Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Jefferies raised its price target on Madrigal Pharmaceuticals (NASDAQ:MDGL) stock to $502.00 from $411.00 on Tuesday, while maintaining a Buy rating. The company, currently valued at $7.79 billion, has seen its stock surge 44% over the past year and is trading near its 52-week high of $377.46. According to InvestingPro data, analyst targets range from $266 to $567, reflecting diverse views on the company’s potential.
The price target increase follows the issuance of a new weight-based dosing patent for Madrigal’s Rezdiffra medication, which extends patent protection until February 2045, compared to the previous expiration around 2033.
Jefferies believes Madrigal’s patent will likely withstand potential challenges from generic companies that might argue invalidity due to obviousness, citing several supporting factors.
The firm specifically noted that Phase 3 trials and FDA review should not be considered prior art, findings at the 100kg threshold are "unexpected," and a skilled artisan would not likely identify this specific weight threshold.
Jefferies’ base case now assumes loss of exclusivity in 2040, presuming a settlement with generic manufacturers, which contributed to the significant upward revision in the price target.
In other recent news, Madrigal Pharmaceuticals reported second-quarter earnings with Rezdiffra sales reaching $212.8 million, surpassing both Goldman Sachs’ estimate of $150.9 million and the FactSet consensus of $159.4 million. This strong performance was attributed to increased patient demand and prescriber penetration. Madrigal also announced an exclusive global license agreement with CSPC Pharmaceutical (TADAWUL:2070) Group for SYH2086, an oral small molecule GLP-1 receptor agonist, involving an upfront payment of $120 million and potential milestone payments up to $2 billion. Additionally, the company secured a $500 million credit facility with Blue Owl Capital, including a $350 million initial term loan and a $150 million delayed draw term loan available through 2027.
Analyst firms have responded to these developments, with Citizens JMP reiterating its Market Outperform rating and a $470.00 price target, citing strong Rezdiffra uptake. Oppenheimer raised its price target for Madrigal to $500.00 from $475.00, maintaining an Outperform rating, following the issuance of a Notice of Allowance for Madrigal’s U.S. patent on resmetirom use. These recent developments highlight Madrigal’s strategic moves to strengthen its product offerings and financial position.
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