Akero Therapeutics stock nearly doubled Monday, pulling shares of rival 89bio higher, after the biotech company's treatment for a devastating liver disease succeeded in a Phase 3 study.
The companies are working on treatments for metabolic dysfunction-associated steatohepatitis, or MASH. Formerly called NASH, the disease causes scar tissue to build up on the liver. Over time, it becomes cirrhosis. Generally, the only treatment option is a liver transplant.
But after 96 weeks of treatment with Akero's efruxifermin, or EFX, 39% of patients experienced a reversal in their cirrhosis with no worsening in the symptoms of their MASH. Just 15% of the placebo group met the same bar. Including patients who didn't finish the study, the reversal rate was 29% vs. 12% for the placebo group.
Leerink Partners analyst Thomas Smith says the results are "meaningfully above investor expectations" for a 15% improvement on cirrhosis. There is one MASH drug on the market from Madrigal Pharmaceuticals but it only treats patients with a lower level of scarring, known as fibrosis.
Akero Therapeutics shares skyrocketed 97.5% to close at 51.71. In earlier action, shares hit a triple-digit gain. 89bio, which is testing a similar drug, surged 26.2% to 9.
'Headline Positive' For The Drug Class
The drugs from Akero Therapeutics and 89bio mimic the activity of FGF21, a protein hormone that plays a role in regulating the metabolism, energy expenditure and glucose levels.
"We believe these results are a clear headline positive for the FGF21 class and represent positive read-through to ETNB, de-risking pegoza's continued development in cirrhotic NASH," Smith said in a client note. 89bio's drug is called pegozafermin.
Other metrics including a blood test that measures liver disease progression, liver stiffness and liver enzyme levels all showed dose-dependent improvements, Smith added.
Notably, companies that make GLP-1 drugs for weight loss are now trying to pivot into MASH treatment. Eli Lilly tested its drug, tirzepatide, in MASH patients. After a year, more than half experienced an improvement in fibrosis. Novo Nordisk also had promising results for its drug, semaglutide, in patients with MASH. Almost four in 10 semaglutide recipients, 37% had a fibrosis improvement.
But RBC Capital Markets analyst Brian Abrahams stayed positive on the FGF21 drugs.
"AKRO's data clearly endorse the potential for FGF21 agents such as ETNB's pegoza to benefit more severe MASH [patients] that other classes such as GLP-1s may not address as well, maintaining hope for their long-term prospects and role," he said in a client note.
He has a sector perform rating on 89bio stock, and doesn't list one for Akero Therapeutics.
Follow Allison Gatlin on X/Twitter at @IBD_AGatlin.
