Madrigal signs potential $2 billion-plus deal with China’s CSPC to develop liver drug

(Reuters) -U.S. drugmaker Madrigal Pharmaceuticals has struck a licensing deal with CSPC Pharmaceutical Group that could be worth more than $2 billion for the Chinese company if it results in a new drug for a serious form of liver disease.

The agreement gives Madrigal exclusive global rights to SYH2086, an oral GLP-1 receptor agonist designed to mimic the effects of popular weight-loss medications such as Ozempic and Wegovy. The drug is currently being tested in lab studies.

Madrigal plans to combine SYH2086 with its flagship therapy Rezdiffra, the only U.S. Food and Drug Administration-approved therapy for metabolic dysfunction-associated steatohepatitis (MASH) with moderate-to-advanced liver scarring.

MASH, formerly known as nonalcoholic steatohepatitis (NASH), is a progressive liver disease linked to obesity, diabetes and high cholesterol. It can lead to liver failure and is a growing cause of the organ’s transplants globally.

“We believe a combination of Rezdiffra and SYH2086 has the potential to deliver a best-in-class oral treatment for patients with MASH,” Madrigal CEO Bill Sibold said on Wednesday.

Under the deal, Madrigal will pay CSPC $120 million upfront and potentially another $2 billion if certain development and commercial milestones are met.

GLP-1 drugs, originally developed for diabetes and obesity, are being tested for MASH due to their weight-loss and metabolic benefits. Novo Nordisk’s semaglutide and Eli Lilly’s tirzepatide are among the most advanced GLP-1 candidates in late-stage trials for MASH.

The deal between Madrigal and CSPC is part of a broader trend of Western drugmakers tapping Chinese biotech firms for innovative therapies, particularly in fast-growing areas such as GLP-1 drugs.

CSPC, which recently signed a separate multibillion-dollar AI-driven drug discovery pact with AstraZeneca, is among several Chinese companies developing next-generation GLP-1 drugs.

(Reporting by Sriparna Roy and Kamal Choudhury in Bengaluru. Editing by Shilpi Majumdar and Mark Potter)