Madrigal Pharmaceuticals (MDGL) Draws a Price Target Bounce from H.C. Wainwright on Back of Robust NASH Data


Madrigal Pharmaceuticals (NASDAQ:MDGL) is taking steps to be a frontrunner competitor in the NASH market, especially following strong 36-weekk data for MI-3196, a Thyroid Hormone Receptor Beta agonist (TRβ). MDGL shares continue to jump another 4% this morning following yesterday’s close to 137% blast through the market ceiling.

H.C. Wainwright analyst Ed Arce cheers that “a new leader in NASH emerges” in Madrigal, calling prospects of a key takeout target meaningfully with better odds now. The Phase 2b trial data exhibits an even stronger clean safety and tolerability profile for MDGL’s lead asset. The present data “strongly” pinpoints good probability of success come Phase 3 for the drug, bets Ed Arce, which “firmly” primes MGL-3196 “as among a very short list of leading therapies for NASH.” Worthy of note, the MDGL team is working “aggressively” to kickstart the Phase 3 trial by the close of 2018 or the beginning of next year.

In reaction, the analyst reiterates a Buy rating on MDGL stock while ramping up the price target from $178 to $313, which implies a close to 14% upside from current levels. (To watch Arce’s track record, click here)

Overall, “In a randomized (2:1), double-blinded, placebo-controlled Phase 2b study of 125 NASH patients, MGL-3196 achieved a statically significant improvement in NASH resolution upon biopsy, something arguably only Genfit’s […] elafibranor and Intercept’s […] Ocaliva (obeticholic acid) have shown so far. Furthermore, in our view, MGL-3196 is a highly differentiated compound as a truly-selective, liver-targeted thyroid hormone receptor (THR)-β agonist with broad metabolic and cardiovascular benefits from a potent, small-molecule, once-daily oral therapy with an excellent safety and tolerability profile that also offers cardio-protective benefits that some other chronic therapy candidates do not. With this profile, not only do we believe ongoing discussions with multiple potential commercial partners are likely to accelerate and intensify in urgency, but also the potential likelihood of a strategic M&A transaction is now significantly higher, in our view,” Arce contends, anticipating a 1.2 million share equity raise in the beginning of next year to bolster the company’s current cash situation.

TipRanks highlights unanimous bullish sentiment on the Street circling the biotech player, with all 7 analysts polled in the last 3 months rating a Buy on MDGL stock. With a return potential of nearly 21%, the stock’s consensus target price stands at $321.17.  

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