Goldman Sachs: Madrigal Pharma Has Blockbuster Potential In Liver, Cholesterol Treatments

Madrigal Pharmaceuticals Inc MDGL, a clinical-stage biotechnology company, could spring a surprise in the non-alcoholic steatohepatitis, or NASH, space, according to Goldman Sachs. 

The Analyst

Analyst Salveen Richter initiated coverage of Madrigal with a Buy rating and $191 price target.

The Thesis

Madrigal's oral drug MGL-3196 is currently in midstage studies for two blockbuster indications, namely NASH, or fatty liver disorder, and heterozygous familial hypercholesterolemia, or HeFH, Richter said in a Friday note.

In NASH, Richter said he expects Phase 2 MRI-PDFF imaging data to translate into positive 36-week liver biopsy results. The data is due in May, the analyst said.

"The HeFH Ph2 data showing a broad lipid lowering and clean safety profile supports the thesis of benefit in NASH."

This data differentiates MGL-3196 from competition, Richter said. 

Goldman Sachs projects peak MGL-3196 sales of $4 billion for NASH and $2.2 billion in HeFH.

The firm recommends owning Madrigal shares ahead of the following 2018 catalysts: 

• Full MGL-3196 Phase 2 biomarker and imaging data at the International Live Congress of the European Association for the Study of the Liver April 11-15.
• MGL-3196 Phase 2 36-week biopsy data in May.
• Full MGL-3196 Phase 2 data in HeFH at the European Society of Cardiology Congress Aug. 25-29.
• The initiation of pivotal studies in NASH and HeFH by the end of 2018.

The Price Action

Madrigal shares are up about 675 percent over the past year.

At the time of writing, the shares were rallying 9.02 percent to $119.59.

Related Links:

Pair Trade Closed: Chardan No Longer Advocates Owning vTv Therapeutics Over Axovant

Mesoblast's Delayed Launches, Teva Split Turn Credit Suisse Bearish