Akero Therapeutics, Inc. (AKRO) Earnings Call Transcript & Summary

Good morning, and welcome to the conference. Akero Therapeutics reports 12-week efficacy end points for Phase IIa BALANCED study of AKR-001. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Bill White, Chief Financial Officer. Please go ahead.

Thank you, and good morning. With me on the call are Andrew Cheng, President and CEO of Akero; Kitty Yale, Chief Development Officer; and Tim Rolph, Chief Scientific Officer. Today, we will be sharing results from the planned 12-week analysis of our ongoing BALANCED Phase IIa clinical trial of AKR-001 for the treatment of NASH. Before we begin, I'd like to remind you that various statements that we may make during this call will include forward-looking statements as defined under applicable securities laws. Forward-looking statements include those regarding implications of this analysis of the BALANCED trial, our future plans, prospects and strategy, the potential impact of COVID-19, financial goals and guidance, product attributes and pipeline, drivers of growth and other statements that are not historical fact. Management's assumptions, expectations and opinions reflected in these forward-looking statements are subject to risks and uncertainties that may cause actual results and/or performance to differ materially from any future results, performance or achievements discussed in or implied by such forward-looking statements. And the company can give no assurance it will prove to be correct and will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. Please refer to the press release we issued today and risk factors included in the company's filings with the Securities and Exchange Commission for a discussion of important factors that may cause actual events or results to differ materially from those contained in our forward-looking statements. Prior to this call, we issued a press release, which is available on our website at akerotx.com under Press Releases in the Investor Relations section. We also posted a presentation, which we will reference during our remarks. This presentation is also available on our website under Events & Presentations in the Investor Relations section of our website. I will now turn the call over to Andrew Cheng, Akero's President and CEO.

Thank you, Bill, and thanks to all who've dialed in or are listening to this call via webcast. As most of you know, NASH represents a growing health challenge. There are no currently approved FDA therapies available. Akero was founded to develop AKR-001, an engineered analog of the endogenous hormone, FGF21, for the treatment of NASH. Today, we announced encouraging results from the ongoing BALANCED study of AKR-001 in NASH patients. On Slide 3, we summarize key results. AKR-001 met each of the week 12 efficacy end points with high degrees of statistical significance. Each of the 3 AKR-001 dose groups met the primary end point with absolute reduction in liver fat of -- in between 12% and 14%. Statistically significant relative reduction in liver fat were also observed for all 3 AKR-001 dose groups, with the 2 highest dose groups, 50 and 70 milligrams, achieving more than 70% relative reduction in liver fat. A total of 50 patients met the definition of responder, that is achieving at least a 30% relative reduction in liver fat at week 12 and are, therefore, eligible for end-of-study biopsies. We expect to report biopsy results in the second quarter of this year. It's important to understand that this trial is ongoing and will remain blinded through completion of the study. We, therefore, plan to report the overall safety and tolerability results, together with histology and other secondary and exploratory end points in the second quarter. Although the blinded safety data is available in the second quarter, the tolerability profile observed for all BALANCED study participants appears generally consistent with data from the previous AKR-001 clinical trials in patients with type 2 diabetes. The adverse events observed most frequently in prior trials were mild to moderate gastrointestinal events and injection site reactions. Turning to the week 12 efficacy end point results, I'd like to review the design of the main BALANCED study, which is illustrated on Slide 4. The study was a randomized, double-blind, placebo-controlled study. All patients had biopsy-confirmed NASH, F1, 2 and 3, and a NAFLD score of at least 4 and a baseline liver fat of at least 10% on MRI-PDFF during the screening period. The study enrolled 80 patients with 20 patients in each treatment group. Patients were randomized to receive once-weekly subcutaneous doses of either 28, 50 or 70 milligrams of AKR-001 or placebo for 16 weeks. The primary end point was analyzed at week 12, but patients remained on treatment for 4 additional weeks until week 16, with a final safety follow-up scheduled for week 20. At week 12, patients who achieved at least a 30% reduction in liver fat are considered responders and are eligible for end-of-study liver biopsy. The study will remain blinded at the individual patient level until the completion of all end-of-study safety follow-up visits and biopsy analyses. Today, we reported several secondary end points in addition to the primary end point. These include relative reduction in liver fat, the proportion of patients who are responders and change from baseline in ALT. We expect to report overall safety and tolerability results together with histology in the second quarter. On Slide 5, we review baseline demographics, which are consistent with what has been reported in other NASH clinical trials and are generally representative of the NASH population. Mean age of participants was between 50 and 53 across the dose groups. The mean liver fat content at the beginning of the study range from about 18% to 21%, and roughly 62% to 65% of the patients in each cohort were fibrosis stage F2 or F3. At the bottom of Slide 5, we define the full analysis set which refers to all patients who were randomized into the study. All of the analyses reported today use the full analysis set at the data source. Slide 6 presents the results for the primary end point of absolute mean change from baseline and liver fat. Each of the 28-, 50- and 70-milligram AKR-001 dose groups met the primary end point compared to placebo, with absolute reductions of 12%, 13% and 14% of liver fat, respectively, compared with placebo, which demonstrated 0.3%. These results were highly statistically significant for each of the AKR-001 dosing groups, with a p-value less than 0.001. On the right-hand side of Slide 6, we report results for the exploratory end point of the proportion of patients who normalized their liver fat, which is defined as less than 5% of absolute liver fat at week 12. Here, we see a numerical trend for the 28-, 50- and 70-milligram AKR-001 dose groups, respectively, with 21%, 45% and 50% compared to 5% for placebo. On the right-hand side of Slide 7, we report the key secondary end point of proportion of responders in each group. We're pleased to report that response rates of 84%, 85% and 75% of all patients randomized into the 28-, 50- and 70-milligram dose groups, respectively, versus 10% for placebo. At the bottom of Slide 7, we summarized the total possible number of end-of-study biopsies. Across all dose groups, there are a total of 50 biopsy-eligible patients based on the week 12 measure of relative reduction of liver fat. As mentioned, 25 of these biopsies have been collected as of March 30, 2020. The extent to which the COVID-19 pandemic will interfere with collection of data from remaining clinical visits, including off-treatment biopsies, is unclear. We report results for reduction in ALT levels on Slide 8. At week 12, we observed highly significant reductions in ALT among patients treated with AKR-001. Specifically, we saw a mean reduction in ALT of 24 units for the 28-milligram dose, 30 units for the 50-milligram dose and 32 units for the 70-milligram dose. In comparison, there is a mean 6-unit reduction for placebo patients. As highlighted by Rohit Loomba in a 2019 gastroenterology article on the Phase II FLINT data, a decrease in ALT of at least 17 units per liter was identified as a predictor of histologic response in the patient population studied in that trial. Turning to Slide 9. In conclusion, we're extremely encouraged by the data we have generated thus far for AKR-001. We believe these data support continued development of AKR-001 as a potential cornerstone treatment for NASH. Each of the 3 dose groups met the primary end point with highly significant mean absolute reductions of 12%, 13% or 14%. In addition, highly significant relative reductions in liver fat were observed for each of the dose groups as well. These robust reductions in liver fat resulted in a higher response rate among all 3 dose groups. As a result, a total of 50 patients are eligible for end-of-study biopsies. Finally, it's important to emphasize that the study remains blinded through the end of the trial, and therefore, we're limited at what we can share with you today. Nonetheless, we can report that the tolerability profile of AKR-001 seen thus far in the BALANCED study is generally consistent with previous trials of the compound in type 2 diabetes patients. We will be working closely with FDA to identify the most expeditious path forward for AKR-001 so that patients who are living with NASH can have a new option to manage this chronic condition. I'd now like to turn the call over to the operator for question and answer.

[Operator Instructions] And today's first question comes from Michael Yee at Jefferies.

Congrats, Andrew, on some great data. Pretty remarkable, but still more to come. 2 questions. One is, maybe you could comment on trying to interpret MRI-PDFF data translating to fibrosis data. On one hand, you mentioned FLINT. On the other hand, maybe there's NGM data as well, but that's FGF19, not FGF21. Maybe talk about your confidence in read-throughs to other FGF19s, for example, and how important the FGFR4 receptor is. So first question is just trying to correlate PDFF data to fibrosis. And then second question, I must ask on COVID-19, how you're thinking about scheduling biopsies for that next 25 patients, logistics and confidence that that will be okay, and there's no delays there.

Thank you, Mike. So you have 2 questions. So why don't we just deal with the second one? First, on COVID-19, as you're aware, this is a moving target. So I think we're doing our best to target all of these patients to get them in for their eligible biopsy. At the same time, as the situation is emerging day to day, it's difficult to predict when a state might go down on shutdown or they may prohibit other procedures. So I think we're working at it, but it's difficult to predict with a high degree of accuracy how many of those we'll get. In terms of the MRI-PDFF to fibrosis, I think that's a very active topic in the field. You've seen some things read through very well in some data sets, but others perhaps looking at the recent CymaBay data set where things are less clear where fibrosis was not as well correlated with MRI. So that being said, as you pointed out, the NGM data did have roughly a 40% reduction in liver fat in the most recent data set, and they showed nice 1 stage improvement in fibrosis. So as we work through the FGF receptors as well, although we don't target FGF receptor 4, as you point out, we're eerily awaiting the results of these biopsies.

And our next question comes from Eric Joseph with JPMorgan.

Let me also add my congrats here on some pretty strong, encouraging -- pretty strong preliminary data here on fat fraction. I guess the 2 questions I would have are whether you are -- you have certainly looked at -- I guess, how frequently you were assessing for fat fraction reduction and ALT as well, whether you have a sense of the declining trend with time, whether you would -- whether there's a sense of kind of plateauing here at 12 weeks or whether you anticipate sort of further reduction had patients been treated longer? And on -- and just to sort of qualify the outlook when it comes to biopsies here. Of those 50 eligible patients for biopsy, have any of them, so far, I guess, lapsed the window for a paired biopsy as a result of COVID by not being able to comment for the 20- to 24-week assessment?

Yes, I understand. So the answer is, yes, we've had a few patients who fall in that category, but as we pointed out, we're already 50% of the way there. And we're hopeful that we can minimize the amount of patients we lose as a result of the pandemic. But again, those are best intentions, and the pandemic is changing very rapidly. So I think we have to be cautious on the rest of those overall as it's difficult to predict the trajectory of the pandemic. You asked about ALT pathway. So -- and how frequently we looked at MRI. So just for clarity, MRI was assessed at baseline, week 6, week 12 and then near the end of the study, for patients who had a paired biopsy. So there are really 4 assessments overall. And for ALT, those were assessed pretty regularly in, I think, roughly 4-week intervals. So we have quite a bit of ALT data. We haven't analyzed the trajectory yet, so I can't comment to that. But we'll certainly have that in Q2.

And our next question comes from Yasmeen Rahimi at ROTH Capital.

Congrats on a phenomenal data. I'm incredibly happy for you. Very well done. 2 questions for you. The first question is, can you kind of comment on a little bit to the extent you can on the granular details on the adverse event? Did you specifically observe any tremors, bone density, fat, blood pressure changes? And then the second question is, can you share with us whether the lipid data that we saw in the type 2 diabetic study was an alignment in BALANCED? And specifically, zooming in on the phenomenal triglyceride lowering effect that we saw in the earlier diabetes study.

Thank you, Yas. So your question is really focused mostly on safety. And in terms of what those look like, we really haven't unblinded the trial at the dose level. So we can't really address how that looks. We actually don't have any safety outputs to date. But as mentioned earlier, we'll have a better idea of how those look by Q2. So I look forward to receiving this question again in a couple of weeks or a couple of months.

And then in regards to the lipid data, I guess, we don't have any color in that regard either whether it's in alignment?

Yes, we haven't broken that down through week 16 either. So we're waiting to do that. And once we have more clarity, we're looking forward to sharing that with you.

And then Andrew, is it fair to say that if there was a signal such as tremors or blood pressure increases, that those would be flagged and would have been reported by the data safety monitoring committee?

So we have had a data safety monitoring board meeting during the trial, and they've looked at the data and they felt very comfortable with the trial proceeding in its current fashion.

And our next question comes from Edward Nash at Canaccord Genuity.

This is Adam Fisher on for Edward this morning. The data looks very good and very strong. And I also like your new website layout as well. Just one question here. What are your thoughts on moving forward with the 50-milligram dose given the numerically greater number of patients attaining a greater-than-30% reduction in liver fat?

Yes. Thanks, Adam. So overall, we're very happy with the doses. You're right to point out that when we look at the relative reduction in terms of the proportions who are responders, there's not a lot of difference between the groups. Keep in mind that this is a small trial, and so I think as we move forward into the next steps, we're very cognizant of the benefits of a relatively flat response. So we're excited to consider the 50-milligram dose. But overall, we haven't seen the totality of the data. So I think once we have all the safety data as well as the biopsy results, that will give us more color as to which doses to select going forward.

That's great. Great job today.

Thank you.

We have time for one final question, and that comes from Ed Arce at H.C. Wainright.

And let me also add my congratulations on a really strong data set here in the preliminary assessment. So just a couple of questions for me. First, if you have it, the proportion of patients that experienced a 5%-or-greater absolute liver fat reduction. And also the relative reduction in liver fat in the placebo arm was 0%. It strikes me as somewhat unusually low. Perhaps you could comment on that as well.

Thanks. So Ed, you had 2 questions, so I'll do the placebo first. We were very pleased that placebo response was where it was. I think some other recent trials have had high placebo response rates and have had investigators and the company sort of perplexed, so our placebo was what we'd hope to do. So I think on that, I don't have a good color as to why the others didn't do this, but I think we're very happy with where we netted out on the placebo response. In terms of the proportion that have greater than 5% response, I don't have that today. So it's something that perhaps at an upcoming scientific meeting, that we'll be able to share that.

And this concludes our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks.

We thank all the participants on today's call, and we look forward to sharing more data with investors upcoming in Q2. Thanks again.

And thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.