TEMPO.CO, Jakarta - The U.S. FDA has approved Madrigal Pharmaceuticals' (MDGL.O), drug for a fatty liver disease known as non-alcoholic steatohepatitis (NASH), the first treatment to get the nod for the condition and opening up a multi-billion dollar opportunity.

The company's shares surged 24% to $301.99 in extended trading.

NASH, which was recently renamed metabolic dysfunction-associated steatohepatitis (MASH), affects about 1.5 million people in the United States, according to the company's estimates, but there was no approved treatment for it until now.

Madrigal's oral drug will be available under the brand name Rezdiffra from April, CEO Bill Sibold told Reuters before the approval.

The company has priced the drug at an annual wholesale price of $47,400.

The Institute for Clinical and Economic Review, a drug pricing watchdog, in May last year, estimated Madrigal's drug would meet the cost-to-effectiveness benchmark if it was priced between $39,600 and $50,100 per year.

Evercore ISI analyst Liisa Bayko estimates Rezdiffra's annual sales to surpass $5 billion at its peak.

Madrigal's drug has been approved for patients who have NASH with fibrosis, or scarring, that has progressed to stage 2 or 3 in severity, the company said on Thursday, March 14.

The FDA's label, however, does not require a liver biopsy requirement for diagnosis of NASH, the company added, which was a key concern among experts that could have hit demand.

The cause of NASH is not fully understood. It is typically associated with obesity, hypothyroidism, diabetes, high levels of fat in the blood, and similar health issues. It causes excess build-up of fat in the liver and causes inflammation and fibrosis, or scarring, of the organ.

The approval marks a "game-changing" moment for patients after a string of failures over the last decade, said Lorraine Stiehl, CEO of patient advocacy organization American Liver Foundation.

"There's a lot of skeletons, there's a lot of tombstones in terms of therapies in the space," Stiehl said. "(But) the ... approval is going to open the floodgates to just so many more therapeutics which are desperately needed."

Akero Therapeutics (AKRO.O), 89bio (ETNB.O), Viking Therapeutics (VKTX.O), and Sagimet Biosciences (SGMT.O), are conducting mid- and late-stage trials of their drugs.

Rezdiffra's accelerated approval was based on data from a late-stage study of 888 patients, which showed those on the drug had significant resolution of symptoms or improvement in liver scarring as compared to those on placebo, according to the FDA.

REUTERS

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