Aligos Reports Mid-Stage Success in MASH, Investors Skeptical

An unusual placebo effect in Aligos Therapeutics’ Phase IIa trial has led to shareholder skepticism regarding its candidate for metabolic dysfunction-associated steatohepatitis (MASH), according to Jefferies analyst Michael Yee.

Aligos Therapeutics recently released topline data from the Phase IIa HERALD study, indicating that its drug candidate ALG-055009 significantly reduced liver fat in patients with MASH. At the 12-week mark, patients treated with 0.5-mg, 0.7-mg, and 0.9-mg doses of ALG-055009 experienced substantial reductions in liver fat, with median placebo-adjusted relative decreases of 24.1%, 46.2%, and 43.6%, respectively. The 0.3-mg dose group saw a 19.7% reduction, which did not reach statistical significance.

Furthermore, up to 70% of participants achieved at least a 30% relative reduction in liver fat from baseline, as reported by Aligos. CEO Lawrence Blatt emphasized that these results underscore ALG-055009’s “enhanced pharmacologic properties,” leading to “robust improvements in liver fat reduction.” The drug was well-tolerated, with no serious adverse events or episodes of clinical hyper- or hypothyroidism, and most treatment-emergent toxicities were mild to moderate.

Blatt highlighted the importance of ALG-055009’s favorable safety profile, noting that treatments for MASH “will likely be administered for prolonged periods of time.” With the positive data from HERALD, Aligos argues that ALG-055009 “warrants further development.” The company is currently in “early discussions” with potential partners and exploring other funding options for the candidate’s continued development. Aligos aims to complete the necessary activities for a Phase IIb study by mid-2025.

Despite the positive results from HERALD and ALG-055009’s promising trajectory, Aligos’ stock plummeted by up to 30% following the announcement. Jefferies analyst Michael Yee attributed this downturn to some perplexing data. Yee noted that HERALD’s placebo arm was “different than other studies,” with a slightly higher background use of GLP-1, complicating quick cross-trial comparisons.

In his analysis, Yee emphasized that the placebo-adjusted efficacy estimate of up to 46% should be considered in the context of the placebo group’s 7% increase in liver fat over the study duration. This contrasts with other studies where placebo participants typically lose liver fat over time, presumably due to dietary adjustments during the trial. Yee suggested that this unusual placebo effect makes ALG-055009’s placebo-adjusted efficacy appear more favorable.

Yee concluded that, on an absolute basis and excluding the placebo effect, ALG-055009’s efficacy might align more closely with other MASH therapies.