Akero(AKRO) - 2023 Q4 - Annual Results

Company Overview & Business Update Akero Therapeutics provides Q4 and full-year 2023 financial results and business updates, highlighting EFX's progress in MASH treatment Introduction and CEO Commentary Akero Therapeutics announced Q4 and full-year 2023 financial results and business updates, with the CEO emphasizing EFX's MASH treatment progress, including two Phase 3 SYNCHRONY studies initiated and a third planned for H1 2024, alongside IIb HARMONY results - Akero Therapeutics initiated two Phase 3 SYNCHRONY studies in December 2023 to evaluate EFX for MASH patients[2] - The company expects to report second on-treatment biopsy results from the Phase 2b HARMONY study in H1 2024 and launch a third Phase 3 SYNCHRONY study for MASH-related cirrhosis patients[2] About Akero Therapeutics Akero Therapeutics is a clinical-stage company focused on developing innovative therapies for severe metabolic diseases like MASH, with its lead candidate EFX in two Phase 3 trials and a third planned for H1 2024 - Akero Therapeutics is a clinical-stage company dedicated to developing transformative therapies for severe metabolic diseases such as MASH[9] - The company's lead candidate, EFX, is currently in two Phase 3 clinical trials (SYNCHRONY Histology and SYNCHRONY Real-World), with a third Phase 3 trial (SYNCHRONY Outcomes) planned for H1 2024[9][10] About Efruxifermin (EFX) Efruxifermin (EFX) is Akero Therapeutics' lead candidate for MASH, an Fc-FGF21 fusion protein designed to comprehensively address MASH pathology by reducing liver fat and inflammation, reversing fibrosis, and improving insulin sensitivity and lipids, showing good tolerability in trials - EFX is Akero's lead candidate for MASH, an Fc-FGF21 fusion protein designed to mimic the balanced biological activity of natural FGF21[7] - EFX aims to reduce liver fat and inflammation, reverse fibrosis, improve insulin sensitivity, and enhance lipid profiles to comprehensively address the complex pathology of MASH[7] - EFX is designed for once-weekly administration and has been generally well-tolerated in clinical trials to date[7] About MASH MASH, a severe form of MASLD, is projected to affect over 25 million Americans by 2030, characterized by excessive liver fat, inflammation, and fibrosis, with no approved treatments and being a leading cause of liver transplants and cancer - MASH is a severe form of MASLD, projected to affect over 25 million Americans by 2030[8] - MASH is characterized by excessive liver fat accumulation, leading to hepatocyte damage, inflammation, and fibrosis, potentially progressing to cirrhosis, liver failure, cancer, and death[8] - There are currently no approved treatments for MASH, and it is the fastest-growing cause of liver transplants and liver cancer in the U.S. and Europe[8] Clinical Program Updates Akero Therapeutics provides updates on its clinical programs, including the ongoing Phase 3 SYNCHRONY trials for EFX in MASH and anticipated results from Phase 2b studies Phase 3 SYNCHRONY Program Update Akero Therapeutics has initiated two of three Phase 3 SYNCHRONY clinical trials to evaluate EFX's safety and efficacy in various MASH patient populations, with the third trial planned for H1 2024, designed to support accelerated and full market approval using a pre-filled syringe - In December 2023, two of the three planned Phase 3 SYNCHRONY clinical trials enrolled their first patients[5] - The SYNCHRONY Histology study aims to evaluate the safety and efficacy of EFX in biopsy-confirmed pre-cirrhotic MASH (F2-F3) patients, with a primary endpoint supporting accelerated approval[5] - The SYNCHRONY Outcomes study, expected to launch in H1 2024, will assess the safety and efficacy of EFX in MASH-related compensated cirrhosis (F4) patients, potentially including dual primary endpoints for histological and clinical outcomes[5] SYNCHRONY Histology SYNCHRONY Histology evaluates EFX in pre-cirrhotic MASH (F2-F3) patients, with a primary endpoint of fibrosis improvement and MASH resolution to support accelerated approval - The SYNCHRONY Histology study evaluates 28mg and 50mg doses of EFX for safety and efficacy in biopsy-confirmed pre-cirrhotic MASH (F2-F3) patients[5] - The primary endpoint is a ≥1-stage improvement in fibrosis and MASH resolution after 52 weeks, designed to support an accelerated approval application for pre-cirrhotic MASH[5] SYNCHRONY Real-World SYNCHRONY Real-World assesses EFX's safety and tolerability in non-invasively diagnosed MASH or MASLD patients, with results supporting safety evaluation for accelerated approval - The SYNCHRONY Real-World study evaluates the safety and tolerability of EFX in patients with non-invasively diagnosed MASH or MASLD[5] - Study results will support safety evaluations for inclusion in accelerated approval applications[5] SYNCHRONY Outcomes SYNCHRONY Outcomes, expected to start in H1 2024, will evaluate EFX in MASH-related compensated cirrhosis (F4) patients, potentially with dual primary endpoints for histological and clinical outcomes to support full market approval - The SYNCHRONY Outcomes study, anticipated to launch in H1 2024, will evaluate the safety and efficacy of EFX in patients with MASH-related compensated cirrhosis (F4)[5] - This trial may include two primary endpoints: histological assessment of liver fibrosis regression in a patient cohort after 96 weeks of treatment, and clinical outcome assessments to support full market approval[5] EFX Administration Device All EFX Phase 3 studies will use a LyoJect 3S dual-chamber pre-filled syringe for self-administration, designed for commercial use post-approval, with an optimized formulation providing comparable EFX exposure - In all EFX Phase 3 studies, patients will self-administer using a LyoJect 3S dual-chamber pre-filled syringe, a device intended for commercial use upon EFX approval[5] - The optimized formulation provides EFX blood concentrations comparable to the liquid formulation used in previous clinical studies[5] Phase 2b SYMMETRY Study Update In the Phase 2b SYMMETRY study for MASH-related cirrhosis, EFX showed statistically significant improvements in MASH resolution and non-invasive markers of liver injury and fibrosis at week 36, despite not reaching statistical significance for fibrosis improvement, with overall good tolerability and 96-week results expected in Q1 2025 - In the 36-week analysis of the Phase 2b SYMMETRY study, EFX treatment groups (28mg and 50mg) showed a trend in liver fibrosis improvement without MASH worsening, but did not reach statistical significance (22% and 24% vs. 14% for placebo, respectively)[5] - Statistically significant MASH resolution rates were observed in the EFX treatment groups at week 36 (67% for 28mg, 60% for 50mg, vs. 26% for placebo)[9] - Statistically significant improvements were also observed in non-invasive markers of liver injury and fibrosis, insulin sensitivity, and lipoproteins in the EFX treatment groups[9] - EFX was generally well-tolerated, with the most common adverse events being transient Grade 1 or 2 gastrointestinal events[9] - Preliminary top-line results for histopathological and non-invasive measurements after 96 weeks of treatment in the SYMMETRY study are expected in Q1 2025[9] Phase 2b HARMONY Study The Phase 2b HARMONY study is evaluating EFX's efficacy in pre-cirrhotic MASH patients, with the company expecting to report second on-treatment biopsy results in H1 2024 - The company expects to report second on-treatment biopsy results from the Phase 2b HARMONY study, which targets pre-cirrhotic MASH patients, in H1 2024[2] Financial Results Akero Therapeutics reports its financial performance, highlighting cash position, increased R&D and G&A expenses, and overall net loss for Q4 and full-year 2023 Full Year and Fourth Quarter 2023 Financial Highlights As of December 31, 2023, Akero Therapeutics held $569.3 million in cash, cash equivalents, and marketable securities, projected to fund operations until 2026, with significant increases in R&D and G&A expenses in Q4 and full-year 2023 due to clinical trial advancements, manufacturing, personnel, and professional service costs Cash, Cash Equivalents, Short-Term and Long-Term Marketable Securities | Metric | December 31, 2023 (Millions USD) | December 31, 2022 (Millions USD) | | :--------------------------------- | :------------------------------- | :------------------------------- | | Cash, cash equivalents, short-term and long-term marketable securities | 569.3 | - | - Akero anticipates its cash, cash equivalents, short-term and long-term marketable securities will be sufficient to support its current operating plan through 2026[9] Operating Expenses | Expense Category | Q4 2023 (Millions USD) | Q4 2022 (Millions USD) | Full Year 2023 (Millions USD) | Full Year 2022 (Millions USD) | | :----------------- | :--------------------- | :--------------------- | :---------------------------- | :---------------------------- | | Research and development expenses | 53.4 | 18.3 | 141.8 | 85.3 | | General and administrative expenses | 8.5 | 7.1 | 31.1 | 29.9 | | Total operating expenses | 61.9 | 25.4 | 172.9 | 115.2 | - The increase in research and development expenses is primarily attributed to the ongoing Phase 2b HARMONY and SYMMETRY studies, the initiation of Phase 3 SYNCHRONY Histology and SYNCHRONY Real-World studies, manufacturing support for Phase 3 and potential market applications, and increased personnel costs[9] - The increase in general and administrative expenses is mainly due to higher personnel costs, professional services, and other expenses associated with operating as a public company[9] Condensed Consolidated Balance Sheets Akero Therapeutics' total assets significantly increased to $580,271 thousand as of December 31, 2023, from $356,570 thousand at year-end 2022, primarily driven by higher cash, cash equivalents, and short-term marketable securities, with a corresponding rise in stockholders' equity to $535,306 thousand Condensed Consolidated Balance Sheets | Metric | December 31, 2023 (Thousands USD) | December 31, 2022 (Thousands USD) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Cash, cash equivalents and short-term marketable securities | 550,010 | 351,449 | | Other current assets | 9,952 | 3,724 | | Non-current assets | 20,309 | 1,397 | | Total assets | 580,271 | 356,570 | | Current liabilities | 19,128 | 19,083 | | Non-current liabilities | 25,837 | 10,925 | | Stockholders' equity | 535,306 | 326,562 | | Total liabilities and stockholders' equity | 580,271 | 356,570 | Condensed Consolidated Statements of Operations and Comprehensive Loss Akero Therapeutics reported operating and net losses for both Q4 and full-year 2023, with the full-year net loss expanding to $151,759 thousand from $112,033 thousand in 2022, mainly due to substantial increases in R&D and G&A expenses, resulting in a basic and diluted net loss per share of $2.89 for the full year Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | Q4 2023 (Thousands USD) | Q4 2022 (Thousands USD) | Full Year 2023 (Thousands USD) | Full Year 2022 (Thousands USD) | | :--------------------------------- | :---------------------- | :---------------------- | :----------------------------- | :----------------------------- | | Research and development expenses | 53,392 | 18,320 | 141,798 | 85,284 | | General and administrative expenses | 8,481 | 7,100 | 31,072 | 29,872 | | Total operating expenses | 61,873 | 25,420 | 172,870 | 115,156 | | Operating loss | (61,873) | (25,420) | (172,870) | (115,156) | | Interest expense | (897) | (362) | (3,099) | (739) | | Interest and other income, net | 7,584 | 2,723 | 24,210 | 3,862 | | Net loss | (55,186) | (23,059) | (151,759) | (112,033) | | Comprehensive loss | (54,410) | (23,022) | (151,526) | (111,969) | | Basic and diluted net loss per share | (0.99) | (0.49) | (2.89) | (2.87) | | Weighted-average shares used to compute net loss per share | 55,717,726 | 46,760,783 | 52,568,159 | 38,984,772 | Forward-Looking Statements This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, concerning Akero Therapeutics' future milestones, business plans, EFX's potential therapeutic effects, Phase 3 SYNCHRONY program design, and new formulation use plans Forward Looking Statements This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, regarding Akero Therapeutics' future milestones, business plans, EFX's potential therapeutic effects, Phase 3 SYNCHRONY program design, and new formulation use plans, which are subject to risks and uncertainties that could cause actual results to differ materially - Statements in this press release constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, concerning Akero's future milestones, business plans, and the potential therapeutic effects of EFX[11] - Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations, including risks related to the success of product candidate development activities and clinical trials, regulatory developments, funding capabilities, and the ability to enroll patients in the Phase 3 SYNCHRONY studies[11] Investor & Media Contacts Contact information for investor and media inquiries regarding Akero Therapeutics Investor Contact Investors can contact Christina Tartaglia for further information - Investor Contact: Christina Tartaglia, Phone: 212.362.1200, Email: IR@akerotx.com[12] Media Contact Media can contact Sarah O'Connell for further information - Media Contact: Sarah O'Connell, Phone: 732.456.0092, Email: sarah.oconnell@vergescientific.com[12]