(Bloomberg) — Madrigal Pharmaceuticals Inc. shares surged 268%, adding about $2.9 billion to its market value, after a late-stage clinical trial of its drug candidate met the main goals in patients with a type of liver disease.
The company’s stock had its best day on record in the wake of the clinical trial outcome, and drove swings in the shares of other firms developing treatments for nonalcoholic steatohepatitis, the fatty liver disease known as NASH. A company developing a drug similar to Madrigal — Viking Therapeutics Inc. — jumped 74%
Meanwhile, some firms fell on the competitive pressure. Intercept Pharmaceuticals Inc. dropped 23%, as RBC Capital Markets’ Brian Abrahams said the Madrigal data “further marginalizes” the company’s drug prospects in the disease. Akero Therapeutics Inc. slid by 17%.
Analysts described the results from the study called “Maestro-NASH” as surprisingly strong, and said that the study sets the drug resmetirom up for accelerated approval by the FDA.
“We believe this morning’s results represent not only a stunning upside surprise, but also makes MAESTRO-NASH a landmark study for the whole field of NASH and the new bar for success,” H.C. Wainwright’s Ed Arce wrote, as the buy-rated analyst lifted his price target on Madrigal.
Raymond James analyst Steven Seedhouse, who had held the only sell-equivalent rating on the stock ahead of the readout in analyst data compiled by Bloomberg, lifted his rating to market perform in the wake of the study.
Madrigal said it plans to file a new drug application seeking accelerated approval for the drug in the first half of next year.
(Updates to add closing trades throughout and Raymond James upgrade.)
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