- Intercept Pharmaceuticals and CymaBay Therapeutics are each banking their futures on a liver disease known as NASH. On Monday, the two biotechs saw just how different that bet can play out.
- Shares of Intercept rose around 10% on news that the Food and Drug Administration has agreed to review the company's main drug as a treatment for NASH, or nonalcoholic steatohepatitis. The agency granted Intercept's obeticholic acid priority review, meaning an approval decision is likely to come in the next six months versus the standard 10-month time frame it usually takes to evaluate New Drug Applications.
- CymaBay shares, meanwhile, lost about 75% of their value after the company announced it was halting all clinical studies of its drug, seladelpar, because of unexpected liver damage seen in a mid-stage NASH trial. The update is a "worst case scenario" for CymaBay, presenting "safety issues that are unlikely to be resolved in the near future," according to SVB Leerink analyst Pasha Sarraf.
Monday's announcements showcase Intercept's commanding lead in the race to the first-ever NASH drug. Obeticholic acid, which Intercept already markets as Ocaliva for another liver disease, could gain a NASH approval as early as spring 2020 — potentially putting it years ahead of rivals like Madrigal Pharmaceutical and GenFit, which have their own experimental therapies in late-stage testing.
Still, it's unclear how beneficial a first-mover advantage will be in NASH. Research suggests the disease can stem from different pathways, causing doctors to anticipate that a combination of drugs and lifestyle changes will be needed to treat most patients.
Being first-to-market would also task Intercept with navigating several big challenges. Currently, the most accepted way to diagnose NASH is a liver biopsy. The test is often painful and expensive, which can make it a tough sell to patients since they often don't notice any symptoms until the disease's more advanced stages.
Additionally, since diet and exercise can significantly improve fatty liver disease, the expectation is that insurance companies will be very sensitive to price and only cover NASH drugs for patients with the most severe liver damage — which is a fairly small slice of the total population, according to the limited data available.
While the NASH drug market may take shape slower than initially expected, Wall Street analysts continue to see it as a multibillion-dollar opportunity. And with CymaBay essentially sidelined, Intercept has one less competitor to worry about.
"We had not expected seladelpar to be as much of a threat in NASH ... though we believe today's news continues to highlight the many hurdles in the NASH space that — to this point — only [Intercept] has overcome," Brian Abrahams, an analyst at RBC Capital Markets, wrote in a Nov. 25 note to investors.
CymaBay said its decision to halt or discontinue all seladelpar studies was due to "atypical histological findings, including histology characterized as an interface hepatitis presentation, with or without biliary injury." The biotech didn't give many other details Monday morning, but plans to hold a conference call at 4:30 p.m.
"We are very disappointed in having to halt the development of seladelpar at this time but patient safety and care is paramount," CEO Sujal Shah said in a statement.
CymaBay's stock price significantly dropped this summer, when seladelpar missed the primary endpoint of a mid-stage NASH study. Following the most recent news, the company's share value is down roughly 83% year to date.