Madrigal Pharmaceuticals initiated with an Outperform at Wolfe Research

Wolfe Research initiated coverage of Madrigal Pharmaceuticals (MDGL) with an Outperform rating and $382 price target. The company has “only one critical driver” – how well its Rezdiffra performs on launch, the analyst tells investors in a research note. The firm is bullish on the drug as it is the first oral drug with no competition and offers “excellent pharmacy strategy”, which unintendedly creates economic incentives for PBMs to cover Rezdiffra broadly. Akero (AKRO) is the strongest upcoming competitor, but Madrigal is about four years ahead of it with its Rezdiffra launch and can create a strong moat, Wolfe adds.