Biotech stocks Akero Therapeutics and Altimmune, diverged Monday as Wall Street debated the outcome of a weight-loss drug study from Zealand Pharma and Boehringer Ingelheim in patients with a liver disease.
Zealand and BI tested a drug that, in part, impacts the GLP-1 receptor. These drugs are well-known for their weight-loss properties. Now companies are pivoting to other diseases with ties to obesity. In this disease — metabolic dysfunction-associated hepatitis, or MASH — patients experience a buildup of fatty tissue in the liver. This causes fibrosis and, eventually, cirrhosis.
After 48 weeks, 83% of patients given their drug, survodutide, had a statistically significant improvement in their condition, as measured by a biopsy. Just 18.2% of placebo patients improved.
The results suggest there's some room for weight-loss drugs to make a dent in MASH treatment, RBC Capital Markets analyst Brian Abrahams said in a report. But not all weight-loss drugs are equal. The BI and Zealand drug acts on the GLP-1 and glucagon receptors. Altimmune has a drug that uses the same mechanism and the biotech stock rocketed 23% to 11.32.
But Madrigal Pharmaceuticals, Akero and 89bio use drugs with different mechanisms. Madrigal stock fell 1.7% to 232.57. Akero shares toppled 5.7% to 23.90. 89bio shares yo-yoed and closed down 1.3% at 11.03.
Shares of Viking Therapeutics and Eli Lilly rose 2.8% and 0.3%, respectively.
Biotech Stocks Diverge On MASH Results
MASH is a tricky disease. To gain Food and Drug Administration approval, a drug must resolve MASH symptoms under a biopsy without leading to worsening fibrosis. Or, a drug can improve fibrosis by one stage, but can't lead to worse MASH symptoms.
The Zealand and BI drug appeared to score both goals. But that came with some caveats that could help rival biotech stocks.
William Blair analyst Andy Hsieh noted Zealand and BI measured improvement in fibrosis without taking into account the total MASH activity score.
It's also important to note that liver fibrosis is measured in four stages, with four being the worst. Zealand and BI enrolled patients with fibrosis stages one through three in their study Lilly is also testing its weight-loss drug in MASH patients. But Lilly enrolled a more severe population with fibrosis stages two and three, and its drug didn't show a statistically significant improvement in fibrosis.
Hsieh argued there is a mechanistic rationale for targeting GLP-1 and glucagon that could give Zealand and BI an edge over rivals, including Novo Nordisk. Novo's weight-loss drug, dubbed semaglutide, only targets the GLP-1 receptor. Drugs from Lilly and Viking target the GLP-1 and GIP receptors.
"Given that glucagon receptors are predominantly expressed in the liver, it stands to reason that survodutide could offer more profound clinical benefit relative to a mono-agonist, such a semaglutide," he said in a report focused on biotech stock Viking.
Not A 'Silver Bullet,' Says Analyst
There's still plenty of room to debate about the potential market grab for weight-loss drugs — also referred to as incretins — in MASH, Leerink Partners analyst Thomas Smith said in a report.
"While we believe the incretins will have utility in addressing some aspects of MASH along with the associated comorbidities, we also believe it is unlikely that these agents represent a 'silver bullet' or functional cure for MASH patients with advanced fibrosis," he said.
He expects the MASH market to provide "ample opportunity for multiple winners" among biotech stocks.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
