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(Reuters) – Exciting news! Sagimet Biosciences announced on Monday that its experimental drug to treat a fatty liver disease significantly reduced the symptoms in a mid-stage study, causing the drug maker’s shares to soar to an all-time high in early morning trading.
The drug, denifanstat, was administered to 168 metabolic dysfunction-associated steatohepatitis (MASH, formerly known as nonalcoholic steatohepatitis or NASH) patients with severe liver scarring, or cirrhosis, as part of the study.
In the study, more than one-third of the patients on the drug showed resolution of MASH symptoms without worsening of liver scarring, compared with 13% on placebo.
MASH, which can progress to liver failure, affects 5% of the U.S. population, and the development of a drug for the condition has been in focus in recent years.
Approved treatments for the disease are expected to generate a multi-billion dollar market in the United States, with Madrigal Pharmaceuticals, Novo Nordisk as well as other smaller companies racing to develop the drugs.
Sagimet’s denifanstat belongs to a class of drugs that blocks fatty acid synthesis in the liver, thereby preventing the development of the disease and its progression.
The data from the drug’s study showed clear superiority in addressing all key measures including inflammation, scarring, and fat accumulation, beating Street expectations at the highest bar, said Yasmeen Rahimi, Piper Sandler & Co analyst.
Shares of the company more than doubled to $15.40 on Monday.
The analyst said the data indicate a high possibility of success in a late-stage study, and “reiterate this was not just getting lucky”.
However, nearly 20% of patients on the treatment dropped out of the study due to adverse events, versus 5.4% on placebo, Sagimet said.
It said it plans to hold a meeting with the U.S. Food and Drug Administration and begin a late-stage study of the drug in the second half of this year.
(Reporting by Khushi Mandowara in Bengaluru; Editing by Shinjini Ganguli, Shailesh Kuber and Anil D’Silva)