Madrigal stock catapulted higher again Friday after Novo Nordisk (NVO) published promising — but not “game-changing” — results for its weight-loss drug in patients with a liver disease.
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How Novo Nordisk, Wegovy And Ozempic Are Changing The Weight-Loss Game For Patients And Investors
Madrigal Stock: Can GLP-1s Compete?
Novo Nordisk’s news is particularly promising for Madrigal, William Blair analyst Andy Hsieh said in a client note. Novo tested semaglutide — which it sells as the weight-loss drug Wegovy — in patients with MASH and stage two or three fibrosis. Fibrosis is measured on five stages, with five being the worst.
In the study, 37% of patients who received weekly semaglutide doses experienced an improvement in fibrosis with no worsening of steatohepatitis, vs. 23% of placebo recipients. In addition, 63% of patient had their steatohepatitis resolved with no worsening in fibrosis. Just 34% of the placebo group had the same result.
“We view the magnitude of fibrosis improvement as similar to Madrigal’s Rezdiffra,” Hsieh said. “Specifically, the placebo-adjusted improvement in fibrosis with no worsening of steatohepatitis for the 100-milligram dose of Rezdiffra was 12%, compared to 14% for semaglutide.”
No ‘Silver Bullet’ For MASH
RBC Capital Markets analyst Brian Abrahams notes weight-loss drugs like Novo’s Wegovy and Eli Lilly‘s (LLY) Zepbound “have been an overhang for pure-play MASH stocks” like 89bio (ETNB). Madrigal, Viking Therapeutics (VKTX) and Sagimet Biosciences (SGMT) are also working on MASH treatments.
But Novo’s results suggest GLP-1-based drugs like Wegovy and Zepbound won’t be a “silver bullet” for MASH, says Leerink Partners analyst Thomas Smith.
Madrigal “management believes additional entrants should help expand the (MASH) market, and expects Rezdiffra to be the foundational medicine in the poly-pharmacy treatment landscape for (MASH) due to its strong product portfolio,” he said in a report.
He has an outperform rating on Madrigal stock.
Madrigal Stock Flies On Rezdiffra Sales
On Thursday, Madrigal reported $62.2 million in third-quarter sales for Rezdiffra. That walloped the Street’s call for $35.5 million, Smith said. Other estimates ranged from $29.7 million to $40 million.
“In our view, this represents a second consecutive quarter of strong launch execution that increases our conviction in the underlying patient/prescriber demand and Madrigal’s ability to successfully leverage their first-mover advantage and commercial experience to build the (MASH) market opportunity,” he said.
Madrigal stock has a strong IBD Digital Relative Strength Rating of 85. This means shares have performed in the top 15% of all stocks over the past 12 months.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
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