Shares of Madrigal Pharmaceuticals more than tripled in value Monday after the Pennsylvania-based drugmaker said its experimental treatment for a common liver disease succeeded in a closely watched clinical trial.
While estimates vary, some experts believe millions of adults in the U.S. have non-alcoholic steatohepatitis, or NASH, a disease caused by a build up of fat in the liver. Many smaller biotechnology companies as well as large, multinational firms like Gilead, AstraZeneca and GSK have for years tried to bring a NASH therapy to market, but so far none have prevailed.
Intercept Pharmaceuticals has come the closest, scoring the first positive late-stage study results for a NASH drug only for U.S. regulators to later reject its approval application. The biotech aims to resubmit its therapy by the end of the year.
With that history in mind, some on Wall Street haven’t had high expectations for Madrigal and its drug resmetirom. Yet, according to the company, a large trial testing two doses of resmetirom found that both were significantly better than placebo on the study’s two main measures: resolving NASH itself, and improving liver fibrosis without making the NASH worse.
“This significantly exceeds consensus expectations, which were for success on the NASH resolution endpoint with only a small probability of hitting on fibrosis improvement,” wrote Thomas Smith, an analyst at the investment firm SVB Securities, in a note to clients Monday.
Smith added that the results are “a major win” for Madrigal and the broader NASH field. Investors seemed to agree, as Madrigal shares rose by as much as 268% Monday morning. News of the data also moved shares in other NASH drug developers, including Akero Therapeutics, 89bio and Viking Therapeutics.
The data Madrigal released were from 955 patients that were split into three study groups of nearly equal size. The first group received a smaller, 80 milligram dose of resmetirom, the second got a larger, 100 milligram dose, and the third were given a placebo. Patients were treated for one year, at which point a liver biopsy was taken.
To meet the goal of NASH resolution, patients in Madrigal’s study needed to show that their fibrosis wasn’t getting worse, while also achieving a 2-point or greater reduction on a scale known as NAS, which researchers use to evaluate the severity of non-alcoholic fatty liver diseases. Across the three groups, the percentages of patients who did this were 26%, 30% and 10%, respectively.
To meet the fibrosis goal, patients needed to show their NASH wasn’t getting worse, while also achieving at least a one-stage improvement on a widely used, five-stage scale. Again, Madrigal said its drug significantly outperformed the placebo, with 24% of the lower-dose arm and 26% of the higher-dose arm hitting the goal versus 14% of the control arm.
Notably, almost all participants had moderate-to-severe liver fibrosis at the study’s onset.
Madrigal also said resmetirom appeared safe and well-tolerated at both tested doses. The frequency of serious adverse events was similar across study arms: 11.8% in the lower-dose group, 12.7% in the higher-dose group and 12.1% in the placebo group.
“With these unequivocally positive Phase 3 data in hand, our path forward is clear. In the first half of 2023, we intend to file a new drug application seeking accelerated approval of resmetirom,” Paul Friedman, Madrigal’s CEO, said in a statement.
The company plans to submit primary results from the study for publication in a peer-reviewed journal, as well as present them at a future medical meeting.