Just over a year ago, I published my initial research on Madrigal (NASDAQ:MDGL) with high hopes that have not been met. Determined, I am doubling down on my investment. Down roughly 55% compared to the price of my initial entry, under $90 provides a buying opportunity that likely won't last much longer for this promising company.
Currently, the share price is sitting around where the initial breakout in 2018 was at $85.
(Source: StockCharts.com)
The historically low valuation that Madrigal currently faces is shocking when you look at the company's actions. Unfortunately, I invested at the wrong period, but I am still bullish on my stance. In the past year, I have been selling covered calls to collect premiums while the price continued to dwindle, lowering my cost average, but now, with the stock under $90, I am adding more to my position.
The price declined following a large offering by the company in December, where Madrigal priced a previously announced underwritten secondary offering through Bay City Capital LLC, of 1,200,000 shares of Madrigal’s common stock at $107.85 per share. This came as a result of exercising a shelf offering from 2018, and the company did not receive any funds for this offering. No wonder the stock has declined from December by nearly 40%. At the current price point, though, I see this as a gross overreaction by the market. I believe we will see $100 by the end of Q1.
Initial Dosing - Resmetirom (MGL-3196)
Madrigal recently dosed its first patient in its second Phase III clinical trial, MAESTRO-NAFLD-1 with its first-in-class, once-daily, oral thyroid hormone receptor-beta selective agonist MGL-3196.
The initial Phase III study (MAESTRO-NASH) is being done with 900 patients, and the primary surrogate endpoint on biopsy will be NASH resolution, with at least a 2-point reduction in NAS (NASH Activity
