Akero Therapeutics could become a leader in non-alcoholic steatohepatitis (NASH) treatment, according to analysts at UBS who have initiated coverage on the stock with a ‘Buy’ rating.
NASH is an advanced form of non-alcoholic fatty liver disease characterized by inflammation and fibrosis of the liver that can progress to cirrhosis, liver failures, and liver cancer.
The UBS analysts noted that Akero’s FGF21 analog efruxifermin (EFX) will enter two Phase 3 trials for NASH in the second half of 2023 and topline data is expected to be released in the fourth quarter for its Phase 2b SYMMETRY trial in NASH cirrhosis.
“We think AKRO has a potential first-in-class FGF21 in NASH with F2/F3 fibrosis and NASH with cirrhosis (F4), and potential to have the highest efficacy across the NASH field more broadly,” they wrote.
Going into the 4Q data readout for the Phase 2b SYMMETRY trial, the analysts see an upside for the stock, noting that the bar is very low in cirrhosis given the severity of the disease and lack of treatment options.
“We think any statistically significant result in 4Q Phase 2b would be a major positive,” they wrote.
Impressive results could also lift other biotechnology firms working on FGF21 class therapeutics for NASH such as 89bio, the analysts believe.
“Although NASH cirrhosis has historically been a highly challenging area, with multiple failures in Phase 2 and Phase 3, we think FGF21s have one of the strongest mechanistic rationales and early clinical data bode well for potential success,” they wrote.
The analysts awarded the stock a US$83 price target, representing an upside of 76.9% from its share price at their time of writing of US$46.91.
They believe the stock could trade up 70% to 100% at about US$83 to US$100 per share should the results of the Phase 2b trial be positive. Should it miss, they see the stock shedding about 25% to 40% at US$30 to US$36.
Akero shares had added 4.2% at US$49.98 on Monday afternoon.
Contact the author at emily.jarvie@proactiveinvestors.com
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