What happened
Shares of the clinical-stage biotech Madrigal Pharmaceuticals (MDGL -4.60%) fell by 10.1% over the course of October, according to S&P Global Market Intelligence. Fortunately for shareholders, this double-digit drop wasn't sparked by a specific clinical or regulatory event.
Rather, the drugmaker's shares appear to have simply drifted lower with the broader biotech industry last month. Biotech stocks, after all, took a pounding in October due to the market's concerns about how President Trump's trade war with China will impact overseas sales and profits going forward.
So what
Madrigal's shares have now lost almost a third of their value since hitting their 52-week highs only a few months ago. The long and short of it is that investors were hoping that a deep-pocketed partner would enter the picture after the company announced stellar mid-stage results for its experimental nonalcoholic steatohepatitis drug, MGL-3196, last May. So far, that value-boosting scenario has yet to materialize.
Now what
Without a partner, Madrigal is now tasked with advancing MGL-3196 into a late-stage trial on its own. The bright side, though, is that the biotech's last stated cash position of $488.5 million should be more than sufficient to get this process going and perhaps even see the company through to a commercial launch.
A go-it-alone strategy also means that Madrigal won't have to fork over the bulk of the drug's sales to a partner later down the line. So, with a potential megablockbuster product close to entering a pivotal-stage trial either later this year or in early 2019, Madrigal's stock may be gearing up for a healthy rebound in the not-so-distant future.