Biotech General Discussion

Tough week for some smid-cap NASH stocks

2/6/24 $LLY announced 📢

• positive Ph2 tirzepatide MASH (AKA NASH) data 

⇨  MASH resolution (74%) of Pts with no worsening of fibrosis at 52 wks 📸

Tirzepatide (wkly injectable GLP-1 & GIP dual agonist)

• Approved for T2D (Mounjaro) and obesity (Zepbound)

The big questions for NASH companies:

• Will GLP-1s reduce weight, treat T2D & resolve NASH too?

• As more and more pts go on GLP-1s for T2D and obesity, 

⇨ will there be much less need for a NASH-specific drug?

⇨ will $LLY and $NOVO dominate

⇨ or will there still be a big market for NASH drugs? 🤔

Tirzepatide NASH efficacy data is promising

• Stacks up well with competing NASH therapies

⇨ using either the ETNB comparison table 📸

⇨ or the AKRO comparison table 📸

No surprise that 

smid-cap NASH companies down ~15% this week

Unless they have a GLP-1/GIP in their pipeline

Are any of the Smid-Cap NASH companies a good buy now? 🤔

Let’s compare some of the top ones:

Ordered by Market cap and Enterprise value

$MDGL ($4B MC/$4B EV)

• Last 5 days (-15%)

• Resmetirom (THR-b) oral PDUFA NASH (3/14/24)

$VKTX ($2.5B/$2.1B)

• Last 5 days (+3%)

• 2809 (THR-b) oral Ph2 NASH (1H 24 readout)

• 2735 (GLP-1-GIP) injectable Ph2 obesity (1H 24 readout)

• 2735 (GLP-1/GIP) oral Ph1 obesity (1H 24 readout)

$AKRO ($989M/$402M)

• Last 5 days (-13%)

• Efruxifermin (FGF-21) injectable NASH Ph2B (Q1 24 readout)

$ETNB ($758M/$334M)

• Last 5 days (-15%)

• Pegozafermin (FGF-21) injectable NASH Ph3 (1H 24 initiation)

$TERN ($332M/$67M)

• Last 5 days (+5%)

• 501 (THR-b) oral Ph2b NASH (initiation 24)

• 601 (GLP-1/GIP) oral Ph1 obesity (2H 24 readout)

$IVA ($191M/$191M)

• Last 5 days (-5%)

• Lanifibranor (Pan-PPAR) injectable NASH Ph3 (1H 26 • readout) (Ph2 Q1 24 readout)

So...

Will the GLP-1s Kill smid-Cap NASH Stocks? 🤔

The NASH dash has been a roller coaster ride over the past decade. 🎢

& many have exited the NASH dash 

• $GILD (selonsertib), $ICPT (OCA), $GNFT (elafibranor), etc. 🪦

But, the smid-cap NASH stocks have been a persistent and resilient group

A number of them have focused on less sever liver diseases (e.g., PBC)

• ICPT - OCA

• GNFT elafibranor PDUFA 6/10/24

Or used their R&D engines to discover obesity candidates too ☝️

Nobody knows the future.

But many of these companies have sufficient cash

& likely will be around for some years to come

• Unless they get acquired 💡

Which of these is the best buy now?

************

What do top biopharma hedge funds think of the NASH smid-caps? 🤔

➤ We watch the top 36 biopharma hedge funds …

⇨ and make their data available on our web site

As of end of Q3 ’23 ...

NASH smid-caps were favorites of top biopharma hedge funds:

$MDGL

➤ 10 of 36 top biopharma funds held it (tied for 10th in consensus holdings)

$AKRO

➤ 9 of 36 (top 10 tied)

$ETNB

➤ 9 of 36 (top 10 tied)

$TERN

➤ 9 of 36 (top 10 tied)

$VKTX

➤ 7 of 36 (top 30 tied)

The exception is

$IVA

➤ None of the top 36 biopharma hedge funds held IVA at end of Q3 ‘23

************

Here are all 31 NASH companies in BPIQ company screener and their Q3 '23 hedge fund holdings. This data is based on information from 36 biopharma-focused hedge funds known to hold these companies. 👇

MDGL: 10 of 36

AKRO: 9 of 36

ETNB: 9 of 36

TERN: 9 of 36

CBAY: 7 of 36

VKTX: 7of 36

SGMT: 5 of 36

ARWR: 4 of 36

IONS: 4 of 36

ALGS: 3 of 36

IVA: 2 of 36

NGM: 2 of 36

ALT: 1 of 36

CHRS: 1 of 36

GLTO: 1 of 36

HEPA: 1 of 36

ICPT: 1 of 36

AXLA: 0 of 36

CORT: 0 of 36

CYDY: 0 of 36

ENLV: 0 of 36

ENTA: 0 of 36

GALT: 0 of 36

GNFT: 0 of 36

INMB: 0 of 36

LMNL: 0 of 36

LPCN: 0 of 36

MNOV: 0 of 36

MTCR: 0 of 36

ORMP: 0 of 36

ZEAL: 0 of 36

This article is not investment or legal advice.

Article History:

2/8/24 AV & EJV