Madrigal shares jump on midstage NASH results

Fatty Liver
The biotech is hoping to become one among a number of growing players within the potentially lucrative NASH space. (Wikimedia Commons)

Using an old Roche drug, Madrigal Pharmaceuticals has seen its stock soar 130% on its latest fatty liver disease trials data.

It’s been a bit of a journey for the biotech: Last year, the biotech merged with oncology company Synta Pharmaceuticals, coming after Synta ditched a lung cancer study and axed 20% of its staff in 2015.

The decision to merge with Madrigal (and change its name to Madrigal Pharmaceuticals while moving its corporate headquarters to Philadelphia) pivoted the merger company’s focus away from oncology and saw it move its attention to developing small-molecule drugs in cardiovascular-metabolic diseases and non-alcoholic steatohepatitis (NASH).

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Madrigal’s main attraction was its lead NASH compound, MGL-3196, a once-daily pill for fatty liver disease in-licensed from Roche. The drug works as a liver-directed selective thyroid hormone receptor-ß (THR-ß) agonist.

NASH is a form of chronic liver disease caused by a buildup of fat in the liver and is thought to affect around 15 million Americans. If left untreated, it can cause scarring, or fibrosis, in the liver, which can eventually lead to liver failure or cancer.

Some experts predict it could replace alcoholism and viral hepatitis as the leading cause of liver transplants by the next decade, generating a market for NASH-targeted medicines that could reach a whopping $35 billion at its peak. A number of other companies alongside Gilead—including Bristol-Myers Squibb, Allergan, Shire, Genfit and Intercept—are all looking to get into this lucrative market.

Today, Madrigal posted new topline data from a phase 2 study of MGL-3196 over 36 weeks that showed “statistically significant results in multiple week 36 endpoints including key secondary endpoints, reduction and resolution of NASH.”

Drilling down into the numbers, statistically significantly more patients treated with MGL-3196 compared with a dummy treatment hit two-point reduction in NAS (NAFLD activity score) on biopsy (56% in the MGL-3196 group and 70% in those patients with less than 30% relative fat reduction on week 12 MRI-PDFF—early responders—compared to 32% on placebo).

NASH resolution scores saw 27% on the first group and 39% in the responder group, with placebo at 6%. In MGL-3196 patients with NASH resolution, fibrosis also resolved in 50% of patients and was decreased statistically significantly relative to all placebo patients.

Becky Taub, M.D., CMO and EVP, R&D at Madrigal, said, “We are excited by the results of this study that demonstrate that MGL-3196 has the potential to show a clear benefit in patients with NASH, including both reduction and resolution of NASH and improvement in multiple atherogenic lipids. Cardiovascular disease is the primary reason for death in patients with NASH.  We look forward to advancing MGL-3196 in a phase 3 clinical trial in patients with NASH.”

RELATED: Madrigal says NASH drug also works in genetic cholesterol disorder

A few months back, the biotech also said that MGL-3196 hit the mark in a separate phase 2 trial, which is focused on heterozygous familial hypercholesterolemia (HeFH). In that trial, giving Madrigal’s drug on top of a high-dose statin achieved a statistically significant reduction in LDL cholesterol compared to placebo after 12 weeks’ treatment, along with improvements in other biomarkers such as triglyceride levels, apolipoprotein B and lipoprotein(a).

Analysts at Jefferies said in a note this morning: “Overall, the data looks good to us for the company to run a large Phase III (we presume 12-18m depending if it wants to shoot for fibrosis over a longer follow-up time needed, and probability of success for Phase III for NASH resolution appears reasonable given totality of data (fat imaging, normalization of ALT, NASH resolution, lipid profile etc).

“Key questions on the drug include: a) would the statistics be lesser/different here if the ~8-10 pts per arm less vs initial Phase II data were incorporated; b) how will the company go about powering for fibrosis given the delta here if it wants to hit that endpoint and does it need longer study; if ICPT and/or GILD hit on fibrosis endpoint (primary) in their Phase IIIs do they have differentiated value there; c) whether they'll use a similar titration protocol for Phase III (high/low PK exposure); d) any question on unclear blood pressure decrease observed in 12 week study though lesser signal in final data; e) need longer-term data and significantly more pts to more fully de-risk program and class.”