On Thursday, H.C. Wainwright adjusted its outlook on Madrigal Pharmaceuticals (NASDAQ:MDGL), increasing the price target to $425 from $405 and maintaining a Buy rating on the stock.
The firm's analyst cited the recent FDA approval of Rezdiffra (resmetirom) for the treatment of noncirrhotic nonalcoholic steatohepatitis (NASH) with moderate to advanced liver fibrosis as a significant positive development. The new drug, which is the first of its kind for MASH, previously known as NASH, is seen as having a strong commercial potential due to its broad and supportive label.
The FDA's accelerated approval of Rezdiffra was announced by Madrigal on Wednesday, marking a milestone in the treatment of NASH patients with significant fibrosis. The label for Rezdiffra is notably broad, indicating its use alongside diet and exercise for adults with noncirrhotic NASH with moderate to advanced liver fibrosis, which corresponds to stages F2 to F3 fibrosis. This inclusive label also supports the use of non-invasive tests (NITs) for characterizing patient fibrosis, potentially simplifying the diagnostic process.
The analyst highlighted several key points of the Rezdiffra label that could set a high standard for future competitors in the MASH market. These include the matching of the indication statement with the patient population studied in the pivotal MAESTRO-NASH trial, no liver biopsy requirement for diagnosis, and the possibility of future label expansion.
Moreover, the label specifies a simple oral dosing regimen, lacks contraindications and boxed warnings, and requires no monitoring beyond standard-of-care, which includes transaminase elevations and liver-related adverse events (AEs).
The efficacy data included in the FDA's analysis on the label aligns closely with the results previously reported in the New England Journal of Medicine in February 2024, although there are slight variations in the strength of efficacy for NASH resolution versus fibrosis improvement. Safety information remains consistent with the most common adverse events being gastrointestinal, mild, and transient in nature.
Madrigal anticipates that Rezdiffra will be available to U.S. patients next month. The ongoing MAESTRO-NASH and MAESTRO-OUTCOMES trials continue to evaluate the long-term outcomes of the drug, potentially solidifying its position in the market and offering further support for its use in treating NASH.
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