Here’s Why Madrigal Pharmaceuticals Fell 39.4% in November

FAN Editor

What happened

Shares of Madrigal Pharmaceuticals (NASDAQ: MDGL), a clinical-stage biotechnology company, fell 39.4% in November, according to data from S&P Global Market Intelligence. Madrigal presented impressive clinical trial results for its lead candidate that were overshadowed by a surprise from a potential rival.

Continue Reading Below

So what

Non-alcoholic steatohepatitis (NASH) is a growing epidemic that threatens the lives of an estimated 20 million Americans at the moment, and there aren’t available treatments proven to help. There’s an even larger population of people with non-alcoholic fatty liver disease (NAFLD), a condition that progresses to NASH once the liver becomes inflamed and begins sustaining damage.

Nobody’s quite sure what causes the immune system to begin attacking fatty livers, but reducing their overall fat content seems like a step in the right direction. Madrigal’s lead candidate, MGL-3196, is a potential first-in-class treatment called a thyroid hormone receptor-beta (TRB) agonist. Trial results presented at a medical conference in November showed MGL-3196 led to a 37% average liver fat reduction for NASH patients after 36 weeks of treatment.

Unfortunately for Madrigal, Viking Therapeutics (NASDAQ: VKTX) presented results from a midstage trial with another experimental TRB agonist that’s a little further back on the development timeline. Treatment with VK2809 helped NAFLD patients reduce their liver fat content by 59%, which appears to wipe the floor with results from MGL-3196.

Now what

Investors should bear in mind that the varied results don’t necessarily mean one treatment is any better than the other, because they were tested different groups of patients. Viking’s midstage study enrolled NAFLD patients who haven’t progressed to NASH. Until we see results from a head-to-head trial or at least similar patient groups, any comparisons between VK2809 and MDGL-3196 need to be taken with a huge grain of salt.

Madrigal shareholders who have held on despite recent losses can take heart in the FDA’s recent draft guidance regarding NASH drug development. The disease progresses too slowly to measure survival outcomes, so the agency’s willing to consider new NASH treatments for approval if they reverse or at least control symptoms of inflammation and stiffening of liver tissue. Patients treated with MDGL-3196 were 450% more likely to experience resolution of their NASH symptoms than those given a placebo. Another performance like this in a pivotal study would almost meet the agency’s criteria.

10 stocks we like better than Madrigal Pharmaceuticals, Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Madrigal Pharmaceuticals, Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 14, 2018

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Free America Network Articles

Leave a Reply

Next Post

Thousands protest in Serbia over attack on opposition politician

Demonstrators walk along a street during an anti-government protest in central Belgrade, Serbia, December 8, 2018. REUTERS/Marko Djurica December 8, 2018 BELGRADE (Reuters) – Thousands of people rallied peacefully in downtown Belgrade on Saturday to protest over an attack on an opposition politician and demand policy changes by President Aleksandar […]