Madrigal Pharmaceuticals scored a win in a particularly tricky field on Monday after its final-phase study hit both its goals, sending MDGL stock into the stratosphere.
Shares of Madrigal soared a whopping 268.1% on today's stock market. MDGL stock ended the day at 234.83, more than three-and-a-half times the company's closing price of 63.80 on Friday.
The company tested its treatment in more than 950 patients with nonalcoholic steatohepatitis, or NASH. NASH is a progressive disease that causes liver inflammation called fibrosis. So far, the field has been marked by high-profile failures, and there are no approved treatments.
After a year, 30% of patients at the highest dose experienced at least a two-point improvement in their symptoms on an eight-point scale. Meanwhile, their fibrosis didn't worsen.
Another measure looked at fibrosis, which is measured in five stages. There, 26% of patients showed an improvement of at least one stage in fibrosis while their symptoms didn't progress.
The Food and Drug Administration requires NASH drugs to meet one of these bars to gain approval.
"This significantly exceeds consensus expectations, which were for success on the NASH (symptoms) resolution endpoint with only a small probability of hitting on the fibrosis improvement," SVB Securities analyst Thomas Smith said in a note to clients.
He kept his outperform rating on MDGL stock.
MDGL Stock: Next Stop, FDA
Now, Madrigal is planning to ask the FDA to approve its pill, dubbed resmetirom, for NASH treatment. If approved, it would be the first to treat patients with fibrosis due to NASH.
Overall, 56% of patients hit one of the goals of Madrigal's study. The FDA will likely weigh that response rate with the fact there are no approved drugs for these patients.
SVB's Smith called the results a "best-case scenario."
Madrigal compared two doses of resmetirom to a placebo. Across the board, patients who received the high dose had better responses. Both doses easily outperformed the placebo. Notably, the drug also appeared safe and tolerable at both doses. Serious side effects were split equally between the two doses and the placebo group.
"We view these results as a major win for both Madrigal and the NASH field," Smith said.
He has a 145 price target on MDGL stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
