Biotech Values

[Mufaso]

NASH- That twitter thread that covers several important subjects. I respectfully disagree with the twitter thread conclusions. I am confident the NASH market will materialize; payers will cover NASH (along with weight loss) and the FDA will come around to accepting non-invasive testing for NASH eventually. (Note- while tempted, I refrained from using sarcasm in referring to the FDA’s assessment motivations or time horizon).

Invasive testing of NASH- Non-invasive cost-effective testing will no doubt be an important aspect of getting payers to pony up. MRE (Magnetic Resonance Elastomy) holds the most promise. Here is a study from 2021 showing MRE has an AUROC of 0.87 which was equivalent to the “gold standard” of biopsy which also has a AUROC of 0.87:

https://www.resoundant.com/single-post/study-mre-has-0-87-auroc-for-diagnosing-nash
https://onlinelibrary.wiley.com/doi/abs/10.1002/jmri.27549

Here is a quote from the second link:

The agreement between automated measurements and the more experienced reader (R2 = 0.87 for stiffness and R2 = 0.99 for proton density fat fraction [PDFF]) was slightly better than the agreement between readers (R2 = 0.85 and 0.98). The model for predicting biopsy-diagnosed NASH had an AUROC of 0.87. The NAS-prediction model had a C-statistic of 0.85.

As a side note, research into improved biomarkers is also being done and together with improved diagnostic testing will improve confidence.

FDA Acceptance of Non-invasive tests- Eventually I think they will relax the requirement for biopsy some and have to some degree already. (still will require biopsy to prove drug works in some - not all ph2/3 studies.) Currently the Madrigal MAESTRO OUTCOMES trial is using non-invasive means to assess liver fibrosis. They will

use reductions in liver stiffness as determined by MRE and Fibroscan TE (a surrogate for liver fibrosis)

https://www.madrigalpharma.com/our-programs/resmetirom/clinical-trials/

NASH/Diabetes/ Weight Loss high overlap – Yes, a large percentage of NASH patients are obese and also have Diabetes (70% of T2 Diabetics are thought to have NAFLD and 20% of those with NAFLD are thought to eventually have NASH). These indications are often interrelated and getting T2D/weight under control is thought to improve the prognosis in NASH. NASH drugs have already been studied in concert with GLP1 agonists and some trials are currently ongoing/in planning. Combinational therapy will likely become the standard of care. As a point of note- the twitter thread incorrectly states all these drugs are are all injectables and they are not. For example, the Madrigal and VKTX Nash drugs are both oral; Rybelsus is an oral GLP1 used for T2 Diabetes which just so happens to have a side effect of weight loss. (VKTX will be uniquely positioned if the oral version of their dual GLP1/GIP agonist shows efficacy later this year as they alone would be positioned to run trials with their own in-house compounds.)

Summary- I think:

• the market will eventually materialize as NASH is a real disease (else there wouldn’t be so many attempts at providing a solution.)
  
• Madrigal and others (ENTB? Pfizer?) will blaze the payer trail and this is something late entrants (VKTX?) likely will benefit from.
  
• Non-invasive testing will continue to improve, be accepted by both the FDA and payers. Costs will come and payers will be assured real diseases are being treated only when necessary.