Gilead stock reversed lower Monday after confirming it's testing a popular weight-loss mechanism as a treatment for a liver disease.
On Friday, shares of Gilead Sciences shot up 2.4% after a poster published ahead of the American Diabetes Association annual meeting. The company said monkeys given Gilead's drug lost about 6.5% of their body weight over 36 days. The drug belongs to the GLP-1 drug class, which Novo Nordisk and Eli Lilly have popularized as diabetes and weight-loss drugs.
But, on Monday, Gilead said it's testing the drug as "part of our interest in NASH," Mizuho Securities analyst Salim Syed said in a note. NASH, or nonalcoholic steatohepatitis, occurs when fatty tissue causes scarring on the liver. It's also called MASH, or metabolic dysfunction-associated steatohepatitis.
"This isn't something we've been proactively discussing, but there was a poster at ADA," a Gilead spokeswoman told Investor's Business Daily.
On the stock market today, Gilead stock dipped 1.2% to 64.27.
Gilead Stock: Big Competition In MASH Treatment
The first treatment for MASH gained Food and Drug Administration approval in March. Madrigal Pharmaceuticals now sells that drug as Rezdiffra. But other companies are also working on treatments for the liver disease. That includes companies testing GLP-1 drugs.
Recently, researchers said more than half of patients who received Lilly's tirzepatide — which blocks the GLP-1 hormone and another called GIP — had their MASH symptoms resolved with no worsening in scar tissue called fibrosis. And 51% to 55% of patients across three doses had a one-stage improvement in fibrosis, out of five stages, while their MASH symptoms remained the same.
Gilead is looking into that market. The biotech company is already known for its efforts to tackle other liver diseases, including hepatitis B and hepatitis C. Gilead stock is under pressure, though, with shares below their key moving averages, according to MarketSurge.
Mizuho's Syed notes Gilead is running a midstage test of Novo's GLP-1 drug, semaglutide, with two of its own drugs as a potential treatment regimen for MASH. The companies expect to wrap that study in November.
He has a buy rating and 90 price target on Gilead stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
