What happened
This week was going down as one to remember for Madrigal Pharmaceuticals (MDGL -2.78%). According to data compiled by S&P Global Market Intelligence, the biotech's shares were an eye-watering 350% higher week to date, as of Thursday's market close. Biotechs tend to pop like that when they report excellent clinical-trial results; such was the case with Madrigal.
So what
On Monday, Madrigal announced that its pipeline drug had done extremely well in late-stage testing. Specifically, this is resmetirom, a drug that targets a liver disease called nonalcoholic steatohepatitis (NASH).
Resmetirom met both primary endpoints of a phase 3 clinical trial involving over 950 patients, the company said. It also produced "potentially clinically meaningful effects," in both the 80 mg and 100 mg orally administered doses that were being tested.
Fifty percent of the recipients of the lower dosage had either NASH resolution with no worsening of fibrosis or saw fibrosis improvement by at least one stage. There was no worsening of a measure known as the nonalcoholic fatty liver disease activity score (NAS). That percentage rose to 56% in the patients being administered the 100 mg dose.
Madrigal quoted its CEO Paul Friedman as saying: "With these unequivocally positive phase 3 data in hand, our path forward is clear. In the first half of 2023, we intend to file a new drug application seeking accelerated approval of resmetirom."
Now what
Two days later, Madrigal announced it had secured a fresh $259 million in gross equity to help fund its operations, in addition to $50 million from a credit facility. Of the equity, $159 million came from the sale of common stock under an at-the-market (ATM) program, while the remainder derived from convertible stock and common shares sold to two of Madrigal's institutional investors, who weren't named.
The additional $50 million was made available after the biotech company reached the credit facility's clinical milestone.
