Galmed stock jumps sky-high on mixed results for NASH drug
- Shares in Galmed Pharmaceuticals more than doubled in value Tuesday after the Israeli drugmaker unveiled mid-stage clinical results that the company says show the potential of its experimental liver disease drug aramchol.
- Treatment with a lower dose of Galmed's drug did lead to a greater reduction in liver fat versus placebo among patients with non-alcoholic steatohepatitis, or NASH. But the effect size narrowly cleared statistical significance and data showed a higher 600 mg dose missed the mark.
- Additionally, the drug's performance on several secondary measures, including resolution of NASH, was mixed. Investors seemed to lose some confidence Wednesday morning, sending shares in Galmed down by about 13%.
As rates of obesity grow, NASH has received more attention, with some dubbing the disease a "silent epidemic." Characterized by a buildup of fat in the liver that can lead to scarring and cirrhosis, NASH is thought to affect anywhere between 3% and 12% of U.S. adults.
No treatment is currently available, though, raising investors hopes that NASH could be a lucrative market for drugmakers.
That anticipation is leading to dizzying market swings for companies reporting clinical data. In May, for example, shares in Madrigal Pharmaceuticals leaped more than 120% on Phase 2 data. On the other side of the ledger, Galectin Therapeutics saw its stock plummet more than 43% when reporting its drug missed its goal in a mid-stage study last December.
Galmed is the most recent beneficiary of the market's NASH enthusiasm: the jump in share price yesterday added nearly $170 million to the biotech's market capitalization.
In its statement on the trial results, the company touted the effect of aramchol on resolving NASH without worsening of liver fibrosis — a secondary endpoint that Galmed says could serve as a regulatory approvable goal in subsequent study. About 17% of patients receiving a 600 mg dose of the drug met this measure, compared to 5% of those on placebo. That difference, though, yielded a statistical value above the threshold usually considered significant.
On another measure, fibrosis improvement with worsening of NASH, there was a positive trend but no statistical difference between the 600 mg dose and placebo.
Jefferies analyst Michael Yee, though, believes the results are encouraging for future study.
"Although the study formally missed stat[isitical] sig[nificance] on both regulatory endpoints (NASH resolution w/ no worsening of fibrosis and fibrosis w/ no worsening of NASH), the trial did show significant trends that could hit significance in a larger trial," Yee wrote in a June 12 note to investors.
Galmed plans to discuss with regulators plans for a pivotal study of aramchol. Based on the company's statement, the 600 mg dose would appear to be the favored regimen. Yet the data presented Tuesday showed the 600 mg dose had no statistical impact on the primary endpoint measuring liver fat levels.
"Aramchol 400mg is probably sufficient for fat reduction but, biologically, a higher dose is needed for achieving more stringent histological endpoints such as NASH resolution and fibrosis reversal," said Vlad Ratziu, a principal investigator of Galmed's study and hepatologist at the Sorbonne Université in France, in a statement from the company.
Despite optimism around NASH therapeutics, it will be a challenge to bring drugs to market. Disease progress is slow and symptomless, and is tied up with co-morbidities like heart disease, high cholesterol and diabetes where the need to treat is far more urgent. And pricing for such a prevalent chronic disease presents another hurdle.
Galmed's stock performance, though, suggests investors aren't too concerned about those considerations just yet.
Ned Pagliarulo contributed reporting to this article.
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