By Manas Mishra
(Reuters) - Gilead Sciences Inc's experimental drug aimed at treating a type of fatty liver disease known as NASH failed to meet the main goal of a late-stage study on Thursday, two months after it failed another trial.
California-based Gilead has been counting on its drug pipeline, including the NASH drug selonsertib, as sales of its hepatitis C treatments fall due to a smaller patient pool and intensifying competition, denting profits.
Oppenheimer & Co analyst Hartaj Singh said the expectation were low after the drug failed another late-stage study in February.
Successful treatments for non-alcoholic steatohepatitis have remained elusive, and Gilead stopped developing another treatment for the disease in 2016.
"Gilead could face some degree of reputational harm, given that this represents the closure of their second Phase 3 NASH program to fail miserably," Baird Analyst Brian Skorney said in a note.
The current trial was testing two doses of selonsertib in patients with scar tissue on the liver or fibrosis caused by NASH. The drug was shown to perform worse than placebo in improving fibrosis symptom.
In the 802-patient study, about 9.3 percent of patients treated with an 18 mg dose of selonsertib, and 12.1 percent of patients treated with a lower dose of the drug achieved an improvement of fibrosis by at least one stage, the company said.
However, 13.2 percent of patients treated with a placebo showed an improvement in fibrosis.
Gilead tied up with privately held insitro to develop therapies for NASH earlier this month, and is also testing a combination of drugs which includes selonsertib, and two other experimental drugs cilofexor and firsocostat as single agents in a mid-stage trial.
Analysts have projected the market for NASH treatments to reach between $20 billion and $35 billion as people with fatty diets increasingly develop the disease.
Fat accumulation and inflammation from NASH can lead to scarring of tissue, or fibrosis, that impairs liver function.
Gilead shares were trading down 0.3 percent at $62.64 in morning trade.
(The story has been refiled to correct drug's chemical name in the ninth paragraph to "firsocostat" from "firsocosta")
(Reporting by Manas Mishra in Bengaluru; Editing by Shinjini Ganguli and Shailesh Kuber)