Madrigal stock skidded Wednesday on detailed results from a study of Eli Lilly's weight-loss drug in patients with a serious liver disease.
The results in metabolic dysfunction-associated steatohepatitis, or MASH, could eventually help Eli Lilly to rival Madrigal Pharmaceuticals. Madrigal gained U.S. approval in March for the first-ever treatment for MASH, formerly called nonalcoholic steatohepatitis, or NASH. In this disease, fatty tissue builds up on the liver, causing scarring known as fibrosis.
More than half of patients who received Lilly's tirzepatide had their MASH resolved with no worsening in their fibrosis. Just 13.2% of placebo recipients hit the same bar. Meanwhile, 51% to 55% of patients across three doses had at least a one-stage improvement in fibrosis — out of five stages — and their MASH symptoms remained the same. But a high 30% of placebo recipients had the same result.
"We believe the magnitude of fibrosis benefit is at the high end of expectations heading into the data readout and could lead to some pressure on NASH-focused stocks given tirzepatide's 21% to 25% delta on fibrosis improvement appears competitive across multiple therapeutic classes within the NASH treatment landscape," Leerink Partners analyst Thomas Smith said in a client note.
On today's stock market, Madrigal stock tumbled 3.4%, closing at 235.97. But Akero Therapeutics reversed course and closed up 8.2% at 20.79. 89bio stock dropped 2.8% to 8.07. Eli Lilly stock edged down a fraction to 832.07.
Madrigal Stock: Room For Other Approaches
Analysts defended other approaches to MASH treatment, however.
Madrigal stock soared 268% on Dec. 19, 2022, after the company said 30% of patients who received its drug, Rezdiffra, had an improvement in MASH symptoms and no worsening in fibrosis. And 26% showed at least a one-stage improvement in fibrosis while their symptoms didn't progress. Rezdiffra targets a thyroid hormone receptor.
Akero and 89bio are working on drugs that mimic another hormone called FGF21. While Lilly's drug led to a 21% to 25% benefit on fibrosis over the placebo, Akero's and 89bio's drugs proved roughly 20% better than the placebo in their studies, RBC Capital Markets analyst Brian Abrahams said in a note.
"We believe FGF21's like (89bio's) pegozafermin will still have a role given their rapid action, different side effect profile and additive activity, particularly in more severe MASH patients, though today's data likely solidify that this role will be more as an alternative rather than core MASH therapy," he said.
Abrahams kept his neutral rating on 89bio stock, but doesn't list a rating for Akero, Lilly or Madrigal stocks. He expects the GLP-1 drug class, including Lilly's tirzepatide and Novo Nordisk's semaglutide, "will likely be a dominant treatment for MASH."
"They are already widely used, with a known safety/tolerability profile, they can potentially offer comparable liver fibrosis improvements and they come with the added benefit of substantial weight loss," he said.
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