By Adriana Mujal, Chandani Limbad, Jasvinder Kaur PhD, Sumyan Ng PhD, Joan Zape and Ben Cohn
Thirty-five years since its initial description, non-alcoholic steatohepatitis [NASH] remains an incurable disease. Given the enthusiasm surrounding NASH after a positive result from Intercept (NASDAQ:ICPT), it is regarded as the next breakout indication.
In this report, we aim to provide investors with a detailed description of the academic, clinical and market landscapes surrounding NASH. We illustrate the complexity of NASH, touch upon on-going clinical trials and highlight companies in the space.
I. The NASH Demographics and Market Opportunity
The global NASH market is expected to reach $1.6B by 2020 and grow at a rate of 25.6% annually from 2014 to 2020. The high prevalence of diabetes and obesity in the global population are some of the major drivers for NASH, as up to 75% of people with NASH have type-2 diabetes and more than 70% are obese. Currently, the US represents about 50% of the global NASH market, followed by Europe, Asia Pacific and LAMEA [Latin America, Middle East & Africa].
NASH affects about 10% of people in the developed world. It is the most common non-communicable liver disease, affecting about 2-5% of the US population and has a similar prevalence in China and Europe. Up to 25% of the adults with NASH may have advanced to NASH-related cirrhosis.
NASH affects individuals of all age demographics. The disease affects adults 40-65 years of age and it is more common in women than in men. Interestingly, children 2-17 years of age can also be affected with NASH. Non-Alcoholic Fatty Liver Disease [NAFLD], which is the precursor to NASH, is more common in young boys than girls. Almost 90% of children with NASH are obese and many are insulin resistant.
Furthermore, as biomarkers and non-invasive tests become readily available, the number of individuals diagnosed with NASH may increase.
II. WHAT IS NASH?
From NAFLD to NASH
NASH is the advanced stage of a liver disease called Non-Alcoholic Fatty Liver Disease [NAFLD]. NAFLD is characterized by excessive fat accumulation, or steatosis, in the liver of patients with no history of alcoholism. NAFLD may follow a non-progressive clinical course marked by simple steatosis or it may develop to a severe form, referred to as NASH (Figure 1).
Figure 1. The NAFLD clinical course leading to NASH. Galmed Pharmaceuticals Corporate Presentation. March 2015.
About 80-90% of NAFLD cases are benign and non-progressive. The progression of NAFLD to NASH occurs when excessive steatosis in the liver triggers an inflammatory response that can cause tissue damage [steatohepatitis] and liver scarring [fibrosis]. NASH can present in patients with steatohepatitis either with or without fibrosis. When NASH is accompanied by fibrosis, it could further develop into liver cirrhosis and eventually, liver cancer (Figure 1). Patients with NASH are usually asymptomatic and may have other diseases such as diabetes, obesity, dyslipidemia or cardiovascular disorders.
III. How do we diagnose and treat NASH?
NAFLD is suspected in patients with diabetes, obesity or dyslipidemia who do not drink alcohol excessively. Since patients are asymptomatic during the early stages of NAFLD, it is usually detected incidentally during testing for other conditions. Elevated levels of liver enzymes alanine-transaminase [ALT] and aspartate transaminase [AST] in the blood are common indicators of NASH.
Steatosis in the liver can be confirmed by various imaging techniques, including MRI, MRS, ultrasound and computed tomography. However, these imaging techniques are unable to determine the stage of fibrosis accurately. So far, transient elastography [Fibroscan], is the only method that can accurately determine the stage of liver fibrosis. By measuring the velocity of the sound waves passing through the liver, tissue stiffness (a property of the extracellular matrix correlated with fibrosis), is measured.
Finally, liver biopsy remains the gold standard for identifying fibrosis in the liver. This procedure includes taking a small piece of the liver from the patient. Subsequently, the tissue is processed and histologically graded by pathologists. Some of the drawbacks of this method include pain and tissue complications associated with the procedure. Overall, there is a pressing need to develop non-invasive diagnostic tools for NASH.
When a liver biopsy of an NAFLD patient shows signs of steatosis (Figure 2, white blobs), hepatocyte injury or liver cell ballooning (Figure 2, Type 3 NASH), inflammation and fibrosis (Figure 2, Type 4 NASH), NASH is then declared. These histological characteristics are indistinguishable from alcoholic steatohepatitis. Thus, prior knowledge of a patient's history of alcohol consumption is critical in diagnosing NASH.
Standard of Care
The current standard of care for NASH patients comprises of lifestyle changes, such as sustained weight loss, diet, exercise or bariatric surgery and the management of related diseases, diabetes and hyperlipidemia. There are no approved pharmacological treatments for NASH.
A. Change in Life Style and Diet
Sustained weight loss, dieting and maintenance of an active lifestyle are usually the first-line of therapies which decrease cardiovascular risks, reduce hypertension and improve diabetic control in NASH patients. However, patient compliance proves to be a significant barrier, as these lifestyle changes are often difficult to achieve and maintain.
B. Vitamin E
Non-diabetic NASH patients are commonly prescribed vitamin E. Vitamin E is a fat-soluble compound with antioxidant properties. Clinical studies showed that sustained vitamin E supplementation reduces serum AST and ALT levels in adults and children with NASH. Furthermore, other studies also showed significant histological improvements in the livers of vitamin E-treated patients. However, it was noted that levels of vitamin E were much higher than the recommended daily dose required to achieve the therapeutic effects. Whether adverse effects of high doses of vitamin E occur remains unclear.
C. Pioglitazone and metformin
Pioglitazone and metformin are insulin sensitizers that may be prescribed in NASH patients with type 2 diabetes. Pioglitazone belongs to the thiazolidinedione [TZD] family, which activate peroxisome proliferator-activated receptors [PPAR] and retinoid X receptor [RXR] in the nucleus. The activation of these receptors leads to alterations in glucose and fat metabolism, thus controlling blood-glucose level in patients.However, one side effect of pioglitazone use is weight gain. Bladder cancer is also associated with pioglitazone, which has led to the suspension of this drug by the regulatory agencies in France and Germany.
Metformin belongs to the biguanide family. It transiently inhibits the mitochondrial respiratory-chain complex 1, and activates AMP-activated protein kinase [AMPK], a cellular metabolic sensor. This activation results in lower glucose output from the liver and higher glucose uptake in the muscles. The use of metformin is associated with a low risk of lactate buildup in the blood [lactic acidosis]. A study also found that metformin treatment improves liver enzyme levels and histological features of NASH.
IV. HOW DO PEOPLE GET NASH?
NASH is multi-factorial
There is no single cause for NASH. The disease is modulated by a complex interplay of metabolic, genetic, internal and external environmental factors which we discuss below:
V. A SCIENTIFIC PRIMER ON NASH
Historically, steatosis has been proposed as the first "hit" towards progression of NASH. Upon improper lipid accumulation, a second "hit" of oxidative stress unleashes the subsequent processes of cell death, inflammation and fibrosis. While the relationships between these cellular pathways and metabolic processes are complex, many key biological targets have been identified for therapeutic development (Figure 3).
Figure 3. Snapshot of Therapeutics Targets and The NASH Competitive Landscape.
A. Lipid Synthesis
Steatosis can arise from dysfunction in lipid synthesis and/or transport. Therefore, one strategy would be to restore lipid homeostasis in NASH patients by targeting triglyceride [TG] metabolism and storage.
TG can be generated through de novo lipogenesis [DNL] pathways or esterification of free fatty acids [FFA] that originate from dietary sources or adipose tissue [Figure 4]. This TG can then be stored in the form of lipid droplets or packaged into very low density lipoprotein [VLDL] and secreted.
Alternatively, if the TG is needed for cellular energy, such as in cases of low glucose or insulin signaling, it can be broken down by enzymes into FFA, which can then undergo beta-oxidation in the mitochondria.
As depicted in Figure 4, lipid accumulation in the liver can result from increased DNL or uptake of FFA. Alternatively, it may also stem from decreased fatty acid β-oxidation and decreased TG degradation.
Figure 4. Mechanisms Leading to Steatosis (Adapted from Guturu et al. 2012).
Because these different pathways intersect in controlling TG metabolism and trafficking, targeting key upstream regulators that control these processes will be critical in NASH treatment. A two-pronged approach could actively stimulate pathways clearing accumulated lipids while inhibiting overactive lipid biosynthesis.
Approaches That Target Lipid Synthesis
The nuclear receptor, Farnesoid X receptor [FXR], is an attractive target candidate. Indeed, ICPT, Novartis (NYSE:NVS), Gilead (NASDAQ:GILD), and Enanta (NASDAQ:ENTA) are currently developing FXR agonist compounds [Figure 3]. The transcription factor FXR inhibits sterol regulatory element binding factor [SREBF-1], which is a master regulator of lipid biosynthesis (Figure 5), through up-regulation of several key enzymes. In addition, it enhances lipolysis, or the breakdown of TG-rich lipoproteins, and also induces beta-oxidation through up-regulation of PPARα and its downstream targets.
Figure 5. The Farnesoid X receptor is a critical regulator of lipid synthesis. (Adapted from Teodoro et al. 2011).
FXR regulates key nuclear receptor, PPARα, which responds to fatty acid levels and controls their oxidation and breakdown through mitochondrial and peroxisomal systems [Figure 5]. As expected, pre-clinical studies showed that PPARα-deficient mice develop substantial hepatic steatosis.
PPAR family members, including PPARα, PPARγ and PPARδ, are involved in lipogenesis and adipogenesis. Agonists of these molecules are currently being developed commercially by Genfit (OTCPK:GNFTF), Takeda (OTCPK:TKPHF), Zydus, Kalypsus, and Islet Sciences (OTC:ISLT).
In contrast, other companies are focusing on various aspects of FFA synthesis, such as inhibiting the activity of an enzyme, acetyl-CoA carboxylase [ACC], which catalyzes the reaction needed for fatty acid biosynthesis.
By inhibiting ACC, companies like Nimbus Therapeutics aim to both limit lipid biosynthesis and promote lipid degradation by shifting the cell towards a beta-oxidative state. In addition, Galmed (NASDAQ:GLMD) is testing a synthetic fatty acid/bile acid conjugate to inhibit the activity of Stearoyl Coenzyme A Desaturase 1 [SCD1], another enzyme involved in FFA synthesis (Figure 3).
Lastly, thyroid hormone receptor beta [THRβ] has generated enthusiasm from Madrigal Pharmaceuticals and Viking Therapeutics (NASDAQ:VKTX) who are testing agonist compounds (Figure 4). THRβ recognizes the ligand T3, and regulates SREBF-1 as well as PPARs and liver X receptor [LXR] family members. Beyond increasing lipase and oxidation activity, THRβ reduces lipid storage and enhances secretion of VLDL.
B. Insulin Signaling
Dysregulated insulin signaling can lead to disruptions in lipid homeostasis that may contribute to NASH. In adipocytes [fat cells], insulin resistance [IR] enhances lipid breakdown [lipolysis], which then increases FFA levels.
These FFA circulate in the liver where, in excess amount, they can contribute to hepatic cell IR. IR also promotes FFA entry into the mitochondria, which further increases oxidative stress. Finally, FFA can sensitize insulin-induced proliferating liver cells to undergo apoptosis.
In addition to its role in lipid metabolism, FXR also contributes to glucose metabolism. For example, in mouse models, FXR dampens the levels of glucose production [glucoeneogenesis] while increasing glycogen storage (Figure 6).
Approaches That Target Insulin Signaling
GLP-1 is being tested as a viable target for NASH treatment by Novo Nordisk (NYSE:NVO) (Figure 3). GLP-1 induces glucose-dependent insulin secretion and inhibits glucagon production. Simultaneously, it also increases fatty acid breakdown and glucose cellular uptake.
Current attempts are underway to modulate GLP-1 activity with agonist compounds, as well as with inhibitors of DPP4, an enzyme that is responsible for GLP-1 degradation.
Figure 6. Regulation of Glucose Synthesis by FXR (Adapted from Teodoro et al. 2011).
C. Bile acid synthesis
Bile acid synthesis functions to eliminate cholesterol. Bile acid is initially synthesized in the liver before being secreted to the intestine where it is modified by resident bacteria. Secondary bile acids are then reabsorbed by terminal ileum cells [enterocytes] (Figure 7).
Elevated bile acid levels contribute to NASH by promoting mitochondrial damage and liver cell death. Interestingly, cholesterol levels are also elevated in NASH patients, possibly as a result of high levels of bile.
Bile acids bind to FXR, further inhibiting bile acid synthesis. (Figure 7). FXR binding in enterocytes during absorption stimulates FGF15, which also halts bile acid synthesis in the liver through repression of several biosynthetic enzymes.
Although this relationship provides an additional pathway to target with a pharmaceutical FXR agonist, therapeutic modulation of FXR may also impact cholesterol metabolism and could thus negatively affect patients.
Approaches That Target Bile Synthesis
Other strategies to reduce bile acid levels in the liver may have more success. Shire Pharmaceuticals (NASDAQ:SHPG) is developing an antagonist against the transporter, ASBT (Figure 3). Expressed by enterocytes, ASBT is responsible for reabsorption of bile acids from the intestine.
Figure 7. Regulation of Bile Synthesis.
D. Hepatic cell death/inflammation
Increased FFA exposure leads to the amplification of oxidative stress. Cells produce greater levels of reactive oxygen species [ROS] to combat the burden of high FFA levels. In excess, lipid peroxidation by ROS can promote liver cell death.
Dying liver cells then produce 'damage signals' recognized by resident immune cells, which promote their infiltration and lead to inflammation (Figure 8).
Obesity is notably associated with NAFLD and NASH diagnosis. Interestingly, it is thought that inflammation in adipose tissue may actually precede NAFLD development and contribute systemically to the disruption of key metabolic processes in the liver, such as insulin resistance. Similarly, the macrophage chemoattractant CCL2 produced in adipose tissue can also induce lipogenesis in the liver.
Approaches That Target Cell Death and Inflammation
Given the intersection of these pathways, there is ample opportunity to target multiple factors. Due to the amount of tissue damage generated by ROS, inhibition of ROS through antioxidant delivery has garnered much interest and was the approach taken by Raptor Pharmaceuticals (NASDAQ:RPTP) (Figure 3).
Further, inhibitors against chemokine receptors like CCR2 or CCR5 are being developed by Tobira Pharmaceuticals (NASDAQ:TBRA), which may reduce the number of inflammatory cells that enter the liver and prevent fibrosis (Figure 8). Other approaches involve inhibiting liver cell death through blockade of caspase proteases, which catalyze cell death reactions, a strategy taken by Conatus Pharmaceuticals (NASDAQ:CNAT) (Figure 3).
Fibrosis occurs as NAFLD progresses into NASH and cirrhosis. Fibrosis typically arises from cellular recognition of cell death and tissue toxicity (Figure 8). Phagocytosis of dying liver cells stimulates a fibrogenic activation program. These signals of tissue damage activate resident cells and induce excessive deposition of extracellular matrix [ECM].
In particular, hepatic stellate cells [HSCs] wield pro-fibrogenic properties and contribute to scar tissue formation (Figure 8). When activated, these cells proliferate and transform into contractile myofibroblasts, while increasing production of ECM components like collagen-I, fibronectin, and proteoglycan (Figure 8).
ECM deposition is amplified further through production of tissue inhibitors of metalloproteinases [TIMP] and fibrogenic cytokines like TGF-β. Cross-linking of ECM elements such as collagen is stabilized and mediated by the enzyme LOXL2. Extracellular galectin-3 is another target in particular that mediates this phagocytic uptake and HSC activation by cross-linking of integrins on HSCs.
Figure 8. An Overview of Inflammation and Fibrosis Tobira Pharmaceuticals Corporate Presentation. June 2015.
Approaches That Target Fibrosis
Treating NASH effectively will require dampening of the fibrogenic program in the liver to prevent further fibrosis and liver damage. Some clinical strategies include inhibitors of galectin-3 (NASDAQ:GALT), LOXL2 or other ECM synthesis targets (Figure 3).
VI. IN BRIEF: Top Companies Currently in Phase III trials
Since no drugs are currently approved for NASH, plenty of opportunities exist for companies looking to enter this therapeutic space. ICPT appears to be the leader of the pack, buoyed by the positive results of the FLINT Phase 2b trial and recent positive results of POISE Phase 3 trial of OCA for primary biliary cirrhosis. A few articles have highlighted the potential cardiovascular risks associated with OCA (here and here).
Trailing behind ICPT, GNFTF also completed its Phase 2b trials. Some investors remain skeptical with GOLDEN-505 trial results. The company cited patient selection as one reason for the mixed results. By excluding patients with the mildest forms of the disease, the company claimed to show efficacy in patients with severe NASH.
In third place is NVO. The diabetes drug giant completed its LEAN trial testing liraglutide (Victoza), a GLP-1 analog, in overweight patients with biopsy-confirmed NASH. The study, while small, met its primary endpoint of NASH resolution and no worsening of fibrosis in 39% of patients treated with drug versus 9% of patients treated with placebo. Liraglutide has favorable safety profile.
NASH is a complex disease with an attractive and potentially lucrative market opportunity. Combination approaches may be most effective, but are in early stages in development. Thus, presently attractive approaches include those that address inflammation and fibrosis associated with NASH, preferably with minimal impact on key cellular and metabolic pathways. In this article, we have provided investors with the scientific and clinical background to understand NASH. We have also provided an overview of the competitive space to outline promising companies that may present investors with exciting investment opportunities.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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