What happened

Shares of Akero Therapeutics (NASDAQ: AKRO), a clinical-stage biopharmaceutical company, are on the move after the company's lead candidate succeeded in a controlled clinical trial. Investors impressed with the results have pushed the stock 22% higher as of 1:36 p.m. EDT on Tuesday.

So what 

Non-alcoholic steatohepatitis (NASH) is a potentially fatal condition caused by inflammation of a fatty liver. Around a quarter of adults in the U.S. have livers with dangerously high fat levels and around a fifth of this group progress to NASH. Since there aren't any available treatment options, Akero's lead candidate could generate blockbuster sales if it continues to succeed. 

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Image source: Getty Images.

During a placebo-controlled dose-determination study with 80 NASH patients, every group treated with Akero Therapeutics' lead candidate AKR-001 showed significant improvements compared to the placebo group. Investors were especially encouraged by significant improvements among patients in the group receiving the lowest dose.

Now what

Akero's NASH candidate could be the first drug of its type to earn approval, but it's going to need clinical trial results from a lot more patients before it has enough evidence to support a new drug application.

Patients treated with AKR-001 had significantly less fat in their liver measured by MRI, and fewer signs of liver damage in their bloodstream after 12 weeks. Investigators are still taking liver biopsies from patients who achieved a 30% liver fat reduction or better, which the company intends to share in the second quarter.