Aligos Therapeutics’ oral treatment for an advanced form of fatty liver disease reported positive results in a Phase 2 trial, showing it was effective at reducing fat across three dose levels.
Despite the seemingly positive data, investors sent the stock down $ALGS almost 30% on Thursday, adding to an ongoing decline in the stock that’s cut its value in half over the last six months.
The trial compared Aligos’ drug ALG-055009 to a placebo in patients with metabolic dysfunction-associated steatohepatitis (MASH). Patients getting the drug saw placebo-adjusted, median relative reductions of liver fat of up to 46.2%, the company reported Thursday. Up to 70% of trial participants given ALG-055009 had at least a 30% relative reduction in liver fat compared to baseline.
But in a note to investors, Jefferies analyst Michael Yee said there were some confounding elements in the readout, like an outlier placebo response compared to competitor studies and higher rates of GLP-1 background use that “make comparisons more difficult.”
Patients given placebo had a 7% increase in liver fat, possibly making the relative reduction figure slightly inflated, according to Yee. The analyst said that when looking at the data on an absolute basis, the reduction compared to placebo is closer to 39%, similar to Madrigal Pharmaceuticals, which has the first and only FDA-approved treatment for MASH. The absolute figure is slightly higher for Viking Therapeutics’ candidate, according to Yee.
Aligos reported no serious adverse events and said there were no clinical cases of dysfunctional thyroids.
What may make investors less skittish, Yee said, is finding a pharma partner for the drug. Aligos CEO Lawrence Blatt said in a statement that the company is working on it.
“We are currently in early discussions with potential partners and evaluating a variety of options to fund the continued development,” Blatt said. He added that the company will “complete the activities required for a Phase 2b study” by the middle of 2025.
Aligos is also pressing ahead with a chronic hepatitis B treatment that similarly looked promising based on data presented at the European Association for the Study of the Liver annual congress back in June. The results showed that ALG-000184 spurred sustained HBV DNA suppression in nine out of 10 patients who were positive for the virus’ antigen.
The biotech had $94.5 million as of the end of June, enough to fund planned operations through 2025.