• Madrigal Pharmaceuticals on Thursday reported highly anticipated results for its Phase 2 non-alcoholic steatohepatitis (NASH) drug MGL-3196, unveiling positive data after 36 weeks.
• The study found a significantly higher number of patients given MGL-3196 experienced a two-point reduction in a measurement test for NASH, as well as resolution of NASH after a liver biopsy over patients receiving placebo.
• In December, the oral once-daily thyroid hormone receptor β-selective agonist showed a greater than 30% relative reduction in liver fat when measured by an MRI, a potential signal the drug was already working at 12 weeks.

NASH has been a hot space for the pharmaceutical industry for the last couple of years, as a number of companies have conducted M&A and the pipeline of drugs for the silent liver disease has grown. Yet, there are still no approved treatments for the condition and investors have become more cautious about the potential outcome of ongoing trials.
The mid-stage results from Madrigal, therefore, are a much-needed reassurance for investors in the space. Shares in the biotech jumped on the data, rising more than 120% to trade near $240 apiece. The stock previously closed at $108.43 on Wednesday.
The positive trial raises hopes a later-stage study could also prove positive and result in a treatment that could resolve the disease in some patients.
“The degree of NASH resolution, an approvable FDA endpoint, in patients who received MGL-3196 for nine months we believe suggests a high likelihood of success in a larger trial with a somewhat longer treatment period in a Phase 3 study designed similarly to this Phase 2 study, pending regulatory agreement with such a design,” said Madrigal CEO Paul Friedman in a statement.
There are multiple schools of thoughts on how NASH works and what endpoints would be best for drugs to target. While resolution of NASH — which Madrigal hit — is one FDA-acceptable endpoint, a reduction in fibrosis is another. Madrigal said fibrosis was reduced by at least one point in 23% of placebo and 29% of MGL-3196 treated patients.
“Some pushback on the lack of significant fibrosis benefit seen; however, there is a trend towards a benefit in the MGL-3196 arm,” wrote Evercore ISI analyst Joshua Schimmer in a May 31 note to clients. “We do think nine months is likely too short to see a meaningful benefit in fibrosis for a metabolically driven therapy, but with longer follow-up, the company should see additional separation of the curve.”
Elsewhere, Jefferies analyst Michael Yee suggested this data from Madrigal could make it a takeout target for Gilead Sciences, which is a major player in the space.