The market is suddenly abuzz about nonalcoholic steatohepatitis or NASH, a common but often “silent” liver disease. Interest in NASH has gone up with Allergan plc (AGN - Analyst Report) announcing a couple of deals targeting this disease area earlier this week. The company announced two back-to-back deals – one with clinical-stage biopharma company, Tobira, worth up to $1.695 billion and the other with privately-held biopharma company Akarna for an up-front payment of $50 million plus additional payments on the achievement of certain milestones. Both Tobira and Akarna are focused on developing treatments for NASH.
NASH Represents Significant Commercial Opportunity
NASH is an increasingly common, progressive form of fatty-liver disease which is becoming a significant and growing health issue given the rising obesity epidemic. Patients who have diabetes, high cholesterol or high triglycerides are often diagnosed with the disease, which is expected to become the leading cause of liver transplant and liver cancer. By 2020, NASH is expected to become the leading indication for liver transplant ahead of chronic hepatitis C and alcoholic liver disease.
With no treatments currently approved for this disease, the market opportunity is significant. Several companies are working on developing treatments for NASH – the market could be worth billions of dollars and many companies are hoping to cash in on this opportunity. According to a Newsweek article, analysts predict that the market for a NASH drug could reach $35 billion or more by 2025.
NASH Stocks in Focus
With Allergan willing to shell out as much as up to $1.695 billion for Tobira, the market is rife with speculation that more acquisition deals will be announced in this space. In such a scenario, it would make sense to focus on these 5 stocks that are working on bringing NASH treatments to market. All these stocks saw their share prices increase following the Allergan-Tobira announcement.
New-York based Intercept Pharmaceuticals, Inc. (ICPT - Analyst Report) is focused on the development and commercialization of novel therapeutics to treat non-viral, progressive liver diseases. While the Zacks Rank #3 (Hold) stock gained FDA approval for its first product Ocaliva (OCA, an FXR agonist) earlier this year for primary biliary cholangitis, the main potential for the product lies in NASH. Intercept has a broad and comprehensive plan for evaluating Ocaliva for NASH with a late-stage study ongoing. Ocaliva got breakthrough therapy designation for Ocaliva for the treatment of NASH with liver fibrosis in Jan 2015. Intercept’s shares are up 7.4% so far this week.
INTERCEPT PHARM Price and Consensus
San Diego, CA-based Conatus Pharmaceuticals Inc. (CNAT - Analyst Report) is another company focused on the development and commercialization of novel medicines to treat liver disease. The company’s lead pipeline candidate, emricasan (an orally active pan-caspase protease inhibitor), is in a phase IIb study in patients with NASH fibrosis. The Zacks Rank #3 stock has fast track status in the U.S. for emricasan for the treatment of NASH cirrhosis. The company has several studies planned covering different types of NASH patient populations. Conatus’ shares are up 25% so far this week.
CONATUS PHARMA Price and Consensus
Norcross, GA-based Galectin Therapeutics, Inc. (GALT - Snapshot Report) is a clinical-stage company focused on bringing new therapies for fibrotic disease and cancer to market. The company, which is targeting late-stage NASH, expects to report top-line data from a phase II study being conducted on its lead drug candidate, GR-MD-02, in NASH patients with advanced fibrosis (stage 3) by the end of this month. GR-MD-02, which targets galectin-3 protein, has fast track status in the U.S. for NASH with hepatic fibrosis. This Zacks Rank #2 (Buy) company’s shares are up 52.9% so far this week on the market buzz regarding NASH and takeover speculation.
GALECTIN THERAP Price and Consensus
Watertown, MA-based Enanta Pharmaceuticals, Inc. (ENTA - Snapshot Report) is looking to move its FXR agonist, EDP-305, into clinical studies this year. The Zacks Rank #3 biotech company saw its shares gaining almost 8% so far this week. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ENANTA PHARMA Price and Consensus
Israel-based Galmed Pharmaceuticals Ltd. (GLMD - Snapshot Report) , a clinical-stage company, is evaluating Aramchol in a phase IIb study in patients with NASH, who are overweight or obese, and who are pre-diabetic or type-II-diabetic. Aramchol also enjoys fast track status in the U.S. Shares of this Zacks Rank #3 stock are up 26.1% so far this week.
GALMED PHARMA Price and Consensus
And it’s not just small or mid-sized companies that are working on bringing NASH treatments to market -- big players like Gilead, Merck and AstraZeneca are some of the companies that have struck deals for adding NASH candidates to their pipeline. More deals are likely to follow given the lack of approved treatments and the prevalence of ~9 to15 million NASH patients in the U.S. of whom about 20% could develop cirrhosis.
Now See Our Private Investment Ideas
While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>