It’s not every day a federal agency bends a rule or two, but it can happen. Biotech stock Madrigal Pharmaceuticals (NASDAQ:MDGL) is all the proof anyone needs, as the Food and Drug Administration gave Madrigal’s resmetirom priority review status. That news was enough to light a fire under Madrigal’s stock, with investors sending it up over 7% in Wednesday afternoon’s trading.
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Resmetirom is a drug designed to treat a liver disease known as NASH, or nonalcoholic steatohepatitis. If NASH doesn’t sound particularly familiar, count yourself lucky; NASH has done quite a bit of damage by some reports and stands as a “major reason for liver-related deaths globally.” Further, the FDA has no treatments for NASH that are currently approved, which likely put a note of urgency into the FDA’s plans to give resmetirom priority review status.
However, even with this priority status, it’s still going to take the better part of a year for the FDA to get a review accomplished. The latest report suggests such a review should be completed by March 14, 2024. It’s worth noting, though, that others who attempted to take on NASH have generally walked away disappointed. If resmetirom proves a different story, then that could give Madrigal a first-mover advantage for who knows how long. That would be a massive win that could be sustained for years.
Analysts, meanwhile, are likely sensing a hefty potential win as well. With six Buy ratings and one Hold, analyst consensus calls Madrigal Pharmaceuticals stock a Strong Buy. Further, Madrigal Pharmaceuticals stock offers investors 56.77% upside potential thanks to its average price target of $297.33.
