With the business potentially at an important milestone, we thought we'd take a closer look at Madrigal Pharmaceuticals, Inc.'s (NASDAQ:MDGL) future prospects. 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$510m, the US$5.1b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Madrigal Pharmaceuticals' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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$82m in 2026. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 68%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won't go into details of Madrigal Pharmaceuticals' upcoming projects, but, take into account that by and large 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.

Before we wrap up, there's one aspect worth mentioning. Madrigal Pharmaceuticals currently has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Madrigal Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Madrigal Pharmaceuticals' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.