1. Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL)
Number of Hedge Fund Holders In Q2 2024: 30
Average Analyst Share Price Target: $362.53
Average Analyst Share Price Target Upside: 55%
Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) is a biotechnology company that recently entered the commercial stage. As a result, its performance depends on the commercial performance of its approved drug. Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL)’s leading drug right now is resmetirom, which aims to help people with a fatty liver disease called NASH. It was approved by the FDA in March, which caused the shares to shoot up by 11%. Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) enjoys two key advantages with resmetirom, which is marketed as Rezdiffra. First, it has a sizeable market ahead of it, since NASH is one of the largest causes of liver transplants in the US. Second, there are no competitors to the drug, with analysts expecting at least three years before comparable products hit the market. Naturally, this makes it unsurprising that Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) tops our list of the best Guru stocks. However, Novo Nordisk and Akero Therapeutics have readouts pending soon, which could change the hypothesis.
Moving forward, the key to further tailwinds for Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) will be its ability to commercialize Rezdiffra – which has a wholesale acquisition cost of $47,000. Here’s what the firm shared during the Q2 2024 earnings call:
“Our field team is focused on patient selection with prescribers. Our patient support team and the specialty pharmacies in our limited distribution network are driving efficient prescription processing and payers are executing on medical exceptions more efficiently because they recognize the unmet need. As a result, patients are moving more quickly through the reimbursement process. We have previously discussed our expectation for a time to fill to improve from about 60 days at launch to about 30 days or less at 6 months. Because of our efforts, time to fill was running faster in the second quarter compared to those initial expectations. We’re also very encouraged by the progress we’ve made with payers. They understand the significant unmet need in NASH, which is the number one driver of liver transplants for women in the United States.
They also recognize the clinical benefits of Rezdiffra for F2/F3 patients and that noninvasive tests or NITs, not biopsies are standard of care. Last quarter coverage was at 30% of commercial lives. As of June 30, more than 50% of commercial lives now have coverage in place for Rezdiffra with over 95% of Rezdiffra covered lives, accepting NITs and not requiring biopsies. We are well on our way to achieving our goal of 80% of commercial lives covered by year-end. As far as government payers, as of July 1, Medicaid coverage was in place across all 50 states. Similar to what we’ve seen with commercial coverage virtually all accept NITs and do not require biopsies. For Medicare, we are on track for full coverage beginning January 1 of next year based on the annual review process for new medications.”
MDGL tops our list of the best stocks to buy according to the Guru ETF. But our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MDGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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