Madrigal Pharma Shares Surges After Drug Wins First Approval For Fatty Liver Disease NASH
Madrigal Pharmaceuticals (MDGL.O) experienced a significant surge in its stock value, jumping by as much as 23% on Friday, following the approval of its oral drug, Rezdiffra, as the first-ever treatment for non-alcoholic steatohepatitis (NASH), a type of fatty liver disease. The approval, granted by the U.S. health regulator without requiring a liver biopsy for diagnosis, marks a pivotal milestone in the treatment landscape for NASH and is expected to unlock a lucrative market opportunity.
Analysts lauded the approval, emphasizing its positive implications for the wider acceptance of the drug. Yasmeen Rahimi, an analyst at Piper Sandler, remarked that the approval and the accompanying label exceeded expectations, setting the stage for significant market penetration.
The global market for NASH treatments is projected to exceed $16 billion by 2030, according to Vision Research Reports. Analysts estimate that Madrigal’s drug could generate approximately $5 billion in peak annual sales, underscoring its blockbuster potential.
NASH, now referred to as metabolic dysfunction-associated steatohepatitis (MASH), results in the accumulation of fat in the liver, leading to inflammation and fibrosis. Rezdiffra has been approved for MASH patients with advanced fibrosis, classified as stage 2 or 3 severity.
The approval also addresses concerns surrounding the impact of GLP-1 drugs, particularly following positive data from Eli Lilly’s tirzepatide. Analysts believe that the FDA approval of Rezdiffra could overshadow excitement in the GLP-1 space, providing a significant boost to Madrigal.
Furthermore, the approval reignited speculation about Madrigal Pharmaceuticals becoming a target for acquisition. Analysts foresee a robust launch for Rezdiffra, driven by its first-to-market advantage, which could make Madrigal an attractive proposition for potential acquirers.
Despite broader market fluctuations, Madrigal’s shares surged approximately 12% to $273.7, reflecting investor optimism surrounding the groundbreaking approval and the drug’s promising commercial prospects.
