“ high-risk nature and unclear regulatory path for NASH” I'm with jfm, you have it in a nutshell.
Unclear regulatory path
You expect when a company put out a PR announcing they got the nod from the regulator that the next part of the PR will detail how the trial will proceed, as it did with the cancer program. You don't expect (a) them to say we'll be talking for another 3-6 months and (b) the EMA to have been left out of the process. It's clear to me the PR was simply to support the financing and we aren't yet at the end of the process. They may in all likelihood have the letter but the where this lands is still unclear. That not only leaves the final outcome uncertain for now but highlights what a complex struggle this has been for the company. Huge applauds for getting any sort of positive outcome but the cost has been a very long time delay and ongoing uncertainty.
High risk nature
He could be talking about both how the NASH field looks in general AND how THTX fits into that. The last 12 months in NASH has been dominated by failure. High profile programs failing, Gilead's 3 mono therapies, Intercept, Genfit and more. This culminated in a paper being written on 9 failed NASH programs and the reasons for failure. My memory of that paper is there were almost as many reasons as there were programs but certain reasons have caught fire in the community. A couple directly related to THTX because they revolve around biopsy data going into Ph3.
There is a schizophrenic nature to biopsy histology data in NASH. Everybody agrees that there is a need to move away from biopsy but at the same time it's a central plank to the NASH approval process. It's enshrined in the guidance documents and now it's become a big part of the "learning from failed trials" discussion. We all thought the NASH field would move away from biopsy but in fact in the short term at least it has become even more important. Take one example the placebo signal in NASH trials. It looks to be real, and not insubstantial, and a source for failure when the drug fails to clearly beat it. There has been a big discussion about how to position your primary endpoints in Ph3 to optimize your chance of success. To do that you need to know the MAGNITUDE of the drugs effect on the various biopsy endpoints. Putting it simple THTX does not have that data so can't do the "learnings" Paul talked about. You need the biopsy data not just as direct proof the drug is working but also to plan your trial. There are other aspects of powering the trial which rely on the biopsy data which the company just don't have. I think if you were looking for de-risked Ph3 programs you'd start with biopsy data, if they don't have it there's an argument you don't need to go any further, it's high risk.
We've at times been calling the dataset odd. I would categorize it as attractive in many places but with an important glaring hole. The hole is biopsy data in f2/f3 patients and it is unfortunately THE most important part of the data for analyzing every NASH program. Without it you are early-stage, unknown potential, risky. With a good biopsy data set you find yourself as one of the frontrunners whether you are actually in the middle of Ph3 like MDGL or still working thru Ph2 like Akero. Thtx from a biopsy-centered approach to data look like an early-stage company about to be given a late-stage nod. Almost the value of have a Ph3 is outweighed by the risk of not having biopsy data.
From a communication perspective with all this in mind the company did the MOST BRILLANT thing they possibly could do in bringing in Loomba for the Nov cc. In the NASH field he's one of a handful of Super KOL's. A man right at the nexus where regulator meets industry meet the clinic meets the market meets academia. His science most supports what THTX has given his focus on the importance of liver fat reduction. If anybody would convince the market it would be him. When we talk about failed communication we have to see the company did the absolute best they could by bring in this voice to explain the potential of this program. AND EVEN THAT FAILED. We really can't be talking about poor communication as a reason for the message not landing when such an expert fails, there is something fundamentally holding back the market, a hole in the actual story.
The mistake we did on this board is to follow the company down the rabbit hole. When they said they could deliver a Ph3 we took a deep dive into the weeds to see if it's true. We came up with a plausible route to Ph3 in line with management and seemingly validated by a group of NASH KOLs. We lost sight of what's central to the market the box ticking need in Ph2 to de-risk the program. I'm totally with SPCEO none of this leads to a zero valuation for the program. There are plenty of positives about the program that mean there is value in this problem seems to be the rest of the market doesn't seem to get beyond the first step in analyzing that value. They go looking for biopsy data, don't find any and so stop there. If they do consider the potential nod for a Ph3 it looks highly risky in an already risky looking indication and so stop again. I can see every reason why there is value locked in this program AND every reason why the market is ignoring it. There is a massive biopsy data hole, on one side stands the company, the KOLs and this board, on the other side stands the market, the regulators seem to be straddling it right now.
The company clearly couldn't talk there way out of this hole, I believe they gave it their best shot (Loomba being the most very best shot). It requires concrete action, it requires Ph2-style biopsy data and/or a solid go on a Ph3. It might be the risky nature of this program lingers on.
My plea - Plz THTX give us some biopsy data as soon as possible.