March 27, 2014 / The race to develop a treatment for Non-Alcoholic Steatohepatitis (NASH)
is getting a lot of airtime lately, pointing to the severity of the
disease, poor prognosis and desperate need for a treatment. The space
has only a handful of competitors, with most seeing rising valuations
due to the tremendous peak sales that analysts are projecting for
products that make it to market. What is particularly unique to this
disease is not only the lack of any approved treatments, but also the
influx of attention and growing broad body of research by companies like
Intercept Pharmaceuticals (NASDAQ: ICPT), Galmed Pharmaceuticals (NASDAQ: GLMD) and
Galectin Therapeutics (NASDAQ: GALT) that shows treatments are on the horizon,
which gives these equities considerable upside.
Intercept has been one of the biggest biotech stories of 2014, with
shares mushrooming from around $70 to as high as $497 in January. The
catalyst was the disclosure that an interim analysis of data from the
Phase 2 FLINT trial of obeticholic acid (OCA) for NASH showed the drug
to be performing so well that the trial was halted early as the primary
endpoints were already met.
The data showed that a once daily 25 mg oral dose of OCA in
biopsy-proven adult NASH patients improved the NAFLD activity score
(based on fat, ballooning hepatocytes, and inflammation) with no change
in fibrosis, a milestone for not only Intercept, but also the industry.
It was also a reason to stop giving the trial's placebo group a
treatment that did nothing.
Perhaps ironically, NASH is not even Intercept's lead indication for
OCA, a bile acid analog and farnesoid X receptor agonist. The drug is
also being developed as a second-line treatment for primary biliary
cirrhosis (PBC). Data from the Phase 3 POISE trial for this indication
was released this month showing that the drug hit its primary and
secondary endpoints of reduction in serum alkaline phosphatase and
improved liver function, respectively. The stock only rose 3% on the
news and gave back all the gains (and then some) the next day. Pressure
seemed to come from the need for a confirmatory trial to be conducted
and analysts forecasting peak sales of less than $1 billion for PBC,
compared to sales of a NASH drug that could be easily top $3 billion,
keeping the focus on the NASH indication.
Intercept said in its latest quarterly report that it expects the final
results from the Phase 2 FLINT trial for NASH in July and to initiate a
Phase 3 trial in the first half of 2015.
Galmed is the newest biotech developing a NASH drug to hit the public
domain, conducting its IPO on March 12 by offering 2.8 million shares at
$13.50. Shares spiked as high as $18.75 on the first day of trading,
but have cooled to around $11.50 currently. The little-known
Israel-based company got a buzz going around it because of its oral drug
candidate aramchol, a synthetic fatty acid and bile acid (FABC)
conjugate scheduled to commence a Phase 2b trial for NASH patients also
suffering from obesity and insulin resistance in the second half of this
year. As shown by Intercept, positive mid-stage data for a NASH drug
can certainly serve as a catalyst for a stock price. On that note, the
results from the planned multi-center trial are expected in the second
half of 2016.
Clinical studies to date show aramchol to reduce liver fat content without any serious adverse side effects.
Pegging NASH was a bit of an accident for Galmed. Aramchol was
originally being developed (and still is) as a once-daily treatment to
solubilize bile stones but was discovered to reduce liver fat
infiltration in hamsters and mice with high-fat diets, so the target
indication was expanded.
NASH is a severe form of Non-Alcoholic Fatty Liver Disease (NAFLD), a
condition that has become increasingly common in the United States.
NAFLD in its simplest state is essentially benign, but as the condition
worsens, NASH arises. The cause of NASH may still remain a mystery, but
NAFLD commonly presents in patients with diabetes and obesity. With the
skyrocketing diagnosis rate of those diseases, subsequently so goes the
incidence rate of NAFLD and NASH. Further, NASH is also linked to
increased risk of cardiovascular complications, a leading killer in
North America. Sadly, liver fibrosis and NASH are not reversible and
often lead to the necessity for a liver transplant, of which only about
6,000 actually happen each year.
These facts make Galectin Therapeutics particularly attractive as early
research shows its lead drug candidate GR-MD-02 to actually reverse
fibrotic damage. Although the company may trail Intercept and Galmed in
stage of human trials at this point, Galectin is only a clinical data
set away from a potential leap forward with GR-MD-02. The drug is being
developed under a "Fast Track" designation from the FDA, which provides
an expedited developmental pathway as well as other benefits.
Galectin is in a Phase 1 trial of GR-MD-02, a complex carbohydrate drug
that targets and inhibits galectin-3, a key protein in the pathogenesis
of fatty liver disease. A critical difference in the trial protocol is
that Galectin is treating patients with NASH and advanced fibrosis,
rather than earlier stages of the disease as other biotechs are.
Moreover, in animal models, GR-MD-02 was shown to not only stop liver
scarring from worsening; it showed the damage to start to be repaired.
Shares of GALT got a brief bump on Tuesday when the company announced
that it will be reporting results from the eight patients in the first
cohort in the Phase 1 trial on Monday, March 31.
Estimates show that up to 37 million adults in the U.S. have NASH, but
this number could be conservatively low because the relatively
asymptomatic disease often goes undetected until advanced stages. As
estimates stand currently, nearly 10 million NASH patients will progress
to develop liver cirrhosis. Halting the progression of fatty liver
disease as Intercept has done is certainly a keystone moment in the
overall genesis of new therapies, but tackling the disease as it reaches
the often-terminal latter stages, as Galectin is aiming to do, will
likely capture a far greater market share should regulatory approval be
attained by both companies.
Click here to receive free email updates on Galectin Therapeutics developments: http://www.tdmfinancial.com/emailassets/galt/galt_landing.php
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SOURCE: TDM Financial
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