Uncertainties and Data Gaps Lead to Sell Rating for Madrigal Pharmaceuticals’ Rezdiffra

Analyst Jason Zemansky from Bank of America Securities maintained a Sell rating on Madrigal Pharmaceuticals (MDGL – Research Report) and keeping the price target at $248.00.

Jason Zemansky’s rating is based on several factors, primarily revolving around the uncertainties in Madrigal Pharmaceuticals’ recent study results. Although the data from the study presented at the European Association for the Study of the Liver (EASL) showed positive improvements in imaging and biomarker tests, there remain significant questions about the overall benefits and the specific patient subpopulation that would most likely benefit from the treatment. These uncertainties have led to a muted reaction from investors, as the potential upside of the drug, Rezdiffra, remains unclear without further de-risking.
Another critical factor contributing to the Sell rating is the lack of biopsy data, which makes it challenging to assess the true impact of Rezdiffra on liver cirrhosis and its potential to reduce the risk of liver cancer or decompensation. The study’s design limitations, such as the absence of a placebo group and gaps in treatment duration, further complicate the evaluation of the drug’s efficacy. While the initial signals are encouraging, more comprehensive insights are needed to determine the drug’s role in treating advanced liver disease, leading to the decision to maintain an Underperform rating with a price objective of $248.