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

Okay. All right. Okay. All right. So we'll get started here. I'm Eric Joseph, senior biotech analyst with JPMorgan. Our next presenting company is Akero Therapeutics, and with us to bring us through the story is CEO, Andrew Cheng. There is going to be a Q&A session after the presentation. Just raise your hand, and we'll bring a mic around. And for folks tuning in via the webcast, feel free to submit questions by clicking the Ask A Question button. With that, Andrew?

Thank you very much, Eric, for having us, and we're excited to be back and really to be moving to '24. I think that '23 was an eventful year for us, and it's really set us up well for how we're going to be moving forward. So I have to show my safe harbor slide to please my legal counsel, but I think that's enough. And so when you think about where we are as a company, we're a clinical stage Phase III company. And that's really exemplified by our press release at the end of last year when we talked about the global SYNCHRONY Phase III program, how we announced that we'd enrolled our first patients in both the Histology, pre-cirrhotic F2, F3 group as well as the SYNCHRONY real world. The trial was based on non-invasive tests. Of course, we also announced that our compensated cirrhotic study, the F4 outcome study. We're meeting with the FDA for an end of Phase IIb meeting in the first quarter of this year. So when one thinks about that, one really looks back, what's the foundation for our Phase III program. It's really the 2-year Phase IIb studies that are really in circles 1 and 2. That is the pre-cirrhotic HARMONY study in F2, F3 patients. It is a 2-year study. We also announced that we'll be providing those 96-week results in March, and I'll talk about the data underpinning that in a moment. And then we also -- in 2023, in October, we announced results of our SYMMETRY study at the primary endpoint Week 36, and I'll talk about that momentarily as well. One note that we're announcing at this meeting is that we'll be providing the 96-week SYMMETRY results in Q1 of '25, so about a year from now. All right. Let's move on. As a reminder, for in case there are some new investors here that our main asset, efruxifermin, is an Amgen in-licensed and engineered asset that is a bivalent FGF21 analog. And you can see the structure on the left-hand side of the slide, that is that you see it has 2 FGF21s, where there's the Fc fusion protein attached to the end terminus. And at the C-terminus, there are important modifications that lead to enhanced binding, most prominently by beta-klotho that also translates to enhanced activity that we've demonstrated in our clinical trials. In addition, when one looks at some in vitro data that we've touched on in scientific meetings, the bivalent nature also leads to longer-term exposure enhanced or demonstrated by the extra -- the longer dissociation or the [KD] from the receptor. And this is different than some of the single chain FGF21s that we've demonstrated in vitro. So why don't we turn to HARMONY, and that is -- this is the 96-week study I touched on the first slide. As a reminder, it's a randomized, double-blind, placebo-controlled trial, looking at 2 doses of FGF21, that is EFX 28 milligrams and 50 milligrams in biopsy-proven F2, F3 study NASH patients with a NASH score of greater than 4 and MRI-PDFF greater than 8%. We resulted -- reported the primary endpoint results week 24 in September of 2022. And the 72-week follow-up is what's ongoing and we'll report out the 96-week data in March of this year. As a reminder, when one looks at the end points, you can see that these are the FDA endpoints in the 2 boxes on the left that lead to registration for NASH products. You can see that the fibrosis response was statistically significant and not too different between doses, roughly a 20% effect size over placebo. The NASH resolution results at 76% are among the highest seen in a Phase IIb study and that [dwarfs] form the 15% response rate on the placebo arm. And lastly, the third box is there because that's the combined endpoint. And that's the endpoint we'll be taking into Phase III in our Synchrony Histology program that I've talked about. What is the reason behind that? Why didn't we choose one or the other, which is what the FDA requires is because in Europe, you're required to meet both end points. And so this is an endpoint that meets both, fibrosis a proven and natural solution. And also, it's probably the most clinically relevant endpoint because if one thinks of what you are as a patient, you want to be improving your fibrosis stage and you want to be free of NASH, you want to have NASH resolved. And so that's why we've chosen that as well. Lastly, when one looks at the 5% placebo rate, that also helps in our powering for our study. When one compares these results to some of the fibrosis one stage approval and fibrosis results with some of the other compounds that are in development, you can see on this slide that it compares favorably. When one thinks about the effects I've seen, it's among the top seen to date in the field. it is, of course, notable that the Madrigal study is a Phase III trial, and it's also ITT. But when one thinks about how successful they are, I think we're encouraged that our Phase IIb results were statistically significant. Lastly, we left the semaglutide study up there because it's one of the questions we often get. And I think you'd have to be living in a cave over the last year to not be aware of the GLP-1 impact in our society overall. And in NASH, in particular, it is notable that after 72 weeks of dosing in a fairly sizable Phase IIb. And in this trial, super Wegovi dosing was used. It was 0.2, 0.3 and 0.4, 3 arms for the active arms, and there were -- those doses were given daily. And so when one thinks of Wegovi at 2.4 doses, at least on the 0.4 milligrams, these are super Wegovi doses yet despite that, as well as the 18-month duration, there was no statistically significant difference when it came to 1 stage approval and fibrosis. Nevertheless, we look at GLP-1s as a class that really make our likely to be impactful in the NASH field. And in fact, given how it's impacted on weight loss, we wanted to understand the combination of our agent, efruxifermin with GLP-1s, and that's what we released in June of last year. That is what we called Cohort D, which D standing for all the patients who were diabetic. And so not very creative. But I think this study is very much a real-world study that is that all of the patients, 100% of the patients were receiving a GLP-1 at baseline. That is -- and the average time was more than a year. So -- and we didn't specify they could have been on any flavor of GLP-1, some of whom were on Mounjaro. But the important thing is that when we looked at these patients, we wanted to understand what was the tolerability as well as what was the impact of adding 50 milligrams of efruxifermin to patients that were or had been taking GLP-1 for more than a year. What we showed is that if you look at the panel on the left is that -- well, first of all, the average baseline liver fat was roughly 11%. So recall that most NASH trials that patients are naive to therapy. Their liver fat is roughly in the upper teens, anywhere of 17 to low 20s. So even though these patients have been on a GLP-1 for more than a year, they still weren't normalized. They were at about 11%. Yet after just adding efruxifermin for 12 weeks, roughly 90% of patients normalized their liver fat. That is they went to less than 5% in just a very short period of time. The average liver fat reduction was 65%, which compares very favorably to just about any other agent in terms of liver fat reduction. Keep in mind that they were already receiving a GLP-1. And then when one looks at the percentage of patients who had a greater than 50% reduction, it's again, nearly 90% of patients achieved that and that's consistent with the middle panel. Now when one looks at the impact on lipids, I think it's important to recognize that in NASH patients, these are patients who the #1 cause of morbidity and mortality is cardiovascular disease. You can see consistent with previous trials with efruxifermin, whether it's in pre-cirrhotic patients in Phase IIa, Phase IIb or in cirrhotic patients, we see a very similar -- statistically significant improvements in lipids in just a short period of time. Overall, we would probably summarize this as being very heart friendly. You can pick the panel, whatever it is. It's really going in the direction your cardiology would want it to go. Why don't I turn now to patients who had a, perhaps, a more difficult time, that is the patients who are cirrhotic. Recall that in this field, there's not a single agent that's been successful in demonstrating improvements when it comes to cirrhosis. Unfortunately, despite the acute medical need that that's a setup that has been difficult for therapeutics, we set out with this study to look at patients who are compensated cirrhotics, Child-Pugh Class A, and they were randomized in a double-blind fashion to again, 1 of 2 doses, 28 and 50 milligrams of efruxifermin. And the primary endpoint differs from the study was at 36 weeks. And again, it's a 2-year study. And last October, we released the data on the primary endpoint, which is one stage improvement of fibrosis at week 36. So what we showed is that we fell short of statistical significance yet at the same time, as you see on the panel on the left, these are among the strongest results ever seen in NASH cirrhosis that one looks at it, we had roughly a 10% effect size at week 36. But keep in mind, this is a 36-week -- 96-week study. And for the first time ever, on the pin on the far right, we demonstrated statistically significant improvements when it comes to NASHFLD resolution that had never been seen before for any agent for any duration. So -- and that was seen for both durations -- both doses of efruxifermin. At AASLD in November, we did some additional analyses. We tried to understand the response rates a little better, and we had a subgroup of patients that is those patients who are either cryptogenic cirrhosis or had a greater than 6 months duration of dosing since they were -- they found out that they were cirrhotic. And what is showed in roughly a little more than 60% -- about 60% of the patients is that we were nearly statistically significant when it comes to the 1-stage improvement of fibrosis by looking at that group of patients. And one could ask, why do we think that is? Think largely the response rate for EFX didn't change very much, especially at the 50-milligram dose. But what really changed is the placebo rate, you can see on this middle panel really dropped from 14 down to 3. And what that really tells us is that biopsy in itself in compensated throughout cirrhosis, and it's true in [indiscernible], is inherently variable and that by taking patients who had a greater portion of their liver that was probably cirrhotic that is those that had known that there were cirrhosis for a longer period of time, who're able to see sort of lower false positive rate, and that boarded on significance. And so what's -- why am I raising this at this meeting is that these kind of insights and what we're able to draw from these data are helped guiding us when we think about what would be the optimal Phase III study in compensated cirrhotics. And so I think we're -- makes the basis for what I referred to earlier. We have an FDA meeting in queue this quarter, and we'll be utilizing some of these data as well as others in how we construct the study. One of the other questions about this is when we get this is that people want to ask, okay, well, you -- this looks promising, but what about the non-invasives, how did that look? So when one looks at that trial, you can see that the non-invasive is consistent with other pre-cirrhotic studies, but also in this study, go in the right direction. We're statistically significant for ELF score. We are for Pro-C3, a marker of new collagen synthesis, and we are for the FAST score as well. We didn't need it FibroScan for the liver score primarily, even though the magnitude of the effect is similar to what we've seen in past trials, we do have a much larger placebo rate, which we're still investigating to better understand why it's so high in this trial compared to other studies. One of the things that's notable about this study that gives us a lot of confidence about the activity of the asset is that we saw patients who had more than 1 stage improvement in fibrosis in just 36 weeks. In fact, one of these patients is on this slide. So this patient had a 3-stage improvement of fibrosis. That is they went from F4 to F1 in just 36 weeks of dosing. And the background for the patient is a 69-year-old woman who had type 2 diabetes, and they were diagnosed about 1.5 years prior to entering the study. They weren't using a GLP-1, and they had a very small weight loss at about just 2 kilos. So, but you don't have to be a liver CRN clinical research network pathologist to see that when one 1 looks at the baseline biopsy versus now, the week 36 biopsy looks nearly normal. It's free of the purple staining that one would see, and it's consistent with a high amount of bridging fibrosis. We just don't see that in this patient. So it's -- when we shared this at AASLD, it's a remarkable picture. But again, there are skeptics as there always are. And they asked, well, what did the non-invasives look like? So when we see on this slide, so this patient, as I mentioned, went 3 stages, there -- and not only did their fibrosis stage changed, but you can see that there -- basically normalized their liver fat as well. They went from a NAS score of 5 down to essentially 0, and they were clear across all of the parameters. And the noninvasives all go in the right direction. You can pick one, whether it's transaminase at or Pro-C3, ELF score FAST score, they're all decreasing. So this taken together is a very complete picture of very strong activity. One of the questions we've also gotten again about GLP-1s is what difference does that make? Because there's a higher percentage of patients receiving GLP-1s in this study than our other studies. And could that have been, a, explain the result have been driving the results. And in this trial, in this slide, you can see that didn't really make the difference. Having GLP-1, and the groups get small because when it's 180-patient study gets divided up -- you can see the subsets get -- aren't enormous. But at least on the macro, you can say that it didn't matter. There's no clear benefit to having a combination of GLP-1 and EFX, their response rates when it comes to fibrosis weren't driving the response. Looking at markers of liver health, the transaminases. You can see consistent with previous trials, you see a very rapid [indiscernible] reduction in ALT as well as AST through the 36-week period. Turning to safety at this point. We unfortunately had a patient who died during this study. This patient was receiving placebo. They died of pneumonia. We had a number of serious adverse events more than we've seen in past trials. But none -- importantly, none of the events were seen to be as drug-related by the physicians in a blinded fashion. And what it really speaks to is really the advanced nature and unfortunately, the number of multiple medical problems that these patients face. As a reminder, these patients who are compensated cirrhotics are not, unfortunately, the liver disease is not their only problem. They have a number of other problems that are also advanced as well. Treatment in adverse events leading to discontinuation was a little bit higher on the EFX arm and that was largely driven by the incidence of diarrhea and it was highest on the 50-milligram dose. Diarrhea is adverse event we've seen in previous studies. It's probably a -- GI adverse events are to be expected, not only with our asset but other FGF21s. Let's turn now to some other things. We saw in this trial, no clinics -- clinically significant changes in heart rate or diastolic blood pressure. We did see for the first time increase in systolic blood pressure that was significant at Week 36. This is something we've not seen in the pre-cirrhotic population, and it's something we'll be looking at when we take a look at the 96-week data in March of this year out of the pre-cirrhotic population. Bone mineral density, bone mineral density has been associated with poor cirrhosis, has been associated with poor bone health. And we did see relative reductions of about 1% -- less than 1% in the spine and about 2% to 3% in the hip at Week 36. Keep in mind that we'll be getting additional bone data out through Week 96 in this trial, and we'll have more insight as we follow that going forward. There was an imbalance in oral corticosteroids as well as other calm meds that may be associated with bone health. So we're also examining that as well. Lastly, we did see improvements when it comes to markers of liver function, I touched on earlier, but we also saw statistically significant improvements in platelets during the study. Consistent with what we've seen in previous studies when it comes to glycemic control, we've also seen improvements throughout the SYMMETRY study through Week 36, whether it's hemoglobin A1c or improvements in C-peptide as well as plasma insulin. So when 1 thinks about SYNCHRONY. Just as a reminder, as what we released in the December press release, SYNCHRONY Histology study in pre-cirrhotic patients is a randomized, double-blind, placebo patients and approximately 1,000 patients equally divided among the arms at 333. That study has already begun enrollment, has been enrolling for quite some time or screening for quite some time, just enrolling in December. And then the real-world study is a non-invasive trial that looks at just 1 dose of EFS 50 milligrams compared to placebo and we'll be looking at safety and tolerability over the 52-week endpoint. Finally, to conclude, when one looks at our near-term milestones, we've already touched on the SYNCHRONY and Histology and real-world enrollments in last quarter. We have an FDA median end of Phase II scheduled in the first quarter of this year as well as in March of this year, we have a 96-week data. And we plan on initiating SYNCHRONY outcomes, the F4 compensated cirrhotic study in the first half of this year. And then about this time next year, well, first quarter of next year, we will read out the 2-year data on the SYNCHRONY, or excuse me, the SYMMETRY study. Maybe I'll stop here and maybe Eric, we'll take questions.

Well, thanks, Andrew. Just a reminder for those of you who have questions, just raise your hand, we'll bring a mic around. But I can get started. Andrew, just you've highlighted at the top of the presentation, the 96-week readout from the HARMONY study expected in March. I guess, I'm going to ask you to just set the stage there a little bit in terms of what -- really, the relative importance of that readout would be relative to the 24-week efficacy readout last year? And maybe just sort of what magnitude -- what change in the relative rate of fibrosis improvement would be compelling, I guess, in the views of the treating physician community here?

So that's multilayered, so let's see if I remember all of that. But let's start the last one since that's easier. So the question really is what sort of improvement in fibrosis rate do we expect to see after the 96 weeks. That's, of course, a tough question, one I'm just going to dodge a little bit by just saying that we're hopeful for improvements and where we are. And in terms of what the meaningfulness of these data, I think there are 2 things to take away is that recall that EFX works as a direct-acting antifibrotic, which is why we saw the rapid improvements in fibrosis. We did see it 24 weeks. But at the same time, we've seen field-leading improvements in NASHFLD solution, 76% after just 24 weeks. The improvements in fibrosis after achieving NASHFLD solution are more indirect. And the benefits take a longer time to accrue. So we would expect and are hopeful that we'll see some of those translate out at the 96-week time frame even though we didn't see that at Week 24. And of course, the other component is the one of safety. So some of the things we're eager to see what the profile looks at and how different or not different it is compared to Week 24.

Okay. Great. We have a question here.

Thanks. -- are you measuring any portal function [indiscernible] in the longer-term setting to connect the outcomes. The clearance of COVID to calculate a disease severity for how well the liver portal system is working.

We're not measuring COVID in this trial.

What about imaging?

We have imaging ongoing in the study. We have a sub-study looking at some imaging procedures. But in terms of specifically a portal venous gradients [indiscernible], but we're not looking at that.

Yes. We think that the hepatic clearance of insulin is an important indicator of how poorly the liver is function and is fasting insulin levels when they're high, they correlate with the type of fibrosis that leads to these outcomes and also worsening with diabetes. So that could be something to look at the insulin clearance.

Thank you.

Sorry if I missed it, but in your trials, what was the average weight loss reduction associated with your product. The reason why I'm asking this is that I was very intrigued by the combination with GLP-1s. We know the GLP-1s are associated with lean mass reduction, which is bad do you actually have data on what your product does in lean mass as well?

So we don't have data when it comes to lean mass. Your first part of the question was about the average weight loss. I think when we've seen it, it's about 2 to 3 kilos after 24 weeks is the amount we saw in the which was statistically significant in the HARMONY 24 week study. We also saw a continued weight loss in the combination study with GLP-1s that we reported last June. So I think overall -- and we've seen weight loss in most of our pre-cirrhotic studies.

Okay. And I suppose it excess visceral fat as opposed to subcutaneous fat.

I think we can't make that assessment because we haven't measured. We haven't done a whole body DEXA to be able to assess or imaging to assess one way or the other.

Maybe just following up on that question. I'm sure there's sort of 3 sort of treatment profiles you might think of here in addressing NASH, right? There's EFX alone. What's the prospect of GLP use alone right as monotherapy and then it's the combination of the 2. Picking up a little bit on your expectation with the 96-week readout from HARMONY that longer time on drug might actually see some NASH resolution converting into fibrosis improvement. Should we not kind of hold this similar expectation for the GLP-1 class. Obviously, you make the contrast that you're seeing, obviously, a much greater magnitude, but after 12 weeks, -- now with longer term, does that delta perhaps shrink? I mean we care to get.

So I think like we await the data. I think that's the challenge. We've not seen -- the HARMONY and SYMMETRY studies are a little bit special in the field because they have serial biopsies. Most trials terminate after some period of time, whether it's 24 or 36 weeks. For instance, the Phase IIb trial on with semaglutide that ended at 72 weeks. So the ability to accurately answer your question is limited. So -- but do I think that longer-term dosing is likely, I think half the studies from bariatric surgery give us some insight because, again, even though there's rapid resolution of NASH, that benefit when it comes to fibrosis takes on the over 4 to 5 years to fully accrue. So I think that's the challenge for some patients, especially those who are cirrhotic.

Sorry, I just lost my [indiscernible] for a second. I was going to ask about from Cohort D, whether there's any clear indication that GLP-1 might be actually additive to the activity of EFX and whether you might expect a combination use of the 2 agents in patients that are nondiabetics to management.

So I think the takeaway from the Cohort D study is really that the ability -- your question would be best answered if everyone were on EFX and we added either GLP-1 or placebo, and that was the converse of the study. So we can't really answer that. But when 1 looks at what happened in for instance, in the SYMMETRY study, where we didn't see a difference. We're not sure that that's the case. I think the -- one of the unique properties of EFX is really the fast-acting nature of it as an antifibrotic. And as you know well, the fields have been looking for that for quite some time. So I think we're -- we remain excited about the antifibrotic component of EFX.

Other questions? Maybe just let me ask about the endpoint selection -- primary endpoint selection for the SYNCHRONY trial using the comp as an endpoint, right? You mentioned that was that's being employed to satisfy both U.S. and EU regulatory requirements. I guess from a trial design and kind of powering standpoint, I guess, -- can you just talk a little bit sort of the facility to arrive at a [indiscernible] signal with that composite endpoint, what derisks it from your prior studies?

Yes, I think the biggest advantage of it is that we didn't really give -- if you go back to that slide, just focusing on the 50-milligram arm, you really saw that the response rate for the 50-milligram was 41%, which is not dissimilar than the 1 stage improvement in fibrosis rate. But the biggest thing is we saw a 75% reduction in the placebo rate. And so when you have that 8x delta, 8-fold delta between the groups, it gives us a lot of confidence in terms of whether we're going to be able to land that Phase III study in a statistically significant manner and also mostly because we think about the global nature of the disease and the ability to have 1 trial to satisfy both EU and U.S. regulatory authorities is really compelling for us.

Assuming success there, certainly an initial label that encompasses the pre-cirrhotic population. I'm curious to get a sense of whether you think you -- whether that might support or that you might see commercial use in the cirrhotic population? Or really, does that require a total separate study used in that setting.

Yes. So that's -- you're asking, is there a possibility for accelerated approval in the cirrhotic population. Current guidance says no, but I think you and I both, we've had a discussion where another company in the field has managed to get FDA concurrence on that. So I think we're eager to -- as we will -- you can imagine that's maybe a topic during end of Phase IIb meeting. And if the FDA remains open to it, I think we would be hopeful to add that to our program, and it will be something where the indication at a launch could be an F2 through F4.

And just from a tolerability standpoint in the F4 population, I guess the signals around bone health, kind of definitely more of a focal point than that in the pre-cirrhotic or non-cirrhotic patient population. I guess, can you just talk a little bit about sort of the how you're continuing to monitor that 1 point and what sort of margins, I guess, around bone loss you'd want to be within in order to kind of have an accessible profile in that patient population?

Yes. So I think that's a great question. It's something we're looking at, and we'll be following up at the 2-year point in the trial. I think it's also just important to recognize how many improved agents there are for bone loss of the same kind, unfortunately, as I mentioned during the study, there are no appropriations for patients with cirrhosis and recognizing that the 5-year mortality for patients with -- out of liver transplant is roughly 50%. I think it's medical need is quite acute in this patient population. So -- that being said, safety is always paramount, but at the same time, there is a benefit risk calculation for all patients. Any other questions?

Maybe. Just 1 sort of operational question as it relates to Histology. I guess just how to think about accrual time lines in that [registrational] study. And to the extent that -- I mean look, you've conducted a number of trials in this setting, and so we can kind of look back obviously at the enrollment time lines there. I guess should we do that basically and map that on and kind of adjust for sizing, I guess, what other, I guess, site expansion efforts have you undertaken to support this?

So I would say that the trial is a global study. Of course, the sample size is quite a bit bigger than our Phase IIa and IIb studies. And as such, it's also the pre-cirrhotic population is very competitive. That being said, in terms of mapping out when things would read out, I think we get that question quite often from analysts and investors. You can imagine, since we announced our first patient was enrolled in December we're a little bit cautious to get too ahead of our skis as we don't like disappointing investors or analysts. And I think we're going to not directly answer that, Eric.

Understood. Let me see if any questions, other questions from the floor. Okay. Great. I think we'll leave it there for time. Thanks, Andrew.

Thank you. Thanks for having me.

For joining us.