Madrigal Pharma Is Said to Weigh Sale Amid Takeover Interest

(Bloomberg) -- Madrigal Pharmaceuticals Inc., with just nine employees and a market value of about $4.3 billion, is exploring a sale after receiving takeover interest from other drugmakers eyeing treatments for a liver disease linked to obesity, people familiar with the matter said.

The West Conshohocken, Pennsylvania-based company is working with investment bank Centerview Partners Holdings on the potential sale, the people said, declining to be identified as the matter is private. The deliberations are at an early stage and Madrigal may opt to continue operations on its own, they said. The shares jumped in New York.

Representatives for Madrigal declined to comment, while Centerview didn’t immediately respond to calls.

The drugmaker’s valuation may deter some potential buyers, the people said, as the stock has surged about 18-fold in the past year with investors growing increasingly optimistic about the prospects for a treatment of the liver disease known as nonalcoholic steatohepatitis, or NASH. The potential for groundbreaking NASH therapies has generated excitement among investors and larger drugmakers, with behemoths like Gilead Sciences Inc. and Novo Nordisk A/S also pursuing treatments.

“We have managed the company with an open mind to strategics who would either want to partner or acquire us,” Chief Executive Officer Paul Friedman said in an interview earlier this month. “There’s a lot of interest in the field, obviously.”

Shares of the drug developer jumped as much as 9.3 percent before trading up 5.3 percent at $297.72 as of 11:35 a.m. in New York. The stock had risen in December after MRI results from a mid-stage study showed Madrigal’s MGL-3196 cut liver fat more than a placebo. Biopsy results in May gave it another lift when data confirmed that more patients getting Madrigal’s therapy had their disease disappear compared to those getting a placebo.

--With assistance from Emma Ockerman and Melissa Mittelman.

To contact the reporters on this story: Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net;Cristin Flanagan in New York at cflanagan1@bloomberg.net

To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, ;Ben Scent at bscent@bloomberg.net, Chitra Somayaji, Timothy Sifert

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