Madrigal Pharmaceuticals' (MDGL) liver disease treatment received a breakthrough therapy designation on Tuesday, and MDGL stock soared towards a buy-point.
The company confirmed that it is on track to submit a request for authorization in the second quarter. Madrigal is now just behind Intercept Pharmaceuticals in the treatment of nonalcoholic steatohepatitis (NASH). This condition occurs when fat replaces the healthy liver tissue in people who drink little or no alcohol. Both companies are hoping to treat liver scarring due to NASH.
Madrigal's resmetirom will be reviewed and developed faster by the FDA after its designation. Thomas Smith, an analyst at SVB Securities, sees this designation as a milestone for the biotech firm as it prepares to submit for FDA approval of its resmetirom product in the next quarter. The approval of resmetirom could be dependent on a study called Maestro -NASH.
In a client report, he stated that "overall, we view breakthrough therapy designation as a milestone which provides further confidence both in the quality of Maestro's clinical data and Madrigal’s regulatory alignment in advance of resmetirom" (new drug application), anticipated in the second-quarter.
MDGL's share price closed at 289.32 today, up 12.8%. Intercept's stock rose by 5.3% to close at 19.29.
Smith stated that Madrigal had announced its intention to apply for a breakthrough designation in February. He said that the FDA may have seen Maestro's NASH data when it granted the designation.
He said: "In our opinion, this should directly address bear concerns about Madrigal's regulatory alignement regarding how Maestro-NASH study goals were defined and reported and whether FDA believes that the benefit of these (goals), is clinically meaningful."
Smith maintained his Outperform rating for MDGL.
Madrigal is now just behind Intercept, which has asked the FDA for approval of its drug Ocaliva in patients suffering from fibrosis caused by NASH.
MarketSmith.com reports that Madrigal's shares surged Tuesday above their 50-day average. The shares are consolidating at 315.55, with a buying point.
MDGL has the best possible IBD Digital relative strength rating of 99. The stock's performance over the past 12 months is in the top 1%.
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Investor's Business Daily published the article Why Madrigal Pharmaceuticals, a biotech company in the top 1% of biotech companies, just sped closer to a breakthrough.