Analysis Focus: MDGL
A little more than three months ago we extensively covered Madrigal Pharmaceuticals’ (NASDAQ:MDGL) MGL-3196. Incidentally in that article we wrote “the last three months have seen gains of more than 230%.” And shareholders would have loved to see the same thing happen in the last three months. But that hasn’t happened. However what has happened is perhaps both more intriguing and interesting at the same time. The stock slumped almost 40% in April 2 to $101.55. And after more or less holding steady for the next one and half months, started zooming ahead in spectacular fashion. In approximately a single day’s trading the stock price has gained 145% to close at $265.61.
This particular spectacular rise is caused by the recent Phase 2 results for their flagship MGL-3196 on patients with non-alcoholic steatohepatitis (NASH). The clear statistical benefit of ~33% improvement in patients over the placebo is a definite way forward for the candidate. In the previous article we extensively discussed about detection and distinguishing between simple steatosis from NASH. However, we also indicated that the effectiveness of MGL-3196 in resolving the fibrosis will be the real game changer. The available phase 2 data is a clear acknowledgement of that. In a similar way, positive results of the Phase 2 study of MGL-3196 in treating heterozygous familial hypercholesterolemia (‘HeFH), a genetic disorder that causes high cholesterol levels, will further consolidate the stock’s position.
However, it must also be reckoned that this is Phase 2 data and the full 12-week phase 2 results and top-line 36-week data, including liver biopsy correlation results, will be available by the end of this year. That means there may be some vestigeal reason to get into the MDGL story even now. Having said that, we will emphasize even more strongly now that due to this recent spectacular surge due to topline data, we do not expect significant upside in the near term. We are taking a closer look at MDGL mainly from a valuation standpoint and will restrain from giving a recommendation for the long term.
It is also being informally mentioned that this surge may have been caused by attention it may have started receiving from several larger drugmakers who might be interested in acquiring Madrigal. A number of big pharmaceutical companies are vying to become the leader in the NASH space. In the developed world, including in the U.S., NASH is projected to be a large market and those companies are interested in acquiring a large pie of that, even if by buying out Madrigal Pharmaceuticals.
Stocks in News: SCPH, MEIP, KTOV
Discussion: The FDA identified deficiencies leading to delay in approval of ScPharmaceuticals’ (NASDAQ:SCPH) NDA of FUROSCIX Infusor (furosemide). The communications precludes discussions and postmarketing requirements. The micropiston pump technology used in the device control releases furosemide for chronic heart failure. It succeeded in real world evaluation for decreasing hospital admissions in Heart Failure. Even by older records, the prevalent cases of HF in the U.S. now exceed 5.8 million and more than 550,000 new cases are diagnosed each year.
Discussion: Interim analysis of open-label Phase 2 study allows continuation of MEI Pharma’s (NASDAQ:MEIP) pracinostat plus azacitidine (Celgene’s VIDAZA) in higher-risk myelodysplastic syndrome (MDS) patients. The estimated end date of the trial is June 2020. Positive patient retention threshold allows for the continuation of the study. MDS includes a group of stem cell malignancies primarily affecting the 60-plus age population. The syndrome is characterized by bone marrow failure, peripheral blood cytopenias, and high mortality. It also carries significant risk of progression to Acute Myelogenous Leukemia (‘AML). By conservative estimates there are more than 10,000 new cases are added to the ≥60,000 individuals with MDS residing in the U.S. An aging population and an improving awareness of the disease will logically further increase the disease burden.
Discussion: The FDA approved Kitov Pharma’s (NASDAQ:KTOV) KIT 302 branded as Consensi (amlodipine and celecoxib) for the treatment of osteoarthritis pain and hypertension. Both the components of the drug were pre-approved in other established drugs and their approved dosage correspond to amlodipine for hypertension and of celecoxib for the treatment of osteoarthritis pain. Present U.S. prevalence rate of osteoarthritis is over 50 million and ~75 million people have high blood pressure. The latter also is called the “silent killer” due to lack of any visible symptoms. Hence, patients’ adherence to the hypertension treatment regimen is low. But the new single pill combination treatment for osteoarthritis and hypertension can potentially improve treatment adherence. In anticipation of FDA approval, the company had signed a definitive license and commercialization agreement for the Chinese market. The company’s main development focus now shifts to NT219, an exciting investigational new drug candidate for various oncology indications.
In other news:
Two Phase 3 clinical trials data of JNJ unit Janssen Pharma’s esketamine nasal spray showed a benefit and positive safety profile.
The Norwegian Academy of Science and Letters awarded the $1M Kavli Prize in nanoscience to CRISPR/Cas9 pioneers Jennifer Doudna, Emmanuelle Charpentier and Virginijus Šikšnys. The snubbing of Feng Zhang, another key patent holder of the technology, added to further controversy in the matter.
The Spanish Ministry of Health approved pricing and reimbursement for ILUVIEN (fluocinolone acetonide intravitreal implant) for the treatment of vision impairment associated with chronic diabetic macular edema. ILUVIEN is being developed by Alimera Sciences.
Merck announced its collaboration with Premier to reduce the recurrence of Clostridium difficile (C. diff) infection.
Nektar Therapeutics filed a marketing application for long-acting mu-opioid against NKTR-181 treatment for chronic low back pain.
Clearside Biomedical announced Phase 2 data of combination usage of CLS-TA (triamcinolone acetonide) and Regeneron Pharmaceuticals’ EYLEA (aflibercept) on diabetic macular edema. The company says the data meets primary endpoint, yet it is evident that the combination failed to register significant improvement over prior baseline achieved by EYLEA.
Vtv Therapeutics announced its exclusive licensing agreement with Newsoara Biopharma Co. Ltd. to develop and commercialize its PDE4 inhibitor program in China and a number of other East Asian countries.
FDA designated Fast Track review for Curis’ Orphan Drug-tagged fimepinostat (‘CUDC-907) for treatment of relapsed/refractory diffuse large B-cell lymphoma (‘DLBCL).
Minnesota sued Insys Therapeutics over illegal marketing of Subsys, a powerful fentanyl-based pain medication. Earlier a former Insys sales representative pleaded guilty of bribing following DoJ action based on whistleblower lawsuits.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.