Biopharmaceutical researchers at Viking Therapeutics (VKTX 1.42%) and Madrigal Pharmaceuticals (MDGL -6.32%) are developing therapies for nonalcoholic steatohepatitis (NASH) that boost thyroid hormone activity, and following data from Viking Therapeutics this morning, both companies have reported phase 2 trial results that suggest their drugs may prevent NASH from causing liver damage that results in patients needing a liver transplant. 

First, a little background

A liver disease caused by a high-calorie diet and sedentary lifestyle, NASH is quickly becoming the most common cause of liver transplant in developed countries.

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Typically, the liver contains less than 5% fat; however, in patients with NASH, storage of excess calories in the liver can result in levels that are much higher than that. Over time, cell damage caused by inflammation resulting from these high levels of fat can scar the liver, and if the scarring is significant enough, then liver function can become so impaired that the disease becomes life-threatening.

There aren't any existing medications approved for NASH, but the pay-off for those that successfully develop therapies addressing it is potentially huge. The NASH treatment market is expected to be worth up to $35 billion per year since high-calorie diets are becoming increasingly common globally.

First out of the gate

Madrigal Pharmaceuticals MGL-3196 and Viking Therapeutics' VK2809 are selective thyroid beta receptor agonists that boost thyroid activity to improve the metabolism and clearance of fat.

In December, Madrigal became the first of the two companies to report mid-stage trial data validating this approach.  In phase 2 trials, up to 75% of patients receiving MGL-3196 once daily saw a 30% or greater reduction in fat in the liver as measured by MRI-PDFF, a non-invasive imaging test, and across all MGL-3196 patients, the average reduction was 36.3%

Madrigal followed up its 12-week data with 36-week data in May that was similarly impressive. At the 36-week mark, the average reduction in liver fat was 37%. Importantly, 39% of patients who responded to MGL-3196 at the 12-week mark achieved NASH resolution, which prompted Madrigal's CEO, Paul Friedman, to speculate that "there is potential to resolve NASH in as little as 9 months in 30%-40% of patients receiving only MGL-3196."

Closing the gap

On Tuesday, Viking Therapeutics reported 12-week phase 2 data for VK2809 that was similarly compelling.

In VK2809's study, 90.9% of patients who received once-daily therapy saw a 30% or greater reduction in liver fat on MRI-PDFF imaging at 12 weeks, and 76.9% of patients who received once-every-other-day therapy saw a similar improvement in fat levels. Overall, the average reduction was 59.7%. 

Admittedly, it's bad science to compare separate trials because of differences in patient populations and trial design; nevertheless, VK2809's results seems to match favorably to MGL-3196's 12-week results. Based on VK2809's performance, Viking Therapeutics CEO Brian Lian said, "VK2809's effect on liver fat at 12 weeks appears to exceed all other oral agents currently in development for NASH, supporting our view that VK2809 has a best-in-class profile."

First-mover advantage

Madrigal's already designing a phase 3 confirmatory study for MGL-3196, and that study should begin soon. If phase 3 data is good, then MGL-3196 could beat Viking Therapeutics to FDA approval. 

However, neither of these companies may be the first to win an FDA OK in the indication. Gilead Sciences (GILD -2.56%) and Intercept (ICPT) are already conducting phase 3 trials of their respective NASH drugs, and each of them expects to report data that could lead to an FDA filing for approval in 2019. Gilead Sciences plans to report data for selonsertib, an apoptosis signal-regulating kinase 1 (ASK1) inhibitor that seeks to reduce ASK1 activity to curb liver inflammation and scarring, and Intercept plans to report data for Ocaliva, a semisynthetic bile acid analogue FXR agonist that's already FDA-approved for primary biliary cholangitis (PBC).

If Gilead Sciences and Intercept's trials succeed, then they could use their head starts to establish themselves in the market, but that won't necessarily mean MGL-3196 and VK2809 can't carve out meaningful revenue. Until a therapy is developed that provides a functional cure to most patients, it's likely that patient treatment will involve multiple approaches. Given the size of this market, that could mean there's room for all of these NASH drugs to succeed.