Madrigal Pharmaceuticals MDGL has acquired exclusive global rights to ervogastat from Pfizer PFE, strengthening its pipeline of innovative and combination therapies for metabolic dysfunction-associated steatohepatitis (“MASH”).
Ervogastat, a mid-stage, oral, liver-targeted DGAT-2 Inhibitor, lowers liver triglyceride levels by blocking the DGAT-2 enzyme and helps decrease liver inflammation.
Over the past year, shares of Madrigal have risen 69.3% compared with the industry’s 4.6% growth.
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Rationale Behind MDGL’s Combination Therapy for MASH
Madrigal is focused on developing combination therapies for MASH treatment. By licensing ervogastat from Pfizer, the company intends to combine it with its approved therapy Rezdiffra, maximizing its clinical outcomes and commercial potential.
In the United States, Rezdiffra (resmetirom) is approved for the treatment of adult patients with noncirrhotic MASH with moderate-to-advanced liver fibrosis (consistent with stages F2 to F3 fibrosis) in conjunction with diet and exercise.
In a prior phase II study, ervogastat demonstrated robust efficacy in reducing liver fat in MASH patients. As assessed by MRI-PDFF, 72% of the patient population treated with ervogastat at a 150mg dose achieved a 30% reduction in liver fat, while 61% achieved a 50% reduction. This level of fat reduction has been shown to correlate with longer-term fibrosis improvement for other mechanisms, including Rezdiffra. Patients also experienced improvements in liver enzymes and reduced liver stiffness. The treatment was well tolerated across all tested doses.
Madrigal plans to conduct a drug-to-drug interaction study with Rezdiffra and consult the FDA on designing a phase II combination study for MASH patients.
Rezdiffra, a once-daily, oral, liver-directed THR-β agonist, is approved for the treatment of adults with MASH with moderate-to-advanced liver scarring (fibrosis) in conjunction with diet and exercise.
The drug was commercially launched in the United States in April 2024 and received the conditional marketing authorization in the European Union for MASH in August 2025.
Per management, as ervogastat and Rezdiffra reduce liver fat through distinct and complementary mechanisms, the combination could provide greater benefit than either one alone.
Financial Highlights
Madrigal is entitled to pay Pfizer an upfront payment of $50 million, which will be reflected in its expenses for the fourth quarter of 2025. Pfizer will additionally receive milestones and royalty payments if Madrigal successfully develops and commercializes ervogastat in the market. In addition to ervogastat, PFE granted worldwide rights to two early-stage MASH pipeline candidates.
Madrigal’s Zacks Rank & Stocks to Consider
MDGL currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Amicus Therapeutics FOLD and CorMedix CRMD, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, estimates for Amicus Therapeutics’ 2026 earnings per share have declined from 67 cents to 65 cents. Shares of FOLD have increased 54.7% over the past year.
Amicus Therapeutics’ earnings beat estimates in one quarter and missed in the remaining three trailing quarters, with the negative average surprise being 20.21%.
Over the past 60 days, 2026 EPS estimates for CorMedix have risen from $2.49 to $2.88. Shares of CRMD have declined 31.4% over the past year.
CorMedix’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 27.04%.
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Madrigal Pharmaceuticals, Inc. (MDGL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
