Why Biotech Investors Should Reconsider Nektar Therapeutics and Look Toward Madrigal Pharmaceuticals Instead

A Tale of Two Pharma Companies

Madrigal Pharmaceuticals (NASDAQ: MDGL) offers a compelling case study for understanding pharmaceutical investment dynamics. The company transitioned from clinical-stage uncertainty to commercial reality when its lead asset, Rezdiffra, earned U.S. regulatory approval in 2024 as the first treatment specifically indicated for metabolic dysfunction-associated steatohepatitis (MASH). This milestone matters: it transformed Madrigal from a speculative bet into a revenue-generating entity.

The financial results speak plainly. During the third quarter alone, Rezdiffra generated $287.3 million in net sales—a trajectory pointing toward blockbuster status in the coming year. For a company addressing a therapeutic area with significant unmet patient need and minimal competitive pressure, this represents genuine market validation.

The Nektar Therapeutics Dilemma

Nektar Therapeutics (NASDAQ: NKTR) presents a different narrative entirely. The clinical-stage biotech captured investor enthusiasm in 2025 with positive phase 2b data for rezpegaldesleukin in eczema treatment. On paper, this asset addresses one of industry’s largest markets—competing against established players like Dupixent and Rinvoq.

Yet therein lies a fundamental challenge: Nektar remains a pre-commercial entity with ongoing net losses. Clinical-stage companies operate in a zone of considerable uncertainty. Mid-stage trial success does not guarantee late-stage victory. The biotech landscape is littered with cautionary tales. aTyr Pharmaceuticals generated encouraging mid-stage results before its lead program failed in phase 3 trials—sending the stock into a decline from which it has never recovered.

For Nektar, a similar setback would carry existential consequences. Without marketed products generating revenue, a failed phase 3 could threaten the company’s viability entirely.

The Regulatory Advantage

Madrigal Pharmaceuticals enjoys an underappreciated structural advantage. While Rezdiffra operates under accelerated approval—requiring confirmatory trials for continued market access—the regulatory environment is relatively favorable. MASH represents a significant unmet medical need with millions of potential patients in the United States. Regulators typically grant greater flexibility to medicines addressing such gaps.

Rezpegaldesleukin faces different regulatory headwinds. Entering an eczema market crowded with effective competitors, it must clear a higher evidentiary bar. The approval pathway is narrower; regulator scrutiny more intense.

The Investment Calculus

Both companies carry risk. Madrigal must demonstrate that Rezdiffra’s early commercial success translates into sustained market adoption and durability of efficacy. Yet this risk profile differs materially from Nektar’s. One company has de-risked through regulatory approval and early revenue performance. The other remains dependent on future clinical trial outcomes in a contested therapeutic space.

For investors seeking biotech exposure without extreme volatility, Madrigal Pharmaceuticals represents the more defensible position in this comparison. Nektar Therapeutics may offer higher potential returns, but that upside comes attached to downside risks that many investors should carefully evaluate before committing capital.