Why Madrigal Stock Jumped 7.8% Despite Q3 Loss Widening

The Paradox: Madrigal Pharmaceuticals (MDGL) posted a wider-than-expected Q3 loss of $5.08 per share—nearly 2.6x worse than the $1.98 consensus estimate. Yet the stock still rallied 7.8% on Tuesday. Here’s what actually matters:

The Real Story: Revenue Crushing It

While the bottom line disappointed, Rezdiffra (the company’s MASH drug) generated $287.3M in Q3 revenue—beating expectations of $249M by 15%. This was the first full quarter post-commercial launch (April 2024), and the momentum is undeniable:

• 29,500+ patients already on treatment
• 10,000+ healthcare providers prescribing it
• Strong year-over-year growth trajectory

Investors saw past the loss (which was largely due to R&D spike: +$174M vs prior year) and focused on the commercial traction.

Operational Reality Check

Cash position strengthened: $1.1B as of Sept 30 (up from $802M in June), thanks to a $350M senior secured term loan from Blue Owl Capital. This funds expansion without dilution.

Spending spike was strategic: SG&A expenses nearly doubled to $209.1M due to aggressive commercialization—headcount expansion, marketing, and distribution setup for Rezdiffra rollout. This is temporary and intentional.

Pipeline Moving Forward

• EU approval: Rezdiffra got conditional marketing authorization in August 2025; Germany launch completed in September
• Combo therapy play: Inked global licensing deal with CSPC Pharma for MGL-2086 (GLP-1 agonist) to combine with Rezdiffra—clinical entry expected H1 2026
• Long-term studies ongoing: MAESTRO-NASH biopsy study (54-month confirmatory data) and MAESTRO-NASH OUTCOMES (2027 readout) will determine full FDA approval and label expansion

The Takeaway

This is a classic pharma story: sacrifice near-term profitability to dominate a market. With Rezdiffra as the first-and-only approved MASH therapy globally, Madrigal controls a valuable niche. Year-to-date, MDGL is up 44.1% vs sector’s 6.6%—that’s the market rewarding execution.

Current Zacks Rank: #3 (Hold), but momentum suggests upside if pivotal trials deliver.