CONSHOHOCKEN, PA — Madrigal Pharmaceuticals Inc. (NASDAQ: MDGL) moved to tighten its grip on one of biotech’s hottest disease areas, striking a $50.00 million licensing deal with Pfizer that could accelerate the arrival of the first true combination therapies for metabolic dysfunction-associated steatohepatitis, or MASH.
The agreement gives Madrigal exclusive global rights to develop, manufacture, and commercialize ervogastat, a clinical-stage oral drug designed to block DGAT-2, a key enzyme involved in the buildup of fat inside the liver. The deal also includes rights to two additional early-stage MASH assets, expanding Madrigal’s pipeline beyond its flagship drug Rezdiffra, the first FDA-approved therapy for the disease.
Investors have been betting that MASH, a silent but deadly liver disorder tied to obesity and diabetes, will become one of the largest new pharmaceutical markets of the decade. Millions of patients worldwide suffer from progressive liver scarring that can lead to cirrhosis, cancer, and the need for transplantation. With no curative therapies, drugmakers have been racing to assemble treatment platforms that can stop or even reverse the disease.
Madrigal is positioning itself at the center of that race.
Rezdiffra, the company’s once-daily oral thyroid hormone receptor-beta agonist, works by accelerating the liver’s ability to process and burn fat. Ervogastat attacks the same problem from the opposite direction, preventing triglycerides from being formed and stored in the first place. Together, the drugs are designed to hit two of the most important drivers of liver fat accumulation.
Bill Sibold, Madrigal’s chief executive, said the deal reflects a strategic shift toward combination therapy, which many researchers believe will be necessary to treat a disease as complex as MASH.
“Rezdiffra’s strong profile as a liver-directed, well-tolerated, once-daily oral therapy positions it as the ideal foundation,” Sibold said. “Our global license agreement for ervogastat aligns with our long-term leadership ambition, and we believe Madrigal is uniquely positioned to advance this promising Phase 2 asset and unlock its full clinical and commercial value through a development program focused on combination therapy with Rezdiffra.”
Clinical data already suggest the approach could work. In a previously published Phase 2 study, 72 percent of patients treated with ervogastat achieved at least a 30 percent reduction in liver fat, while 61 percent reached a 50 percent reduction as measured by MRI-PDFF, a standard imaging technique for liver fat. Those levels of fat reduction have been associated in other programs with later improvements in liver scarring, the outcome that ultimately determines whether patients avoid liver failure.
Professor Quentin Anstee of Newcastle University, who led earlier ervogastat studies, said the science behind combining the two drugs is compelling.
“Because Rezdiffra and ervogastat act on distinct yet complementary pathways that drive liver fat accumulation, this combination has potential to produce additive antisteatotic and antifibrotic efficacy,” Anstee said.
From a financial standpoint, the deal is modest by big-pharma standards but meaningful for Madrigal. Pfizer will receive $50.00 million upfront, recorded as an expense in Madrigal’s fourth quarter of 2025, plus milestone payments and royalties tied to future sales. For Pfizer, the agreement offloads development risk while preserving upside if the drug succeeds.
Madrigal plans to begin a drug-to-drug interaction study in 2026 to test how ervogastat behaves alongside Rezdiffra, followed by discussions with the Food and Drug Administration on a Phase 2 combination trial. The company will outline its strategy in more detail at the J.P. Morgan Healthcare Conference on Monday, January 12, at 1:30 p.m. PST.
The stakes are enormous. MASH is now the leading cause of liver transplants in women in the United States and the fastest-growing indication in Europe. Patients with moderate to advanced fibrosis face up to 17 times the risk of liver-related death, and those who progress to cirrhosis see that risk jump more than 40-fold.
With diagnosis rates rising and awareness spreading, Wall Street sees a market that could eventually rival diabetes and obesity drugs in size. By locking up ervogastat and layering it on top of Rezdiffra, Madrigal is signaling that it does not intend to be just another player in that market. It intends to define it.
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