Understanding NASH/MASH

What is MASH/NASH?

MASH stands for Metabolic dysfunction-associated steatohepatitis. The disease consists on the fat accumulation around the liver causing its inflammation. It is estimated that 25% of the global population have some degree of MASH. The disease has three different stages:

1. MAFLD (Metabolic dysfunction-Associated Fatty Liver Disease)

   It is the initial stage when fat accumulates in the liver causing no inflammation.

2. MASH (already introduced above).

The first two stages show no obvious symptoms that will allow us to identify it. Thankfully, they are reversible via fat removal from the liver (what implies weight loss).

3. Cirrhosis

   Advanced stage reached by 11% of the patients in which the liver is damaged to a non-reversible extent and experiments malfunctioning to some extent.

All described above resembles the fatty liver diseases related to heavy alcohol drinkers. However, during the 70s & 80s doctors observed those symptoms in people who didn’t drink alcohol at all, calling the diseases NAFLD (Nonalcoholic fatty liver disease) & NASH (Nonalcoholic fatty liver disease).

Nomenclature was changed as the cause of NASH was narrowed down to a metabolic problem. At the risk of oversimplifying, when any food is digested, its carbohydrates can be processed in two different ways. Firstly, they will be transformed into glycogen and stored in the skeletal muscle and liver.

Secondly, the carbohydrates in excess which are not stored immediately consumed or stored as glycogen will be accumulated as fat. Initially, fat will be accumulated subcutaneously (layer under the skin) Studies have shown subcutaneous fat is not bad. Individual fat-storage capacity varies person to person due to genetic factors and especially ethnicities (e.g. Asian people tend to have lower fat-storage capacity than Caucasians).

Thirdly, once subcutaneous fat-storage capacity has been reached due to calories surplus, excess energy starts to accumulate in other places, leading to visceral fat, which is the fat accumulated around and in between organs. This visceral accumulated fat prevents organs from normal functioning and leads to metabolic alterations such as insulin resistance, cardiovascular diseases, etc.

Novo Nordisk portfolio positioning

Novo Nordisk is a leader in the diabetes and obesity market. Their understanding of the interrelation of plenty of the metabolic diseases related with the modern diet and lifestyle is tremendous, giving them an edge with a superior drug discovery process. Consequently, they have established their R&D strategy and portfolio positioning accordingly.

Focusing on the MASH pipeline, four different drugs are being developed:

• Semaglutide MASH

  Currently in Phase III clinical trials is a long-acting GLP-1 based once-weekly treatment. It is a subcutaneous 2.4mg semaglutide like the Wegovy highest dose. Its Phase III clinical trials results are planned to be presented in Q4 2024.

• FGF21

  FGF21 stands for fibroblast growth factor 21. It is a once-weekly treatment in Phase II clinical trials which is being developed in collaboration with Cellarity and Omega Therapeutics

• siRNA platform

  Two drugs in Phase I clinical trials belong to this group: MARC 1 (obtained from the acquisition of Dicerna Pharmaceuticals in 2021) & LXR(a).

Estimation of the Number of Potential Patients

As above mentioned it is estimated 1 out every 4 human beings is estimated to currently have MASH at any of their stages, meaning 2000 million humans might have some form of MASH. 11% of that patients will be in the cirrhosis advanced stage, leaving 1780 million patients with MAFDL/MASH and 220 million people with cirrhosis in the world.

Obesity medical treatment has gained awareness during the XXI century. Moreover, the awareness of all the health problems obesity contributes to has been raised during the last decade to the point of developing the GLP-1 drugs to treat the disease. However, what is still overlooked is the amount of people who are not obese but might have metabolic dysfunction. Figure 2 visually represents the uncoupling between obesity and metabolic dysfunction.

As it can be observed from figure 2, approximately 22% of non-obese people are estimated to have developed a metabolic dysfunction representing the estimated 1780 million MASH patients, an estimated 593 million patients who go under the radar.

TAM Estimation

Let’s recap the estimations from above:

• 1780 million people have some form of MAFLD/MASH in the world.

• 22% of non-obese people experience a metabolic dysfunction.

• 593 million of non-obese people with some form of MAFLD/MASH in the world.

Estimating 593 million of un-attended patients is conservative considering the prevalence of metabolic dysfunction in non-obese people is probably lower in Western people due to the larger subcutaneous fat storage we have on average compared with the Asian people. This is important to highlight as half of the world’s population is Asian.

According to the CDC (Center of Disease Control & Prevention) there are 110 million obese people in the USA. As per Figure 2, 62% of them are estimated to have a metabolic dysfunction, 68.2 million in absolute numbers As exposed before, metabolic dysfunctions prevalence is two times higher in obese people than in non-obese we get 34.1 million non-obese people in the USA ar estimated to have some form of MAFLD/MASH.

That number is important because if we assume only semaglutide for MASH is approved, then the additional TAM left to extend semaglutide prescription are only the non-obese patients as the others will experience its benefits if prescribed with GLP-1 obesity medication like Wegovy.

For the TAM estimations we have:

• 34.1 million patients in the USA at an average´of 565$ per month (6780$ per year).

Note: Based on average net price range for diabetes and obesity drugs reported in 2024 Mar;32(3):472-475. doi: 10.1002/oby.23973.Epub 2024 Jan 16.

• 558.9 million in the Rest of the World at an average price of 100$ per month (1200$ per year).

Note: Conservative scenario based on Ozempic price range observed on Figure 3 above oscillated around 100$ and no rebate-like system leading to vast discount is in place in other countries so list price is used.

The estimated current TAM is then $902 billion, contributing the USA market alone to 25% of the TAM. Note that in the USA net prices of GLP-1 drugs are expected to be reduced over time. However, metabolic dysfunctions prevalence will continue growing.

Estimation of MASH Treatments Contribution to Novo Nordisk Profits

According to Q2 2024 report, Novo Nordisk has reached 1.3 million patients on treatment for 12 months or longer per year since Wegovy approval in June 2021.

However, Wegovy volumes have been capped, limiting its access to new patients. If we look at the Diabetes care product patients growth during the last three years, 5.9 million patients have started using Novo Nordisk GLP-1 drugs (GLP-1 drugs are the main contributor to patients growth in the category). See Figure 4. Based on this information, it is reasonable to expect 5 million patients using MAFLD/MASH medication.

For my estimations, I will set a conservative approval for commercialization of the semaglutide for MASH in 2027 and that it will reach 3 million patients during its first five years after commercialization.

Additionally, I will consider GLP-1 prices to continue to decrease in the USA at a 9% per year (reported GLP-1 products portfolio price decrease during the last 3 year period) until the end of the decade. Then, it will keep stable.

To estimate the contribution of other countries on sales a comparison with Ozempic can be drafted. The injectable diabetes GLP-1 drug for diabetes was approved back in 2017. As per 2023 annual report, 65% of the sales still come from the USA. Hence, 35% come from other countries.

For the modeling, I will consider 25% of sales will come from other countries after five years from approval for commercialization. I think this assumption is conservative based on the USA lower GLP-1 drugs expected price and more GLP-1 manufacturing and market access related activities.