Madrigal Pharmaceuticals Inc (NASDAQ: MDGL) is having an overwhelmingly rough start to the trading session this morning, and for good reason. The company’s experimental treatment was looked at as the first in line in NAFLD treatment. However, Viking Therapeutics (NASDAQ: VKTX) announced positive Phase 2 clinical data from VK2809, a competing drug. Of course, the news led to fear among investors, sending the stock tumbling down. Today, we’ll talk about:
- The reason for the MDGL drop;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
MDGL Falls Hard On VKTX Data
As mentioned above, Madrigal Pharmaceuticals is having a rough day in the market today after Viking Therapeutics released Phase 2 clinical data from VK2809. VKTX said that its phase 2 study met its primary endpoint, demonstrating statistically significant reductions in LDL-C when compared to placebo. The treatment also met its secondary endpoint, leading to statistically significant reductions of fat within the liver. This combined with the fact that VK2809 proved to be safe and well tolerated became a source of fear for MDGL investors.
At the moment, the company is working on its own NAFLD treatment, known as MGL-3169, and it’s a treatment that investors have attached a ton of value to. Much of this has to do with a recent note from Citi analyst Joel Beatty who recently started MDGL with a buy rating and a $340 price target. One of the big reasons for his bullish view of the stock is that he believed that MGL-3169 was becoming the favorite among four non-alcoholic steatohepatitis drugs in late-stage development. With the news from VKTX, the new leading drug in the space is VK2809, which is bad news for MDGL.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Viking Therapeutics, the news was great and the stock is gaining in multiples in the pre-market today. Unfortunately for Madrigal Pharmaceuticals, the news hit hard, leading to a flurry of upset investors who are sending the stock down. As is normally the case, our partners at Trade Ideas were the first to alert us to the movement. Currently (9:00), MDGL is trading at $195.12 per share after a loss of $33.31 per share or 14.58% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on MDGL. In particular, we’re interested in following the continued development of both MGL-3169 and VK2809 as both treatments seem to be showing promise at the moment. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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