Terns, trailing rivals, hits in phase 2 NASH trial but fails to quash differentiation doubts

Terns Pharmaceuticals has confirmed what other biotechs have already shown: Selective activation of thyroid hormone receptor-beta appears to reduce liver fat in nonalcoholic steatohepatitis (NASH). But with Terns years behind its rivals, the phase 2a study has failed to clear up doubts about whether TERN-501 can stand out. 

Madrigal Pharmaceuticals and Viking Therapeutics are developing candidates with the same mechanism of action as TERN-501. Both candidates are far ahead of Terns’ challenger. Madrigal completed a filing for FDA approval of resmetirom last month. Viking Therapeutics’ VK2809 is partway through a phase 2b trial and, based on data released to date, may be a stronger candidate than Madrigal’s resmetirom.

The clinical successes of Madrigal and Viking set a high bar for TERN-501. Based on the phase 2a data, Terns’ candidate can hold its own against its rivals, but analysts questioned whether the drug has a point of difference needed to come from behind and claim a significant slice of the market. 

“Despite it looking generally in line on a [placebo]-adjusted basis versus its peers, we still aren’t sure given the timelines in NASH and the cost of development that this asset makes sense for Terns to develop standalone (perhaps an out license) given the cost and development timelines in NASH,” Jefferies analysts wrote in an Aug. 8 note to investors. 

The analysts’ view is based on top-line results from a phase 2a trial that compared three TERN-501 doses to placebo. After 12 weeks, the relative mean reduction from baseline in liver fat content, as measured by MRI, was 45% in the high-dose arm, compared to 4% in the placebo group. 

Adjusted for placebo, the mean change in liver fat, 41%, is in the same ballpark as the results of Viking’s phase 2b, 48%, and better than the 23% Madrigal chalked up in its midphase study. Madrigal reported deeper reductions in liver fat when it tracked patients for 52 weeks in its phase 3 trial. 

Safety is another potential opportunity for differentiation, particularly versus resmetirom. The 12-week data suggest TERN-501 may have an edge over resmetirom in terms of gastrointestinal tolerability, with the rates of nausea, diarrhea and vomiting similar in the treatment and placebo arms, but Viking’s asset also looks strong in that regard.