NASH-focused Akero Therapeutics extends its runway by another year with Pfizer's help
Two years ago, Akero Therapeutics laid out what one analyst called the “best-in-class NASH data so far” in a field littered with trial failures and ambiguous readouts. Following those interim Phase II results, Akero embarked on a larger Phase II trial that is supposed to report out later this year.
But things weren’t looking up for the San Francisco-based biotech when it revealed in its Q1 earnings report that it had just a year and a half of cash left — not enough to push its drug into pivotal Phase III clinical trials that would support an FDA approval.
Enter Pfizer and Hercules Capital.
Pfizer will invest $25 million via its Breakthrough Growth Initiative to buy approximately 6.7% of Akero, and Pfizer’s VP of discovery & development Jeff Pfefferkorn will get a seat on Akero’s newly formed scientific advisory board. Alongside Pfizer, venture lending company Hercules will loan up to $100 million to Akero, with $10 million available immediately.
Jefferies analyst Michael Yee (who was also the one who deemed Akero best-in-class in 2020) called Pfizer’s investment “an incremental positive.” Yee noted that Pfizer’s previous Breakthrough Growth Initiative investments were in early-stage companies prior to key readouts:
But the focus, in our view, is PFE sees [potential] in AKRO and an opportunity to invest in a promising asset, help support and drive forward a potential important drug, and can watch and follow the data carefully as a passive investor with 7% stake.
That extra cash should be enough to keep Akero afloat until the third quarter of 2024, which is two years beyond its upcoming readout of its Phase II study, it said in a press release. In addition to finishing out its two Phase II trials, Akero will use the money to manufacture a drug-device combo and initiate a Phase III trial to test that combo.
The financing news caused Akero’s stock $AKRO to jump some 14% this morning to over $9, though it is still a far cry from its peak days at $37 following that first Phase II announcement.
Akero’s drug candidate for NASH — a disease in which fat builds up in the liver and causes inflammation and scarring — is an old Amgen drug known as efruxifermin. It mimics FGF21, a liver hormone that regulates sugar uptake. In the 2020 Phase II study, nearly half of patients who responded to the treatment and were biopsied saw their NASH resolve without their liver scarring worsening.
Pfizer itself has also been working toward a treatment for NASH, but with mixed results. In 2018, the pharma dropped a Phase I candidate that inhibits the fatty acid enzyme DGAT2. However, Pfizer is now testing a different DGAT2 inhibitor, ervogastat, in conjunction with clesacostat, an inhibitor of another key fatty acid enzyme, with results expected in 2024.