RBC Capital says positive Madrigal data further marginalizes OCA NASH prospects

RBC Capital analyst Brian Abrahams notes that Madrigal Pharmaceuticals (MDGL) reported positive biopsy results in Phase 3 data from resmetirom showing 10%-12% and 16%-20% of patients had fibrosis and NASH improvements, respectively, relative to placebo — both statistically significant. With the caveats of comparing across studies, this looks to him to be at least as good if not better than what Intercept Pharmaceuticals’ (ICPT) OCA has been showing in a longer Phase 3 NASH study – recall OCA showed 12%-13% placebo-adjusted fibrosis improvements from re-analysis and 3%-4% NASH improvements, and without the considerable tolerability/safety liabilities of pruritus, LDL increases, and potential liver toxicity. Abrahams argues that Madrigal data provides further reasons why deprioritizing NASH and focusing on PBC may be the most viable pathway for value creation for Intercept. He keeps a Sector Perform on Intercept’s shares with a price target of $16.