Shares of NGM Biopharmaceuticals (NASDAQ:NGM) soared 20% on a down day for the market after the company reported positive results from a trial of its lead drug for non-alcoholic steatohepatitis (NASH), aldafermin. NGM is a clinical-stage biotech company that had its initial public offering in April.

The trial was the fourth cohort of a phase 2 placebo-controlled study, in which 53 patients with biopsy-confirmed NASH took alderfermin daily for 24 weeks. The results indicated success on multiple measures, meeting the primary endpoint of liver fat reduction as well as secondary and exploratory endpoints for liver histology and disease activity.

Image of a liver above hand of a physician.

Image source: Getty Images.

Alderfermin reduced liver fat content by an average of 39%, compared with 13% for the placebo group, with 66% of the treated group achieving greater than a 30% reduction versus 29% of patients receiving the placebo.

But perhaps even more significant were the results for measures that the U.S. Food and Drug Administration (FDA) has indicated will be important for winning accelerated approval of NASH drugs -- 38% of the patients on alderfermin had improvement in liver fibrosis with no worsening of NASH, compared with 18% on placebo. And 24% of patients taking the drug had resolution of NASH, meaning little or no liver inflammation or ballooning, without worsening of fibrosis, versus 9% of the placebo group. Better still, 22% of the trial subjects achieved both fibrosis improvement and NASH resolution, compared with none taking the placebo.

Although the trial was relatively small and NGM is still years away from potential approval of alderfermin, the results pointed to the possibility of its superiority to Ocaliva from Intercept Pharmaceuticals (NASDAQ:ICPT). Intercept is leading the race to bring a NASH drug to market, and expects a decision by the FDA on Ocaliva by June 26.