Akarna joins the NASH race with a $15M fundraise

By Ben Adams

Akarna Therapeutics is looking to join the pack of drugmakers racing to develop a drug for a progressive form of fatty liver disease, chasing potential blockbuster sales.

The privately held biopharma gained $15 million in a Series B preferred stock financing round this week after new investor Forbion Capital Partners joined existing backers New Science Ventures and Third Point Ventures to help shore up its finances.

Cambridge, U.K.-based Akarna said in a statement that it will use the funds to accelerate the development of its lead drug candidate through Phase I studies in patients with nonalcoholic steatohepatitis, or NASH.

Akarna has now set itself up against the likes of Intercept Pharmaceuticals ($ICPT), Gilead Sciences ($GILD) and Enanta Pharmaceuticals ($ENTA) in finding a new therapy for patients with NASH, a progressive form of fatty-liver disease for which there are no approved treatments.

Intercept leads the pack with its Phase III ​obeticholic acid, on track for a 2017 FDA filing. Gilead bought into the NASH race with a $470 million deal with German biotech Phenex Pharmaceuticals this time last year, while Enanta has outlined its hope of creating a new treatment independently.

Like Intercept, Gilead and Enanta, Akarna is betting big on activating the body's farnesoid X receptors (FXRs), which regulate bile and lipids in the liver. Targeting FXR is believed to help prevent the accumulation of fat and occurrence of inflammation.

There are also NASH programs from Genfit, which has entered Phase III, and Shire ($SHPG), which recently bought Lumena Pharmaceuticals for around $260 million for its Phase I FXR drug.

The prevalence of NASH is increasing worldwide as Type 2 diabetes and obesity reach epidemic proportions--with treatment limited to doctors simply telling their patients to lose weight.

It is estimated that as much as 5% of the U.S. population (around 16 million people) has NASH--with around 8 million patients worldwide with advanced disease. The disorder is projected to become the leading cause of liver transplant by 2020.

This means there is major blockbuster potential for a first-to-market drug, with analysts predicting that new treatments for liver diseases such as hepatitis B and NASH could reach annual sales of as much as $10 billion by the next decade.

"Patients suffering from this debilitating disease desperately need therapies that are effective and well-tolerated," Akarna CEO Raju Mohan said in a statement. "We believe our lead drug candidate has the potential to treat NASH while avoiding some of the serious side effects associated with other therapies in development."

This comes after Gilead, with the help of its $11 billion purchase of Pharmasset in 2011, brought two new drugs to market in 2014 and 2015 in the form of Sovaldi and Harvoni that are predicted to almost wipe out the scourge of the liver-scarring disease hepatitis C within a generation.

- read Akarna's statement