Akero soars as drug shows it reverses scarring in liver disease patients

Updates share move in paragraphs 1 and 8, adds analyst comment in paragraph 7

By Sriparna Roy

Jan 27 (Reuters) - Akero Therapeutics AKRO.O shares gained 117% in early trading on Monday, after its lead drug showed it can help patients with a type of liver disease to reverse scarring of the organ without worsening the condition in a keenly awaited mid-stage trial.

The experimental drug efruxifermin is being studied in patients with severe scarring or cirrhosis due to a type of fatty liver disease known as metabolic dysfunction-associated steatohepatitis (MASH).

In the trial, 39% of patients treated with a 50 milligram dose of the drug experienced reversal of cirrhosis with no worsening of MASH, compared with 15% of those who received a placebo, after 96 weeks.

"Akero is the first to show reversal of cirrhosis, a goal that has evaded the field until now," said Evercore ISI analyst Liisa Bayko, calling the data "transformational".

MASH, which was earlier known as NASH or non-alcoholic steatohepatitis, affects around 5% of adults in the U.S., according to the American Liver Foundation, making it a large patient population.

Madrigal Pharmaceuticals' MDGL.O, Rezdiffra, the only approved drug, treats patients with moderate to advanced liver scarring or fibrosis without cirrhosis.

At least two analysts said Akero's drug could potentially be a multibillion-dollar opportunity for treating patients with cirrhosis who are the most severe and have the highest unmet need.

Shares of peer 89bio ETNB.O rose more than 60% after the study results. The company is conducting trials with its experimental drug pegozafermin in patients with severe scarring of the liver.

Drugmakers such as Novo Nordisk NOVOb.CO and Eli Lilly LLY.N are also conducting trials with their blockbuster GLP-1 treatments to treat patients with the type of liver disease.

In patients who were not taking GLP-1s, 45% of those who were on Akero's drug showed reversal of cirrhosis without worsening the condition, compared with 17% for placebo, which suggests the observed reversal was not attributable to GLP-1 therapy, the company said.