Guojin Securities: Multi-dimensional catalytic intensive landing on the MASH circuit Madrigal will maintain double-digit growth for a long time in the future

The Zhitong Finance App learned that Guojin Securities released a research report saying that the MASH circuit is currently in the “1 to 10” incremental development stage, and the commercial side and BD sector are expected to continue to maintain a high level of prosperity; at the same time, based on the heterogeneity of diseases, drug combination schemes with different mechanisms are expected to become mainstream clinical choices in the future. The probability that a single molecule will cover most market share is low, and drugs under development are expected to maximize the value of differentiated advantages. Overseas recommendations focus on the clinical progress of late-clinical or marketed varieties in terms of long-term follow-up, population expansion, drug combination, etc.; domestic recommendations focus on potential BD opportunities for MASH pipelines with differentiated advantages after reading clinical data.

Guojin Securities's main views are as follows:

The MASH circuit has gradually heated up in recent years, and multi-dimensional catalysts have been implemented intensively at the drug commercialization end, pipeline BD, clinical guidelines and supervision levels

1) Commercialization: On April 9, 2024, Rezdiffra (resmetirom) was approved by the FDA for marketing, becoming the first NASH treatment approved by the FDA. As of the first quarter of 2026, there were more than 42,000 patients in use, an increase of more than 2.5 times over the first quarter of 2025. Sales revenue for the quarter reached US$310 million, an increase of about 127% over the previous year, and sales exceeded 1 billion US dollars in the past four quarters. 2) BD: In the past two years, there have been many BD and M&A events in the MASH sector. MNCs such as Eli Lilly, Novo Nordisk, Roche, and GSK have all had a layout; judging from the total transaction amount, the total scale of the 3 BDs or mergers and acquisitions surrounding FGF21 analogs has exceeded 10 billion US dollars. 3) Clinical guidelines and supervision: Clinical guidelines for MASLD from several authoritative liver disease associations around the world have entered the normalized update stage; the FDA has accepted proposals for non-invasive alternative endpoints, and the development process of new MASH drugs is expected to accelerate.

MASH is a chronic disease with a high incidence rate, poor prognosis, and long-term maintenance and treatment. The market size is expected to target IBD and other 10 billion dollar racetracks

1) Disease side: The prevalence of MASLD is on the rise globally. Among them, the MASH prevalence rate is estimated to be 5.27%. Among them, the number of MASH cases in the US market will increase from 14.9 million in 2020 to 23.2 million in 2050. MASLD is closely related to liver adverse outcomes, cardiovascular events, and risk of non-liver tumors, and is one of the most common causes of liver transplantation. After treatment with existing drugs is discontinued, early reversal of efficacy will occur, and disease progression will occur; MASH requires long-term maintenance treatment. 2) Driven by market growth: Resmetirom's target patient population has increased by nearly 50% in the past 2 years due to factors such as increased disease awareness, increased diagnosis rates, and the continuous increase in the number of patients receiving specialist care; currently, there are more than 100 MASH R&D pipelines worldwide (more than 70 in phase II/III total). Madrigal predicts that the MASH market will evolve in size similar to diseases such as IBD and RA (market size all over 20 billion US dollars). With the increase in approved drugs, it will maintain double-digit growth over the long term.

THR-beta, GLP-1R and FGF21 are the most popular targets for new MASH drugs, and combined use is expected to maximize clinical benefits

The pathogenesis of MASH is closely related to intestinal and adipose tissue metabolism. Past drug development history suggests that only downstream targets are not effective, and popular targets such as THR-beta, GLP-1R, and FGF21 can all achieve multiple pathway benefits. 1) THR-beta agonists: They can enhance mitochondrial oxidative phosphorylation, promote fatty acid beta oxidation, and stimulate lipophagy effects; at the same time, they improve cholesterol clearance by up-regulating LDL receptor expression and bile acid synthesis; good adherence to long-term use as oral formulations. 2) GLP-1 drugs: Combined with GIP/GCGR receptor excitation is expected to further improve patient benefits. Retatrutide, a three-target agonist of GLP-1 & GIP&GCGR, can achieve a relative reduction in LFC by 82% in 24 weeks. However, after weight loss reaches a certain extent, the marginal effect of improving fibrosis may weaken, and long-term drug use is currently insufficient, so it is still necessary to use other types of drugs in combination with other types of drugs in the future. 3) FGF21 analogs: They mainly target adipose tissue, increase glucose uptake, adiponectin secretion, and regulate lipid metabolism, thereby coordinating the coordinated response of the whole body and liver. Phase 2 clinical trials achieved 75% fibrosis improvement over stage 1 with no worsening ratio of MASH, and have shown the potential to reverse stage F4 fibrosis. Existing clinical data have shown a higher proportion of fibrosis improvement effects than other types of drugs. Furthermore, compared with GLP-1 drugs, FGF21 combined with GLP-1 drugs achieved a significantly higher LFC reduction ratio (65% vs. 10%) in T2DM people, and the potential for combined use is huge. (4) Other targets with a good competitive pattern: nucleic acid drugs targeting susceptible genes such as HSD17B13 and PNPLA3, and pipelines with differentiated advantages such as Pan-PDE inhibitors are also recommended.

Related targets: Madrigal, Novo Nordisk, Roche, GSK, Huadong Pharmaceutical, HiCisco, Zhongsheng Pharmaceutical, etc.

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The risk that R&D progress falls short of expectations, the risk of commercialization falling short of expectations, and the risk of increased competition.