Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Madrigal Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development of therapeutics for the treatment of non-alcoholic steatohepatitis (NASH) in the United States. With the latest financial year loss of US$374m and a trailing-twelve-month loss of US$519m, the US$6.8b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Madrigal Pharmaceuticals' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Madrigal Pharmaceuticals

Consensus from 14 of the American Biotechs analysts is that Madrigal Pharmaceuticals is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$113m in 2026. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Madrigal Pharmaceuticals given that this is a high-level summary, however, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 15% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Madrigal Pharmaceuticals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Madrigal Pharmaceuticals, take a look at Madrigal Pharmaceuticals' company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:

1. Valuation: What is Madrigal Pharmaceuticals worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Madrigal Pharmaceuticals is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Madrigal Pharmaceuticals’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.