Wave Life Sciences linked its obesity drug candidate to a 1% dip in body weight after six months, leading investors to drive the stock down more than 50% despite the biotech hailing the data as positive.
Last year, Wave shared three-month data on people with overweight or obesity who received one dose of WVE-007, a siRNA drug candidate designed to silence INHBE mRNA. Wave’s share price surged in the wake of the three-month readout despite the lack of weight loss at that time point, with investors buying the claim that dropping fat would translate into reductions in body weight as lean mass stabilized.
Investors are still waiting for evidence that WVE-007 can drive significant weight loss. Placebo-adjusted weight loss in the 32-subject phase 1 trial cohort was 0.9% after six months, versus 0.3% after three months. Wave’s share price fell 55% to $5.60 in the first hour of trading Thursday from a Wednesday closing price of $12.09.
Yet the company was upbeat about the results, hailing changes in visceral fat and waist circumference as evidence that WVE-007 improves body composition. Wave reported a 14.3% drop in visceral fat after six months, compared to a 7.8% decline after three months. The average waist circumference fell 3.3% over six months, having dipped 0.4% by the three-month assessment.
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Mizuho Securities said in a note to investors that visceral fat loss and waist circumference are arguably the two most important metrics for the dataset. The analysts called the six-month data “good,” arguing that evidence that WVE-007 reduces visceral fat and waist circumference while stabilizing lean mass is “particularly encouraging.” Mizuho analysts forecast peak WVE-007 sales of $7 billion.
The forecast reflects a belief that body composition matters and will gain more traction over time. While GLP-1 drugs drive fast, steep reductions in body weight, the declines reflect the loss of muscle and fat. Wave, like fellow INHBE drug developer Arrowhead Pharmaceuticals, is betting that fat loss with muscle preservation will become a key objective as the obesity market evolves.
With the FDA setting 5% weight loss after one year as the benchmark for an effective obesity drug, Wave may need to improve on results achieved to date regardless of the data on body composition. On a call with investors Thursday, Erik Ingelsson, M.D., Ph.D., chief scientific officer at Wave, predicted the biotech will see more weight loss as it enrolls people with higher BMIs and more excess fat in later-phase trials.
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Wave CEO Paul Bolno, M.D., said on the call that the biotech continues to believe WVE-007 can meet the FDA’s one-year weight-loss goal at the right dose and in the right population. For payers, Bolno believes WVE-007’s effect on visceral fat, which drives cardiometabolic risk, could be attractive.
Investors must wait to find out if Bolno’s and Ingelsson’s predictions about further weight loss come to pass. Wave plans to start the phase 2a, multidose portion of its Inlight study in the second quarter. The trial will test WVE-007 as a monotherapy in people with BMIs of 35 to 50. Patients in the phase 1 dataset had an average BMI of 32.
