Viking Therapeutics' successful liver treatment trial boosts Madrigal Pharmaceuticals, says Oppenheimer

The success of a mid-stage trial of its rival Viking Therapeutics’ (NASDAQ:VKTX) treatment for non-alcoholic fatty liver disease (NAFLD)  improves the commercial outlook for Madrigal Pharmaceuticals (NASDAQ:MDGL), which offers a similar therapy to treat the disease, according to a new report by Oppenheimer analysts.

Viking Therapeutics’ VK2809 and Madrigal Pharmaceuticals MGL-3196 are both selective thyroid beta receptor agonists that treat liver disease by improving thyroid activity to bolster the metabolism and get rid of fat in the organ.

Earlier this week, Viking said a Phase 2 trial evaluating the use of VK2809 in patients with both NAFLD and elevated levels of low-density lipoprotein cholesterol (LDL-C) was successful and met its primary goal of paring back LDL-C. The study also significantly reduced patients’ liver fat content.

Read: Maxim bullish on latest data for Viking Therapeutics’ key drug to fight fatty liver disease

Oppenheimer’s Jay Olson and Silvan Tuerkcan see the outcome of the phase 2 Viking trial as an “additional positive read through to Madrigal’s MGL-396”, which underlines the effectiveness of the entire class of thyroid beta receptor agonists in combating NAFLD.

“We see these results as validation for the THR-B agonist class that seems to enable strong liver fat reduction and a decrease in key atherogenic lipids,” they write in their note to investors.

At week 12 in a recent Phase 2 clinical trial for patients with NAFLD, MGL-3196 also demonstrated statistically significant results for the primary endpoint with a 36.6% reduction in liver fat compared to a 9.6% reduction for patients taking the placebo.

“Biopsy data in the ongoing Phase 2 NASH trial look very promising with NASH resolution and indications that reduction in fibrosis should follow. These are approvable endpoints and derisk the planned Phase 3 study in our opinion,” write Olson and Tuerkcan in their note to investors.

Madrigal looks poised to meet with the US Food and Drug Administration to discuss Phase 2 results for MGL-3196 and agree upon a design for the Phase 3 trial, which should come by the end of the year, according to the Oppenheimer note.

Read: Madrigal Pharmaceuticals releases promising study results, Oppenheimer more than doubles price target

The full results from Viking’s trial for VK2809, meanwhile, will be presented at The Liver Meeting in San Francisco, sponsored by the American Association for the Study of Liver Diseases, which takes place from November 9 through the 13^th.

Olson and Tuerkcan are curious to see “the full data including several other important biomarkers, especially for cirrhosis.” On the back of Viking’s succesful trial results, the Oppenheimer analysts are keeping an Outperform rating and a US$300 price target on Madrigal’s shares.

Viking’s VK2809 and Madrigal’s MGL-3196 both take aim at two diseases – NAFLD, which is the build-up of extra fat in liver cells that is not caused by alcohol, as well as non-alcoholic steatohepatitis or NASH, another condition in which a build-up of fat in the liver causes inflammation and cell damage.

Viking Therapeutics shares jumped 2.3% to US$19.91 in Wednesday’s pre-market session while Madrigal shares were flat at US$207.15.

Story by ProactiveInvestors