Viking Therapeutics (VKTX) are testing medicines known as THR agonists.
Obesity Epidemic Leads To A New Problem — And It Could Be Worth Billions
• ALLISON GATLIN
• 8/16/2019
The obesity epidemic in the U.S. is leading to a new problem for doctors.
By 2020, a liver disease known as nonalcoholic steatohepatitis, or NASH, will be the leading cause of liver failure. That will lead to more liver transplants in the U.S., experts say.
A cadre of biotech companies — led by Intercept Pharmaceuticals (ICPT) and Genfit (GNFT) — believe they each have a solution to what could be a several-billion-dollar problem. Estimates vary widely, but some say the opportunity for a NASH liver disease drug could be $50 billion or more.
"It's already overtaken alcoholic liver disease and it's about to overtake hepatitis C (as the leading cause of liver transplants)," Intercept Chief Executive Mark Pruzanski told Investor's Business Daily. "It really is an epidemic. It's not just one confined to the U.S. The Western diet and lifestyle is pervasive globally. So this is a burgeoning disease around the world."
nd today there's no approved treatment for NASH liver disease, said Pruzanski, whose biotech company is seen grabbing the first Food and Drug Administration approval in 2020.
This liver disease is an epidemic, he said.
NASH Liver Disease Is Hard To Diagnose
NASH liver disease is a progression of fatty liver disease. In these patients, fat accumulates in the liver, causing inflammation and eventually scarring. This differs from fat accumulation due to heavy alcohol use, which is called alcoholic liver disease.
The National Institutes of Health estimates 30%-40% of adults in the U.S. have a fatty liver. Of those, about 20% have NASH liver disease.
But liver disease treatment is complicated, especially in the case of NASH. First, patients with NASH generally don't have symptoms until their livers become extensively scarred — a condition known as cirrhosis. By then, most experts say, the patient is too sick for anything but a transplant.
Second, the only way to confirm NASH liver disease is through a costly liver biopsy.
Third, without a targeted liver disease treatment, there's no reason to perform a liver biopsy, JMP Securities analyst Liisa Bayko said in an interview. A liver biopsy involves a large needle pushed through the abdomen to grab a piece of the liver. It can be complicated and painful.
"There's no reason to be diagnosed because there's nothing to be done about it," she said. "Once there's a solution, physicians are motivated to try to find the patients because they have something to offer. If there's nothing to offer them, there's no point in diagnosing them."
Specific Guidelines For Approval Of NASH Liver Disease Drug
The Food and Drug Administration has specific guidelines for biotech companies exploring NASH liver disease treatments.
Most biotech companies are looking to treat patients with fibrosis, a form of scarring in the liver. Doctors measure fibrosis in stages. The worst level of fibrosis is stage 4. Healthier patients have a lower stage of fibrosis. Cirrhosis is a more serious form of scarring in the liver.
In order to gain approval, a company must show its treatment can improve fibrosis by at least one stage. Meanwhile, NASH symptoms must not worsen at the same time. Or, a biotech company can resolve NASH completely. But fibrosis must not increase. They must do this in stage 2 and stage 3 patients.
So far, only one biotech company has shown that: Intercept. In a Phase 3 study, the company's drug — dubbed obeticholic acid, or OCA — improved fibrosis by one stage over 18 months. Meanwhile, patients didn't show worsening symptoms of NASH.
Genfit Could Follow Intercept With Approval
Now, Intercept is planning to ask the FDA to approve OCA in NASH liver disease treatment in the third quarter. The biotech company is also planning to file for European approval in the fourth quarter, CEO Pruzanski said. He expects to launch the drug in 2020.
Genfit could follow. It's the only other biotech company with an experimental drug for NASH in Phase 3 testing. Genfit is studying a medicine called elafibranor in patients with stages 2-3 fibrosis. It's due to have the results of that study by year-end.
"When elafibranor gets on the market about the same time as OCA, the next drug will not get on the market for at least another three years," Genfit Chief Operating Officer Dean Hum said in an interview. "So having that time advantage is going to be very important."
Gilead Sciences (GILD) started the year with a potential NASH liver disease treatment in late-stage testing. Gilead looked at the drug, selonsertib, in patients with stage 2-3 fibrosis and cirrhosis. In both cases, the drug failed.
Biotech Companies Rush To The Finish Line
Intercept also sells OCA under the brand name Ocaliva as another liver disease treatment. It's known as an FXR agonist. These drugs regulate bile acid, lipid and glucose metabolism. But industry watchers associate them with itching and raising "bad" LDL cholesterol.
Genfit's elafibranor targets a substance called PPAR. The biotech company believes it can resolve NASH liver disease completely. Further, elafibranor has shown a penchant for cutting LDL cholesterol and lipids, boosting insulin sensitivity and lowering the risk of cardiovascular events.
SVB Leerink analyst Pasha Sarraf acknowledged Intercept will likely grab the first approval in NASH liver disease treatment. But patients who take Ocaliva will have to "stack" other medicines to keep their LDL cholesterol in line, he said.
"Why do you have to sort 15 different drugs just to tolerate Ocaliva?" he said in an interview. "As new drugs become available, I expect the opportunity for Intercept will start being competed against and their opportunity will diminish."
Challenges Face Biotech Companies In NASH
Meanwhile, Genfit is also facing its own doubters. In mid-June, rival biotech company CymaBay Therapeutics (CBAY) offered a disappointing look at its PPAR drug in a Phase 2b study. In that study, reductions in liver fat remained minimal and insignificant compared with a placebo.
"These data raise the risk for Genfit whose drug, elafibranor, is also a PPAR and we believe already had a low likelihood of success on NASH resolution in its upcoming year-end 2019 Phase 3 readout," RBC Capital Markets analyst Brian Abrahams said in a June report.
Part of the challenge? Experts don't agree on what causes NASH. It can take decades for a fatty liver to become inflamed. From there, patients can develop fibrosis and cirrhosis more rapidly.
"NASH is silent until it gets very advanced," JMP analyst Bayko said. "Then it's too late."
Biotech companies like Madrigal Pharmaceuticals (MDGL) and Viking Therapeutics (VKTX) are testing medicines known as THR agonists. These drugs control the metabolism of fat in the liver. By lowering liver fat, Madrigal hopes to resolve NASH.
Madrigal's midstage study found that upon NASH's resolution, patients show a 61% reduction in fibrosis, says Rebecca Taub, the biotech company's chief medical officer and executive vice president of research and development.
"We think this also demonstrates the importance of treating the underlying cause," she said in an interview. "Fibrosis is just a reaction to the NASH. Take that away, then the fibrosis will improve."