Akero Therapeutics' Lead Candidate Potential: Analyst Unpacks Complicated Regulatory Path Forward

Tuesday, Akero Therapeutics Inc AKRO reported a 36-week analysis of SYMMETRY, a 96-week Phase 2b study of efruxifermin (EFX) in patients with compensated cirrhosis (F4) due to nonalcoholic steatohepatitis (NASH).

Efruxifermin was not statistically significant in topping the placebo in improving liver scarring without worsening of NASH, resulting in shares tumbling.

HC Wainwright has lowered the price target from $64 to $40, with a Buy rating.

The analyst Ed Arce says that 36 weeks is generally considered too short for most mechanisms to elicit fibrosis improvement in NASH. However, EFX has previously shown rapid and robust antifibrotic effects. 

Last year, in the Phase 2b HARMONY study in F2/F3 NASH, EFX 50 mg achieved a doubling of treatment effect over placebo at week 24 (41% vs. 20%). 

More directly, in Cohort C of the Phase 2a BALANCED study in compensated cirrhotics (F4, Child-Pugh A), EFX 50 mg achieved a 33% response rate and 33% effect size vs. placebo (0/5) after just 16 weeks of treatment. 

The analyst notes a surprise that in the longer duration (and larger sample size) SYMMETRY trial, the response rate fell to 24%, from 33% in Cohort C, but more concerning is that the placebo response rose to 14%, from 0% in Cohort C. 

The analyst also writes that the comprehensive data strongly aligns with the management's perspective that a considerably extended treatment duration could offer EFX ample time to target the denser collagen found in cirrhotic patients and attain a favorable outcome in fibrosis improvement.

Price Action: AKRO shares are down 20% at $14.52 on the last check Wednesday.