What’s in Store for Madrigal (MDGL) This Earnings Season?

Madrigal Pharmaceuticals, Inc. MDGL is expected to report third-quarter 2017 results on Nov 9, after the market closes.

So far this year, the company’s share price has increased significantly by 215.5%, compared with the industry’s gain of 1.5%.

Factors to Consider

Madrigal has no approved product in its portfolio, so its complete focus on the third-quarter earnings call will be on its lead pipeline candidate, MGL-3196.

Madrigal’s lead pipeline candidate MGL-3196 is a liver-directed THR-ß agonist, which is being developed in phase II studies for the treatment of non-alcoholic steatohepatitis (NASH).

Additionally, it is developing MGL-3196 for dyslipidemia, particularly genetic dyslipidemias such as familial hypercholesterolemia, (FH) including both homozygous and heterozygous forms of the disease. A phase II study on heterozygous familial hypercholesterolemia (HeFH) is also ongoing.

In September 2017, the independent Data Safety Monitoring Board (“DSMB”) recommended to continue both the NASH and HeFH clinical studies with no modifications to either protocol. The company announced the completion of enrolment for HeFH study. While top-line results from NASH are expected in 2017, the same from the HeFH study are expected by early 2018. The positive results will to support the phase III study for MGL-3196 for both the indications.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Madrigal this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. That is not the case here, as you will see below.

Zacks ESP: Madrigal has an Earnings ESP of 0.00%. That is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 84 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Madrigal carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.

Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.

Stocks to Consider

Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:

Alnylam Pharmaceuticals, Inc. ALNY has an Earnings ESP of +2.02% and a Zacks Rank #3. The company is scheduled to release results on Nov 7. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agenus Inc. AGEN has an Earnings ESP of +8.11% and a Zacks Rank #2. The company is expected to release results on Nov 7.

Amedisys, Inc. AMED has an Earnings ESP of +0.62% and a Zacks Rank #2. The company is expected to release results on Nov 7.

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