Madrigal Sets Sights High with $500M Public Offering in the Booming NASH Market Race

Madrigal Pharmaceuticals has set its sights on a substantial windfall of approximately $500 million from a public offering, with these funds earmarked to propel its clinical and commercial endeavors, particularly in anticipation of the potential launch of resmetirom, its therapy for nonalcoholic steatohepatitis (NASH).

The biopharmaceutical company, headquartered in Pennsylvania, plans to conclude its offering on October 3, 2023, with the likes of Goldman Sachs, Jefferies, TD Cowen, Evercore ISI, and Piper Sandler serving as joint bookrunning managers. Madrigal intends to allocate the net proceeds for a range of general corporate purposes, including the facilitation of clinical trials and the production of drug substances and products.

In a significant development last December, Madrigal revealed that its investigational thyroid hormone receptor agonist had successfully met both primary endpoints in the Phase III MAESTRO-NASH biopsy trial. Patients administered both 80-mg and 100-mg doses of resmetirom exhibited markedly superior outcomes, demonstrating the resolution of nonalcoholic steatohepatitis (NASH) and an improvement in liver fibrosis compared to those who received a placebo.

Furthermore, resmetirom achieved a pivotal secondary endpoint by significantly improving LDL-C levels in treated patients.

The FDA acknowledged the molecule’s potential by granting it Breakthrough Therapy Designation in April 2023. Madrigal subsequently initiated the rolling submission for its New Drug Application in June 2023, seeking accelerated approval for resmetirom as a treatment for NASH with liver fibrosis.

By July 2023, Madrigal had completed its submission, and the FDA officially accepted the NDA in September 2023, designating it for priority review and setting a target action date of March 14, 2024. Notably, the regulator will not convene an advisory committee to evaluate resmetirom’s application.

This public offering announcement positions Madrigal as a prominent player in the NASH field, particularly following the exit of former frontrunner Intercept Pharmaceuticals. In June 2023, Intercept received its second FDA rejection for obeticholic acid tablets, which the company had proposed as a treatment for pre-cirrhotic liver fibrosis due to NASH. Shortly thereafter, Intercept announced the discontinuation of its NASH program and laid off approximately one-third of its workforce.

Intercept’s struggles underscore the formidable challenges of drug development in the NASH arena, where safety concerns are ever-present. According to the FDA, drug-induced liver toxicity ranks as the “most common cause for the discontinuation of clinical trials.”

These challenges are exacerbated in the NASH realm, where patients often contend with other conditions such as diabetes and cardiovascular diseases. Medications for these comorbidities may interact with investigational NASH therapies, creating additional complexities.

Just this week, Intercept, still grappling with its NASH failure and bereft of advanced assets, agreed to be acquired by Italian pharma firm Alfasigma S.p.A for $800 million.

GlobalData analyst Jay Patel opined that Intercept’s acquisition by Alfasigma directly reflects its NASH missteps. Patel also forecasted that the U.S. NASH market alone will exceed $25 billion by 2029.

The race to combat NASH continues to evolve, with resmetirom’s fate hanging in the balance, and Madrigal’s public offering adding an intriguing twist to this unfolding narrative.

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