Akero Therapeutics, Inc. (NASDAQ:AKRO) is a clinical-stage biotechnology company dedicated to developing innovative treatments for patients with serious metabolic diseases marked by high unmet medical need, including metabolic dysfunction-associated steatohepatitis (MASH), formerly known as non-alcoholic steatohepatitis (NASH). The company's lead product candidate, efruxifermin (EFX), is an analog of fibroblast growth factor 21 (FGF21), a naturally occurring hormone that regulates metabolism of lipids, carbohydrates, and proteins throughout the body.

Akero's Promising Pipeline and Clinical Progress

Akero's pipeline is currently focused on EFX, which has demonstrated promising results in clinical trials for the treatment of MASH. The company has initiated a Phase 3 program called SYNCHRONY, with the first two of three planned clinical trials evaluating EFX having begun screening. Additionally, EFX is being evaluated in the ongoing, 96-week Phase 2b SYMMETRY study in patients with compensated cirrhosis due to MASH (F4 fibrosis).

Based on statistically significant fibrosis regression and MASH resolution among patients with biopsy-confirmed pre-cirrhotic MASH, as well as a trend toward fibrosis improvement and statistically significant MASH resolution among patients with cirrhosis due to MASH, the company believes EFX has the potential, if approved, to be an important medicine for treating MASH.

Financials

Akero has reported significant financial results in recent years, though the company has yet to generate any revenue. For the fiscal year ended December 31, 2023, the company reported a net loss of $151,759,000, with no revenue generated. The company's annual operating cash flow and free cash flow for the same period were both -$145,367,000.

In the first quarter of 2024, Akero reported a net loss of $53,344,000, with no revenue generated. The company's quarterly operating cash flow and free cash flow for the same period were both -$35,140,000.

Liquidity

As of March 31, 2024, Akero had $903,665,000 in cash, cash equivalents, and short-term marketable securities, which the company believes will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months.

The company has raised significant capital since its inception, including $105,800,000 from its initial public offering in June 2019, $1,196,600,000 from the sales of common stock in equity offerings between 2020 and 2024, and $90,500,000 from the sale of redeemable convertible preferred stock. Additionally, Akero has borrowed $35,000,000 from a term loan provided by Hercules Capital, Inc.

Risks and Challenges

Akero faces substantial competition in the MASH treatment landscape, with several pharmaceutical companies, including AstraZeneca PLC/MedImmune LLC, Boehringer Ingelheim AG, Inc., Eisai, Inc., Eli Lilly, GSK plc, Johnson & Johnson, Merck & Co., Inc., Novo Nordisk A/S, Pfizer Inc., Roche Holding AG, and Takeda Pharmaceutical Company Limited, as well as large and small biotechnology companies, actively pursuing the development of MASH therapies.

Key risks facing Akero include the ability to successfully enroll and retain patients in its clinical trials, the potential for delays or failures in the development and regulatory approval process, the ability to manufacture its product candidate, and the potential for competition from other MASH therapies. Additionally, the company's reliance on its license agreement with Amgen for the rights to EFX and the potential need for significant additional capital to fund its operations and development activities present ongoing challenges.

Business Overview

MASH is a severe form of metabolic dysfunction-associated steatotic liver disease (MASLD), formerly known as non-alcoholic fatty liver disease (NAFLD), characterized by inflammation and fibrosis in the liver that can progress to cirrhosis, liver failure, cancer, and death. The disease affects a significant and growing population, with an estimated 25% of the global population affected by NAFLD and up to 6% of the global population affected by MASH.

Akero's lead product candidate, EFX, is designed to address the underlying metabolic dysregulation that drives the progression of MASH. By leveraging the natural protective and regulatory functions of FGF21, EFX has the potential to reverse fibrosis, resolve steatohepatitis, and help restore healthy metabolism in patients with MASH.

The company's Phase 3 SYNCHRONY program and the ongoing Phase 2b SYMMETRY study are evaluating EFX's ability to improve clinical outcomes for patients with MASH, including those with compensated cirrhosis. The positive results observed in earlier clinical trials have positioned EFX as a promising potential treatment for this serious and debilitating condition.

Akero's Regulatory Milestones and Partnerships

Akero has made significant progress in advancing EFX through the regulatory process. In October 2021, the company announced that the U.S. Food and Drug Administration (FDA) had granted Fast Track designation for EFX for the treatment of MASH. Additionally, in December 2023, Akero achieved a key milestone by dosing the first patient in its Phase 3 SYNCHRONY program, triggering a $7,500,000 payment to its licensor, Amgen, Inc.

The company's partnership with Amgen, which granted Akero exclusive global rights to develop and commercialize EFX, has been instrumental in the advancement of the program. Akero is responsible for all development, manufacturing, and commercial activities and costs related to EFX, while Amgen is entitled to various milestone payments and royalties on future sales.

Akero's Experienced Management Team and Board of Directors

Akero's leadership team is composed of seasoned biotechnology executives with extensive experience in drug development, regulatory affairs, and commercialization. The company's co-founder and Chief Executive Officer, Andrew Cheng, M.D., Ph.D., previously held leadership roles at Gilead Sciences, Inc. and Tobira Therapeutics, Inc. The management team is further bolstered by a highly experienced Board of Directors with deep expertise in the pharmaceutical and biotechnology industries.

Outlook

As Akero continues to advance EFX through its Phase 3 SYNCHRONY program and the ongoing Phase 2b SYMMETRY study, the company remains focused on addressing the significant unmet need in the MASH treatment landscape. With its strong financial position, experienced leadership team, and promising clinical data, Akero is well-positioned to potentially bring a transformative therapy to patients suffering from this debilitating condition.

The successful development and commercialization of EFX could position Akero as a leader in the MASH treatment market, which is expected to grow significantly in the coming years due to the increasing prevalence of the disease. Additionally, the company's ability to leverage its FGF21 platform and expand its pipeline with additional product candidates could further enhance its long-term growth prospects.

Conclusion

Akero Therapeutics is a promising biotechnology company that is advancing a potentially transformative treatment for patients with MASH, a serious metabolic disease with high unmet medical need. With its lead product candidate, EFX, demonstrating positive results in clinical trials, a strong financial position, and an experienced management team, Akero is well-positioned to capitalize on the significant market opportunity in the MASH treatment landscape. As the company continues to execute on its clinical development strategy and navigate the regulatory landscape, investors will be closely watching Akero's progress and the potential impact of EFX on the lives of patients suffering from this debilitating condition.