Some Analysts Do Not Want You To Write Off Madrigal In Favor Of Eli Lilly And Company’s GLP-1 Agonist For The Treatment Of Fatty Liver Disease MASH

Eli Lilly and Company (NYSE: LLY) is currently one of the two primary darlings of Wall Street when it comes to thematic investing around anti-obesity GLP-1 drugs, with Novo Nordisk constituting the other end of this emerging duopoly. Yet, it is the precise heft of these two pharma giants that continues to present emergent opportunities to their smaller counterparts, especially in obesity-related diseases such as the Metabolic dysfunction-Associated Steatohepatitis (MASH, previously known as Nonalcoholic Ateatohepatitis or NASH).

For the benefit of those who might not be aware, MASH is a fatty liver disease that develops primarily due to metabolic disorders, including obesity and diabetes. This fat accumulation can sometimes become toxic to the liver cells, resulting in a condition known as fibrosis, where fibrous or scarred liver tissue replaces those damaged by MASH, eventually leading to the loss of liver function.

The GLP-1 hormone plays an important role in suppressing hunger and regulating the production of insulin and glucose. After a meal, GLP-1 agonists raise the level of insulin, which decreases blood glucose levels. Simultaneously, these drugs reduce the speed at which the stomach empties its contents into the small intestine, thereby increasing the feeling of fullness and satiation.

Eli Lilly and Company offers Tirzepatide as one of its proprietary drugs to combat diabetes and obesity. The drug leverages a GLP-1 agonist as well as a Glucose-dependent Insulinotropic Polypeptide (GIP) one to ensure improved efficacy. Eli Lilly markets Tirzepatide under the Mounjaro and Zepbound labels, with the former geared toward diabetes and the latter billed as a treatment for obesity.

Back in February, we reported the initial results of Tirzepatide's SYNERGY-NASH phase 2 trial. As per the trial's findings, all doses of Tirzepatide managed to reverse MASH in a "clinically meaningful" manner without worsening fibrosis, with the 15mg dose of Tirzepatide exhibiting the greatest efficacy in combating this disease.

Now, the detailed results of this phase 2 trial have been published, indicating that over 50 percent of patients who received Tirzepatide in three different doses reached the trial's primary goal of MASH resolution without worsening of fibrosis at 52 weeks of treatment, compared to just 13 percent for those on placebo.

Additionally, over 60 percent of the patients who received Eli Lilly and Company's Tirzepatide GLP-1 drug in a 15mg dose achieved MASH resolution without the worsening of fibrosis. This outcome was replicated in just 10 percent of the placebo recipients. Finally, the treatment resulted in only mild to moderate side effects.

Eli Lilly And Company Vs. Madrigal And Viking Therapeutics

The FDA approved Madrigal's (NASDAQ: MDGL) Rezdiffra oral drug back in March for the treatment of MASH. Viking Therapeutics (NASDAQ: VKTX) is also developing its own anti-MASH drug, VK2809. Given the significance of the just-revealed detailed results of the SYNERGY-NASH phase 2 trial, it is hardly surprising that Madrigal shares are on a back foot today, currently down around 7 percent.

However, JMP Securities analysts have identified several lacunae in the trial's findings that give Madrigal investors a cause for continued optimism. These include:

"The lack of a dose-response relationship, the use of a completer’s analysis, and an unexpectedly high placebo response could mean that an intention-to-treat analysis might align $LLY Tirzepatide’s effectiveness closer to that of $MDGL Rezdiffra."

Additionally, the analysts note that the long-term use of GLP-1 drugs such as Eli Lilly and Company's Tirzepatide is quite atypical, which continues to present unique opportunities to Madrigal's Rezdiffra.

Finally, the analysts note that Eli Lilly and Company might not even participate in the phase three trial of this program, given Tirzepatide's already approved status for the treatment of obesity, which is a comorbidity for MASH.

Meanwhile, Eli Lilly and Company's competitors in the obesity sphere continue to grow. As per the results of a recent phase 2 trial, Viking Therapeutics' orally administered anti-obesity drug, VK2735, a dual agonist that leverages both GLP-1 and GIP receptors, was able to induce an average weight loss of 14.7 percent of the body weight after just 13 weeks of treatment. Critically, VK2735 managed to exhibit statistically significant outperformance relative to the placebo.

What's more, VK275 did not produce any severe side effect during its phase 2 trial. Given the increased convenience of an orally administered drug vs. the injectable form of GLP-1 agonists that currently dominate the market, Viking Therapeutics can present a significant challenge to Eli Lilly and Company. Of course, do note that Eli Lilly is also working on its own oral GLP-1 anti-obesity drug, Orforglipron.

About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.

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