Medical student’s perspective on $MDGL and the only liver drug for NAFLD

I’m a second year medical student at a USMD school. So, for this stock ($MDGL), I will be approaching my evaluation from a scientific perspective. About two years ago when I started medical school, learned about the only drug for NAFLD or nonalcoholic steatohepatitis (NASH) called Resmitrom that was in the pipeline to be FDA approved. The science for this drug was solid, the investigators had published their work in a high impact factor journal (Lancet) and had even gotten breakthrough designation from the FDA prior to the drug being approved even. Fast forward a few months to March 2024 and Resmitrom being marketed as Rezdiffra gets FDA approval. To add even more hype for this drug, the Institute for Clinical and Economic Review (ICER) published a paper that says that this drug, Rezdiffra, is a breakthrough drug that is one of its kind that will help a lot of people and is beneficial and economically will help due to the benefits it brings in terms of cost saving, improving quality of life, and extending life expectancy.

In April 2024 this drug started to be sold in the United States and the initial numbers have come out as $MDGL had their financial report yesterday since the FDA approval. Rezdiffra being sold brought in $14.64 million in revenue for $MDGL as its only source of revenue and this number will continue to increase as the drug becomes more widely available and marketed. That is a 233.98% increase in revenue, but that is not surprising as the drug was recently FDA approved. This drug has no competitors which means there are already investigators looking at its affects as a dual therapy candidate for a lot of metabolic disorders. What that means is that this drug is being studied on how it will impact cholesterol levels if it is combined with a statin for example or how it affects diabetes and obesity of it is combined with metformin or ozempic. This drug has a lot of potential for dual therapy due to its low occurrence of side effects and how the mechanism of action for it does not interfere with other drugs of a similar class. Also, did I mention that it has no other competitors? That means that if a dual therapy is found, it will have a far better probability of staying as the standard of care than any new competitors that may emerge.

Approximately 25% of the United States population suffers from NAFLD which means as this flow of income comes into $MDGL and they start to market this medication and it becomes more widely available, it will help a lot of people. The quarterly report also showed that only 5% of the people who were prescribed Rezdiffra required a liver biopsy which means that the process of acquiring this medication is faster and becoming easier accessible.

To help individuals get more access to this medication, there even is a website set up with support and a copay savings program. Also, there is a potential approval time set for this medication to be available in Europe and the European Medicines Agency (EMA) is scheduled to have it approved by mid 2025 which means that will bring more care and help to individuals in Europe that can benefit from this medication and it will act as a catalyst for the stock too.

On August 7, 2024 when the financial report from $MDGL came out after having had a 233.98% increase in revenue and beating EPS by 7.33% the stock started to go down in price. There are a lot of benefits to this medication and a lot of catalysts that should drive the price up, but it went down, why? Well, $MDGL has a 100.34% held by institutions and a short ratio of 12.43 which points to big banks and institutions artificially bringing down the price of a beneficial medication with a lot of potential to try and scare away investors so that they can make some money themselves. Therefore, as a medical student who has seen this medication be touted as a game changer, I took the chance and bought the dip. I believe this stock has a lot of potential as it helps people, has solid foundational science that can help it in becoming a candidate for dual therapy, is being shorted which has the potential for a short squeeze, and has a lot of catalysts that can drive up the price.

Here is the link to $MDGL website where you can find the articles on the science behind the drug, the ICER economics report, FDA breakthrough designation article, and other resources: https://ir.madrigalpharma.com/news-releases/

I’m only a medical student that likes the science behind $MDGL for its life changing medication and not a financial analyst. Everything that I have posted here are for informational purposes.

tldr: $MDGL has the only NAFLD medication that is FDA approved. It is beneficial with a lot of catalysts that can drive up the price. It is also being shorted. I like the stock.