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For Madrigal Pharmaceuticals (MDGL -1.83%) stock to take off, three things need to happen: Sales of Rezdiffra need to keep growing; the drug needs to expand to patients with cirrhosis caused by metabolic dysfunction-associated steatohepatitis (MASH); and Madrigal needs to prove it has something valuable beyond it.Rezdiffra is Madrigal's once-daily pill for MASH, a serious liver disease caused by a buildup of fat that can lead to inflammation, liver scarring, and eventually liver failure or liver cancer. Rezdiffra is currently approved for patients with moderate-to-advanced liver scarring, but not cirrhosis.
That's where the second opportunity comes in. MASH cirrhosis is essentially the next, more advanced stage of the disease, when the liver has become severely scarred. Madrigal estimates there are roughly 245,000 diagnosed patients with MASH cirrhosis in the U.S. under specialist care, and there are currently no approved drugs specifically for them.
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So essentially, Rezdiffra needs to keep taking market share among the patients it can already treat, and Madrigal needs to prove it can eventually treat that much larger group of sicker patients, too.
Moving in the right direction Rezdiffra generated $364.3 million in second-quarter sales, up 71% year over year. More than 49,000 patients were taking the drug at the end of June, more than double the number a year earlier. Those are strong numbers. But they're also why the bar is getting higher.
The market already knows Rezdiffra can sell. What Madrigal needs to show now is how much bigger it can get. And that makes continued patient growth, expansion into MASH cirrhosis, and the company's developing pipeline the three things you should watch closely.
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Cirrhosis could change the math The biggest catalyst is Madrigal's ongoing Maestro-NASH-Outcomes phase 3 trial, which is evaluating Rezdiffra in patients with MASH cirrhosis. ("NASH," or nonalcoholic steatohepatitis, was the former name for the condition now known as MASH.) Results are expected in 2027. If the trial is successful, Madrigal could seek to expand Rezdiffra into this more advanced stage of the disease, potentially adding hundreds of thousands of patients to its addressable market.
And there are already some encouraging signs. In a separate study, 51% of patients with MASH cirrhosis experienced at least a 25% reduction in liver stiffness after two years of Rezdiffra treatment. That's a positive development, but it doesn't prove Rezdiffra will succeed in the Outcomes trial. The phase 3 study needs to show that treatment actually reduces the risk of serious liver complications.
Madrigal needs a second act We also need evidence that Madrigal won't remain entirely dependent on one drug. The company now has more than 10 MASH development programs, including an experimental oral GLP-1 drug that's being advanced into phase 1 development. Indeed, the strategy makes sense. MASH is a complicated disease, and future treatment could involve attacking it from multiple directions: reducing weight and liver fat while also directly treating liver fibrosis.
Ultimately, Rezdiffra needs to maintain strong growth in patient numbers and sales volume. The 2027 cirrhosis data need to add another major patient population to the addressable market. And Madrigal needs to show that at least one pipeline candidate has the potential to become a meaningful second asset.
If all three happen, Madrigal Pharmaceuticals won't simply have a successful MASH drug. It could have the foundation for an entire MASH franchise. And that's what could really move this pharma stock.