Aligos’ oral MASH trial succeeds, but placebo group shows odd trend

Aligos Therapeutics has reported promising outcomes from its Phase 2 trial for an oral treatment targeting an advanced form of fatty liver disease known as metabolic dysfunction-associated steatohepatitis (MASH). The trial results indicated that the treatment, ALG-055009, was effective in reducing liver fat across three different dose levels. Specifically, patients receiving ALG-055009 exhibited placebo-adjusted, median relative reductions in liver fat of up to 46.2%. Additionally, up to 70% of participants treated with ALG-055009 experienced at least a 30% relative reduction in liver fat compared to baseline measurements.

Despite these encouraging results, Aligos Therapeutics' stock, represented by the ticker $ALGS, fell by almost 30% on Thursday. This decline is part of a broader trend for the stock, which has seen its value halved over the past six months. Investors appeared to react cautiously, perhaps due to some complexities noted in the trial data.

Jefferies analyst Michael Yee highlighted certain confounding factors that might have impacted the trial's readout. For instance, there was an unusually high placebo response when compared to similar studies by competitors. Additionally, there was a higher incidence of GLP-1 background use among trial participants, making direct comparisons with other studies more challenging. Yee pointed out that patients in the placebo group experienced a 7% increase in liver fat, which could have slightly exaggerated the relative reduction figures for those treated with ALG-055009. On an absolute basis, the reduction in liver fat compared to placebo is closer to 39%, which is similar to the results from Madrigal Pharmaceuticals, whose treatment is the first and only FDA-approved option for MASH. Viking Therapeutics' candidate showed a slightly higher absolute reduction.

Importantly, the trial reported no serious adverse events, and there were no clinical cases of dysfunctional thyroids among participants, further underscoring the potential safety of ALG-055009.

Aligos Therapeutics' CEO, Lawrence Blatt, addressed the investor concerns by stating that the company is currently exploring partnerships to advance the drug's development. "We are currently in early discussions with potential partners and evaluating a variety of options to fund the continued development," Blatt said. He also mentioned that the company aims to complete the necessary activities for a Phase 2b study by mid-2025.

Alongside its efforts in developing treatments for MASH, Aligos Therapeutics is also making strides in the realm of chronic hepatitis B. The company's treatment, ALG-000184, has shown promising results. According to data presented at the European Association for the Study of the Liver annual congress in June, ALG-000184 achieved sustained suppression of HBV DNA in nine out of ten patients who were positive for the virus's antigen.

Financially, Aligos Therapeutics appears to be on stable ground, with $94.5 million in funds available as of the end of June. This financial reserve is expected to support the company's planned operations through 2025, providing a runway to potentially bring its promising treatments to market.

In summary, while Aligos Therapeutics' recent trial results for its fatty liver disease treatment are promising, investor caution remains due to some complexities in the data. However, the company's ongoing discussions with potential partners and its financial stability suggest a commitment to advancing its innovative treatments for MASH and chronic hepatitis B.