Akero Therapeutics (NASDAQ:AKRO) stock is soaring 120% and is one of today’s top trending tickers on sites like Yahoo Finance. The rally was sparked by the company’s release of positive data on its drug candidate, efruxifermin, or EFX. Akero is testing efruxifermin’s efficacy as a treatment for a type of liver disease called “pre-cirrhotic nonalcoholic steatohepatitis (NASH), fibrosis stage 2 or 3.”
NASH causes excessive fat to accumulate in the liver, resulting in inflammation and damage in the organ.
The Data on Akero’s Drug
In a Phase 2b clinical study, Akero’s efruxifermin met its primary target, the company reported today. Specifically, among two separate groups of NASH patients taking 50 milligrams and 28 milligrams of the drug, 41% and 39% of the patients’ liver fibrosis improved by “one stage” or more. Additionally, those patients’ NASH did not deteriorate.
The 41% and 39% figures were both significantly better, from a statistical perspective, than the 20% of the patients taking placebo who met the targets.
Moreover, 76% of the patients who received 50 milligrams of Akero’s were cured of NASH. Meanwhile, 47% of those who received 28 milligrams of the drug were cured of the disease. Conversely, only 5% of those taking a placebo were reportedly cured.
For patients receiving both doses, the discrepancy with those taking a placebo was statistically significant when it came to the latter endpoint.
Moreover, according to the drug maker, “Treatment with EFX was generally well-tolerated.” Only one patient suffered a serious adverse event while taking the drug. That patient, who had previously had gastroesophageal reflux disease, suffered esophagitis while on EFX.
The Implications for AKRO Stock
In a statement today, Akero’s CEO Andrew Cheng said:
As the fastest growing cause of liver transplantation and liver cancer in the US and Europe, NASH represents a substantial and growing health burden. We believe the data are very compelling and show EFX’s potential to meet the critical, global unmet need for patients by intervening across stages of disease progression, potentially addressing both early-stage metabolic drivers and later-stage inflammation and fibrosis.
Experts estimate that roughly 1.5%-6.5% of U.S. adults suffer from NASH, meaning that there’s a very large potential market for EFX. Given this announcement today, it is likely that the drug will generate a great deal of revenue for Akero. In turn, that will lift AKRO stock further over the long term.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.