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Intercept, Gilead, Pfizer And Genfit In NASH: Overview Of Q1 2019 Catalysts In Liver Therapeutics Investments

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Includes: CANF, CSTX, CWBR, DRRX, ENTA, GALT, GILD, GLMD, GNFTF, ICPT, IMRN, MDGL, MNOV, MTZPY, NGM, PFE, THTX
by: First Genesis Consulting
First Genesis Consulting
Long/short equity, Deep Value, Growth, biotech
Summary

Liver Therapy Forum weekly digest provides an overview on what’s happening in the NASH ecosystem in Q1/2019.

Due to the significant interest in liver therapeutics-focused investment opportunities, I highlight anticipated catalytic events that could increase or decrease stock value in Q1/2019.

Currently, over 30 drug candidates are in different phases of clinical trials for NASH.

This weekly newsletter provides news-related events with a focus on FDA, clinical trials and financials on stocks focused on the development of liver therapeutics.

Clinical Trials

NASH is a progressive chronic liver disease with many causal pathogenic factors. We have learnt from research that dysregulation of the glucose and lipid metabolic pathways could be associated with the development of NASH. Inflammation and activation of the apoptotic (i.e. cell death) machinery have both been reported to promote the development of NASH. NASH is often labeled a ‘silent disease’ because it is asymptomatic. Internally, the effects of NASH in the body is not a silent effect, with its pathogenic effects in the liver now being increasingly recognized: steatosis (i.e. fatty liver), inflammation, fibrosis and cirrhosis, all characteristic of NASH.

Regardless of the causal pathogenic factor(s), NASH is a 2-phase disease, early and late phase, with great unmet needs. In the absence of FDA-approved therapeutics, the prevalence of NAFLD, the precursor for NASH, and NASH are both expected to increase dramatically in the USA and globally in 2019 and beyond. Unfortunately, beginning 2020, NASH is expected to surpass HCV infection as the main cause of liver transplant. With over 30 drug candidates in clinical development for early phase or late phase NASH, a lot catalytic events are expected in Q1/2019 and beyond.

Top Line Data Readout

In Q1/2019, top line data readouts are expected from two Phase 3 anti-NASH drug candidates, selonsertib by Gilead (NASDAQ:GILD) and obeticholic acid by Intercept (NASDAQ:ICPT). Regardless of your investment preference, clinical history would be made in the NASH world. I also know some of you may agree with me that these are major catalytic events that could be a HUGE upside or downside for both companies. I have updated my thesis on these drug candidates in the liver therapy forum and would not discuss clinical expectations in this digest.

Top line data readout is also expected in Q1/2019 from Conatus (NASDAQ:CNAT). This small market cap biopharma may finally get to validate the clinical efficacy of its dual anti-apoptotic/anti-inflammatory anti-NASH drug candidate, emricasan, in Phase 2b NASH fibrosis (recently reviewed in Liver Therapy Forum). Given emricasan’s history of perceived clinical disappointments, a positive clinical outcome would definitely cause significant upside to the stock.

Theratechnologies (THERF) (and as TSX.TH on the Toronto stock exchange) is a relatively unknown stock that I recently reviewed on the Liver Therapy Forum. It could see significant upside in its valuation if its anti-NASH drug candidate, egrifta, produces a positive top line data readout in the NASH trial in HIV patients. Egrifta is a metabolism modulator containing tesamorelin, an analog of human growth hormone-releasing factor. Its preliminary data in HIV patients with NAFLD was very promising. Presently, Theratechnologies is the only biopharma that focuses on curbing NASH in the HIV population.

Other Phase 2 drug candidates with top line data readout and anticipated catalytic events in Q1/2019 are: Immuron (NASDAQ:IMRN) from Pediatric NAFLD Phase 2, Mitsubishi Tanabe Pharma (OTCPK:MTZPY) from NASH Phase 2b and MediciNova (NASDAQ:MNOV) from Phase 2a NASH. Can-Fite (NYSEMKT:CANF) could announce the clinical effects of its anti-NASH drug candidate, namodenoson, in advanced liver cancer Phase 2 studies.

Enrollment Completion (NASH Trial)

Enanta (NASDAQ:ENTA) is expected to complete enrollment for its Phase 2a NASH trial in Q1/2019. Its drug candidate, EDP-305, is a Farnesoid X receptor agonist (FXR). Notably, the most famous clinical FXR agonist is obeticholic acid by Intercept.

NAFLD & NASH Trial Completion

Pfizer (PFE) should complete its Phase 2a NAFLD and NASH trial on drug candidate, PF05221304, this quarter. Furthermore, an ongoing Phase 1b NAFLD trial on anti-NASH drug, PF06865571, should be completed in Q1/2019.

NASH Trial Initiation

I anticipate that Madrigal (NASDAQ:MDGL) and possibly Galmed (NASDAQ:GLMD) and Galectin (NASDAQ:GALT), could initiate their pivotal Phase 3 trials in Q1/2019. These are important catalytic events due to the clinical promise of their respective drug candidates in Phase 2b NASH trials.

FDA hold

CohBar (NASDAQ:CWBR) reported in a Q3/2018 financial update that they were working with the FDA to lift the clinical hold on its Phase 1 anti-obesity/NASH drug candidate, CB4211. Gemphire (NASDAQ:GEMP) has a partial hold on Gemcabene, its lead investigative drug candidate. Gemcabene cannot be used in clinical trials beyond 6 months until all required safety studies have been completed and approved by FDA.

Financials

Earnings

Gilead (GILD) is expected to announce its Q4/2018 earnings on February 4th, after hours. We expect an update on its NASH program.

All biopharmas focusing on liver therapeutics are expected to announce their respective dates for their earnings call for Q4/2018 very soon. Depending on what information is provided by the CEO and other clinical developments happening in the company, catalytic events could occur based on how it is received by investors and markets.

Stock Offerings

Genfit (OTCPK:GNFTF) has a registered share offering pending on the US stock exchange. It is expected to issue American Depositary Shares. One would expect this to be a positive catalytic event with its top line data readout on elafibranor in Phase 3 NASH due late Q4/2019.

Stock offerings are always associated with a negative catalytic event. It is expected that a positive clinical outcome from these imminent catalysts from other biopharmas highlighted in this digest could induce a stock offering(s) from biopharmas. Institutions may want to buy into the company which is a positive thing.

Strategic Alternatives: Gemphire (GEMP) is currently evaluating strategic alternatives for its drug asset. No time line is given. Depending on the outcome and expectation of investors, this could be an upside or downside catalytic event.

Pending IPO

These 2 biopharmas, NGM biopharmaceuticals (NGM) and Cirius Therapeutics (CSTX), all have pending IPOs that would be major upside catalytic events for their respective stocks. NGM282 has shown clinical promise in NASH.

Market Outlook

2019 has been designated the year of NASH. In 2019, one or all of Phase 3 drug candidates could make clinical history in achieving FDA-mandated clinical endpoint needed for conditional approval. NASH is a huge addressable market estimated at $32B. Obviously, all biopharma with an anti-NASH drug candidate is hoping to capture a sizeable share of the NASH market. The first drug to the market may not necessarily be the best.

An ideal drug candidate should demonstrate therapeutic efficacy with good safety and tolerability signals. There would be a market rally with Intercept but I expect it to be a temporary rally. With over 30 drug candidates in clinical trials for NASH, liver therapeutics investment opportunities could and would induce some investors into early retirement!

This weekly digest is offered to all subscribers of the Liver Therapy Forum to keep them updated on imminent catalytic events.

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.

Additional disclosure: As always, my articles are meant to facilitate your understanding. Readers are expected to form their own trading plan, do their own research and take responsibility for their own actions. Investing in common stock can result in partial or total loss of capital. Please implement due diligence and invest wisely.