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Akero Therapeutics, Inc. (NASDAQ:AKRO) has been able to report positive results from its phase 2b HARMONY study, which used its drug efruxifermin [EFX] for the treatment of patients with pre-cirrhotic MASH or Metabolic dysfunction-associated steatohepatitis with stage 2 or 3 fibrosis. The significance of this is that it is already in the process of testing out this drug in a phase 3 program known as SYNCHRONY. Patients have already been dosed in the first two phase 3 studies in 2023, and the third study is likely to be initiated in 2024. With the phase 2b HARMONY study showing continued histological improvements, I believe this bodes well for this program. Another shot on target in the pipeline would be the advancement of EFX for the treatment of patients with cirrhosis due to NASH in the ongoing phase 2b SYMMETRY study.
When data from this study was released at week 36, it was noted that the primary endpoint was not met, but a trend in favor of treatment with Akero’s drug was shown. Despite that, there is an opportunity to possibly make a comeback and that would be with respect to another batch of results to be released. That is, it is expected that 96-week results from the phase 2b SYMMETRY study, using EFX for the treatment of patients with cirrhosis due to MASH are going to be released in Q1 of 2025.
I believe that this creates another good catalyst opportunity for investors to look forward to. With positive data achieved in the phase 2b HARMONY study, plus continued advancement towards potentially advancing EFX for the treatment of patients with cirrhosis due to NASH, I believe that investors might be able to benefit from any potential gains made.
Efruxifermin For The Treatment Of Patients With Metabolic dysfunction-Associated Steatohepatitis
As I stated above, Akero Therapeutics was able to report positive results from its phase 2b HARMONY study, which treated patients with F2-F3 metabolic dysfunction-associated steatohepatitis. The newly released data bodes well for the ongoing phase 3 SYNCHRONY program, which will consist of three studies in total.
The first important thing to go over is what MASH is and what the possible market opportunity for this program might be. Metabolic dysfunction-associated steatohepatitis [MASH] is a type of disorder characterized by fibrosis of the liver due to fatty lipid accumulation. If left untreated or not treated adequately, then it can lead to cirrhosis, which is severe scarring of the liver. Not only that, but it is said that MASH is the fastest growing cause of liver cancer as well. One other item to point out is that MASH is interchangeable with NASH or non-alcoholic steatohepatitis. In essence, NASH was the previously used name for this disorder, but it is now moving towards being known as MASH. The global non-alcoholic steatohepatitis market [NASH] size is expected to reach $14.53 billion by 2028. This is a big market opportunity, but it is going to have to post stellar results from its phase 3 program if it hopes to be able to compete in this particular space.
The good news for Akero Therapeutics is that it is well on its way to possibly eventually receiving approval in this space. It is not there yet, because it has one major task to accomplish first, which would be to achieve positive results from its phase 3 SYNCRONY program. A good way to describe this phase 3 program would be to highlight what each one entails:
- SYNCRHONY Histology – [Study has already dosed first patient] – Goal is to determine efficacy of using EFX for the treatment of patients with MASH
- SYNCRHONY Real World – [Study has already dosed first patient] – Goal is to study non-invasively diagnosed MASH patients; That is, they are diagnosed with this metabolic liver disorder through non-invasive means [example of this is for them to not be diagnosed with a liver biopsy]
- SYNCHRONY Outcomes – [1st patient not expected to be dosed until the 1st half of 2024]; Goal is to determine safety and efficacy of patients with compensated cirrhosis [F4 fibrosis] due to MASH
One item to point out right away is that there is a catalyst opportunity I noted above, which investors can look forward to. This would be with respect to the 1st patient being dosed in the phase 3 SYNCRHONY Outcomes study in the 1st half of 2024. I believe this is another investment opportunity for investors to look forward to.
Not only that, but this particular trial is going to be crucial for Akero to eventually possibly receive full FDA approval of using EFX for the treatment of patients with compensated cirrhosis [F4] MASH. Besides this point, it is important to go over what the other studies could end up doing to increase shareholder value. The phase 3 SYNCHRONY Histology study may end up being used to receive FDA Accelerated Approval of EFX for the treatment of pre-cirrhotic MASH patients with F2-F3 fibrosis. Why is that? That’s because there was an alignment with the FDA that this particular late-stage study would support such Accelerated Approval by the agency.
Of course, that is barring the notion that the primary endpoint of ≥1-stage fibrosis improvement and resolution of MASH after 52 weeks. This is only going to be the Accelerated Approval aspect for this patient population. The second portion is going to be looking at the long-term treatment of these patients and if warranted, the FDA may allow for this part to allow for the conversion to “Full Approval” of EFX for this F2-F3 MASH patient population.
The last phase 3 study as part of the SYNCHRONY program, known as Outcomes, is crucial in that it could ultimately allow the full marketing approval of EFX for the treatment of patients with compensated cirrhosis [F4] due to MASH. This is not going to be easy though, for a few reasons, for starters. The first reason is because two primary endpoints must be met to achieve U.S. marketing approval for this specific MASH patient population. The endpoints are as follows:
- Histological assessment of patients who are to be biopsied after 96 weeks of treatment which will determine if significant regression of hepatic [liver] fibrosis is achieve
- Statistically significant clinical outcomes to determine if a Full marketing approval is warranted for these compensated cirrhosis MASH patients.
The second item that needs to be addressed would be that, honestly, clinical data at the 96-week timepoint has to improve. That’s because there was a setback when targeting F4 fibrotic MASH patients. Why is that? Well, that’s because back on October 10th of 2023, it was noted that the primary endpoint for the phase 2b SYMMETRY study was not met at the 36 week time point. It was stated that such MASH patients given 28 mg EFX and 50 mg EFX achieved 22% and 24% of at least one stage improvement in liver fibrosis with no worsening of NASH by week 36 respectively. Placebo patients experienced a 14% improvement in liver fibrosis at the same 36-week timepoint.
There was a trend in favor of patients given either dose of EFX over placebo, but such an effect was not statistically significant. If this is the case, then how can Akero somehow stage a comeback for this particular F4 patient population? It is because the trial was designed in such a way to allow for another analysis to be done at a later time. That is, it is expected that 96-week treatment biopsy results will be reported in Q1 of 2025.
There is no assurance that the data will improve, but there has been some evidence that the longer patients take EFX, the better the eventual clinical outcomes that is observed. This is kind of shown from the release of Phase 2b SYMMETRY data that I’m going to go over directly below, whereby extended treatment showed an improvement for patients.
It is looking very good thus far for the phase 3 SYNCHRONY program for Akero. I state that because it just reported positive preliminary 96-week results from the phase 2b HARMONY study, which used EFX to treat patients with pre-cirrhotic MASH with stage F2-F3 fibrosis. The new clinical data from this study just released notes on the 96-week timepoint evaluation. It was said that patients who took 50 mg of EFX [46% patients improved] and 28 mg of EFX [46% of patients improved], achieved this primary endpoint of ≥1 stage improvement in fibrosis with no worsening of MASH after 24 weeks of treatment.
This, compared to placebo, which only saw 24% of patients achieve such an improvement. Okay, this data is great, but why is it noteworthy? That’s because it did as I stated above, which is that extended treatment allowed for an improved clinical outcome to be achieved. Consider that this was the outcome of the primary endpoint being met at the 24-week time point:
- 50 mg EFX allowed for 41% of fibrosis improvement based on histology
- 28 mg EFX allowed for 39% of fibrosis improvement based on histology
- Placebo allowed for 20% of fibrosis improvement based on histology.
As you can see from the data directly above, treatment from week 24 to week 96 showed that fibrosis reduction increased over time. This shows that the extended treatment observed in this phase 2b HARMONY study might also translate to an improvement of fibrosis reduction in the phase 2b SYMMETRY study. Although, considering that each of these studies is targeting different MASH patient populations, such an outcome is not guaranteed. The good news is that investors won’t have to wait that long to see this possibility, because results from the phase 2b SYMMETRY study using EFX targeting compensated cirrhosis [F4] patients with MASH are expected in Q1 of 2025.
Financials
According to the 10-K SEC Filing, Akero Therapeutics had cash, cash equivalents, short-term and long-term marketable securities of $569.3 million as of December 31, 2023. This biotech has been able to maintain its cash flow through the use of several financial transactions over the years. It started off in 2019 with its initial public offering raising $105.8 million. From there, it has enacted a registered direct offering with Pfizer (PFE), a term loan with Hercules and other follow-on public offerings.
More recently in April and May of 2023, it was able to raise gross proceeds of $127.4 million and $220 million from the sale of its common stock, from an AMT offering and registered-direct offering respectively. I believe that it is in good shape in terms of cash, because it believes that it has enough cash to fund its operations into 2026. Despite this cash runway, it is quite possible that management might pull the trigger on a cash raise immediately. Why is that? That’s because the positive preliminary 96-week data from the phase 2b HARMONY study caused the stock price to trade significantly higher. Thus, management may elect to raise cash because of this.
Risks To Business
There are several risks that investors should be aware of before investing in Akero Therapeutics. The first risk to consider would be with respect to the ongoing phase 3 SYNCHRONY program itself. Even though the primary endpoint of the phase 2b HARMONY study was met in F2-F3 pre-cirrhotic MASH patients at week 24, plus even better fibrosis improvement was observed at week 96, there is no assurance that such an outcome will be replicated in the ongoing SYNCHRONY Histology study.
Not only that, but the SYNCHRONY Real World study is evaluating safety primarily and this is another aspect that must be achieved for eventual FDA approval. Should the company receive Accelerated Approval from the U.S. agency of EFX for F2-F3 pre-cirrhotic MASH patients based on the Histology and Real World studies, the conversion to Full FDA approval of the drug for this specific patient population will be determined upon the release of long-term outcomes data from the Histology study. This is a risk, because if this study fails, then not only would not conversion to “Full FDA approval” happen, but EFX might be removed off of the market.
The second risk to consider would be the targeting of compensated cirrhosis [F4] patients due to MASH. The results from the phase 2b SYMMETRY study are expected next year and if the trial fails, then that would spell an end for the targeting of this specific MASH patient population. I believe that if this were to somehow happen, the company might still be in good shape if it can get EFX to the finish line for the treatment of patients with pre-cirrhotic MASH patients with F2-F3 fibrosis.
Another aspect to consider would be the phase 3 SYNCHRONY Outcomes study. Why is that? That’s because this late-stage study is going to potentially be the one to confirm findings from the phase 2b SYMMETRY study. This Outcomes study is going to be important for allowing for full marketing approval of EFX for the treatment of patients with compensated cirrhosis due to MASH. Even if the 96-week data from SYMMETRY turns out well, there is no assurance that the phase 3 study will yield a similar outcome. Not only that, but the phase 3 SYNCRHONY Outcomes study has yet to be initiated, because it is not expected to start until the 1st half of 2024.
The third and final risk to consider would be with respect to competition in this space. That’s because there are a lot of competitors in the MASH space. I would say the most notable ones would be Madrigal Pharmaceuticals (MDGL) and Viking Therapeutics (VKTX) for the treatment of these each developing resmetirom and VK2809 respectively. Speaking of Madrigal, this is a very important to keep an eye on and not only because of it being a potential competitor. It has the ability to make history as having the first medicine to be approved for NASH, with a PDUFA date of March 14th of 2024. This would also open the door up for Viking Therapeutics with its drug VK2809, which by the way is expected to release results from its phase 2b VOYAGE study using this drug to treat patients with NASH and fibrosis in the 1st half of 2024. The advantage for both Madrigal and Viking would be that the drug can be given orally.
On the flip side, from what I see at least Akero has taken steps to allow for patients to self-inject EFX using the LyoJect 3S dual chamber syringe. This is intended to be used for commercial use and would be more convenient than having to visit an outpatient center or doctor to receive treatment. Other competitors might be companies like Viking Therapeutics, Pfizer, Novo Nordisk (NVO) and Eli Lily (LLY) advancing GLP-1 agonist drugs for NASH. My feeling about this is that while such a drug may b effective with weight loss, plus possibly removal of lipid fats on the liver, it may not adequately address the most crucial component of all for treating these patients which is fibrotic damage.
I believe that for a drug to do well here, it must be able to address both fat accumulation and fibrosis. Thus, why I believe that Akero and other biotechs may still do well in the face of competition from the big pharma companies developing GLP-1 agonists.
Conclusion
Akero Therapeutics reporting preliminary positive 96-week data from its phase 2b HARMONY study bodes well for this phase 3 SYNCHRONY program. The only downside is that dosing of patients in the Histology and Real World studies was initiated in 2023. Not only that, but the Outcomes study is not expected to have the first patient dosed any day now in the 1st half of 2024.
Despite this timeline, I believe that Akero Therapeutics, Inc. investors can benefit with the early part of 2025, when the biotech expects to release 96-week data from the phase 2b SYMMETRY study. If it can somehow achieve a comeback with this program, then it would allow it to open its door towards another MASH patient population. Regardless, I think this newly released 96-week data from the phase 2b HARMONY shed light on the notion that extended treatment was key to seeing a huge improvement for F2-F3 patients. I hope that such an outcome of extended treatment can be replicated in the other studies.
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