INSIGHT-After hep C cure, companies target next big liver disease market

Last Updated: 2014-11-10

By Bill Berkrot

NEW YORK (Reuters) - Now that new medicines promise to cure millions of hepatitis C patients in coming years, drugmakers including Gilead Sciences Inc are turning their attention to other liver diseases, with a potential market that could rival the success of statins, which generated more than $30 billion a year in sales at their peak.

Several companies are working on treatments for hepatitis B, which can be controlled but not yet cured, and for fatty liver conditions caused by rising obesity, which without treatment could affect half of all Americans by 2030, according to the American Liver Foundation (ALF). Some of the drugs will address advanced fibrosis and cirrhosis, which are the scarring that virtually all liver diseases cause without effective treatments. Each of these drugs, once approved, could reach annual sales of as much as $10 billion, industry analysts said.

Most of the treatments are now in early Phase I or Phase II clinical trials, with more informative interim data on several expected over the course of the next year.

Gilead, which was first to market with its hepatitis C cure Sovaldi late last year and has been racking up about $3 billion in sales each quarter, is a solid bet to be among the leaders in the next wave of liver therapies, experts said.

"The Gilead program is encouraging," said Dr. Naga Chalasani, director of gastroenterology and hepatology at Indiana University Hospital in Indianapolis, who is participating in clinical trials of promising drugs from Gilead and others.

Drugmakers are working to address the fatty liver disease known as NASH, or nonalcoholic steatohepatitis. Without treatment, NASH can progress to liver-destroying cirrhosis and potentially cancer.

ALF estimates that non-alcoholic fatty liver disease, including NASH, affects up to 30% of people in the United States. It can be caused by bad diets and alcohol abuse, and has also been tied to diabetes.

"We have no treatment for that condition other than tell a patient they need to lose weight," said Dr. Mauricio Lisker-Melman, director of the hepatology program at Washington University School of Medicine in St Louis.

Intercept Pharmaceuticals has attracted the most attention. Just released final data from a mid-stage clinical trial showed its obeticholic acid halted NASH progression and improved liver scarring in primarily moderately ill patients. "For now, no one else has demonstrated an antifibrotic effect in this population, and I believe we are ahead of the pack in that sense," said Intercept Chief Executive Mark Pruzanski.

Intercept plans to begin a Phase III trial with at least 1,000 more seriously ill patients next year.

Dr. Scott Friedman, dean for therapeutic discovery at Mt. Sinai Hospital in New York, who has worked with virtually all the companies in the field, said most were first testing drugs in patients whose liver damage is not advanced.

"Gilead has sort of leapfrogged that," Friedman said, tackling more serious damage, as its simtuzumab targets fibrotic scarring directly, rather than inflammation or other drivers of disease. Reversing cirrhosis and improving liver function is "the highest bar I can think of in this business, and it would be spectacular," he said.

Gilead faces competition from several smaller companies with promising drugs in development, including Intercept, France's Genfit, Israel's Galmed, Galectin Therapeutics, Conatus Pharmaceuticals and Raptor Pharmaceuticals, specialists said.

Gilead's antibody simtuzumab blocks an enzyme called LOXL2 that is directly involved in laying down bands of collagen that form the scar tissue behind cirrhosis. The collagen bands, which result from a wide variety of assaults on the liver, including alcohol and drug abuse, cross link haphazardly to destroy the liver's architecture and function.

Gilead expects to have a strong indication of whether its drug is working when one-year data from a two-year Phase II study becomes available next year.

"We have a very active research program," said Mani Subramanian, head of liver disease clinical research at Gilead. "We're targeting everything: metabolic issues, inflammation and fibrosis directly." He acknowledged challenges faced by drugmakers trying to address more advanced liver disease: "It's been a graveyard for drugs that try to reverse fibrosis," Subramanian said.

NOT FOR FAINT OF HEART

Chalasani at Indiana University Hospital estimated there may be 20 different drugs being tried by various drug companies that seem to be good targets.

But betting on them is not for the faint of heart. Intercept's shares shot from about $72 to over $400 in a matter of days in January after it was announced the trial of its drug would meet the intended goal. On the flip side, Galectin lost nearly two thirds of its value in July, when its NASH drug using a different approach had a setback in a Phase I trial.

Conatus is first testing its drug, emricasan, in patients facing acute liver failure, which has a 50% mortality rate in 28 days. Chief Executive Steven Mento said the goal was to "rescue these patients and prevent catastrophic organ failure." The company plans to work its way back, testing on less severely ill patients. The drug targets inflammation and excessive cell death seen as drivers of the disease.

Dr. David Bernstein, chief of hepatology at North Shore University Hospital in Manhasset, N.Y., called the Conatus drug exciting and the initial trial a sensible approach.

"There's limited downside because there's nothing else that can be done anyway," said Bernstein, who expects to be involved in future emricasan trials. "If you can reverse cirrhosis, you really will change the impact of liver disease worldwide."

Drugs that succeed in reversing cirrhosis "can be as big a class as the class of statins," said Conatus's Mento, referring to cholesterol drugs, such as Pfizer's Lipitor, which alone at its peak had annual sales of about $13 billion.

Raptor, by contrast, is developing a drug for NASH in children, a growing problem that has left liver specialists fearing an obese generation that could require liver transplants in the prime of life.

Raptor is testing a drug already approved for use in children for an extremely rare kidney disease. "In terms of safety, it's well established," said Raptor President and CEO designate Julie Anne Smith. It is now engaged in a year-long mid-stage trial of 169 children whose NASH was confirmed by liver biopsy with data expected in the first half of next year.

Companies are waiting for the U.S. Food and Drug Administration to outline what it will take to approve a NASH drug. "The FDA is struggling with what constitutes a meaningful improvement with a patient," Gilead's Subramanian said.

Goals such as reducing fat buildup or modestly improving fibrosis would likely be simpler and quicker to achieve, for example, than avoiding need for liver transplants.

The FDA is working "to identify clinically meaningful endpoints for NASH and related liver diseases to help guide drug development," it said in a statement.

The uncertainty from the FDA also creates risks for investors and has led some analysts to focus on other liver therapies. RBC Capital Markets analyst Michael Yee favors companies taking on hepatitis B, such as Arrowhead Research Corp , Canada's Tekmira Pharmaceuticals, Gilead and Isis Pharmaceuticals in partnership with GlaxoSmithKline. And one private company not to be ignored, OnCore Biopharma, founded by former Pharmasset executives, including the inventor of Gilead's Sovaldi.

While finding a cure for hepatitis B will not be easy, trials would mirror those for hepatitis C, with a simple blood test yielding clear results in months rather than years.