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Investing.com - Goldman Sachs has reiterated its Buy rating and $567.00 price target on Madrigal Pharmaceuticals (NASDAQ:MDGL), which is currently trading near its 52-week high of $377.46 and has delivered a 47% return over the past year, following Novo Nordisk (NYSE:NVO)’s Wegovy receiving accelerated approval for NASH patients with moderate to advanced liver fibrosis.
Wegovy becomes the second approved therapeutic for NASH and the first GLP-1 receptor agonist in this indication, raising questions about competitive dynamics in the market where Madrigal’s Rezdiffra was first to launch.
Goldman Sachs believes Rezdiffra’s clinical profile—offering benefits on NASH resolution and fibrosis while being an oral, well-tolerated medication requiring no titration—positions it to maintain significant market share despite the new competition. According to InvestingPro data, the company maintains strong financial health with a current ratio of 5.11 and impressive gross margins of 96%.
The firm notes that Novo Nordisk’s efforts to increase NASH awareness could actually expand the addressable patient population for Rezdiffra beyond the 315,000 patients currently targeted by Madrigal, potentially reaching into the estimated 22 million F2-F4 patients in the US.
Goldman Sachs sees continued growth opportunities for Madrigal through imminent European approval following a positive CHMP opinion in July, and potential expansion into F4 cirrhotic NASH patients based on MAESTRO-NASH Outcomes data expected in 2027. InvestingPro analysis reveals 13 additional key insights about Madrigal’s potential, available in the comprehensive Pro Research Report, which transforms complex Wall Street data into actionable intelligence.
In other recent news, Madrigal Pharmaceuticals reported second-quarter earnings with Rezdiffra sales reaching $212.8 million, marking a 55% increase from the previous quarter. This performance significantly exceeded estimates from Goldman Sachs and FactSet, which were $150.9 million and $159.4 million, respectively. Additionally, Madrigal has secured a $500 million senior secured credit facility with Blue Owl Capital to support its MASH pipeline. The financing includes a $350 million initial term loan and a $150 million delayed draw term loan available until December 2027.
Madrigal has also entered into an exclusive global license agreement with CSPC Pharmaceutical (TADAWUL:2070) Group for SYH2086, an oral GLP-1 receptor agonist. The agreement involves an upfront payment of $120 million and potential milestone payments of up to $2 billion. On the analyst front, Piper Sandler reiterated its Overweight rating on Madrigal stock, expressing confidence in the progress of Rezdiffra’s launch. Jefferies raised its price target for Madrigal to $502, following a patent extension for Rezdiffra, which now lasts until 2045.
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