Shares of Madrigal Pharmaceuticals (MDGL) plunged 5.59% in early trading on Thursday, despite the company reporting better-than-expected first-quarter results. The significant drop suggests that investors may have concerns about the company's financial health and future prospects, even as it shows signs of improvement.

Madrigal Pharmaceuticals announced its Q1 2025 financial results before the market opened. The company reported a net loss of $73.2 million, or $3.32 per share, which was less than the average analyst estimate of a $3.69 per share loss. Revenue for the quarter came in at $137.3 million, surpassing Wall Street expectations of $113.76 million. Despite beating estimates, the company's substantial operating loss of $79.311 million and high operating expenses of $216.561 million likely contributed to investor unease.

While the company's performance showed improvement compared to the same quarter last year, when it reported a loss of $7.38 per share, the ongoing losses may be weighing on investor sentiment. The market's reaction suggests that investors might have been hoping for more substantial progress towards profitability or may have concerns about the company's cash burn rate. Additionally, any cautious guidance or comments about future challenges in the corporate updates could have further dampened investor enthusiasm, leading to the sharp stock price decline despite the better-than-expected quarterly results.