AKRO - Akero Therapeutics' EFX Data Warrants Caution
2024-04-03 02:43:52 ET
Summary
- Akero Therapeutics' week 96 Harmony trial data findings and reporting warrant caution due to biomarker data regression and inconsistent findings.
- In our view, Efruxifermin's phase 2 data reveal a fragile efficacy profile and a concerning safety record, casting doubt on its potential to successfully translate into phase 3 trials.
- MASH space growing competition and future sales of Resmetirom will significantly impact valuations.
Introduction And Investment Thesis
Thesis
This analysis posits Akero Therapeutics, Inc. (AKRO) as a potential short investment, premised on the assessment that its flagship product, Efruxifermin ((EFX)) - an FGF21 analogue - faces considerable hurdles toward achieving substantial market success. The likelihood of FDA approval appears constrained, not merely by the drug's marginal efficacy but also due to concerns over bone mass density ((BMD)) implications and adverse quality of life (QoL) impacts. In our opinion, the methodology employed by Akero in their statistical analysis paints an overly favorable clinical relevance, therefore making the underlying fragility of the data less apparent. Anticipation of accelerated approval notwithstanding the actual market performance of EFX is likely to fall short of the forecasts until its efficacy and safety parameters are unequivocally established in subsequent confirmatory trials. The "multi-billion" MASH market is associated with challenges, including a nascent understanding of the disease pathophysiology, stringent FDA safety requirements, and intensifying competition, notably from the recent approval of Resmetirom and likely more to come.