P R E M I U M

HEALTHCARE | Friday, March 15

Madrigal Wins the Liver Race




With Eli Lilly and Novo Nordisk rushing to prove their drugs can treat obesity-linked liver disease—drug developer Madrigal just beat everyone to market.


BREAKING NEWS

Drug developer Madrigal Pharmaceuticals just added $2 billion to their market cap in the space of a few hours after news broke that their new liver treatment just got approved by the FDA. Why is this such a huge deal? 

WHAT HAPPENED

Madrigal’s new drug—Rezdiffra—is the first treatment to actually get released to the public that can treat NASH, or fatty liver disease. This is a kind of liver disease that affects folks struggling with obesity where their liver gradually becomes more and more scarred. Rezdiffra helps reduce scarring and dissolve the fat that builds up in the livers of folks with NASH. This is massive because NASH is on the rise and can get bad enough that people need liver transplants. Doctors finally have a critical ‘off-ramp’ that helps folks avoid that fate. It’s even more massive for the pharmaceutical landscape though.


WINNER WINNER

Madrigal stock exploded last year when Rezdiffra trials showed a lot of promise in treating NASH—but it fell equally hard once players like Eli Lilly and Novo Nordisk demonstrated that their GLP-1 drugs can also show promise in treating NASH. Sure, Rezdiffra actually treats fatty liver disease while GLP-1 drugs simply treat the underlying metabolic dysfunction that creates the disorder—but they can still eat into Reszidffra’s market. More importantly, Ozempic and Mounjaro are less than 30% of the cost of Rezdiffra, so they can severely limit Madrigal’s revenue horizons. However, approvals for GLP-1 liver disease treatments are years away—so Rezdiffra getting approved for sale now gives Madrigal a critical edge. 


WHY IT MATTERS

In Big Pharma—sometimes it's better to be first than to be right. Madrigal winning approval here gives them a critical edge to be the solo player in a rapidly growing space. The market loves a decent semi-monopoly, even when it’s going to be short-lived. Madrigal stock popped over 25% in early trading. 

 


 



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