NVO - Drugmakers still chasing potentially lucrative NASH market despite setbacks

2023-08-14 13:19:20 ET

Despite recent setbacks, drugmakers are still forging ahead in their quest to develop effective treatments for non-alcoholic steatohepatitis, or NASH, a growing public health concern that could represent a roughly $108B global market opportunity by 2030.

According to the US National Institutes of Health, up to 24% of Americans have non-alcoholic fatty liver disease, or NAFLD, a precursor to NASH, while approximately  1.5% to 6.5% have NASH. The disease is staged in four phases, F1 through F4, with the last stage indicating cirrhosis, or advanced scarring of the liver.

While the exact causes of the disease are still unclear, it is more common in people who have conditions such as diabetes, high cholesterol or obesity. In its more advanced stages, NASH can lead to cirrhosis or liver cancer, making it a leading cause of liver-related deaths in the US.

NASH has been on the rise in many industrialized countries over the past several years. According to Pfizer , which has a NASH drug candidate in development, the number of people with NASH is expected to reach 48.3M in China and 27M in the US by 2030. Vantage Market Research estimates that the global market for NASH therapies will reach $108.4B by the same year.

But despite an uptick in cases, the number of M&A deals involving NASH assets remained relatively flat between 2018 and 2022 while the number of VC deals dipped from around 11% to 7%, according to Global Data.

Meanwhile, the number of Phase 3 candidates in the space is low, accounting for only 4, or 5%, of the 84 NASH drug assets in development. Another 37% are in Phase 2 development, with 35% in Phase 1, 21% in preclinical and 2% in the discovery stage. The therapies mostly fall into five drug classes: Farnesoid X receptor agonists, fibroblast grow factor 21, thyroid hormone receptor-? agonists, glucagon-like peptide 1 agonists, and PPAR agonists, according to Global Data.

Global Data believes the first drug to win approval in both the EU and US will be Madrigal Pharmaceuticals' ( NASDAQ: MDGL ) resmetirom, a thyroid hormone receptor beta-selective agonist that is taken daily by mouth for the treatment of NASH with liver fibrosis. Madrigal completed submission of its FDA market application for the drug in July, with a request for priority review. The therapy received breakthrough designation from the FDA in April.

Other drug companies with NASH drug candidates in mid-to-late stage development include Viking Therapeutics ( VKTX ), Terns Pharmaceuticals ( TERN ), 89Bio ( ETNB ), NGM Biopharmaceuticals ( NGM ), Inventiva ( IVA ), Akero Therapeutics ( AKRO ), Galectin Therapeutics ( GALT ), Galmed Pharmaceuticals ( GLMD )  and newly public Sagimet Biosciences ( SGMT ).

But the road to success can be wrought with peril, as evidenced by the recent FDA rejection of Intercept Pharmaceuticals' ( NASDAQ: ICPT ) NASH drug candidate, Ocaliva. Shares of Intercept plunged nearly 30% on the news, with the company announcing a few weeks later that it was shutting down its NASH program and laying off one-third of its staff.

Global Data said it sees some drugmakers trying to improve their chances of success by developing combination treatments for multiple stages of the disease, citing Novo Nordisk ( NVO ) as an example. The Danish drugmaker has been developing its diabetes drug semaglutide, also known as Ozempic, as a monotherapy for F2/F3 NASH.

Novo Nordisk is also evaluating a combination of semaglutide with Gilead Sciences' cilofexor and firsocostat for patients with F4 NASH. The combination is in Phase 2 testing, according to Gilead's ( GILD ) website.

Despite M&A activity being relatively flat over the past few years in the NASH space, Global Data said the sector could see an increase in late-stage partnering as companies roll out more data and the market becomes "more saturated."

More on NASH drugs:

Madrigal Pharmaceuticals: The NASH Market Is No Longer Guaranteed

89bio, Inc.: A Big Bet On NASH

Terns slips after mid-stage readout for NASH candidate

Sagimet, NASH liver disease drug developer, sets terms for $75M IPO

Intercept Pharmaceuticals to end NASH program following FDA feedback

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