Resmetirom's EU Approval Milestone Positions Madrigal as NASH Market Leader

The European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion for Madrigal Pharmaceuticals' resmetirom (Rezdiffra) in June 2025, recommending its approval for the treatment of adults with noncirrhotic metabolic dysfunction-associated steatohepatitis (MASH) and moderate-to-advanced liver fibrosis (stages F2-F3). This marks a pivotal moment for Madrigal (NASDAQ: MADG) and the broader NASH therapeutics sector. Resmetirom now stands to become the first approved therapy for MASH in the European Union, capitalizing on a high-growth, underserved market with no currently licensed treatments.

Why This Matters: The Unmet Need in NASH

NASH, a severe form of non-alcoholic fatty liver disease (NAFLD), affects an estimated 25-30 million people in the U.S. alone and is rapidly rising in Europe. It is now the fastest-growing indication for liver transplantation in both regions. Despite its prevalence, no therapies have been approved for NASH in the EU until now. Resmetirom's U.S. FDA approval in March 2024 broke this impasse, but its pending EU green light—expected by August 2025—will unlock a market of over 20 million potential patients across Europe.

The CHMP's decision is rooted in the Phase 3 MAESTRO-NASH trial, which demonstrated statistically significant improvements in two critical endpoints:
1. Fibrosis reduction: 29% of patients on resmetirom (100 mg) achieved fibrosis improvement without worsening MASH vs. 17% on placebo.
2. MASH resolution: 30% of resmetirom patients achieved MASH resolution without worsening fibrosis vs. 10% on placebo.

These results underscore resmetirom's dual efficacy in addressing both fibrosis and inflammation, a combination that sets it apart from competing therapies in late-stage development.

Market Opportunity: A First-Mover Advantage

The global NASH drug market is projected to grow from $1.3 billion in 2023 to $10.5 billion by 2030, driven by rising obesity rates and aging populations. Resmetirom's first-in-class status in Europe positions Madrigal to capture a dominant share of this market. Key tailwinds include:

1. Conditional EU Approval Pathway: The CHMP's recommendation leverages the EMA's conditional marketing authorization, which expedites access for life-threatening conditions with no alternatives. This allows commercialization even as confirmatory trials (e.g., the MAESTRO-NASH OUTCOMES trial in compensated cirrhosis patients) continue.
2. Strategic Launch Timeline: Madrigal plans to roll out resmetirom in Germany first by late 2025, followed by other EU markets. The company's $931 million in cash as of December 2024 ensures ample funding for this effort.
3. Orphan Drug Exclusivity: Resmetirom holds orphan drug designation in both the U.S. and EU, granting 10 years of market exclusivity post-approval—a critical barrier to competition.

Note: A visual of MADG's stock price rise from $30 to $80+ since March 2024 would illustrate investor optimism tied to regulatory milestones.

Risks and Considerations

While resmetirom's prospects are compelling, risks remain:
- EU Commission Delays: Though the August 2025 decision is expected to align with the CHMP's recommendation, regulatory surprises could delay the launch.
- Pricing and Reimbursement: Success in Europe hinges on negotiating favorable pricing with national health authorities.
- Competitor Pipeline: Drugs like elafibranor (Kynamro) and cilofexor/firsocostat (Allergan) are in late-stage trials, but resmetirom's proven efficacy and first-to-market advantage may limit their impact.

Investment Thesis: A Buy on a NASH Pioneer

Madrigal's stock has already surged on U.S. approval news, but the EU milestone could propel further gains. With a market cap of ~$3.5 billion and $931 million in cash, the company is well-positioned to scale commercial operations while advancing its pipeline.

• Near-Term Catalyst: EU approval by August 2025 and subsequent country-specific launches.
• Long-Term Growth: Data from the MAESTRO-NASH OUTCOMES trial (anticipated in 2027) could expand resmetirom's label to include cirrhotic patients, widening its addressable market.

Recommendation: Madrigal remains a strong buy for investors seeking exposure to the NASH market. The CHMP's positive opinion solidifies its leadership, and with no direct competitors yet approved in key markets, resmetirom is poised to dominate a multibillion-dollar opportunity.

In a sector starved of approved therapies, Madrigal's resmetirom is not just a drug—it's a turning point for NASH treatment. For investors, this is a rare chance to back a first-in-class therapy with clear regulatory and commercial tailwinds.