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Madrigal's stock surges as FDA approves first drug for liver disease MASH

By Eleanor Laise

'Silent' disease affects an estimated 5% of U.S. adults

Madrigal Pharmaceuticals Inc.'s stock jumped 25% premarket on Friday after the company scored the first Food and Drug Administration approval for a drug designed to treat a severe liver disease known as MASH.

The drug, Rezdiffra, was approved Thursday for treatment of metabolic dysfunction-associated steatohepatitis, which is liver inflammation caused by excess fat cells. The FDA approved the drug for MASH patients with moderate to advanced liver scarring. MASH, which is also known as NASH, or non-alcoholic steatohepatitis, can cause liver damage and may ultimately lead to liver failure.

Roughly 5% of U.S. adults have MASH, according to the American Liver Foundation. Despite the disease's severity, it's often poorly recognized: MASH is considered a "silent" disease because patients often have few or no symptoms.

Previously, patients with the condition suffering from notable liver scarring "did not have a medication that could directly address their liver damage," Dr. Nikolay Nikolov, acting director of the FDA office of immunology and inflammation, said in a statement.

Rezdiffra's list price will be $47,400 a year, Madrigal said on a conference call Thursday. That's near the upper end of the range where the drug could be considered cost-effective, according to a 2023 analysis by the Institute for Clinical and Economic Review (ICER), a nonprofit group that assesses the value of drugs and other treatments.

Madrigal said in a release Thursday that it would offer a patient-support program to help patients navigate insurance and affordability issues.

Potential rivals to Madrigal's (MDGL) treatment have also signaled progress in recent days. Akero Therapeutics Inc. shares (AKRO) jumped last week after the company said it saw positive results from a midstage trial of efruxifermin, its experimental treatment for MASH. And 89bio Inc. (ET)(N)(B) on Tuesday announced the launch of a phase 3 trial of its investigational drug pegozafermin in MASH patients.

But anti-obesity medications are also casting a long shadow over the developing MASH drug market. Eli Lilly & Co. (LLY) last month released results of a midstage study showing that tirzepatide, the active ingredient in the diabetes drug Mounjaro and the weight-loss drug Zepbound, achieved an absence of MASH at 52 weeks in 74% of trial participants taking the drug, compared with 13% of patients on placebo. The news weighed heavily on shares of Madrigal, 89bio and Akero.

Given the anti-obesity medications' access and supply issues, however, "the MASH market will persist despite the new weight-loss medicines," Evercore ISI analyst Liisa Bayko wrote in a report last month. Bayko projected that Madrigal's total sales of its MASH drug will top $2 billion by 2029.

In a late-stage study published last month in the New England Journal of Medicine, Rezdiffra resolved MASH with no worsening of fibrosis, or liver scarring, in 26% to 30% of patients, depending on the dosage, compared with less than 10% of patients in the placebo group.

Rezdiffra is expected to be available to U.S. patients next month and will be distributed through a limited specialty-pharmacy network, Madrigal said in a statement Thursday.

Consumers may soon be hearing a lot more about MASH. The FDA's first approval of a MASH drug is expected to spark advertising about the condition as a silent disease, advising patients to talk to their doctors about screening, ICER said in its report last year. Given the number of patients with fatty-liver disease, "this should be done in a measured way to avoid overwhelming the healthcare system," the report said.

Despite widespread anticipation of the drug's approval, Madrigal shares fell more than 10% Thursday, after a liver-disease research group mistakenly issued and then deleted a statement celebrating the FDA decision before it was made public. The research group, the American Association for the Study of Liver Diseases, said in a statement later Thursday that its earlier communication "was issued prematurely and in error."

Madrigal shares have climbed 5.3% in the year to date, while the S&P 500 is up 8%.

-Eleanor Laise

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


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03-15-24 0831ET

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