WHAT COULD START WATCHING, IN 2016, AN INVESTOR WANTING TO SELECT A BIOTECH TARGETING THE NASH MARKET !!! (by Gery DIVRY) 

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An analytical approach is sometimes the only method to guide rational investment, but the study of a unknown subject is long and arduous. That is why you will find below some keys to understand at the beginning of 2016, the NASH disease treatment market, its environment and the potential of its actors.


The initial picture of the pathology

 

NASH is a complex disease that scientists are only beginning to understand the contours and whose definition changes with the advance of scientific knowledge.

It is the consequence of a metabolic disorder that finds its soil in fatty liver(NAFLD), a disease previously regarded to this day as benign, as reversible with a change in lifestyle.

But steatosis has become a so common disease that we can speak now of an epidemic. 

Its multiple causes, increasing obesity of the population and especially the increase in the consumption of hidden sugars, especially fructose, added so exaggerated by the food industry at all processed foods for 30 years. This massive increase in sugar consumption for 30 years is going to poison the population that is still little awareness of the consequences on his health, so that everywhere in the world, hepatologists, diabetologists, specialist in cardiovascular disease are sounding alarm.

Opposite them, the action of the sugar industry lobby, minimizing the impact of the effects of sugar on health, is comparable to that of the tobacco lobby 20 years ago .But the affected population is much larger, and poisoning is much more problematic, because the product is concealed in most foods without the consumer being aware. 

We must confront the reality, the industrialized world is facing a massive and insidious poisoning by sugar. We now note with amazement that more than a third of the North American population suffers from fatty liver disease with consequences that are only beginning to discover as NASH, which became the second indication for liver transplantation in the United States.

But contrary to what some people try to pretend for years, this is not the consumption of fat, which is the cause, but mainly sugar.

Faced with this outbreak, the medical community is disarmed, his only weapon now is to try to raise awareness to their patients about the need to change their lifestyle and lose weight, with the success that we know.

To date, There is no drug that can treat NASH, which affect about 10% of the North American population and is steadily increasing. So it is urgent to find treatments for patients awaiting a hypothetical awareness of the impact of industrial food on health by the population.


The Market

The market for the treatment of this pathology is estimated at $ 35 billion annually and is virgin of any treatment, so it is subject to many lusts.

The number of biotech having, to date, claimed to have initiated research on the action of their drugs in NASH is impressive. However, there is far from the Gap and few biotechs, having a chance to put a drug on the market before 2025 are actually in the race.

If we exhaustively list all the laboratories having made an announcement it seems difficult to separate the candidates up to the podium of the mass of candidates.

A first selection allows laboratories to distinguish the progress of their clinical studies as well as the target of their drug candidate. Indeed a large number of candidate drugs announced to treat NASH in fact handle only causes, steatosis or consequences, cirrhosis.

  • The Molecules targeting steatosis (NAFLD) does not really address the particular metabolic disorder of NASH but the soil or it prospers, thus they can have an indirect effect on NASH.
  • By cons, molecules that specifically target inflammation and cirrhosis handle only adverse consequences of NASH without affecting the disease and can not therefore claim to act directly on NASH
  • The molecules specifically targeting metabolic dysregulation that characterizes NASH are few, treating the disease, they regress or prevent the consequences such as fibrosis and cirrhosis.

According to the target of each of these drug candidates, the size of the relevant market is not the same.

  • - The market for advanced fibrosis or cirrhosis affects very advanced patients with a engaged vital prognosis, therefore, the cost of treatment is accepted higher, but the number of patients is reduced. The annual size of this market is estimated at about $ 12 billion, which should decrease if other treatments are effective.
  • - The market for steatosis (NAFLD) is vast but patients with virtually no symptoms or immediate risk, it is a chronic prevention market with a low cost of accepted treatment and this market is estimated at between 5 and 10 $ billion that will increase.
  • -       The NASH market limited to the disease will also be that of a chronic treatment, but with a high incidence of cardiovascular risk and non-invasive diagnostic system under development, it should be important with an annual cost of treatment accepted up to 10 times higher than that of NAFLD .. This market, which will increase is estimated between 25 and 30 billion $.

The progress of clinical studies varies greatly between preclinical study phases and Phases 3 being launched.

The table below gives us an insight in the early 2016

 

 

All this means that, at the beginning of 2016, only a few laboratories are eligible for success in this market in the coming 6 years:

GENFIT, INTERCEPT PHARMA, GALMED, Novo Nordisk, GILEAD  and TOBIRA


Among these laboratories, only one was able to demonstrate clinical efficacy on the reversion of NASH as defined by the FDA today:  GENFIT.

Under the current definition of reversion (as recently amended by the FDA), GENFIT, in its phase 2b study GOLDEN (270 patients), demonstrated for Elafibranor (at the novembre 2015 AASDLMeeting in San fransisco ), proved significant results on reversion of NASH on the overall studied population (NAS 3 included).


Another laboratory, INTERCEPT, demonstrated for the OCA, an action on the steatosis, inflammation and fibrosis in its very controversial phase 2b FLINT study (283 patients), without reaching a significant result, either in the old or in the new definition, in the reversion of NASH.

 But especially the OCA could not confirm any  effects on NASH and fibrosis in the Japanese Phase 2b study that followed, which casts doubt on the effectiveness of the molecule in NASH and fibrosis. Furthermore OCA has many side effects, with significant pruritus and particularly an increase in cholesterol, which seems unacceptable often associated with patients with cardiovascular risk

Novo Nordisk conducted a limited scope study in NASH (52 patients) with their injectable drug against diabetes, VICTOZA,  and got a very good result in the reversion of the NASH. However they decided to start in 2016 a new phase 2 on NASH with their new compound  GLP-01.. and abandon Victoza on NASH .. so it postpone the potetial arrival of a drug on this market.

 

Other laboratories (TOBIRA, GILEAD, and GALMED) have not finished their Phase 2b study, which limits the details identifying their effectiveness or safety, the phases 1 and 2a being less significant.

For example, the RAPTOR lab that was conducting a Phase 2b study on children after significant metabolic phase 2a results, did not reach the histological results, expected in phase 2b, and stopped its research in the NASH a few months ago.


Given all these factors, an investor who wants to bet on the success of one of these laboratories on a virgin market could ask himself the following questions:

Regarding the NovoNordisk decision to abandon VICTOZA on NASH.. the NovoNordisk items below should be removed

 

- What are the biotechs have shown significant clinical efficacy results in NASH:

  • GENFIT
  • INTERCEPT
  • Novonordisk ( not in the lead anymore)

 

- What are the biotechs have already demonstrated clinically significant reversal of NASH (with the old or new definition)?

  • GENFIT
  • Novonordisk ( not in the lead anymore)

 

- What are the biotechs with a drug candidate with little known side effects?

  • GENFIT
  • Novonordisk ( not in the lead anymore)
  • GALMED
  • GILEAD
  • TOBIRA

 

- To comply with the constraints of a chronic treatment, what are the biotech offering oral treatment (injections are not well accepted in the long term)?

  • GENFIT
  • INTERCEPT
  • GALMED
  • TOBIRA

 

What are the 3 biotech the most advanced in their clinical studies and therefore those most likely to quickly reach the market?

  • INTERCEPT
  • GENFIT
  • GALMED


What are the 3 cheapest biotech (with the lowest market capitalization) thus having the highest probability to evaluate significantly in the future?

  • GALMED
  • TOBIRA
  • GENFIT

 

And finally what are the biotechs grouping all of these criteria:

Anim-marguerite



Only one   GENFIT,  which, moreover, is likely to be the first on the market in 2019

So the first choice is GENFIT

The second could be GALMED but, with no histological results on NASH it is a risqued bet

The third could be NovoNordisk but they are not in the lead anymore !!!

The fourth could be Tobira .. with no histological results on cirrhosis  it is also a risqued bet and the targeted market is smaller.





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