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With Low Expectations, Gilead’s Top NASH Drug Fails 1st Major Test

Xconomy San Francisco — 

Gilead Sciences (NASDAQ: GILD) said after market close Monday that its most advanced candidate to treat the fatty liver disease known as NASH failed the first of two Phase 3 trials.

NASH, or nonalcoholic steatohepatitis, is a quickly growing condition, thanks to the obesity epidemic. It causes liver inflammation and scarring, and when it progresses to liver failure, patients require a liver transplant. Thousands of transplants in the U.S. each year are due to NASH. There are no FDA-approved drugs for the condition.

The results, from the 877-patient trial dubbed STELLAR-4, showed that in the most severe cases of NASH—patients who already had progressed to liver cirrhosis—Gilead’s selonsertib made essentially no difference improving their fibrosis, or scarring, compared with placebo.

Selonsertib was riding low expectations, and analysts quickly noted this afternoon that they had already projected Gilead’s future would likely be without the drug. Gilead is due to report selonsertib results from a second Phase 3 trial later this year, STELLAR-3, in patients with less severe cases of NASH.

“It is always possible different biology and metabolism could enable success in F3 [less severe] patients, [but] we see it as unlikely,” wrote RBC Capital Markets analyst Brian Abrahams in a research note. “Additionally, even if STELLAR-3 were to read out successfully, we believe they might still need additional studies to support approval in the F3 population.”

Gilead shares were down more than 3 percent to $65.50 in after-hours trading.

The failure could spur Gilead to keep hunting for more NASH assets to stock its pipeline as it races other companies to provide the first NASH treatment. Intercept Pharmaceuticals (NASDAQ: ICPT) and Genfit (NASDAQ: GNFT) could report Phase 3 data this year.

Gilead and Allergan (NYSE: AGN) have each shelled out hundreds of millions of dollars to acquire NASH drug candidates. Last month, startup 89Bio acquired an experimental NASH drug from Teva Pharmaceutical (NYSE: TEVA), and Roche bought San Diego startup Jecure Therapeutics.

Others in the race include NGM Bio, Pfizer (NYSE: PFE), Bristol-Myers Squibb (NYSE: BMY), Viking Therapeutics (NASDAQ: VKTX), Madrigal Pharmaceuticals (NASDAQ: MDGL), and Akero Therapeutics.

Image of fatty liver cells by Nephron via Creative Commons.