Breakthroughs in the biotech industry sometimes come from relatively small drugmakers. Competing with the largest companies in significantly crowded areas, such as oncology, can be difficult. That's why relatively unknown biotechs often opt to develop medicine where there are few (if any) approved therapies.

Madrigal Pharmaceuticals (NASDAQ: MDGL), a mid-cap biotech, has followed this blueprint. The company was recently awarded the first approval from the U.S. Food and Drug Administration (FDA) for a treatment for non-alcoholic steatohepatitis (NASH). Let's look deeper at this important milestone and determine whether it makes Madrigal's shares attractive.

First, a primer on NASH. It is caused by a buildup of fat in the liver. As its name suggests, patients don't owe it to excessive alcohol abuse, although the liver damage the illness causes is similar to that of heavy alcohol users. Instead, obesity and diabetes are thought to be some of the major risk factors. NASH can cause serious, life-threatening problems. That's why the approval of Madrigal's Rezdiffra to treat NASH is such a big deal.

Continue reading

Source Fool.com