Akero Therapeutics wowed investors Tuesday with midstage test results for a hepatitis treatment, and the biotech stock skyrocketed by triple digits.
On today's stock market, Akero shares vaulted 136.8% higher to close at 29.05. Shares of 89bio, another NASH drugmaker, rocketed 40% to 7.
Akero tested a treatment for nonalcoholic steatohepatitis, or NASH. NASH causes fat to build up in the liver, leading to inflammation and scarring called fibrosis.
Patients received Akero's drug for six months. Depending on the dosage, 39%-41% of patients experienced improvement in fibrosis while their NASH symptoms remained in check. Just 20% of placebo recipients had the same result.
"We believe today's results from the (study called) Harmony are an important milestone not only for Akero, but for the entire NASH community," Akero Chief Executive Andrew Cheng said in a written statement. "As the fastest growing cause of liver transplantation and liver cancer in the U.S. and Europe, NASH represents a substantial and growing health burden."
Biotech Stock: A Tricky Bar In NASH
Akero's news helped the biotech stock open at its highest point since June 2021.
The company tested its drug in patients with stage 2-3 fibrosis. Fibrosis is measured on a scale of 1-4. Today, there is no approved NASH treatment because the bar is tricky. A drug must either lead to a one-stage improvement in fibrosis without causing worse NASH symptoms, or it must resolve the symptoms of NASH without leading to worse fibrosis.
In Akero's study, 39%-41% of patients who received the drug — dubbed efruxifermin — experienced at least one-stage improvement in fibrosis and no worsening in NASH symptoms. In comparison, just 20% of placebo recipients had the same result. Also bullish for the biotech stock, 47%-76% of patients achieved NASH resolution without worsened fibrosis, vs. just 15% in the placebo group.
Further, 29%-41% of patients hit both goals: improved fibrosis and NASH resolution.
The results suggest efruxifermin "has the potential to treat the core facets of NASH," Dr. Stephen Harrison, medical director of Pinnacle Clinical Research, said in a written statement. Harrison was the primary investigator for the study.
The most frequent side effects were diarrhea, nausea, increased appetite and more frequent bowel movements. Five efruxifermin recipients dropped out of the study due to side effects vs. none of the placebo recipients. One patient reported a severe case of esophageal swelling. But that patient also had a history of gastroesophageal reflux disease, Akero said.
Rival Gets A Boost Too
The results also bolstered smaller biotech stock 89bio, which is working on a similar approach to NASH. 89bio is expected to have the results from its Phase 2 study in the first quarter, RBC Capital Markets analyst Brian Abrahams said in a note to clients.
Abrahams sees a multibillion-dollar opportunity in NASH treatment. He acknowledged "commercial and regulatory uncertainties in the space," but said safety and broad metabolic benefits of 89bio's and Akero's drugs should pave the way to U.S. approvals.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
