Analyst Reactions on NGM Biopharmaceuticals Disappointing Aldafermin Data in NASH Study

Today, NGM Biopharmaceuticals Inc NGM reported disappointing results from the Phase 3 trial of aldafermin in NASH patients.

What Happened: The primary endpoint of an improvement in fibrosis with no worsening of NASH among the 107 patients taking a 0.3 mg, 1 mg, or 3 mg dose flopped badly.

In the aldafermin arms, 15% to 31% of patients experienced such improvement, with the highest rate seen in the group who received the lowest dose. 19% of placebo patients improved by that measure.

But among the middle 1 mg dose cohort, only 15% reached that threshold — an even smaller percentage than placebo.

Why It Matters: The company ramped up expectations for aldafermin last year when Phase 2 data showed that the drug led to statistical significance on the primary endpoint of change in absolute liver fat content, compared to placebo.

Related content: Benzinga's Full FDA Calendar

Analyst View: Michael Yee at Jefferies believes this latest failure on NASH will cast a wide shadow. "The results are a surprise given it was a potent drug and generally expected to be positive. It will add confusion and greater unpredictability for other NASH programs. That said, the study was short and small, and the profile was not great (daily injection, requires statins), so they will de-emphasize focus despite F4 ongoing."

Piper Sandler analyst Yasmeen Rahimi said she was "shocked" that the NASH trial missed its primary endpoint, stating that this "was inconsistent with historical data, especially from the 24-week Cohort 4." The trial was able to meet key secondary endpoints and maintained a comparable safety profile to Cohort 4. Still, that data was insufficient to keep ALPINE 2/3 from being cut from development, the analyst noted. The price target is lowered at $20 from $30, with an Overweight rating on the stock.

Raymond James analyst Steven Seedhouse downgraded NGM to Outperform from Strong Buy with a price target of $22, down from $52. NGM is continuing its F4 study of aldafermin and also has other assets that will drive value. Still, his last cash flow analysis was "anchored" in aldafermin's F2/F3 opportunity, and "carving that out of the model" drives his price target cut and downgrade, Seedhouse writes in the note.

See the slide presentation here.

Price Action: NGM shares are trading 39.5% lower at $17.18 during the market session on the last check Monday.