Akero Receives Up To $125 Million To Continue Liver Disease Treatment Development
San Francisco-based Akero announced that it secured funds from pharma giant Pfizer and Hercules Capital which could add up to $125 million for the company to continue developing its nonalcoholic steatohepatitis (NASH) focused therapy, efruxifermin (EFX). Pfizer made a $25 million equity investment, and Hercules Capital offered a $100 term loan, of which, Akero confirmed it would withdraw $10 million at the transaction closing.
Terms of Akero’s Most Recent Funding
Pfizer agreed to buy 2,525,252 shares of Akero (AKRO on NASDAQ) at a market value of $9.90 a piece, totaling the $25 million. Since the announcement, Akero’s stock rose to $10.37 per share. The uptick is a nice change of pace for Akero, which had seen consistent drops in its stock price since the beginning of the year when it was $21.70 per share in January.
After the purchase is finalized, Akero said Pfizer would own about 6.7% of its stock and, as part of the deal, will establish a Scientific Advisory board and allow Pfizer to appoint one member. Akero emphasized that it will still have full ownership and control of EFX, the rest of its pipeline, and all other operations.
In a different financing endeavor, Akero secured a term loan facility from Hercules Capital which could provide Akero with up to $100 million. The loan matures in December 2026, giving Akero four and a half years to repay. Akero says the first 24 months will consist of interest-only payments, which could extend to 36 months if Akero achieves certain milestones.
Akero will have access to $10 million immediately upon closing with two $35 million draws upon near-term clinical and financial milestones. The company also says it may be eligible for a third $45 million withdrawal, subject to Hercules’ approval.
Akero says the $125 million could fund its current operating plan until the third quarter of 2024. With existing funds, the company says it will be able to finish two ongoing Phase 2b clinical trials and start a Phase 3 clinical trial.
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Building a Company on the Back of One Treatment
Starting in 2017, Akero initially focused on its own modified fusion protein to treat NASH. However, after receiving licensing for EFX from Amgen in 2018, Akero has placed nearly all of its attention on developing EFX to treat NASH.
NASH is a liver inflammation caused by a build-up of fatty tissue in the liver. Unfortunately, there are no approved therapies to treat NASH. The disease can lead to cirrhosis and hepatocellular carcinoma.
Akero engineered EFX to mimic fibroblast growth factor 21 (FGF21), which regulates metabolic pathways. This metabolic regulation process could allow EFX to treat NASH by addressing the core drivers of disease progression.
While working diligently to develop a treatment for NASH, Akero saw rapid success within its first few years. Just two years after starting, Akero went public in 2019, which provided just over $100 million for the young company. Since then, the company has received various funding to continue its development.
Akero looked to be on track to skyrocket as a company with a hyper-focused niche up until 2021. Like most public companies, the economic downturn has significantly affected Akero’s stock prices. The most recent funding from Pfizer and Hercules Capital will hopefully kick Akero in the right direction as it moves forward in its EFX development program.©www.geneonline.com All rights reserved. Collaborate with us: firstname.lastname@example.org