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Investors Lock In On Fatty Liver Drug As Next Big Payout

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Robert Donachie Capitol Hill and Health Care Reporter
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A small cohort of companies developing groundbreaking treatments for a progressive form of fatty liver disease is causing investors to take notice.

The pharmaceutical sector has long been a draw for investors looking to make a strong return on investment, but fierce competition between producers is worked to crowd out once readily available, lucrative opportunities. The emergence of a life-threatening liver disease is causing a resurgence in Wall Street’s interest in pharmaceuticals, Reuters reports.

A slew of new medications aimed at treating NASH, a fatty liver disease that is on course to become the primary cause of liver transplants by 2020, are currently being developed a number of small companies, according to Reuters. The market for the drugs is set to explode in the next decade, expected to reach a market capitalization of nearly $35 billion, as more and more Americans fall prey to fatty liver disease.

Financial analysts are describing the market for NASH drugs in health care the hottest space in health care, Reuters reports.

Experts predict that within the next decade, non-alcoholic fatty liver disease will become the major form of chronic liver disease in both adults and children, BioMed Central journal reports. Furthermore, the problem is likely to become the leading indication for liver transplants. Fatty liver disease is already serious and pervasive, with an estimated 15 million currently affected in the U.S. alone.

Investors are seeing the unfortunate trend as an opportunity to cash in large amounts of capital now to receive giant payouts down the road. The logic is rather straightforward: If the current trajectory of the disease continues, it virtually guarantees a large swath of patients for years who need medications in order to survive.

Pharmaceutical giants like Pfizer and Bristol-Myers Squibb are jockeying to produce the best NASH treatment, and are considering taking on smaller partners to gain a competitive edge in bringing the first drug to market.

Small companies like Intercept Pharmaceuticals, Galectin Therapeutics and Galmed Pharmaceuticals are currently developing ground breaking treatments for NASH and each of them has the opportunity to be the first NASH drug available. The small shops are also reportedly seeking to team up with a major investor or company to bring their drug to market.

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Robert Donachie