Key Highlights

  • Shares are trading down 8.08% at $396.32 versus a prior close of $431.16.
  • Rezdiffra net sales reached $431.3 million, up 50% year over year.
  • Net income was $55.4 million, the company's first profitable quarter.

Madrigal Pharmaceuticals (NASDAQ:MDGL) shares are trading down 8.08% at $396.32 today after the company reported its first profitable quarter. The stock gapped higher before reversing sharply on Volume far above average, and it sits near the bottom of a 52-week range of $387.34 to $615.00 while the healthcare sector ETF is little changed and biotech ETFs are higher.

Madrigal Pharmaceuticals is a West Conshohocken, Pennsylvania-based commercial-stage biopharmaceutical company focused on metabolic dysfunction-associated steatohepatitis, or MASH. Its sole marketed product, Rezdiffra, is a once-daily, oral, liver-directed THR-beta agonist and was the first medication approved by the FDA and European Commission for MASH with moderate to advanced fibrosis. The company has 915 employees.

Rezdiffra Tops Consensus and Delivers a Profit

Third-quarter net sales were $431.3 million, up 50% year over year and above the roughly $405 million consensus, with year-to-date sales above $1 billion and an annualized run rate above $1.7 billion. Net Income was $55.4 million, or $1.83 per diluted share, against a net loss of $114.2 million a year earlier, and the company has been Operating Cash Flow positive for two quarters.

More than 55,850 patients were on therapy at the end of September, nearly double the 29,500 a year earlier. Cash and marketable securities totaled $961.8 million. Citigroup lifted its price target to $760 from $725.

Why the Shares Sold Off on Good Numbers

Investors appear to be selling the news, possibly weighing heavier fourth-quarter SG&A spending, a higher 2027 gross-to-net, the long wait for cirrhosis data and the company's warning that it may move in and out of profitability near term. Madrigal gave no formal Revenue guidance and expects fourth-quarter growth in line with consensus along with the usual first-quarter seasonality in 2027.

Full-year 2026 gross-to-net is expected at the low end of the mid-to-high 30s range, and 2027 gross-to-net is expected near the high end as Medicare Part D contracts take effect in the first quarter. Selling, general and administrative expense rose to $265.7 million in the quarter from $209.1 million, reflecting an expanded endocrinology field force and a direct-to-consumer campaign.

Cirrhosis Trials Define the Next Phase

The company raised its U.S. F4c addressable population estimate to 360,000 from 245,000 and plans to start the Phase 3 MAESTRO-CSPH trial, enrolling more than 2,000 patients, in the first half of 2027. MAESTRO-NASH OUTCOMES, with 845 patients, is expected to read out in late 2027, though the company says that is not guaranteed if events lag. The diagnosed F2-F3 market grew to more than 530,000 patients and is on track to grow more than 30% in 2026.

Eighteen Madrigal abstracts have been accepted for the AASLD Liver Meeting from November 5 to 9, including 13 real-world evidence abstracts, the largest covering nearly 12,000 patients. About 25% of patients are on a GLP-1, and management says Wegovy has not dented growth.

AASLD and 2027 Gross-to-Net Are the Next Items to Watch

With the shares trading near their 52-week low despite a blockbuster milestone, investors will look to the AASLD presentations and fourth-quarter spending for evidence that profitability can be sustained. Management says competitors have delayed timelines, with the earliest potential entrant not expected until 2030.