NASH market holds enormous untapped potential: GlobalData

The prevalence of nonalcoholic steatohepatitis (NASH), a more advanced stage of nonalcoholic fatty liver disease (NAFLD), continues to increase. Following the receipt of a complete response letter (CRL) from the FDA for its farnesoid X receptor (FXR) agonist, obeticholic acid (OCA), in NASH, Intercept Pharmaceuticals has joined the list of companies who have failed to be the first to enter the NASH market. With no FDA-approved therapies, the NASH market holds enormous untapped potential, says GlobalData.

Currently, Madrigal’s resmetirom (selective thyroid hormone receptor-β agonist; THR-Beta agonist) will most likely be the first drug candidate approved for NASH in both the US and EU.

Sravani Meka, Senior Immunology Analyst at GlobalData, comments, “The lack of FDA-approved therapies coupled with the emergence of research highlighting the benefits of combination treatments has continued to attract several big pharmaceutical and biotech companies (e.g., as Gilead Sciences, Novo Nordisk, Eli Lilly, and AstraZeneca) to try their hand in developing a successful asset for NASH.”

Even though the NASH market remains a lucrative one based on its increasing prevalence and need for approved therapies, deals activity from 2018-2022 reveals a different level of sentiment and one that represents a modest outlook. Figure 1 provides an overview of completed mergers and acquisitions (M&A) and strategic alliance deal activity for NASH, as well as venture financing activity for NASH in the 7MM (US, France, Germany, Italy, Spain, UK, and Japan).

Sravani continues, “While most assets have suffered the same fate as Intercept’s OCA, these attempts have fuelled a certain degree of M&A and strategic alliance deal activity between 2018 and 2022. However, as seen in Figure 1, M&A and strategic alliance deal activity remained relatively flat during that period, potentially due to the high proportion of agents in the early stages of development.”

On a slightly diminishing note, it appears that venture financing deals have been decreasing, most likely due to current macroeconomic environment factors such as the impact of the COVID-19 pandemic, increasing inflation, and the high cost of capital.

Figure 2 shows that only five per cent (4) of the total number of NASH pipeline assets (84) are in Phase III development, with slightly more than 50 per cent of these assets in the discovery, preclinical, and Phase I stages of development.

To increase their chance of success in the NASH market, established companies may look to develop combination therapies to target multiple stages of NASH progression to develop a successful treatment. Notably, Novo Nordisk is currently developing its glucagon-like peptide-1 receptor agonist (GLP-1RA), semaglutide as a monotherapy for patients with stage F2/F3 NASH (NCT04822181) while exploring semaglutide and cilofexor+firsocostat as a combination therapy for patients with stage F4 NASH with cirrhosis (NCT04971785) in partnership with Gilead Sciences.

Sravani concludes, “With the slow recovery of the pharma/biotech markets, in addition to the increasing therapeutic potential of combination treatments, it is possible that investments in the pharma/biotech space may continue to see a flat growth rate in the short term. However, it is anticipated that the trend might be reversed with ongoing developments within the NASH pipeline landscape. As the market becomes more saturated, and companies are able to capitalise on clinical trial data, it is likely that late stage partnering activity will begin to rise.”