In the race to treat the fatty liver disease known as NASH, brought on by the modern obesity epidemic, much of the attention has focused on the U.S. But a new biotech company is looking at China.
Terns Pharma has raised $30 million from the Asian venture arm of Eli Lilly (NYSE: LLY) and said this morning it has bought three experimental NASH treatments for an undisclosed sum from Lilly. The tiny firm, with footholds in the San Francisco Bay Area and Shanghai, plans to start Chinese clinical trials for NASH next year. “We want to be the first in market,” says president and CEO Weidong Zhong.
In the U.S. and Europe, Terns is far behind several large, rich competitors. Bristol-Myers Squibb (NYSE: BMY), Intercept Pharmaceuticals (NASDAQ: ICPT), Gilead Sciences (NASDAQ: GILD), and others all have NASH treatments in Phase 2 or 3 studies. Intercept’s obeticholic acid (Ocaliva) is the furthest along, with Phase 3 data expected in 2019.
Zhong thinks Terns can get the jump on all of them in China, thanks to a slate of changes last year in the regulation of foreign drug companies. Terns wants to test combinations of drugs, which Zhong says will be the future of NASH treatment.
NASH stands for nonalcoholic steatohepatitis. Bad diet and sedentary lifestyle are the cause, and it is showing up with more frequency. There is no cure and plenty of medical and financial incentive to stem the tide. The later stages of the disease result in inflammation and scarring; NASH is now a major cause of liver transplants, and it can also lead to liver cancer. Zhong estimates that 3 percent of Chinese could have NASH. A 2014 report in the journal Hepatology showed NASH’s precursor, nonalcoholic fatty liver disease, or NAFLD, accounting for half of the country’s 300 million cases of liver disease. (Not all cases of NAFLD convert to NASH, however.)
All three drugs from Lilly hit NASH in different ways, and the firm is also working on two drugs in-house. “We want to bring forward five or six assets with different mechanisms of action in NASH and make sure we have multiple combinations,” says Zhong. Drugs fail frequently, however, and he acknowledges the need to keep hunting for more assets.
Gilead is pursuing a similar strategy in the U.S. It has collected three drugs and is testing combinations. Gilead is reporting Phase 2 results at a medical conference next week. Based on initial data, RBC Capital Markets analyst Brian Abrahams wrote in a research note that the results demonstrate “potential combinability” and no safety problems, but he emphasized that the small studies don’t provide “any definitive conclusions on how overall efficacy will stack up long-term.”