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Nov 01, 2024

Madrigal's MASH drug Rezdiffra 'blew away' expectations in Q3

Forget about the “bumpiness” analysts expected from Madrigal Pharmaceuticals’ launch of potential blockbuster Rezdiffra. In its second full quarter on the market, the metabolic dysfunction-associated

Forget about the “bumpiness” analysts expected from Madrigal Pharmaceuticals’ launch of potential blockbuster Rezdiffra.

In its second full quarter on the market, the metabolic dysfunction-associated steatohepatitis (MASH) therapy racked up sales of $62 million, which “blew away,” Wall Street’s expectations, according to Liisa Bayko of Evercore ISI’s research division.

The performance came in ahead of both the consensus estimate of $34 million and Evercore’s bullish projection of $45 million. Analysts at IQVIA were the only ones who were on the right track, estimating third-quarter sales of $58 million.

“It’s HUGE!” Evercore's Bayko wrote, a feeling that investors backed up as Madrigal’s share price grew by 16% by the early afternoon on Thursday.

In its third-quarter report, Madrigal helped explain the showing, pointing out that it achieved a key goal early by gaining 80% coverage of commercially insured lives in the U.S. It’s a milestone the company didn’t expect to reach until the fourth quarter.

Additionally, Madrigal said that fewer than 5% of those who are covered need a biopsy for diagnosis as opposed to a noninvasive test.

Madrigal closed the quarter with more than 6,800 patients on the fatty liver disease drug, up from more than 2,000 at the start of the period.

“We’re now six months into the launch and the feedback we’re hearing from prescribers continues to be very positive,” Madrigal CEO Bill Sibold said on a conference call. “They’re finding it easier to prescribe Rezdiffra to their patients thanks to our efforts to wire the system and the improved access that we’ve secured.”

Madrigal also is ahead of schedule in securing prescriber support. At the end of the third quarter, 40% of the company’s targeted prescribers had written a prescription for Rezdiffra, which was up from Madrigal’s 20% penetration rate at the end of the second quarter. The company also is seeing an increasing number of prescriptions written per prescriber, Sibold added.

During the conference call, Madrigal's leadership suggested that the analyst consensus estimate for 2025 sales of Rezdiffra is low at $410 million. Evercore is mapping out sales of $565 million.

In the second quarter, when the Pennsylvania-based company reported product sales at $15 million, the figure tripled the expectations of analysts. But, at the same time, the company warned investors to strap in for some turbulence in the launch. Fortunately for Madrigal—which had no commercial experience before the launch—it has surprised itself with its performance.

“This quarter we delivered outstanding results, meeting or exceeding our ambitious targets,” Sibold said.

Madrigal also said that it remains on track to launch Rezdiffra in Europe the second half of next year, pending an approval. It's in good position to do so as it now has $1 billion in cash and cash equivalents, the company said.