On Tuesday, Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) saw its price target increased by Evercore ISI to $405.00, up from the previous target of $325.00, while the firm sustained its Outperform rating on the stock. The revision comes as Madrigal prepares to launch its new drug, Rezdiffra, backed by a solid financial position with an additional $600 million in funding.
Evercore ISI updated its model to reflect a number of factors, including a projected pricing of $47.4K for Rezdiffra, a reduced discount rate for approvals in the European Union and the rest of the world, and expectations for the drug's market share. The firm anticipates that initially, the gross-to-net revenue will be high but will stabilize to the low teens within a year. The model also assumes that Rezdiffra will capture 18% of the F2/3 patient market in the United States and 12% internationally, with a lower price point of $30K outside the U.S.
Physician feedback on Rezdiffra has been positive, with indications that it could be used in conjunction with obesity medications for approximately half of the patients. Evercore ISI has also factored in potential future competition, adjusting their projections to account for this.
Regarding intellectual property concerns, Evercore ISI expects Madrigal to secure a patent term extension to 2033 for its polymorph patent and to reach a settlement on generic entry in the first half of 2037. This expectation is based on due diligence, including insights from a 2023 webinar featuring patent attorney Dr. Kevin Noonan. Furthermore, the firm's sensitivity analysis suggests that Madrigal's stock could be valued at $260 per share if generic competition enters the market in 2033.
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