What happened
Shares of Madrigal Pharmaceuticals (MDGL -6.29%) had skyrocketed by 243.7% as of 11:11 a.m. ET on Monday. The huge gain came after the company announced positive results from a phase 3 clinical study evaluating its experimental drug resmetirom as a treatment for nonalcoholic steatohepatitis (NASH), a potentially fatal liver disease.
So what
When a biotech stock more than triples after the company reports clinical trial data, "positive" probably isn't the strongest word to use to describe the results. That's certainly the case with Madrigal's late-stage study results for resmetirom.
The thyroid hormone receptor agonist achieved both primary endpoints of the pivotal study. Of the 316 patients receiving 80 mg doses of resmetirom, 26% had NASH resolution with no worsening of fibrosis, and 24% achieved fibrosis improvement by at least one stage with no worsening of the nonalcoholic fatty liver disease activity score (NAS).
Madrigal reported even better results for participants taking the 100 mg dose of resmetirom. Of the 321 patients receiving the higher doses, 30% achieved NASH resolution with no worsening of fibrosisa and 26% achieved fibrosis improvement by at least one stage with no worsening of NAS.
More than 20% of adults across the world and around 20% of adults in the U.S. have nonalcoholic fatty liver disease (NAFLD). Within these groups, up to 20% could have NASH. The disease could soon become the top reason for liver transplants to be needed in the U.S.
Now what
Madrigal now plans to file with the Food and Drug Administration (FDA) for accelerated approval of resmetirom in the first half of 2023. There are no FDA-approved drugs for NASH right now, so resmitirom could become the first NASH drug on the market.
Given that, it's quite possible that Madrigal could attract acquisition interest from bigger drugmakers seeking to vault into the lead position in what could be a huge NASH market.
