Place your bets: Biotechs hustle along new drugs for blockbuster liver diseases

Late last week investors wound up using Intercept Pharmaceuticals ($ICPT) as a punching bag after new data on its NASH drug for fatty liver disease raised some troubling questions about its safety and efficacy. Its stock was hit hard, forced down 30% in hours as analysts mulled the implications of potential trouble.

But one factor that often gets lost in times like these is that Intercept's rollercoaster ride on the market--which has seen giddy highs and sharp drops--illustrates how the sheer size of the market it's aiming at has whipped up market expectations in a world where fatty liver disease afflicts a large percentage of the population. Any shift in the wind--pro or con--for a drug like this tends to whipsaw the share price.

Reuters has picked up on the trend and followed with a story that takes a comprehensive look at the next-gen liver drug developers working in areas like NASH as well as hepatitis B. The trend piece highlights Intercept, expected to head into a pivotal Phase III next year, as werll as Gilead's ($GILD) LOXL2-targeting antibody simtuzumab for cirrhosis, which just failed a Phase II cancer study. Galectin ($GALT), another biotech that got hammered recently following a Phase I cohort analysis of its NASH drug, is on the radar along with the newly public Conatus ($CNAT), which is working on emricasan. Raptor, meanwhile, has its sights set on NASH in children, with a mid-stage study delivering data next year.

Betting on the hepatitis B side, investors are taking positions for and against Arrowhead Research, Tekmira and a partnership involving Isis ($ISIS) and GlaxoSmithKline ($GSK), reports Reuters. OnCore Biopharma, a privately owned biotech which was set up be ex-Pharmasset execs and newly partnered with NeuroVive, is also engaged in the hep B race.

With the market winners and losers taking clear shape among a horse race involving Gilead in the lead, with big players like AbbVie ($ABBV) and Merck ($MRK) coming up from behind with late-stage efforts of their own, the next big thing in liver diseases currently involves a slew of biotechs. -- John Carroll (email | Twitter)

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