A Primer On NASH

Non-alcoholic steatohepatitis (NASH) is a type of non-alcoholic fatty liver disease (NAFLD), a condition in which fat builds up in a person's liver. As noted by the National Institute of Diabetes and Digestive and Kidney Diseases, there are no approved medicines to treat NAFLD and NASH.

In a research report on Thursday, Aaron Gal of Bernstein noted that the disease is still being defined, and as a field, NASH is "relatively immature." Accordingly, treatment for the disease is a focal point of several pharmaceutical companies with approximately 25 drugs in clinical stage development, including four that are undergoing or about to enter pivotal trials.

Gal added that he expects commercialization of therapies to be "highly challenging" for several reasons, including:

1. There are no "easy measures" of treatment effectiveness.
2. Treatment benefit for many patients is questionable.
3. Payments for the treatment is easy to manage if only by requiring periodic liver biopsy to demonstrate treatment effectiveness.

Gal further noted that he expects the success case for the treatment of NASH to be around $7 billion in global sales by 2025.

Company Commentary

1. Allergan plc Ordinary Shares (NYSE: AGN)'s CVC realized a "decent (not great)" profile in a phase 2 and isn't considered to be an important commercial asset until at least 2024.

2. Novo Nordisk A/S (ADR) (NYSE: NVO) GLP1 semaglutide is in a phase 2 trial and could be a second wave entrant in or around 2022. It remains to be seen if NASH will be core to Novo's focus on the metabolic syndrome.

3. Shire PLC (ADR) (NASDAQ: SHPG)'s anti-ABST Volixibat has yet to pass proof of concept in NASH, but it wouldn't be surprising if the company makes further acquisitions in the space.