Theratechnologies Inc T.TH

RE:Piper on MDGL after NGM failure

[qwerty22]

That's a robust defence of MDGL and plenty of valid points that may or may not turn out to be true. But you have to ask yourself why do they feel the need to do it? I think they must think they need to pushing back against something, and that something is general, negative market sentiment about NASH. I saw a few serious biotech commentators Twitter feeds. You don't get the analysis like this but you do capture sentiment in one sentence and most were along the lines of "another Nash failure, surprise surprise!". Article headlines include "another flop", "NASH graveyard" etc. General sentiment looks clear, it needs to turn around on some successses. I'm hopeful MDGL will buck the trend.

Another analysts short view point.
 

Michael Yee at Jefferies believes this latest failure on NASH will cast a wide shadow. "The results are a surprise given it was a potent drug and generally expected to be positive. It will add confusion and greater unpredictability for other NASH programs. That said, the study was short and small, and the profile was not great (daily injection, requires statins), so they will de-emphasize focus despite F4 ongoing."

I think people want to know to what extent the result was specific to NGM's drug and trial design and what extent it has more general lessons about NASH. It's going to take time to resolve that.

SPCEO1 wrote: I 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.