Resmetirom's EU Nod Positions Madrigal as Pioneer in a $3 Billion MASH Market

The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) has recommended conditional approval for Madrigal Pharmaceuticals' (NASDAQ: MDGL) resmetirom (Rezdiffra) for the treatment of noncirrhotic metabolic dysfunction-associated steatohepatitis (MASH) with moderate to advanced fibrosis. This milestone, announced on June 19, 2025, paves the way for a final decision by the European Commission by August—a critical step toward addressing a therapeutic void in Europe, where MASH has become the leading indication for liver transplantation. With robust Phase 3 data and a market poised for explosive growth, resmetirom's approval could solidify Madrigal's position as the first-in-class leader in a multibillion-dollar opportunity.

A Breakthrough in Treating MASH

Resmetirom's conditional approval is underpinned by the Phase 3 MAESTRO-NASH trial, which demonstrated statistically significant improvements in fibrosis resolution (without worsening steatohepatitis) and MASH resolution (without worsening fibrosis). At the 80 mg dose, 36% of patients achieved fibrosis resolution versus 19% on placebo, while 23% saw MASH resolution versus 11% placebo. These results, combined with its mechanism targeting lipotoxicity and fibrosis via selective THR-β agonism, establish resmetirom as a foundational therapy in a disease with no approved treatments in the EU.

The CHMP's recommendation underscores the urgency of addressing MASH, which affects an estimated 47 million Europeans. The disease, driven by metabolic dysfunction, is rapidly overtaking alcohol-related liver disease as the top cause of liver transplants. With no therapies approved for MASH in the EU—and only Madrigal's resmetirom and Novo Nordisk's semaglutide (pending approval) in late-stage development—resmetirom's first-mover advantage is substantial.

The EU Market: A $3 Billion Prize with Room to Grow

While global MASH therapy sales are projected to reach $2.6 billion in 2025, Europe's specific market potential is even larger. The EU's aging population, rising obesity rates, and underdiagnosed MASH cases suggest a $3.2–$4.5 billion addressable market by 2030. The CHMP's emphasis on resmetirom's safety profile—despite side effects like diarrhea (29%) and nausea (11%)—reflects the severity of unmet need.

Navigating the Competitive Landscape

Resmetirom faces competition from therapies targeting metabolic pathways, most notably Novo Nordisk's semaglutide, a GLP-1 receptor agonist. In its Phase 3 ESSENCE trial, semaglutide achieved a 37% fibrosis improvement rate versus 22% placebo, positioning it for EU approval by late 2025. However, resmetirom's direct fibrosis and MASH resolution data, coupled with its earlier U.S. FDA approval (March 2024), give it a 6–12 month head start in market access and physician familiarity.

Other late-stage candidates, such as Boehringer Ingelheim's survodutide (83% histological improvement in Phase 2) and Akero's efruxifermin (39% fibrosis reversal in cirrhotic patients), are still years away from EU launches. Meanwhile, Madrigal's ability to leverage noninvasive diagnostics (e.g., AIM-NASH) for patient stratification could accelerate uptake.

Regulatory Risks and Mitigation Strategies

The conditional approval requires Madrigal to provide additional data post-launch, including long-term safety and efficacy. While this adds execution risk, the CHMP's alignment with U.S. regulators and the drug's established safety profile in over 1,000 patients mitigate this concern.

Another risk is pricing pressure. European payers may balk at resmetirom's projected $30,000–$40,000 annual price tag. However, its cost-effectiveness in delaying liver transplants and reducing hospitalizations could justify coverage, particularly given the lack of alternatives.

Investment Thesis: A Strategic Play on First-Mover Advantage

Madrigal's stock () has underperformed expectations since its U.S. launch, trading at ~$30 (down from $50 post-FDA approval). This creates an attractive entry point if the August EU approval is confirmed.

With a market cap of $1.2 billion and minimal debt, Madrigal is well-positioned to capitalize on its lead. Assuming 10% EU market penetration by 2027, resmetirom could generate $350–$500 million in annual EU revenue—transforming Madrigal from a niche player into a $3–$5 billion biotech.

Conclusion: A High-Reward Opportunity

Resmetirom's EU approval is a near-term catalyst with asymmetric upside. While competition looms, Madrigal's first-in-class status, clinical differentiation, and the EU's urgent need for MASH therapies make it a compelling investment. For risk-tolerant investors, a position in MDGL at current valuations offers exposure to a rapidly growing market and a drug with best-in-class data. The August decision is a binary event—but one that could make resmetirom the standard of care in Europe for years to come.

Investment Recommendation: Buy MDGL with a 12–18 month horizon, targeting $45–$60 per share by 2026. Risks include regulatory setbacks, pricing disputes, and accelerated approvals for competitors.