Found the article. Surprising Results Could Put

Found the article.



Surprising Results Could Put Madrigal in Big Pharma's Sights -- Heard on the Street -- WSJ
Mentioned: MDGL
By David Wainer

There have been so many disappointing trial results targeting the liver disease known as NASH, or nonalcoholic steatohepatitis, that investors were understandably cautious going into one small biotech's late-stage results.

Yet the topline results released by Madrigal Pharmaceuticals on Monday looked better than most analysts had expected, sending the stock soaring 220%. Ahead of the study, most analysts expected the study to achieve one of the two primary endpoints -- a reduction in inflammation -- but weren't as confident it could also deliver on the reduction of liver scarring. The latter is an important measure because it can lead to complications such as cirrhosis.

But the 950 patient-study delivered improvement in both measures with no major safety scare. With these results in hand, Madrigal said on Monday it intends to file for accelerated Food and Drug Administration approval for the treatment of non-cirrhotic NASH, a severe form of fatty liver disease.

The full data, which the company will submit for publication in a peer-reviewed journal at a later date, will be closely reviewed by larger pharmaceutical companies. Companies from Pfizer to Novartis to Bristol-Myers Squibb could potentially be interested in either partnering with or acquiring Madrigal as a way to gain entry into what could be a sizable market. Even just a 5% share of this market could be worth over $8.5 billion assuming a $15,000 price, Liisa Bayko, an analyst at Evercore ISI, wrote in an October report previewing the results.

"It's fair to say that anyone who has been interested in this space is going to feel more reassured by the data," said Ms. Bayko.

Pfizer recently invested in Madrigal competitor Akero Therapeutics, which is up 80% for the year after reporting encouraging mid-stage results. Notably, though, the Madrigal release sent competitors such as Akero and another NASH-contender 89bio down more than 10% each on Monday. Those declines are somewhat puzzling given that Madrigal doesn't seem destined to monopolize the NASH space.

If approved, Madrigal's resmetirom will become the first approved drug for a chronic disease that has grown increasingly widespread due to the Western world's obesity epidemic. It would mark a rare win in a painful quest for a treatment after dozens of companies from Gilead Sciences to Genfit and NGM have faced setbacks in this space over the years.

With solid data, the market will now get to test out whether there really is a big market for fatty liver disease. It is no doubt a major health problem, but one of the issues is fatty liver disease is underdiagnosed. It is sometimes called the silent killer because it doesn't show symptoms until the liver is severely damaged.

Of course, the best way to tackle fatty liver disease, just like other illnesses generally caused by obesity, will always be to make lifestyle adjustments such as cutting down on unhealthy foods.

But with obesity sadly unlikely to go away anytime soon, treating its effects on the liver will continue to be important. Now there may finally be a treatment on the way, and big pharma isn't likely to want to miss out on that.

Write to David Wainer at david.wainer@wsj.co