Citi analyst Joel Beatty sees the Phase 3 trial design confirmed by Madrigal Pharmaceuticals at the end of March as "derisking." The analyst believes there will be a growing appreciation toward using nonalcoholic steatohepatitis drugs with a strong metabolic component in most patients. Further, there's little takeover premium currently in Madrigal shares, which could lead to upside in the event that a NASH competitor is acquired, says the analyst. He keeps a Buy rating on Madrigal Pharmaceuticals with a $200 price target.

As previously reported, BofA analyst Alexandria Hammond initiated coverage of Madrigal Pharmaceuticals with an Underperform rating and $150 price target. The commercial stage company has received the first FDA approval for fatty liver disease, also known as MASH, though investors have "largely moved past Rezdiffra's best-case scenario FDA approval" and payer pushback given Rezdiffra's $47,000 annual price tag could prompt a slow launch, perpetuating a "short the launch thesis" and providing further downside potential for shares, the analyst argues.