Friday, June 15, 2018 3:13:43 PM
What's the next massive multibillion-dollar market for the biopharmaceutical industry? Put an increasingly prevalent liver disease high on the list.
Some analysts predict that the market for treatments of nonalcoholic steatohepatitis (NASH) could be between $20 billion and $35 billion. The progressive fatty liver disease is expected to become the leading cause of liver transplants by 2020. And there's currently no approved treatment for NASH, so the market is wide open.
With such a huge amount of money on the line, quite a few drugmakers are developing NASH drugs. We'll probably soon see acquisitions activity heat up. I think Madrigal Pharmaceuticals (NASDAQ: MDGL) and Viking Therapeutics (NASDAQ: VKTX) are highly likely to be gobbled up in the not-too-distant future. My hunch is that Bristol-Myers Squibb (NYSE: BMY), Gilead Sciences (NASDAQ: GILD), and Pfizer (NYSE: PFE) could be among the potential buyers.
Hand holding marker with drawing of big fish with mouth open next to several small fish with question marks around them
Hand holding marker with drawing of big fish with mouth open next to several small fish with question marks around them
Image source: Getty Images.
Two top targets
Madrigal Pharmaceuticals is practically a no-brainer to rank as one of the most likely acquisition candidates. The company is reportedly considering a sale after catching the eyes of several larger drugmakers, according to Bloomberg.
I'm not surprised at all that Madrigal is contemplating cashing in. In January, I listed the company as one of the top three small biotechs that "big drugmakers are probably drooling over." The drool that I was imagining stemmed from Madrigal's very encouraging phase 2 results reported in December 2017 for lead candidate MGL-3196.
Since then, the news has only gotten better for Madrigal. The company's initial results from the phase 2 study were after 12 weeks of treatment. Madrigal announced a few weeks ago updated results after 36 weeks of treatment. The new data were at least as impressive as the company's earlier report.
One company was probably nearly as pleased with those phase 2 results as Madrigal was -- Viking Therapeutics. Like Madrigal, Viking's lead candidate targets treatment of NASH. Viking's drug, VK2809, uses the same mechanism of action as Madrigal's MGL-3196. Positive results for MGL-3196 should bode well for Viking's chances with VK2809.
Viking is a little behind Madrigal, though. Madrigal is already looking to advance MGL-3196 to a pivotal phase 3 clinical trial. Viking expects to report phase 2 results for VK2809 sometime in the second half of 2018.
Lots of potential suitors
Which big drugmakers could be interested in acquiring Madrigal or Viking? You could probably throw a dart at a list of the biggest biopharmaceutical companies and land on a potential suitor.
I think the odds of either Bristol-Myers Squibb (BMS) or Pfizer making a bid for either of the two smaller biotechs are pretty high. Both companies confirmed to Reuters in April that they're interested in acquisitions in the NASH space.
BMS has four pipeline candidates targeting fibrotic diseases. Three of those experimental drugs are in phase 2 clinical trials while one is in phase 1 development. The most advanced of these candidates is PEG-FGF21, also referred to as BMS-986036. However, the phase 2 results for the drug weren't nearly as positive as Madrigal's results for MGL-3196. I have no doubt that BMS would love to have MGL-3196 in its quiver.
STORY CONTINUES
https://finance.yahoo.com/news/cash-nash-2-top-biotech-183100427.html
GO MDGL
"PEACE"
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