Merck And Private Partner NGM Hope For Once-Monthly Dosing NASH Drug

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About: Merck & Co., Inc. (MRK), Includes: GNFT, ICPT
by: Terry Chrisomalis
Summary

Merck has been able to license a drug from NGM Bio, now known as MRK-3655, which can be used to treat patients with both Type 2 diabetes and NASH.

Preliminary results from phase 1b study showed that NAFLD patients treated with MRK-3655 achieved 30% relative fat reduction on day 23 and then 37% relative fat reduction on day 36.

NASH space has competition; one is Intercept, which is gearing up to file for FDA approval of Ocaliva and then interim results expected from Genfit end of 2019.

A monthly dosing available for NASH patients would be highly ideal, because there would be a possibility to avoid having to take pills every day as treatment.

Merck (NYSE:MRK) and its partner NGM Biopharmaceuticals hope to deliver on a potential treatment for non-alcoholic steatohepatitis and type 2 diabetes. This is what both companies showed when some preliminary data was released for a study using MK-3655 to treat patients with non-alcoholic fatty liver disease (NAFLD). There was a new updated data released from the study at the 79th Scientific Sessions of the American Diabetes Association (ADA). With promising preliminary data, it is expected that MK-3655 will be moved into a phase 2 study. The hope here lies not only to develop a new non-alcoholic steatohepatitis treatment but one that can be given to patients in monthly doses.

Preliminary Data Points To Adequate Improvements In Several Measures

The new preliminary data presented at the medical conference on Sunday, June 9, 2019, stemmed from a phase 1b study using MRK-3655 (formerly known as NGM313) to treat obese non-diabetic patients with NAFLD. Preliminary data showed that those treated with the drug achieved a statistically significant reduction in liver fat content. On top of that, there were improvements in multiple metabolic parameters. The newest data is pretty much consistent with what was shown before. However, there were several new pieces of data that were released in the poster presentation. A single dose of MRK-3655 was able to achieve several key findings. For instance, the drug was able to reduce HbA1c levels. That's a good thing because excessively high levels of HbA1c are associated with a higher risk of obtaining diabetes. Other noticeable measures were reductions in liver enzymes ALT and AST. Lower liver enzymes are what a patient wants as that means the liver is not severely impaired or damaged. Other reductions were:

  • A drop in bad cholesterol (LDL-C)
  • Reduction in triglycerides
  • Increase of good cholesterol (HDL-C)

These are all good parameters, but in the context of NAFLD, there were some significant findings on this front as well. As you may have seen in many other NAFLD trials, the ability for a drug to treat the disease is to determine the reduction of liver fat content. Treatment with MRK-3655 achieved a 30% relative fat reduction on day 23 and then a 37% relative fat reduction on day 36. The best part of all is that this treatment can possibly be dosed once a month. That would be a major advantage over many of the other NASH pharmaceutical companies. All this data is solid, because it shows that MRK-3655 can be used for both NASH and type 2 diabetes. Being that this drug is a monoclonal antibody, it was pretty safe and tolerable for patients to take. There were mild adverse events noted in the study. All common adverse events were increase in appetite and injection site reactions. Nothing major at all, in that there were no serious adverse events (SAEs) or no Grade 2/3/4 adverse events.

Competitors

Merck intends to advance a phase 2b study for NASH patients either with diabetes or without it. That is still being worked upon for the time being. The best part of all is that Merck was able to license MRK-3655 (formerly NGM313) from NGM Biopharmaceuticals. The thing is that Merck only needed to pay an upfront payment of $20 million. Once a phase 3 launches, NGM has the right to share up to 50% of the cost and revenue of the drug. If it doesn't take the option to do this, then it can choose to instead to retain additional commercial milestones and tiered royalties instead. There are a few competitors that are in front in the NASH space. These include Intercept Pharmaceuticals (ICPT) and Genfit (GNFT). Intercept recently reported positive phase 3 results where it met one of its co-primary endpoints, and it will be able to file for regulatory approval in the United States. Genfit is awaiting interim results from its phase 3 study expected to be read out by the end of 2019. If this study meets the primary endpoint, then Genfit will also be able to file for regulatory approval of its NASH drug thereafter also. The thing is that MRK-3655 is very early in the process of clinical trials. However, despite many biotechs being able to possibly obtain first-mover advantage, it will not matter. That's because most of these biotechs offer oral pills that must be taken every day. On the other hand, MRK-3655 acts as a single injectable drug which may potentially be developed to be given once a month. While many drugs get first mover advantage, Merck should not be worried at all, because it will have a major advantage if it reaches the market with regulatory approval. I'm pretty sure patients would be willing to forego daily pills every day and then be treated once every 30 days.

Conclusion

Merck did well to license NGM313, now known as MRK-3655. That's because it can be used to go after two large markets which are Type 2 diabetes and NASH, respectively. Most importantly, MRK-3655 may have a huge advantage if it ends up ultimately being approved. That's because the hope is to develop it for NASH using a once-a-month dosing schedule. That would allow patients to forego having to take daily pills to treat their NASH. The risk is that this program is still in the early stages of clinical testing. That means it could be years before it is even close to potentially achieving FDA approval. Even then, there is a risk that the FDA may not ultimately approve MRK-3655 for NASH. It highly depends on how well the clinical data is once a phase 3 study is completed. The good thing is that it can also be developed to treat patients with type 2 diabetes. This gives another shot on goal as well, which reduces the risk of MRK-3655.

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.