Akero Therapeutics $AKRO, Efruxifermin trials, and why we think Gilead Sciences may be an acquirer

On Tuesday, $AKRO ( ▲ 1.28% ) ran up 24% on the rumor of them hiring an investment bank as they had been approached by an buyer.

Since the FDA recently approved the first drug for MASH ( $MDGL ( ▼ 1.4% ) ’s Rezdiffra), big pharmaceutical companies have become very interested in the area. Now, this is just a rumor and nothing has been confirmed yet but our team has had our eye on Akero ever since Martin Shkreli (Pharma Bro) tweeted this:

Shkreli has been on a biotech tear as of lately, he called Cassava Sciences $SAVA ( ▲ 3.42% ) failed phase 3 trials and Galactin Pharmaceuticals’ $GALT ( 0.0% ) 60% drop in an interesting paper I suggest reading before getting up to speed on Akero;

Company Overview;

Akero is a clinical-stage company that’s creating a drug pipeline to help patients with serious metabolic diseases. They primarily have a focus on metabolic dysfunction-associated steatohepatitis (MASH). Their lead product is a drug called Efruxifermin (EFX). Efruxifermin is similar in structure and function to a hormone humans have called fibroblast growth factor 21, a natural hormone that helps us to regulate energy homeostasis and metabolism. EFX is currently in a phase 3 clinical trial called SYNCHRONY, which is building upon the findings during phase 2b trials, where they saw statistically significant reversals of cirrhosis and fibrosis among patients. Phase 3 findings will be revealed in the first half of 2027. The findings they’ve found so far are leading management to believe that EFX has the potential to be approved.

Amgen is the original developer of EFX. They originally wanted the drug to target diabetes. Akero acquired the exclusive global development and commercialization rights to EFX from Amgen, taking over clinical development and shifting the drug's focus to MASH.

MASH:

Akero’s main focus is MASH;

Metabolic-dysfunction-associated steatohepatitis (MASH) is a form of fatty liver disease that occurs when the liver accumulates excess fat and leads to inflammation and liver damage. If MASH is left untreated, it can lead to more serious issues such as fibrosis and cirrhosis.

Clinical Trials Overview:

Akero has currently completed two Phase 2b trials, SYMMETRY and HARMONY. In SYMMETRY, they evaluated the efficacy and safety of EFX in patients with biopsy-confirmed compensated cirrhosis (liver has some scarring but still OK) and Child-Pugh Class A (mild liver disease), caused by MASH. So the patients still have a relatively preserved liver function, which is why Akero wants to see if EFX can reverse the damage that MASH is doing to the liver. This trial showed no statistical significance in improving the stages of fibrosis.

SYMMETRY:

At week 36/96, Akero saw no statistically significant results from this data set so far.

Week 96 results only included patients who had biopsies at baseline and week 96, n = 134. The results for this were strong, as 39% of patients treated with 50mg of EFX (n=46) experienced reversal of cirrhosis with no worsening of MASH, compared to only 15% in the placebo group (n=47); p=0.009. Looking at the intent to treat (results of all participants enrolled in the study), n=181, showed that 29% of patients taking 50mg of EFX (n=63) experienced a reversal of cirrhosis with no worsening of steatohepatitis, showing a significant p-value of 0.031. This is in comparison to only 12% for the placebo group (n=61).

GLP-1 (SYMMETRY):

Akero also saw results attributable to the EFX by patients who were not on GLP-1s (Wegovy, Ozempic), which can potentially improve liver-related complications. In a completer analysis of 97 patients who took 50mg EFX, Akero saw that 45% experienced a reversal of cirrhosis with no worsening of their MASH (p=0.009), compared to 17% (n=36) for the placebo group. This showed a big finding that the patient reversals weren’t attributable to GLP-1 therapies, which is a key investor concern.

HARMONY:

Akero ran another phase 2b trial evaluating the efficacy and safety of EFX in patients with pre-cirrhotic MASH and fibrosis stage 2 or 3. We will only review the 50mg EFX group. HARMONY met its primary endpoint of >=1 stage improvement (if someone had stage 3 fibrosis and improved to stage 2, that would count as >=1 stage improvement) with patients showing no worsening of MASH after 24 weeks of treatment. The 50mg EFX group showed that 41% of patients improved >=1 fibrosis stage and had no worsening of their MASH (p <0.001), compared to 20% for the placebo group. At the end of 96 weeks, the 50mg dose group saw major improvement, with 75% of the group seeing >=1 stage improvement with no worsening of MASH (p <0.001), compared to 24% for the placebo group. Notably, 36% of the 50mg group saw a 2-stage improvement (p=0.002), compared to the placebo group of 3%.

“Not withstanding inherent limitations in making cross-trial comparisons, the statistically significant results for ≥1- and 2-stage fibrosis improvement and no worsening of MASH observed for 50mg EFX at week 96 are the largest response rates reported publicly to date for these endpoints in any MASH population,” - Stephen Harrison, M.D.

“I believe the magnitude and general consistency of results observed across the Phase 2a BALANCED and Phase 2b HARMONY studies in patients with pre-cirrhotic MASH are reasons to be optimistic about results of the ongoing Phase 3 SYNCHRONY Histology study and the potential for EFX to be an important MASH medicine, if approved.” 

$AKRO is well-positioned in the market for late-stage liver disease treatment, CEO Andrew Cheng states, “So I think the idea that this could improve -- you asked earlier about 40% of fibrosis. Right now, the options are 0 for these patients outside of liver transplant.” Management vision seems to be in the right place, but investors are worried that this prime positioning can be disrupted due to the effects of GLP-1s on the MASH market. Some concerns are that cases of liver diseases that Akero is dealing with are caused by being overweight, a sedentary lifestyle, not genetics. MASH caused by genetics is rare. “The main drivers of MASLD are obesity and insulin resistance. Most genetic variants, despite their strong association with MASLD phenotype, are not sufficient to cause disease in the absence of these drivers” (Sookoian 1)

Why is the time now?

Last week, GSK ( $GSK ( ▲ 0.99% ) ) agreed to pay up to $2B to acquire privately held Boston Pharmaceuticals’ MASH candidate, Efimosfermin alfa. Under the agreement, GSK will pay $1.2 billion upfront, with potential for additional success-based milestone payments totaling $800 million. Efimosfermin is a phase III-ready, potential best-in-class, investigational specialty medicine to treat and prevent progression of steatotic liver disease. Efimosfermin is very similar to Efruxifermin as they both act as analogue’s for the hormone FGF21, and are designed to mimic and enhance activity for the treatment of metabolic diseases such as MASH.

GSK’s chief scientific officer, Tony Wood, stated “The FGF21 class has shown some of the most exciting data in MASH including first-in-disease evidence of cirrhosis reversal, and efimosfermin has the potential to define a new standard-of-care with its monthly dosing and tolerability profile,” Boston Pharma’s drug is very similar to Akero’s but has a monthly injection instead of a weekly injection. Both studies had very similar results as in Boston Pharma’s phase 2 trial, they saw statistically significant results in MASH resolution without any worsening of fibrosis. 68% of patients saw improvement (n=31), compared to placebo of 29% (n=34), p < 0.01. Looking at >=1 stage fibrosis improvement without any worsening of MASH, 45% of patients achieved >= 1 stage fibrosis improvement without any worsening of MASH (n=31) compared to 21% in the placebo group (n=34), p < 0.01. The duration of patients treatment was relatively short, giving GSK confidence going into phase 3 trials.

Madrigals ( $MDGL ( ▼ 1.4% ) ) Rezdiffra was the first drug for treatment of MASH to be approved by the FDA in March of 2024. In the first 12 months on market the drug generated $317 million, beating sales projections for 4 quarters in a row.

Why we think Gilead is a name pursuing Akero;

We think that Akero’s EFX, which is a lead asset of the company and for MASH, is crucial to fill the gaps for Gilead’s liver disease pipeline. Gilead has been a long pursuer in the liver disease-related sector. It has created a legacy through antiviral treatments and drugs for Hepatitis B and C. In the past decade, it has turned its attention towards metabolic and fibrotic liver diseases, MASH, and NASH.  Their current pipelines include Firsocostat, Selonsertib, and Cilofexor, all of which help reduce fat and target inflammation. They are also all in Phase 3 trials. Selonsertib didn't have the best results in their phase III testing and was a sharp blow, while the other two have shown better results. So far Akero has seen success in their clinical trials and we think this buyout rumor ties back to Gilead – whose NASH tests have shown limited success compared to EFX. That's why we think EFX and $AKRO offer a high upside in this buyout, with a regulated path and in an area of diseases with no approved treatments, it positions Gilead to lead a massive, undervalued market that directly addresses the root issues of MASH.

Gilead's legacy aligns closely with Akero’s leadership, as CEO Andrew Cheng spent 19 years at Gilead, most recently serving as Chief Medical Officer, while Chief Development Officer Kitty Yale spent 17 years there, most recently as Vice President.

As stated earlier this will be our first and only write-up in the biotech sector. It was great learning about everything but it’s not a game you can just step in to play.