Madrigal Stock Soars More Than 20% After FDA Approved First In MASH Treatment

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Madrigal stock — which had gained 62% over the past month — slumped and was halted Thursday before the Food and Drug Administration approved its liver disease treatment, now called Rezdiffra. The shares then soared more than 20% in late trading.

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Rezdiffra, formerly known as resmetirom, is the first treatment for metabolic dysfunction-associated steatohepatitis, or MASH. The disease was previously called NASH, or nonalcoholic steatohepatitis. In this condition, fatty tissue builds up on the liver, causing damage. Eventually, patients need a liver transplant.

Madrigal Pharmaceuticals (MDGL) said Rezdiffra’s approval is contingent upon further confirmatory testing.

Madrigal stock took a hit on the stock market today after a news release accidentally announced the approval of resmetirom before the FDA issued its decision. Shares tumbled 10.8% to 243.57 before trading was halted at the close. As of Wednesday’s close, shares had climbed 62% from a low point in February. Madrigal stock was last up more than 22% in after-hours trades.

Madrigal Stock Tied To First-Ever MASH Treatment

Madrigal’s drug is the first-ever treatment for MASH. Rezdiffra is a once-daily pill designed to target a receptor associated with lipid lowering, increased bile acid synthesis and fat oxidation.

To gain approval for a MASH treatment, a drug must improve fibrosis by at least one stage on a scale of zero to four, with four being the worst. But patients must not worsen on another scale measuring MASH symptoms. Or, a drug can improve MASH symptoms but not lead to worsening fibrosis. There have been lots of failures in this space.

In December 2022, Madrigal said two doses of resmetirom achieved both goals. That month, Madrigal stock rocketed nearly 314%, MarketSurge.com shows.

Shares recently broke out of a consolidation with a buy point at 245.31. Madrigal stock is now narrowly below the 5% buy zone.

Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.

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