Biotech Movers: Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) And Immunomedics, Inc. (NASDAQ:IMMU)

Non-alcoholic steatohepatitis (NASH) has been a real hot topic this week, with news hitting press that the development stage biotechnology company Galectin Therapeutics Inc (NASDAQ:GALT) failed to hit on a couple of primary endpoints in its lead phase IIb study of a drug called GR-MD-02, which was being investigated as a potential therapy for patients with NASH cirrhosis.

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Galectin lost more than 30% of its market capitalization on the news.

Fast-forward 24 hours, however, and another company working in the same space has put out its own NASH-related news and, this time around, the implications are far more positive.

The company in question is Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL).

There is a good chance that this one will, until now, have been off the radar for many reading – it’s a relatively small NASDAQ development stage stock that doesn’t have the sort of following many others of a similar size have managed to amass in the US.

On the back of the latest development, however, this one is no longer under the radar.

On Wednesday, Madrigal reported data from a phase II clinical study of a drug called MGL-3196. The trial was set up to prove that the just mentioned asset could be safe and effective in patients with biopsy-proven NASH and, as per the results, it looks as though it is able to do exactly that.

The primary endpoint in the vast majority of these sorts of NASH studies is the reduction in liver fat and more often than not (and as was the case here) said reduction is gauged against placebo.

In this instance, patients on the trial that received placebo recorded a 9.6% reduction in liver fat across the measurement period. In contrast, patients who received active doses of MGL-3196 recorded a reduction in liver fat of a little over 36%.

In other words, the drug has essentially hit it out of the park and its hard to imagine results coming in as so decisive on the back of a phase II that then are unable to translate (and, by proxy, replicate) to a larger scale study in phase III.

So that brings us to what’s next.

There were no major safety concerns associated with active dosing (at least, that is, none that might imply that the FDA won’t allow Madrigal to set up and conduct a phase 3 pivotal investigation in this population) and so the next step is to get a protocol in place and, beyond that, get it green-lighted by the agency in the US.

Subsequent to a protocol green light, it’s then all about getting the trial conducted and – with any luck – completed, successfully.

As might be expected, Madrigal is running on the news and closed out the session yesterday at a price 88% higher than that at which it opened the day­.

Another big mover in the markets on Wednesday was Immunomedics, Inc. (NASDAQ:IMMU).

The company put out data from its own phase II trial, this time looking at the safety and efficacy of a drug called sacituzumab govitecan in patients with metastatic triple-negative breast cancer (mTNBC).

And again, as per the results, the drug seems to be able to do its job and do it pretty well. The numbers showed an Objective Response rate (ORR) of 31%, including six complete responses (CRs) and 28 partial responses (PRs), in the 110 patient trial.

In a cancer like mTNBC, which is incredibly difficult to treat with the current standard of care therapies and, even when caught early, has a relatively poor prognosis, the ability to demonstrate an ORR of 31% is a strong win for any asset.

This one will be approved based on a Biologics License Application (BLA) if it picks up approval at all, and the company expects to submit the application at some point during the first quarter of 2018. It’s a fast-track submission, meaning there is the potential for a quick FDA turnaround (assuming everything is sufficient with the submission) and, in turn, the potential for an approval before the end of the third quarter of 2018.

Again, and just as with Madrigal, markets are receiving this news positively and have traded up on the company as a result. At close on Thursday, Immunomedics was trading for a 13% premium to its preannouncement pricing.

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