On Thursday, Madrigal Pharmaceuticals (NASDAQ:MDGL) saw its price target lowered by H.C. Wainwright to $390 from the previous $425, while the firm maintained a Buy rating on the stock. This adjustment follows the company's first-quarter earnings call, which took place on Wednesday, providing insights into the commercial launch of Rezdiffra, their newly approved drug for treating NASH with significant liver fibrosis.
During the earnings call, Madrigal outlined the current status of Rezdiffra in the market. The company has secured coverage for 30% of commercial lives and is on track to reach 80% by the end of 2024. Large national commercial plans are in the midst of establishing reimbursement coverage, with many awaiting reviews from Pharmacy & Therapeutics committees.
The pricing of Rezdiffra, set at an annual wholesale acquisition cost (WAC) of $47,400, was expected by payors and falls within the range previously suggested by the Institute for Clinical and Economic Review (ICER).
Madrigal has also focused on ensuring patient access to Rezdiffra. A comprehensive support program has been established, aiming to limit co-payments to $10 per month for many commercial patients. Additionally, the company is offering programs to provide the drug for free to qualified underinsured and uninsured patients. The initial prescription data shows that 75% of Rezdiffra prescriptions have been issued by top target physicians, indicating a successful engagement with the key prescriber base.
Furthermore, payer discussions have included the use of routine blood and imaging non-invasive tests (NITs) for patient management, which are widely available and not seen as an obstacle to accessing the treatment. Upcoming updates to clinical guidelines, particularly from the American Association for the Study of Liver Diseases (AASLD), are expected to further support the trial and adoption of Rezdiffra.
InvestingPro Insights
Madrigal Pharmaceuticals' recent earnings call and the subsequent price target adjustment by H.C. Wainwright have put the spotlight on the company's financial health and market performance. In light of this, key metrics from InvestingPro provide a deeper understanding of MDGL's current position.
InvestingPro Data shows a market capitalization of $4.43 billion, indicating the company's significant presence in the sector. However, the metrics reveal a challenging financial landscape, with an adjusted P/E ratio for the last twelve months as of Q1 2024 standing at -9.98, and an EBITDA growth rate at -44.54% during the same period. This suggests that investors are dealing with a company that has been experiencing recent financial strain.
Meanwhile, InvestingPro Tips highlight that Madrigal holds more cash than debt on its balance sheet, which is a positive sign for financial stability. Additionally, the stock price has seen a large uptick over the last six months, with a 52.58% price total return, reflecting investor optimism in certain respects. However, it's important to note that analysts have revised their earnings downwards for the upcoming period, and the company is not expected to be profitable this year.
For investors and analysts following Madrigal Pharmaceuticals, these insights could be crucial in making informed decisions. For a deeper dive into Madrigal's prospects and to access a total of 13 InvestingPro Tips, visit https://www.investing.com/pro/MDGL. And don't forget, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering even more value as you navigate the complexities of pharmaceutical investments.
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