Attacking non-alcoholic steatohepatitis (NASH) "at the start of the pathogenetic stream" could distinguish MGL-3196 from others in the space, Paul Friedman told BioWorld Today. The CEO-to-be of the company formed through the merger of Synta Pharmaceuticals Corp. with Madrigal Pharmaceuticals Inc. added that "all facets of NASH should be responsive in a positive way to this treatment, whereas something like an antifibrotic is at the end of the process. It's simply removing fiber that's been laid down because of all the other damage that's been done."

Ft. Washington, Penn.-based Madrigal's phase II-ready MGL-3196, an oral, liver-directed selective thyroid hormone receptor-ß agonist, will also be developed for heterozygous as well as homozygous familial hypercholesterolemia (FH). Synta, of Lexington, Mass., is acquiring all outstanding shares of Madrigal in exchange for about 253.9 million newly issued shares, after which Madrigal shareholders will own 64 percent of the combined company. Cleared by the boards of both firms and by owners of Madrigal stock, the deal is expected to close by the end of the third quarter.

Synta's shares (NASDAQ:SNTA) closed Thursday at 41 cents, up 17 cents, or 67.7 percent. They've been hobbled since October's surprise phase III blow-up of heat-shock protein 90 inhibitor ganetespib in non-small-cell lung cancer. "There are studies ongoing and [they] contractually have to go on for a while," Friedman said. "I don't know where to place the odds on those, like the acute myeloid leukemia studies. One could argue that the drug has substantial activity and that either the tumor type [in the October trial] – which is a tough one – and/or the study design, in which there were a number of amendments, just weren't optimal to tease out ganetespib's activity. I think the jury remains out on that. I followed it because I was on the Synta board, and it's not clear what led to [ganetespib's] lack of activity."

Friedman, former CEO of Wilmington, Del.-based Incyte Pharmaceuticals Inc., said that, before the merger closes, an investor syndicate that includes Bay City Capital and its founder Fred Craves as well as SQN LLC, a corporation held by Friedman and Madrigal CEO Rebecca Taub, will add as much as $9 million to fund MGL-3196 through phase II trials. "We should have enough money to take us through all the critical time points in 2016 and 2017," Friedman said. "I don't think you would want to run your bank account down to where we would be at the end of that time. We would certainly have to look at opportunities to replenish our bank account" when conditions are right, he said.

Taub will serve as chief medical officer in the new firm. Formerly vice president of research in metabolic diseases at Basel, Switzerland-based Hoffmann-La Roche Ltd., from 2004 to 2008, she has been the head of Madrigal since its founding in September 2011. She licensed MGL-3196 and another asset from Roche upon leaving, and they were developed for a while under the auspices of Via Pharmaceuticals Inc., of San Francisco. One wasn't able to move ahead, but MGL-3196, in the hands of Madrigal, seems to hold promise.

"We have multiple points at which the drug will benefit the liver, both in the metabolic sphere, reducing triglycerides and liver fat, as well as reducing triglycerides in the plasma," Taub noted. "Mechanistically, we feel that it's going to be very solid. The other thing that's really a standout for this drug is the cardiovascular [CV] benefit," since CV disease is "far and away what [most] patients with NASH die of." In FH, MGL-3196's mechanism of action is validated by research outside of Madrigal. "At the same time, it's a more limited opportunity from a commercial perspective, so we're considering it a more niche opportunity, where the NASH is a tremendous upside if we have a highly successful drug," she said. "That's how we're weighting the two opportunities. One is an efficient development path to get to the FH approval, and the other is a larger opportunity that will take a longer time. As we see it, [general cholesterol lowering] is a more difficult space, because there are a lot of players and existing therapies with the statins and other agents," she said. "We're looking at this as more of a niche lipid opportunity rather than the big kahuna."

ACCUMULO-NIMBUS VALUE

Friedman said he thinks MGL-3196 is "going to work in both" indications. The FH proof-of-concept cited by Taub, "with a compound that had safety issues and dropped out of development" at the phase III stage, provides confidence, he said. Huddinge, Sweden-based Karo Bio AB's eprotirome, a thyroid hormone agonist formerly called KB2115, was scrapped after a toxicology study in dogs indicated that long-term exposure could result in cartilage damage. "We have long-term animal [toxicity data with MGL-3196] and it looks very well tolerated in people," he said. (See BioWorld Today, Feb. 15, 2012.)

In NASH, "it's very interesting that a significant subset of NASH patients is actually overtly hypothyroid, and there are data that exist [showing] that the liver itself is organ-specifically hypothyroid," Friedman said. "Since the major receptor in the liver is the beta receptor, since this drug homes to the liver, and since all the animal data that we've seen and lipid data that we've seen in people so far are in line with this being a seminal mechanism for dealing with the pathogenesis of NASH, we're pretty bullish on both indications." Some say NASH afflicts more than 10 percent of adults in the U.S., he said, and "there's no indication that it's going to even level off" because of prevalent obesity, type 2 diabetes, metabolic syndrome and insulin resistance. "And it is a nasty clinical condition," leading not only to CV deaths but also hepatocellular carcinoma (HC), he pointed out. The field is "large enough to have multiple agents with different mechanisms. It's an attractive area to be in."

The would-be worth of the NASH asset, Taub said, can further be gauged "if you compare it with what Gilead just bought from Nimbus for a lot of money, which is simply a drug that inhibits the production of triglycerides. I think the world is waking up to the fact that the metabolic aspect of NASH is critical." Foster City, Calif.-based Gilead last week disclosed its plan to acquire Nimbus Apollo Inc., a wholly owned subsidiary of Nimbus Therapeutics Inc., of Cambridge, Mass., for $400 million up front and $800 million in development-related milestone payments. Gilead gains the lead acetyl-coA carboxylase (ACC) inhibitor program at Nimbus, including a phase II-ready and preclinical allosteric ACC inhibitors aimed at treating NASH, HC and other metabolic and liver diseases. (See BioWorld Today, April 6, 2016.)

Effective with the signing of the merger agreement, Friedman has stepped down from Synta's board. Marc Schneebaum, the current chief financial officer of Synta, will continue in that capacity with the combined firm. The board of the merged company will comprise seven directors, including five of Madrigal: Friedman (chairman); Taub; Craves; Keith Gollust (currently a director with Synta); and two more to be named. The corporate headquarters will be located in the Philadelphia area. The combined company will be called Madrigal Pharmaceuticals Inc.