Investing.com -- Madrigal Pharmaceuticals, Inc. (NASDAQ: NASDAQ:MDGL) stock fell 11% following the company's preliminary fourth-quarter and full-year 2024 financial performance announcement. Despite reporting net sales for the fourth quarter between $100 million to $103 million and $177 million to $180 million for the full year, shares declined as the market reacted to factors beyond the immediate sales figures.
Madrigal, a biopharmaceutical company known for its novel therapeutics for metabolic dysfunction-associated steatohepatitis (MASH), shared its achievements and financials in a press release dated January 13, 2025. The company highlighted the successful launch of Rezdiffra, the first and only U.S. FDA-approved treatment for MASH, which now has over 11,800 patients on therapy. Furthermore, Madrigal boasted a strong cash position with approximately $931 million in cash, cash equivalents, restricted cash, and marketable securities at year-end 2024.
The company's CEO, Bill Sibold, expressed optimism about the future, citing the potential for European expansion and the MAESTRO-NASH OUTCOMES trial's ability to position Rezdiffra as a leading therapy for F2 to F4 MASH.
Despite these positive developments, Evercore ISI analyst Liisa Bayko noted that the stock's decline at the open was "likely driven by 2 factors: fading near term M&A speculation & cash utilization," with cash utilization up approximately 17% quarter over quarter. Bayko maintains an Outperform rating on Madrigal and has raised the price target to $392 from $360, citing a strong quarter for Rezdiffra sales and a 4% price increase at the year's turn. The analyst also mentioned the anticipated approval and launch of Rezdiffra in the European Union, starting with Germany in the second half of 2025.
Madrigal's press release also recapped notable events from 2024, including the publication of the Rezdiffra Phase 3 MAESTRO-NASH trial results and the U.S. FDA approval of Rezdiffra. Additionally, the company completed enrollment for the MAESTRO-NASH OUTCOMES study, which could further solidify Rezdiffra's position in treating MASH.
While the financial performance and sales figures for Rezdiffra appear strong, the stock movement reflects investor concerns over the company's cash burn and the absence of near-term merger and acquisition activity. As the market digests the full scope of Madrigal's update, the company's strategic moves and operational execution will continue to be closely monitored by investors and analysts alike.
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