The stock market has been on edge over the past several days, and Monday didn't seem to bring a lot of clarity in a difficult economy. The Nasdaq Composite (^IXIC 1.59%) kept declining shortly after the opening bell on Monday morning, failing to recapture any of its losses from late last week.
One stock that has weighed on the Nasdaq particularly heavily lately is Tesla (TSLA 1.85%), but its shares moved higher as investors parsed through the latest happenings concerning its electric vehicle business and its chief executive. And yet another, less familiar stock captured Wall Street's attention, as Madrigal Pharmaceuticals (MDGL 2.29%) more than tripled in value. You'll find the details below.
Will Tesla get back in gear?
Shares of Tesla were up about 2% near the market open on Monday morning. After seeing its share price fall more than 20% just since the beginning of December, some investors were pleased at signs that its CEO might take steps to remove what many have felt has become an increasingly troubling distraction.
Over the weekend, Elon Musk posted a poll on Twitter asking if he should step down from his CEO role at the recently acquired social media platform. By the time the poll ended, a modest majority of those answering favored the Tesla CEO giving up the executive reins at Twitter.
Some Tesla investors haven't been happy with the way that Musk has managed his multiple responsibilities, especially since he completed his personal acquisition of Twitter. Moreover, in order to finance the $44 billion purchase of the social media platform, Musk has sold off significant positions in Tesla stock. There have also been discussions about the Tesla CEO potentially needing to put up more collateral to secure loans that have Tesla shares as collateral.
Even after the poll, Twitter remains a concern for Tesla investors, with analysts at Oppenheimer downgrading Tesla stock from outperform to perform on risks related to the social medial platform. Until the situation is resolved, it could continue to weigh on Tesla's share price.
Madrigal is singing for joy
Madrigal Pharmaceuticals was the big winner on Wall Street Monday morning. The small-cap biopharmaceutical company's stock jumped more than 200% after management announced positive results from a key clinical trial.
Madrigal said early Monday that its phase 3 trial of its resmetirom, a candidate for treating nonalcoholic steatohepatitis (NASH), had achieved both of its dual primary endpoints: improving scores on a common scale measuring NASH resolution, as well as seeing improvement in fibrosis. The treatment also achieved many secondary endpoints in the study, including reductions in key liver enzyme levels and various lipids, lipoproteins, and fibrosis biomarkers.
One reason Madrigal stock rose so much is that it has been difficult for researchers to find viable treatments for NASH. Even among promising candidates, safety considerations including a lack of tolerability with other drugs have prevented approval by the Food and Drug Administration (FDA) in the past.
Also getting a boost from the news was Viking Therapeutics (VKTX 1.69%), whose shares jumped 48%. Viking is looking at a NASH treatment that could use an approach similar to that of Madrigal's candidate, and while Viking's drug is earlier in the clinical trial process, investors were pleased to see a proof of concept.
For Madrigal's part, it intends to seek accelerated approval for resmetirom from the FDA. If that leads to the first approved treatment for NASH, then it could fully justify the jump in Madrigal's stock price and then some.
