5 Biotech Stocks To Watch As Interest In NASH Increases

The market is suddenly abuzz about nonalcoholic steatohepatitis or NASH, a common but often “silent” liver disease. Interest in NASH has gone up with Allergan plc (AGN  - Analyst Report) announcing a couple of deals targeting this disease area earlier this week. The company announced two back-to-back deals – one with clinical-stage biopharma company, Tobira, worth up to $1.695 billion and the other with privately-held biopharma company Akarna for an up-front payment of $50 million plus additional payments on the achievement of certain milestones. Both Tobira and Akarna are focused on developing treatments for NASH.

NASH Represents Significant Commercial Opportunity

NASH is an increasingly common, progressive form of fatty liver disease which is becoming a significant and growing health issue given the rising obesity epidemic. Patients who have diabetes, high cholesterol or high triglycerides are often diagnosed with the disease, which is expected to become the leading cause of liver transplant and liver cancer. By 2020, NASH is expected to become the leading indication for liver transplant ahead of chronic hepatitis C and alcoholic liver disease.

With no treatments currently approved for this disease, the market opportunity is significant. Several companies are working on developing treatments for NASH – the market could be worth billions of dollars and many companies are hoping to cash in on this opportunity. According to a Newsweek article, analysts predict that the market for a NASH drug could reach $35 billion or more by 2025.

NASH Stocks in Focus

With Allergan willing to shell out as much as up to $1.695 billion for Tobira, the market is rife with speculation that more acquisition deals will be announced in this space. In such a scenario, it would make sense to focus on these 5 stocks that are working on bringing NASH treatments to market. All these stocks saw their share prices increase following the Allergan-Tobira announcement.

New-York based Intercept Pharmaceuticals, Inc. (ICPT - Analyst Report) is focused on the development and commercialization of novel therapeutics to treat non-viral, progressive liver diseases. While the Zacks Rank #3 (Hold) stock gained FDA approval for its first product Ocaliva (OCA, an FXR agonist) earlier this year for primary biliary cholangitis, the main potential for the product lies in NASH. Intercept has a broad and comprehensive plan for evaluating Ocaliva for NASH with a late-stage study ongoing. Ocaliva got breakthrough therapy designation for Ocaliva for the treatment of NASH with liver fibrosis in Jan 2015. Intercept’s shares are up 7.4% so far this week.

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