Novo-Nordisk A/S (NVO.US) blockbuster weight-loss drug Wegovy has received approval from the U.S. Food and Drug Administration (FDA) for treating a serious liver condition. This move allows the company to beat competitor Eli Lilly (LLY.US) to market with this indication, as the condition becomes increasingly common in the United States. The drug is approved for adult patients with non-cirrhotic metabolic dysfunction-associated steatohepatitis (MASH) with moderate to severe liver fibrosis (stage 2 or 3). According to an FDA statement released Friday, this condition affects approximately 6% of American adults, or about 14.9 million people. The medication is intended to be used in combination with a reduced-calorie diet and increased physical activity.

Fatty liver develops when fat accumulates in the liver, leading to inflammation and potentially more serious conditions such as cirrhosis and liver cancer. This approval gives Novo-Nordisk A/S another first-mover advantage in the rapidly growing GLP-1 drug market. These medications have gained widespread popularity for their weight management benefits. Additional indications, such as this liver disease treatment, could help Novo-Nordisk A/S expand its market share as the company faces significant pressure to grow its market presence amid intense competition from lower-priced generic drugs and rival Eli Lilly.

As of press time, Novo-Nordisk A/S shares rose 7.14% in after-hours trading. Meanwhile, Madrigal Pharmaceuticals (MDGL.US), which is developing treatments for the same condition, fell approximately 7.53%.

In a clinical study, Wegovy improved liver fibrosis in 37% of patients without worsening inflammation, compared to only 22% improvement in patients receiving placebo. The company stated that patients taking the drug experienced inflammation resolution at nearly twice the rate of those receiving placebo.

Martin Holst Lange, Novo-Nordisk A/S Chief Scientific Officer, said in a statement that approximately one-third of people who are overweight or obese are affected by this condition. He noted that Wegovy not only prevented disease progression in these patients but also helped repair liver damage.