Dive Brief:

• Madrigal Pharmaceuticals, the first company to win U.S. approval for a medicine to treat the common liver disease known as MASH, is now betting on the power of RNA therapies in its quest to find new ways to attack the condition.
• The drugmaker on Wednesday announced an agreement with China’s Suzhou Ribo Life Science to license six preclinical small interfering RNA programs. Madrigal will pay $60 million up front and as much as $4.4 billion more for reaching certain milestones.
• RNA interference therapies offer the possibility of silencing genes implicated in producing the proteins that spur MASH, or metabolic dysfunction-associated steatohepatitis, Madrigal said. The company plans to test the approach in combination with its approved medicine Rezdiffra in hopes of finding an even more powerful way to combat the disease.

Dive Insight:

Madrigal surprised analysts and investors with the quick success of Rezdiffra. Drugmakers had tried for years to develop a treatment for MASH, previously known as non-alcoholic steatohepatitis, and repeatedly failed. And some analysts questioned whether a MASH drug would find a large market, considering the disease often hides in the body and some symptoms can be treated with a less costly regimen of diet and exercise.

But Madrigal proved the doubters wrong, with Rezdiffra sales repeatedly outstripping expectations. Since Rezdiffra’s introduction, awareness of the disease has increased, spurring as much as a 50% spike in diagnoses, Cantor Fitzgerald analyst Prakhar Agrawal wrote in a note to clients in January.

Now, Madrigal is facing the prospect of increased competition for its pioneering medicine. Novo Nordisk won Food and Drug Administration approval to widen the use of its weight loss drug Wegovy to include MASH in August, and other treatments are in advanced testing. Meanwhile, there’s been a flurry of dealmaking centered on the condition, including Novo’s $4.7 billion buyout of Akero Therapeutics.

Amid all the activity, Madrigal has been trying to shore up its position as the market leader. In addition to Wednesday’s deal, the company has licensed experimental drugs from Pfizer and another Chinese company, CSPC Pharmaceutical Group, in recent months. Madrigal now has more than 10 programs aiming at different drivers for the disease.

The latest deal is “strategically logical and diversifying from a mechanistic perspective, as well as commercially and economically attractive,” Leerink Partners analyst Thomas Smith wrote in a note to clients. It supports Madrigal’s “efforts to build on Rezdiffra’s competitive leadership as a foundational therapy in MASH,” he added.