Piper on MDGL after NGM failureI thought this might be of interest to some:
CONCLUSION
Given the disappointing data from NGM's Phase 2b ALPINE 2/3 this morning, the Street
is nervous on biopsy-driven data. With the key endpoint in the NASH landscape being
52-week MAESTRO-NASH, which will finish enrollment by the end of 2Q21 (with our
estimates putting topline in 3Q22), we dove into our rationale on why we should not be
jumping ship on MAESTRO-NASH, based on its enriched F3 patient population that can
potentially drive down the placebo response, larger study size (including a 900 F2/F3
patient interim analysis), and 52-week long duration. Therefore, we are compelled that
MAESTRO-NASH's outcome will not be impacted by ALPINE 2/3's dataset and foresee
MDGL's stock moving on four catalysts through 2022.
• Do not be alarmed by NGM's ALPINE 2/3 failure; here is why it is not a threat
to MAESTRO-NASH. With the Street shocked that ALPINE 2/3 missed the mark on
its primary endpoint (> 1-point improvement in fibrosis), investors are worried what
this would mean for Phase 3 MAESTRO-NASH, which has 900-patient interim data
expected in 3Q22 based on our estimates (enrollment completed by end of 2Q21).
First, we point out that the ALPINE 2/3 study only included a pre-specified histological
analysis of 143 patients, which we determined to be too small of a population given the
variability of histological data. According to the data provided this morning, ALPINE 2/3
enrolled ~43 patients per arm (0.3 mg, 1 mg, 3 mg, placebo). Putting MAESTRO-NASH
into perspective, the monster-sized study is enrolling approximately 2,000 patients,
with a 52-week, 900-patient interim analysis in biopsy-proven F2/F3 (300 patients per
arm; 80 mg, 100 mg, placebo). Therefore, with interim MAESTRO-NASH enrolling
approximately 10X the patient number in ALPINE 2/3, we believe will provide sufficient
data to show a stat. sig. separation from placebo. In addition, MAESTRO-NASH has
enriched its population with ~50% F3 NASH fibrosis (ALPINE 2/3 had ~33% F3 fibrosis).
Looking at the NASH CRN scoring system, F1 fibrosis consists of three stages (A: mild
perisinusoidal; B: moderate perisinusoidal; C: portal/periportal fibrosis), F2 fibrosis is
classified as perisinosoidal and portal/periportal fibrosis, and F3 fibrosis is classified as
bridging fibrosis. Therefore, it is histologically easier to distinguish a change from F3 to
F2 fibrosis (based on the definitions) compared to F2 to F1 fibrosis, due to the similar
definitions. Next, we point out that the duration (ALPINE 2/3 was a 24-week study) of
MAESTRO-NASH may also be a benefit to the readout, since a longer dosing regimen
could produce more stable histological results and reduce variability. We also note that
both Aldafermin (FGF19 antagonist) and resmetirom (THR-B agonist) are two different
MOAs that target separate hepatic pathways, and therefore cannot be compared to one
another, especially given that resmetirom is administered orally (80 mg, 100 mg) and
Aldafermin is a subcutaneous injection (0.3 mg, 1 mg, 3 mg).
Lastly, do not be discouraged that the NIT data from ALPINE 2/3 did not align with histology.We emphasized in our NGM note that the NITs were more aligned with historical data thanhistology endpoints, suggesting that the primary problem was the variability in histology and notthe "uselessness" of NITs to indicate a clinically relevant effect. Given that MAESTRO-NASH is differentiated from ALPINE 2/3 through its size, duration, andMOA, we anticipate MDGL's stock will move on 4 factors: 1) 52-week MAESTRO-NAFLD open-label data (and a preliminary analysis on a cirrhotic subgroup) presented at EASL (June 23-26);2) Enrollment completion of 52-week MAESTRO-NASH by the end of 2Q21; 3) Topline data fromMAESTRO-NAFLD by YE21; 4) Interim data from 900 patients from MAESTRO-NASH by 3Q22.