“However, given sentiment in the space, long timelines to data and cash, it’s prudent to halt further development,” the firm said. And that’s exactly what Metacrine will be doing for now, as it focuses ‘642 on inflammatory bowel disease (IBD) in the near future, shelving the NASH work—at least for now.

A phase 2 in IBD is slated for the first half of next year and would be a novel approach in this condition.

But there’s a snag here too: Metacrine has seen some early findings from a nine-month animal toxicology study for MET642, which clearly has the company slightly spooked. An independent review is now being conducted of these data “which may result in the need for an additional long-term animal toxicology study to support phase 3 clinical trials in IBD.” The review should be done by year’s end, when we’ll know more.

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Jefferies sees the new preclinical toxicity findings as “complicating the next steps for '642, as it may necessitate the requirement for more long-term animal work.”

“After a rigorous assessment of our NASH and IBD programs, including the significant capital and resources required to progress these large clinical development programs, we have made the decision to focus Metacrine’s clinical development effort and financial resources on moving MET642 into a Phase 2 trial in IBD in the first half of 2022 and to halt future development of the FXR program in NASH,” Klassen added.  

He continued: “This decision was influenced in part by a potential delay in confirming appropriate safety margins in our long-term toxicology work that would impact the timing of future NASH studies, but is unlikely to impact timelines for the IBD clinical program.”

Shares in the biotech were down 56% as the markets opened Friday to $1.64.