By Josh Nathan-Kazis

Shares of Akero Therapeutics more than doubled in response to startlingly positive data on its liver drug efruxifermin, which the biotech said reversed liver scarring in patients with advanced cases of the condition known as MASH.

The data appeared to slam the door on the idea that the advent of the GLP-1 drugs from Eli Lilly and Novo Nordisk would eliminate demand for drugs specifically intended to treat MASH, or metabolic dysfunction-associated steatohepatitis.

Data from Lilly last year had shown that tirzepatide, the drug sold under the brand names Zepbound and Mounjaro, could be an effective treatment for MASH. That sent shares of companies working on MASH drugs tumbling, on the theory that Zepbound and Mounjaro would swallow the market.

The new results on Akero's efruxifermin, however, appear to be unprecedented. They point to a significant market opportunity.

Patients in the trial had compensated cirrhosis, meaning their livers were damaged but still functioning. The worry for such patients is that they will progress to decompensated cirrhosis, a deadly condition in which the liver stops working.

Compensated cirrhosis can be managed, but isn't generally considered reversible. In Akero's trial, however, 39% of patients treated with efruxifermin experienced a reversal of cirrhosis after 96 weeks, compared with 15% in a placebo group.

"We believe today's first-ever public report of reversal of cirrhosis due to MASH... sets EFX apart from other approved or investigational treatments in the MASH landscape as a compound with transformational potential," said Akero's CEO, Dr. Andrew Cheng, in a statement.

Akero shares were up 112% Monday morning to $55.40. Shares of a competitor, 89bio, were up 51%.

Though the trial was a relatively small Phase 2b study, Phase 3 trials of efruxifermin are under way.

The results appeared far stronger than analysts had anticipated. "This is a major breakthrough in a very severe MASH population and hits the bull case scenario for investors," Cantor Fitzgerald analyst Prakhar Agrawal wrote in a research note early Monday.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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January 27, 2025 10:57 ET (15:57 GMT)

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