Madrigal Pharmaceuticals, Inc. Aktie

Great. Well, first, I'd like to welcome Madrigal Pharmaceuticals, CEO, Bill Sibold; CFO, Mardi Dier; and CMO, Dave Soergel. Welcome to the Goldman Healthcare Conference. Maybe first, starting on the launch. Can you give us an update of how it's progressing, some highlights from, call it, the last 12 months and what investors should be looking for, for the rest of the year?

Yes. Well, first of all, thanks for having us. It's always great to be at the conference. And it's always good when you have a conference like this to look back what's happened since the last time we were here. So when you look back over the last 12 months, it's been really quite a remarkable 12 months for us, transformational in many ways. We've continued to have a best-in-industry launch with Rezdiffra over the last 12 months. We've seen that we are part of a market that is growing rapidly, and we're at the very beginning we secured IP out to 2045, which is, again, allows us to think in the very long term about the evolution of the business. And because of the success that we've had, we've invested in the pipeline.

So we now have over [Technical Difficulty] in the pipeline, and hopefully, Dave can cover those. And so it was a very strong '25. And we've carried that momentum into '26 when you take a look at our first quarter. Over 42,250 patients on Rezdiffra at the end of the first quarter, which, again, leads to our -- confirms our steadily adding patients. If you look back the last 12 months of launch, over $1.1 billion in sales. So on over -- already a blockbuster on the way to being a mega blockbuster. Market access is really exceptional. And penetration rate, we're still at a -- if you look at the market that's growing from about 315,000 to 460,000 patients in a short period of time, we're still at about 10% penetration into that. So all very, very good prognosticators of the future. And when we look ahead towards the rest of the year, it's really a focus on continued launch.

Launch execution is really the. Key the ability to perform with Rezdiffra really allows us to enact the rest of our strategy. So continued launch, new data readouts at meetings new data generation initiatives so that we can continue to drive the science in the space. We'll have progress with the pipeline. Also, we continue to aggressively pursue new IP. So we would expect some additional IP around the F2/F3 label that we got and also even in advance of a cirrhosis label look for additional IP there. So stay tuned, but there's a lot that's going on with us. And I think '26 is shaping up to be a really, really strong year for us.

Great. Let's take a step back and go beyond '26. Can you give us some insight in your views on where Madrigal will be 5 years from now, putting everything in perspective, competition, market and the company.

Yes. Look, I think that when I look across the industry, and I look across even my career in the industry, you're hard pressed to find an opportunity that is attractive as this.

First of all, you have to start with the unmet need. This is a high unmet need disease. You've got -- it's the #1 cause of liver transplants for women in America, #2 for men, soon to be #1. And it has been void of therapies for ever. Over 23 programs had tried, they all failed. We were the first through. So you start with the market dynamics you've got high unmet need disease. You've got a healthy patient population. By that, I mean by size, we talk about 315,000 in 2023 that were diagnosed in the practices that we were calling on, and in 2 years' time, that's grown to 460,000. So if you look at the prevalence number, people talk about millions. And if you take our 460 and say it's 10% diagnosis rate, that gets you into that 1 million number right away.

So you've got a market where there hadn't been a therapy, now there's a solution and that provides in itself a good starting point. then you look and you've got Rezdiffra, which is I like to describe it as the holy grail of profiles, once-a-day pill, that's effective, safe, well tolerated. That allows you to become this foundational therapy, which we can grow from. So we see that if you look ahead 5 years, treatment rates are going to go up because diagnosis rates have gone up, penetration of Rezdiffra, which is already a blockbuster moves towards mega blockbuster status. We have now over 10 things in the pipeline.

So we will have data readouts in the combinations. And we don't know which combination is going to be the one that is either adding even more efficacy to the whole population or to a subpopulation but we are -- we have the tools now and the potential combos that can look for driving more efficacy. So we'll have readouts from that. And we've really put ourselves in a position, I think, to be looked at as not only the leading company in MASH, but somebody who has become a leading company in the industry because of what we've been able to do in this really growing market. So I think all of the -- look, at the end of the day, we'll be a more valuable company. How much more valuable? I'm going to let you guys do your math on that, but all the prognosticators are exceptionally strong about this space.

Great. You mentioned the F2/F3 market of initially 315 grown to 460. Can you give a little bit more detail in terms of what drove the growth and your expectations from here?

You know it's like any disease diagnosis rates tend to remain lower when you don't have a therapy. Because if I diagnose somebody -- and these people -- these patients tend to have multiple comorbidities, and so what's the value of coding them for something else, especially when there's no treatment. So just by virtue of having a new therapy in the market, it helps with diagnosis rates all of a sudden, people are looking for it and then the professional societies start to write their guidelines, which say on high suspicion, you should be testing for MASH. And then you have more of the diagnostics that are available, the NITs, whether they be liver stiffness measures or blood tests, et cetera, that become more ingrained.

So you have all these things that help and you have us as a company talking about it, and we've had competition come in the market. Really, I look at it more as an enabler rather than competition with Novo coming in, who've also created awareness and you've got all the companies that have products in the pipeline. So it's this virtuous cycle, if you will, that because there's therapy and because there's more people talking about it, it's just awareness lifts, and that's what we think has driven the $315 million to $460 million and we expect double-digit growth for the foreseeable future. I mean this is a market that we truly believe is set up to grow for decades because it should mirror other large specialty markets that are all over $20 billion in annual sales with penetration rates that have continued to go up year after year for really tens of years. So we think this is going to be modeled after that.

Great. Continuing on commercial theme, you've -- I believe your numbers are -- you've reached 10,000 out of 14,000 approximately prescribers. Can you talk a little bit about the depth and breadth of prescribers today and what you expect going forward?

Yes. We -- 10,000 -- achieving 10,000 was the last, I think, number that we've provided. The reason being is that from my experience, getting over 10,000 prescribers is a real prognosticator for the future. If you have that breadth, it allows you to build the product that we're trying to build, which is a mega blockbuster. We've continued to add prescribers. Just to remind everyone, hepatologists and gastroenterologists were the initial focus. And in fourth quarter, we started with endocrinologists in a more concentrated way. So it's -- we're seeing scripts across all of these.

One of the things when you've got a new disease, when I say new disease, not a new disease, but a treatment for a disease, so it gets you actually intervening with that disease is it takes you time to ways so that patients can be processed through the [Technical Difficulty] and it takes a little time. So with the hepatologists, they were probably out first because it was a disease they were very familiar with and they had access to the NITs and the various tests. Gastroenterologists took them a little bit longer because they had to build their pathways, sometimes they were adding staff, APPs to help with the actual treatment, getting access to NITs, et cetera. And now with the endocrinologists, they are essentially starting from where gastroenterology was 2 years ago.

So they're going to go through that wiring of the system, if they will, for their own practice. So we're seeing pretty consistently across any of the specialties time corrected, so to speak, so when that specialty started. Similar behavior where they start with a patient, some patients and then it grows over time. So we have established the breadth right now, which we think is necessary and can carry us a long way. And the focus more is on depth and having people just go deeper into their prescriber base. The good thing is that when we think about even the highest writers they're nowhere near fully penetrated into their own practices and patients are still being referred into those practices. So again, even on that front, we're at the very beginning.

Great. Maybe shifting gears a little bit to financials. You had mentioned on your quarterly call that gross to net was favorable compared to your expectations. Can you talk a little bit about, one, what's driving this? How that could impact the rest of 2026 and how to think about it for '27 and beyond?

Great. Thanks, Rob. As Bill said, we are in excellent shape with respect to market access and gross to net in total. We take very seriously at the company.The team has done an excellent job managing gross to net to date. We also talked about in 2026 was the first time that we had our commercial contracting take effect in Q1. And the way the commercial contracting works, it remained in first-line access. We had improved utilization management criteria, et cetera. And we work really with the big 3 PBMs and establish those contracts. Thereafter, all the partner plans or downstream plans, then we'll adopt the plans of the big 3, and that takes some time. So what we said about gross to net going into 2026 that we did see some favorability in Q1, mainly because of the time of these downstreams coming on to the plan.

So we saw some favorability there. And for the rest of 2027, then we believe that gross to net will be in that mid- to high 30s range for the rest of the year, and Q1 was a little more favorable for everything I just mentioned. So we're in very good shape, excellent market access across the board. Now going into 2027, 2025 to 2026 was really the big impact. That was our biggest step as we brought on the commercial contracting. In 2027, you will still see some impact on gross to net as we do Medicare contracting, et cetera. But the real big impact was in 2026. And we really haven't talked about specifics yet in 2027, but just we're in great shape and have great access. Did you talk about sales too? What was that part of the question?

How -- I think you largely addressed it. How is it impacting the rest of '26 and then '27 and beyond?

Yes. Okay. Let me just mention then just to reiterate that gross to net, we take very seriously, and we also talked about on the Q1 call, no change here for Q2, looking at Q2 and the rest of the year, we feel very good about consensus of what we discussed on the Q1 call. So we're in great shape for the rest of the year.

Great. Let's shift to overall MASH landscape. Wegovy has been on the market for a few quarters. First, how are you seeing the impact of Rezdiffra of Wegovy on the market? And then second, there continues to be MASH data across other mechanisms, including later this year. How do you see the market continuing to evolve?

Maybe I'll start and maybe, Dave, do you want to cover the pipeline. So it's been great having another product on the market. As I said, we think that Novo has really been helping to increase diagnosis and treatment, and we're the benefactor of that. So Wegovy is getting used, but certainly not to the detriment of Rezdiffra. We've talked about steadily adding patients. We've steadily added patients since launch. We expect to continue to steadily add patients. And when they were -- they've been approved and on the market since August, we've continued to steadily add patients through that.

So no impact from a Rezdiffra perspective, but certainly helpful in driving the diagnosis rate and so forth. And I think their focus -- they're tending to spend some time on primary care, which really is where the referral pool comes to the specialists that we call on. So from our perspective, works out well. The more people that are talking about it, the better.

So I think that the other piece is that a large number of our patients are on a GLP-1 as well. So combination therapy is over 25% of patients are on. And when you look at patients that have been previously exposed to a GLP-1, it's 50%. We expect GLP-1s are going to become just a background therapy, right, kind of ubiquitous. I think people -- most people we expect will have been on or are on. and there's enough comorbidities that they can be really effective at that it leads kind of the combo for MASH for Rezdiffra.

So that's how we see it as a real enabler more than anything. And the other specialty markets that we've talked about, many of them, despite being over $20 billion markets, they have 10, 15, greater than 15 products that are on the market at one time. So this is clearly one of those specialty markets that can support multiple products. Part of our strategy is to have those multiple products within our portfolio with combination strategy that hopefully we can talk about at some point. Dave, do you want to maybe comment on other stuff.

Yes, other stuff. Yes. I think the statement that incretins are going to kind of be in the water is probably likely going to happen over time. But Rezdiffra is still going to be the foundational therapy for NASH just based on where we are in the life cycle, as Bill has already described. So the advantage that we have is we can take complementary mechanisms and add them to the foundational therapy and demonstrate either better efficacy or either within the entire NASH population or within a subset of individuals. So a really good example of that is the PNPLA3 siRNA that we just in-licensed from Arrowhead.

So PNPLA3 is a genetic driver of NASH and drives very poor outcomes for people who are homozygous for that mutation. And this isn't a rare problem. So it's about 30% or so of the NASH population who have this homozygous mutation. So combining -- the thesis is combining a PNPLA3 siRNA with Rezdiffra will deliver even better efficacy for these folks who are at even higher risk. So the advantage that we have is that when you look across all of the mechanisms, you always want to think of Rezdiffra as the first product that patients are having something added to. And that's how we thought about building our pipeline. And then, Rob, I think you're talking about any other kind of competitive threats as well.

Yes. I mean, Dave, do you want to comment? Look, I don't think there's anything on the horizon that we think about too much, right? I mean we -- I think you have to remember, profiles matter with a drug. And it is hard to beat the profile that we have. And it's also hard to beat the fact that we very quickly, I would say, the community has transitioned from clinical trial data to real-world evidence. And what we're hearing to a doctor or a prescriber is that Rezdiffra is performing extremely well in the real world. They're seeing that fibrosis counts are moving down, patients are doing well, and that is actually helping to spark additional prescribing. So that real-world profile, the first-mover advantage that we have, the continued data generation that we're setting up and just the system that we've wired, I think for anyone else to replicate that, it's a tall order.

And we are -- the one thing we don't talk about that much, but really we should lead with is we've got an exceptional team. We've got people who have launched some of the biggest products in the industry. They know what scale looks like. They know what it's like to interact with a specialty, how to provide high levels of service, et cetera. That isn't something that you can just pick up and replicate tomorrow. That has been careers of in-depth experience, knowledge and know-how that we're applying to this situation, and that's what somebody else has to come in and try to compete against. And I don't care whether it's the biggest pharma company in the world or some small biotech company that's trying to dip their toe in the space. It is a tough job, and we are experts at it.

You've discussed previously you're preparing for profitability, but also expecting an increase in OpEx this year. First, can you provide any views around how you're balancing continued investment in the business while achieving that profitability? And then second, can you discuss when you might expect profitability?

Yes, at least the first part, we didn't indeed say in our first quarter call that we are preparing for profitability. And we also did say that our OpEx will continue to grow. We're building a mega blockbuster brand, and we're going to support what it takes to make sure that we're driving the top line. So our focus is gaining market share and continuing to drive the top line. Also, we've done a lot of BD in the last 6 to 8 months, and we'll be growing out the R&D expenditure as well over time, although early on, it's a lot of Phase I work, so it's not that much in terms of incremental spend. But with the growth -- as long as we support the growth of the top line the right way, which we anticipate, we see the rate of growth of net sales far outstrips the OpEx growth over time.

So again, that just sets us up nicely for profitability. It's inevitable with this business model. In 2026, we were very clear on the Q1 call that we do not expect to be profitable in 2026. Now there may be quarters in the near term where we dip our toe into profitability and then are not profitable, so we can expect that. But for 2026, that's not our expectation. We really haven't commented beyond that. But again, understanding the growth drivers of the top line and then the spend increases, you will see a divergence of those curves soon.

Maybe 2 things, just to confirm that's full year '26, not profitability, as Mardi said. The other thing, just as you think about spend and the pipeline. I'll take people back to 12 months ago when we were at this pipeline, we had our 2 ongoing trials with Rezdiffra, products in the pipeline, and we've done so at less than $300 million upfront. And these are quality assets that we've added. The reason we could do that is because the world still hasn't woken up, we believe, to MASH being an attractive place to play. And if the world has woken up, they also realize that they've got to go through Rezdiffra, so to speak. I mean with Rezdiffra as a foundational therapy, we now have this pipeline that we're going to use in combo. If you've got a monotherapy -- that is a big lift to say, how am I going to show more efficacy with a monotherapy over a combo therapy of a product that already works and was the first to be approved and has over 42,250 patients on and the company has spent about $3 billion to get to this point and and and.

So we're doing this in a -- as Mardi said, we are all in for the commercial launch. We are all in for the pipeline, but we've also done so in an exceptionally disciplined way. Our pipeline we have built, as I said, very efficiently. And you can assume that when we do the clinical trials, we're going to have that same idea of efficiency. So we're not going to go out and run 10 Phase III programs, right? We will set a high bar, and we'll have to find a place where either all patients have even more efficacy or a subpopulation. So this is, again, a unique moment that we are taking full advantage of. And it presented itself, we've identified it and we put the resource towards it.

Great. On that BD topic, as you mentioned, you've been very busy over the last 12 months. Can you discuss how investors should think about business development on the forward?

Yes. I mean, look, we've done a lot. In 10 months -- 12 months, we've done a lot. Now I would don't expect the same pace going forward, but there are additional mechanisms that we may be interested in. And if we can find 1 or 2 of those, great, that's something that we would be interested in. But we feel like we have set the table really well. However, again, there's other mechanisms that we would like to add. Again, you can also expect that it will be done in an efficient manner. One of the real cornerstones of our strategy has been we're not going to bet the company on a BD deal. We don't have to and we're not going to. So anything we do will have to be on terms that are acceptable and favorable for us.

Great. Shifting to F4C. I think you've commented publicly before that it could roughly double the size of the market. You obviously have an outcomes trial underway that could potentially give you full approval from F2 all the way to F4C. Can you discuss a little bit around what gives you confidence in Rezdiffra's potential in that market?

Yes, sure. So as you pointed out, we actually have 2 Phase III studies going on right now. We have MAESTRO-NASH, which is in the F2, F3 population, looking at progression to cirrhosis. So that was a study where the interim analysis got us approval, accelerated approval. And then the second study we have is a time to event-driven F4C study called MAESTRO Outcomes. So that study is ongoing and expected to deliver in 2027. So the reason why we're confident in F4 is because what we've already seen with the drug in an earlier study called MAESTRO-NAFLD-1, where we had an open-label cohort of 122 people with F4C in that study. And we were able to look at a variety of measures in that population, most importantly, looking at liver stiffness measurements and risk of clinically significant portal hypertension.

So just by way of background, people who develop cirrhosis progress through cirrhosis to get to clinically significant portal hypertension. And when their portal pressures go up, it's when you start to see the decompensation events like ascites and variceal bleeding, et cetera.

So patients have to move through that portal hypertension sort of milestone before they start to have decompensation events. And what we saw in those 122 patients is that we were able to move the people who had the highest risk of clinically significant portal hypertension into lower-risk categories. So it shows us that we're having an effect of the drug on liver stiffness measurements and kind of this critical measure in people with F4. And so when you think about that and then you think about the ongoing outcomes trial, if you're able to pull patients back from clinically significant portal hypertension, you should also then see fewer events in those individuals because they're no longer having the key pathophysiologic finding in those patients.

So that's really the foundation of our confidence in the trial. And the other thing I'll just point out is there is no good standard of care for F4, right? So there is no available effective therapy for patients with F4. So usually, when you're going after a new disease where there's no good standard of care, you really do expect an effective drug to show through and show efficacy.

Great. You recently presented some new data at EASL. Can you give investors a recap and overview of that?

Yes, sure. So -- so there were 3 pieces of data that we presented there. The first, coming back to the clinically significant portal hypertension discussion, we looked at those 122 patients in the open-label study and looked at a different measure of clinically significant portal hypertension called anticipate NASH score. And the reason why we looked at this particular score is because it's sort of an orthogonal way of risk in the population compared to the other approach that we've used in the past, which is called the Baveno criteria. And what we showed is that the results when you use this different approach, different analytic approach were very consistent with what we saw in the -- with the Baveno data.

So clear shift to lower risk categories and lower risk status in patients using this measure. The second presentation was on measures of CV risk and specifically looking at atherogenic lipids, changes of -- produced by resmetirom in the MAESTRO-NASH study. And so what we see with resmetirom and sometimes we miss talking about this because we talked so much about histology and liver fat and all that because obviously, we're talking about a liver-directed drug.

But resmetirom has systemic effects also. So because THR-beta, thyroid hormone beta receptor triggers many different downstream effects. What we see is reductions in LDL cholesterol, reductions in Lp(a), which put together gives you reductions in ApoB of about 20%. And so why does that matter? Reducing ApoB is one of the best biomarkers for reducing cardiovascular outcomes. if you look across all the statins and PCSK9s and all the other new mechanism of drugs, it's ApoB lowering that actually leads to better outcomes for patients. So I think that was another crucial piece of evidence that we showed. And then we also had some real-world evidence that we also presented at the meeting.

Great. We talked a few times about the 10 programs in the pipeline. Maybe briefly rationale behind some of the mechanisms that are in the pipeline and any that you would highlight that you're particularly excited about?

Yes. So I'd come back to what we were saying before. So we're treating Rezdiffra as the foundational therapy in NASH. So we treat it that way when we look at the competitive landscape, and we treat it that way when we think about business development deals. So -- what we look at are complementary mechanisms. So GLP-1, DGAT2 and PNPLA3 are the 3 clinical assets that we have in the near term that I'll give you a little bit more detail on a second.

But in each of those cases, there's a scientific rationale for why that mechanism would be -- would give you at least additive effect with resmetirom. And so if you talk about GLP-1, for example, we in-licensed from CSPC last year an orforglipron analog GLP-1, oral GLP-1. That should be able to be combined with -- and what we -- the reason -- the rationale is that we saw that even a little bit of weight loss with resmetirom produces better antifibrotic efficacy. So we can dial in a little bit of weight loss with this GLP-1, enhance resmetirom's efficacy and deliver a better efficacy profile for patients.

So that new molecular entity is entering the clinic in June, so this month. So that will be a prototypical first-in-human study and then Phase II, we anticipate next year. DGAT2 was a molecule we in-licensed from Pfizer. It inhibits the production of triglyceride droplets in the liver through inhibition of the incorporation of the last fatty acid into the triglyceride molecule. And so there's a very good rationale for preventing production of triglyceride droplets with the DGAT2 inhibitor and then burning the fat with THR beta. So we're both preventing the production and we're burning the fatty acids with 2 complementary mechanisms.

So that compound will be going through a drug-drug interaction study with resmetirom later this year and then, again, anticipating a Phase II next year. And then PNPLA3 is our latest addition. I've already touched on that, but that's a molecule that sort of is associated with lipid droplets in the liver and has been shown to -- if you inhibit PNPLA3 production, you can improve liver fat, and that's what they saw in their Phase I study. So again, a good complementary mechanism for THR beta.

Great. Maybe in our last couple of minutes, in closing, Bill, anything you would like to leave with investors? Anything you think might be underappreciated about Madrigal today?

Look, I think there's actually quite a bit that's underappreciated. I think that sometimes you say, well, is this too good to be true, the market dynamics? Every now and then, it is true. And I think in this case, it's a perfect example, as I started with high unmet need, large population, low diagnosis rate, great first asset -- it's a foundational therapy that we're going to combine everything that we've built get even more efficacy somewhere. done is we kind of have started with the end and work back to say, how do you truly create value in this space over time? How do you ensure consistent top line growth for years and years and years? And we have the right market opportunity, the right first asset, and we'll see about the right pipeline as things read out.

But we've really taken a thoughtful approach to how do we become the leaders in this space and therefore, serve as really kind of leaders in the entire industry. And that doesn't happen too often. But I think every proof point that we've put out there or said that this is what's going to happen, at least in the last 3 years, I'm coming up to my 3-year anniversary, that we've hit each one. We've knocked down each payer thesis. And I can tell you, I'm more excited today than I was in September '23 when I joined because the opportunity has only gotten better.

Wonderful. Well, thank you, Bill, Mardi and Dave for the time today. Really appreciate it.

Thanks for having me.

Thanks, Rob.

Thank you.

Good morning, and thank you for standing by. Welcome to Madrigal Pharmaceuticals First Quarter 2026 Earnings Conference Call.

[Operator Instructions]

As a reminder, today's conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

Thanks, Brilla. Good morning, everyone, and thank you for joining us to discuss Madrigal's First Quarter 2026 earnings. We issued a press release this morning and put the slide deck to accompany this webcast on the Investor Relations section of our website. On the call with me today is Bill Sibold, Chief Executive Officer; Dave Sergel, Chief Medical Officer; and Mardi Dier, Chief Financial Officer. They will provide prepared remarks followed by Q&A.

Please note on Slide 2. We will be making certain forward-looking statements today. We refer you to our SEC filings for a discussion of the risks that may cause actual results to differ from the forward-looking statements. With that, I will now turn the call over to Bill on Slide 3.

Thanks, Tina. Good morning, and thanks for joining us. 2026 is off to a terrific start. We've made impressive progress towards our strategic growth priorities to maximize the value of Rezdiffra and build our pipeline. Rezdiffra has achieved blockbuster status generating more than $1.1 billion in net sales in the last 12 months. That's a $1 billion run rate in a market that's still in its infancy. Penetration is low, the diagnosis rate is low, unmet need is high and the market is expanding at a double-digit pace. When you put those fundamentals together, the future growth opportunity is quite remarkable. Competition has helped grow the market but not at the expense of Rezdiffra.

Beyond F2/F3 MASH, we're advancing our F4C outcomes trial, where an indication expansion could double the opportunity for Rezdiffra. And because we believe this is one of the most compelling opportunities in the industry, we've moved quickly to build the leading pipeline in MASH. We added to it yesterday with a new siRNA asset that targets a mutation in the PNPLA3 gene, a genetically validated driver of disease in a meaningful subset of patients. When you step back, it is hard to find another opportunity with this combination of market fundamentals and product strength. We have a first-in-disease approval a foundational therapy, a rapidly expanding market, and we are building an industry-leading pipeline. We believe Madrigal is exceptionally well positioned to win here and continue to shape the future of MASH.

I'll begin with an update on the Rezdiffra launch, hand it to Dave to discuss our pipeline and R&D strategy, and Mardi will wrap up with a review of our financials. Turning to Slide 5 and net sales. first quarter 2026 net sales were $311 million, representing year-over-year growth of 127%. This performance continues to reinforce that Rezdiffra is tracking in line with and, in many cases, exceeding the best-in-class specialty launches we compare ourselves to. Over the last 2 years, we have wired the system to drive Rezdiffra's growth. We built a large and growing prescriber base, secured first-line access with commercial payers and establish Rezdiffra as the foundational therapy in MASH. Combined with Rezdiffra's differentiated profile and strong patient adherence, our execution has enabled us to steadily add patients quarter-over-quarter as shown on Slide 6. We ended the first quarter with more than 42,250 active patients on Rezdiffra. On a year-over-year basis, patients on therapy increased by 2.5x compared to the first quarter of 2025. That is a significant achievement by any standard, but especially in a market that didn't exist before Rezdiffra's approval.

This momentum reflects strong execution by the team the clear unmet need in MASH and continued demand from both prescribers and patients. And importantly, we are seeing that momentum carried into the second quarter. Slide 7 shows how quickly the MASH market is expanding. Since launch, we've seen the U.S. addressable market grow nearly 50% from 315,000 patients at the end of 2023 to 460,000 patients at the end of 2025. These are diagnosed F2/F3 patients seen by our target specialists. Rezdiffra's approval, together with increased industry investment has helped transform the market by driving greater awareness, referrals, diagnosis, specialist involvement and more patients seeking care. And yet, this market is still in its earliest stages. The diagnosis rate is just over 10%, and Rezdiffra penetration remains just under 10% of the 460,000 addressable patients. The MASH market has expanded rapidly and the opportunity ahead is substantial. That gives us a clear path to peak sales, and we believe no company is better positioned than Madrigal to capitalize on it. But being first in a large and growing market is only part of the story. We have established this leadership position because Rezdiffra delivering what the MASH market wants. And that is what Slide 8 highlights.

After 2 years on the market, 3 things are clear. First, profile matters. Rezdiffra is the only approved liver-directed therapy in me. It has broad proven efficacy across all patient subtypes and is an oral, once-daily, well-tolerated medicine with no titration requirements. In a chronic disease, this profile is a key reason why we continue to see strong persistence and increasing depth of prescribing. Second, real-world performance matters. Pinnacle trials get a drug approved, but real-world experience determines a product success. With tens of thousands of patients treated, we've received overwhelming feedback from the community that Rezdiffra's efficacy continues to exceed expectations in the real world. This includes improvements across liver stiffness, liver fat, liver enzymes, LDL-cholesterol and Lp(a). This is the kind of real-world experience that builds confidence with prescribers and helps establish a true standard of care. And third, we have built not only a leading product but a leading MASH company. We have the right team, the right model and the right start in a market we developed from the ground up. We have executed one of the best launches in the industry where our differentiated specialty model has set a high bar for anyone launching in this space. And we have learned, refined and improved our approach along the way. We were first to market and now have a pipeline with more than 10 programs designed to extend our leadership over time.

Our leadership is also reflected in our presence at key hepatology, gastroenterology and endocrinology-focused medical meetings this month where more than 40 Rezdiffra abstracts -- with more than 40 Rezdiffra extracts being presented. This includes a poster presented at DDW this week where nearly 70% of Rezdiffra prescribers surveyed said Rezdiffra has improved their patient's quality of life and nearly 70% expect to increase their Rezdiffra's use over the next 6 months. Later this month at EASL in Barcelona, we will present additional data that reinforce the breadth of Rezdiffra's effect. That includes a secondary analysis from our Maestro NASH and NAFLD 1 trials showing that reduced Lp(a) and LDL-C in patients with MASH supporting its potential to reduce cardiovascular risk independent of baseline statin use along with 2 real-world data sets that demonstrate Rezdiffra's benefit in everyday clinical practice. We believe evidence generation is a strategic advantage for Madrigal. The more we can show prescribers and payers about Rezdiffra's performance across clinically relevant endpoints, the more it's solidified as the foundational therapy.

Everything we've discussed so far speaks to the strength of Rezdiffra in F2-F3 match, but there is another significant opportunity ahead of us in well-compensated mash cirrhosis or F4 C, as noted on Slide 10. It's an untapped market with no approved therapies and a much higher urgency to treat. We believe F4C to double Rezdiffra's opportunity with approximately 245,000 patients under specialist care in the U.S. We have an event-driven outcomes trial underway in 4 that, if positive, is expected to support expansion into this indication as well as support full approval across F2 to F4C. So before I turn it over to Dave to talk about our pipeline, let me reiterate how rare an opportunity Magical has. We were first to launch, we rapidly achieved blockbuster status and we are still at the very beginning of the development of this market. It's hard to find a comparable opportunity in the industry where the fundamentals are this attractive. And from that position of strength, we are now investing in the next wave of innovation to extend our leadership and define the future of MASH. With that, I'll turn it over to Dave.

Thanks a lot, Bill. Our objective in R&D is straightforward: deliver the industry-leading pipeline in MASH to make better therapies for patients with Rezdiffra as the foundation. As shown on Slide 11, we're doing that through targeted business development and smart clinical execution, leveraging the expertise of an R&D team that pioneered modern mash drug development. Our strategy has 4 goals: first, deliver outcomes data and full approval for Rezdiffra from F2 through F4C. Second, advanced complementary mechanisms for combination with Rezdiffra to deliver the best efficacy across the mass spectrum. Third, remain modality-agnostic with development of the best combination regimens as our strategic gain. The recent addition of siRNA assets to our pipeline underscores that approach. And fourth, leverage our experience to design smarter, more informative clinical trials and use capital efficiently, taking more shots on goal and advancing only programs that serve patients' needs more effectively.

The first pillar of this strategy is delivering outcomes data in FC on Slide 12. our confidence in the Maestro MASH outcomes trial is informed by the 2-year open-label experience in 122 F 4C patients from our Maestro NAFLD-1 trial. Those data are best understood in the context of how mash progresses to cirrhosis. The critical inflection point in this process is the development of clinically significant portal hypertension or CSH. It marks the transition from well-compensated disease towards decompensation when the most serious complications begin to occur. The literature is clear that patients with CFPH have meaningfully higher rates of liver-related events, and reducing CSP risk lowers those event rates. That's why the 2-year data are so important. 65% of patients with CFPH at baseline shifted into lower-risk categories by year 2. We also saw a favorable movement in other biomarkers, including liver stiffness and fibrosis-related measures. Taken together, these results support riders potential in F4C and reinforce confidence in our event-driven outcomes trial.

The second pillar of our R&D strategy is advancing combination therapies anchored by Rezdiffra, which we know works broadly across patient subtypes. Slide 13 highlights our newest addition, ARO-PNPLA3, a clinical stage siRNA that we recently in-licensed from Arrowhead. We're especially excited about this asset for a couple of reasons. One, PML is a well-understood and known target for MASH based on extensive epidemiological and genome-wide association studies. Two, this is a clinical stage asset that has completed Phase I studies. And three, we know Rezdiffra works well across all patient subtypes, including PNPLA3. So a combo including Rezdiffra and this asset has the potential for improved efficacy in a subset of patients that are especially vulnerable due to their genetics. The PNPLA3 mutation is particularly prevalent among Hispanic patients. Compared to those with wild-type PNPLA3, [indiscernible] patients homozygous for the I148M mutation of PNPLA3 have a twofold higher risk of liver-related events. Approximately 30% of F2-F3 MASH patients are homozygous carriers of the PNPLA3 mutation making it a meaningful target for our development efforts.

This asset is completed Phase I studies and demonstrated 2 important things. First, it's selectively effective in the genetically defined population of PNPLA3 homozygote. Second, after a single dose, it reduced liver fat by up to 46% at 12 weeks at the highest dose. We know from Maestro NASH that greater reductions in MRI-PDFF are associated with better fibrosis reductions with is different. So the goal here is straightforward. Combine a foundational therapy, Rezdiffra, that works broadly with a targeted agent that may move more patients into a high response category and potentially improve antifibrotic efficacy with a genetically tailored approach. Stepping back on Slide 14. Our pipeline now includes more than 10 programs. Rezdiffra continues in 2 Phase III outcomes-based trials. First, our F4C study, which is an event-driven trial that we expect to read out in 2027, and second, the F2/F3 study, which is primarily histology driven with data expected in 2028. These trials would make Rezdiffra the first fully approved drug with outcomes data, well ahead of other competitors.

Moving down the pipeline for [indiscernible] Stat, or D2 inhibitor, the drug-drug interaction study with resmetirom remains on track to begin in the fourth quarter of this year, and we expect to initiate a Phase II combination study in 2027 following regulatory discussions. For MGL-2086, our oral GLP-1, the Phase I single ascending dose study remains on track to initiate later this quarter. For ARO-PNPLA3, our next step will be to engage with regulatory authorities on the Phase II combination trial. And our 6 siRNA targets are progressing at various stages of preclinical development. Our approach is consistent. We're building around a foundational therapy and prioritizing mechanisms that we believe are complementary mechanistically sound and capable of improving outcomes either broadly across the population or in important patient subgroups.

Our goal is to ensure Madrigal is engaging with the community and driving the science, so we are delivering meaningful advances for patients. With Rezdiffra's long-term patent protection, we have the runway to invest, innovate and define the future of mash care. With that, I'll hand it over to Mardi.

Thank you, Dave. Turning to Slide 15 and a summary of our financials. First quarter 2026 net sales totaled $311.3 million, up 127% year-over-year. We're off to a strong start in 2026. As we discussed on the last call, our results reflect the typical Q1 effect due to benefit plan changes in insurance reverifications plus a step-up in gross to net related to our commercial contracting efforts for first-line access. The team did an excellent job managing all the moving parts in the quarter. We were able to steadily add patients and our gross to net came in better than we anticipated. We now expect our gross to net discount to be in the mid- to high 30s for the rest of 2026.

Looking ahead, the fundamentals of the business are strong. And as Bill discussed, Q2 is off to a great start. For the rest of 2026, we expect to steadily add patients and generate robust net sales growth. Moving to operating expenses, which include a total of $34 million of noncash stock-based compensation expense in the quarter. Cost of sales for the first quarter of 2026 was $26.8 million compared to $4.5 million in the prior year period. Cost of sales at this point primarily reflects royalties owed to Roche. R&D expenses for the first quarter of 2026 were $108.7 million compared to $44.2 million in the prior year period. The increase was primarily due to onetime upfront business development expenses of $54.3 million. As a reminder, the $25 million upfront payment and related expenses for ARO-PNPLA3 will be recorded in the second quarter. SG&A expenses for the first quarter of 2026 were $268.5 million compared to $167.9 million in the prior year period. The increase was primarily due to continued investment in commercial activities for Rezdiffra, including head count for the endocrinology field force expansion that occurred in the fourth quarter of 2025, as well as marketing efforts, including our DTC campaign.

Looking ahead, we expect full year 2026 R&D expenses to be roughly the same as 2025 which is inclusive of the onetime upfront payments we've announced for strategic business development investments in both periods. We expect full year 2026 SG&A expenses to increase compared to 2025 with the annualization of the Endo sales force as we continue to support the launch of Rezdiffra and build the foundation for our expected long-term growth. This includes some choppiness with higher Q2 SG&A expenses in 2026 due to timing of certain marketing expenses, including DTC, then studies for the rest of the year. Net loss for the first quarter of 2026 was $94.4 million compared to $73.2 million for the prior year period. Net loss for the first quarter was inclusive of onetime upfront business development expenses of $54.3 million. While our focus remains on supporting our top line growth and building our pipeline, we are also preparing for profitability.

Turning to our balance sheet. We ended the first quarter of 2026 with $817.9 million in cash, cash equivalents, restricted cash and marketable securities compared to $988.6 million at the end of 2025. The balance reflects several quarter specific uses of cash, including onetime upfront business development payments and timing of API purchases to support future Rezdiffra manufacturing. With this strong cash position, we continue to be well resourced to support the ongoing launch of Rezdiffra and the advancement of multiple pipeline programs and continued business development. So to close, Slide 16 captures what we've discussed this morning. Rezdiffra continues to deliver incredible commercial performance with a trailing 12-month net sales now exceeding $1.1 billion, and demand remained strong with patient growth more than doubling since Q1 2025.

We are leading in a market that is still in the early stages of development, but has already expanded nearly 50% in the last 2 years. This reinforces both the scale and the opportunity and the runway that remains ahead of us. We also see significant upside beyond F2-F3 with F4C representing an important next phase of growth in an indication where there are currently no approved therapies. And importantly, we're not standing still. We're investing in our pipeline of more than 10 programs designed to build on Rezdiffra's foundation and extend our leadership across the full spectrum of MASH. Taken together, this is a company built for sustainable value creation. We believe Madrigal is exceptionally well positioned in 2026 and beyond. I'll now turn the call back over to Tina and open the Q&A session.

Thanks, Mardi. Let's move into the Q&A portion of the call. Brilla, please go ahead and provide instructions for the Q&A session.

[Operator Instructions]

Our first question comes from the line of Prakhar Agarwal with Cantor Fitzgerald.

Congrats on the quarter. Maybe just on Rezdiffra. What are you seeing on the 2Q trends so far and the expectations for patient adds for the rest of the year? And as a follow-up, now that [indiscernible] has been on the market for MASH for a few quarters, what are you seeing on the impact to rise in the market, if any?

Thanks for the question, Prakhar. Look, as we take a look at the Q2 trends, I mean stepping -- first of all, they're great. So I'll get to that in a second. Context over 42,250 patients on drug as we exit Q1, 2.5x growth over last year at this time, really impressive. And in the context of we are at the very beginning of a market. We fully expect this is going to be a mega blockbuster, $1.1 billion in the last 4 quarters, we're in a really great space. So to put in perspective, how are things going in the second quarter, we're off to a strong start. We're carrying that momentum. We're steadily adding patients.

Maybe it's best to put it in the context of Wegovy that you mentioned as well. Wegovy had now 3/4 of launch that we've been out there. It's being used, but certainly not to the detriment of Rezdiffra. We continue to steadily add patients through it. You have to think Wegovy and GLP-1s are really becoming a background therapy. In fact, most of the doctors that we talk to say they're already on a GLP-1 when they come into the office. So they're coming into the office on a GLP-1 and they have F2-F3 MASH. So our profile looks really, really strong there. So it's out there. We're seeing them, but we're not seeing any real difference.

And maybe as a final proof point as I talked about us having our best MBRx week in the last quarter. And as we exit April, it's been our best NBRx month since launch. So we're really excited about the rest of the year. We'll be steadily adding patients, just as we've said from [indiscernible]

The next question comes from the line of Ash Verma with UBS.

Congrats on the quarter. So maybe just can you talk about the breadth of prescribing right now? And how do you think that would evolve? Is it fair to assume that bulk of the prescribing right now is coming from gastroenterologists. And when do you start to get traction from hepatology, which is kind of like a smaller patient audience and then endos when does that become a big source. And then on the 1Q new patient ad dynamic. So it seems like of 36,000 new patients that you added, which is lower than some of the recent quarters. We saw this dynamic in the first quarter of last year as well when you have 5,000 and then kind of doubled from there. So is it primarily the New Year insurance deductible reset that's driving that? And how does the rest of the year shake out on a new patient dynamic?

Great. Thanks, Ash. Let me start there. So the Q1 adds, again, it falls into our steadily adding patients, and it is a Q1 effect. That's really it. I mean when you think about the Q1 effect, the Q1 effect applies to virtually 100% of your patients on therapy. And remember, what we are presenting is the number of patients that are on drug on the last day of the quarter, right? So you have patients that are coming in the top and then the patients that are on drug. So it is a -- that's the Q1 effect that you have since everyone is exposed to it.

So as I said in the last question, we expect to steadily add patients throughout the rest of the year. Q2 is off to a strong start. Maybe the discussion then about breadth of prescriber. We have over 10,000 prescribers now, which is plenty of breadth for us, though we continue to add new prescribers every day. When you think about just the numbers of physicians, gastroenterologists, outnumber hepatologists, 10:1. So you're going to see the majority of prescriptions that are flowing through them. hepatologists, they were out of the gates a little faster. They have treated the disease longer, probably a little bit better prepared. In fact, we know they were better prepared. We had to wire the system practice by practice with the others. Endocrinology, they're just coming on board. It was really fourth quarter that we started our efforts there. And you have to think about endocrinologists as being where gastroenterologists were about 2.5 years ago, right? So it's something that they've been seeing some match, but they haven't really thought about it. Now they're starting to more actively look and we're wiring the system for each of those endocrinologists as well.

So we see them as in the future being a really productive specialty for us. As I said, they see all these patients with background -- on background GLP-1s, yet they're still seeing F2F3 MASH. So we think that in the future, that becomes a valuable specialty for us as well.

The next question comes from the line of Kripadwar Kunda with Truist Securities.

I have a question about patient mix. I think you just mentioned that GLPs are likely going to be backbone therapy. But you had also previously talked about how 25% of refer patients are on a combo. Can you talk about how that has evolved over the last few quarters? And also, some of the KOL tracks, not all that we've done, say that they prefer [indiscernible] for F2 would be helpful to understand the F2/F3 split that you are seeing in the real world?

Yes. Thanks for the question. And you're right. We still continue to see 25-plus percent of patients that are on Rezdiffra also on a GLP-1 and over 50% have been previously exposed. So we expect that trend to continue. We expect that most patients that are going to come in, in the future will have had experience with the GLP-1. So those dynamics seem to be in place. Now your second question, was it's about?

50-50 still.

And I know some people have thought, well, wouldn't prescribers want to clear the F3s first. And I think it has to do with you have a patient sitting in front of you that's 1 to 2 steps away from cirrhosis. Are you going to wait to treat an F2, not knowing how fast they're going to progress to F3 or to cirrhosis? And no, you're not going to wait. You're going to make the call on that patient what you think their risk factors are and initiate therapy. So we still see -- and that's been pretty consistent since the start of launch, about a 50-50 split between F2/F3.

The next question comes from the line of Ritu Baral with TD Cowen.

I have a more sort of high-level question on diagnostic growth as you see it, Bill, through the rest of the year and next year. Do you think that you could be that it could be worthwhile to spend more on disease awareness. Now that competitive diagnostic awareness programs may be slowing with the maturity of the GLP-1 launches in MASH, and how you think about maybe stepping up SG&A to support top line growth versus clinical development, versus your approach to profitability. And then if you have -- there's some client questions coming in on how you think about estimates for the full year, which still sit at 1.48, I think, but this change in gross to net.

Okay. So let me start off with on the diagnostic growth question, Ritu. Thanks for the question. So look, I think the proof is in the market sizing that we've seen. In just 2 years, the market grew almost 50% from 315,000 addressable patients to 460,000 addressable patients. And we think that -- and remember, diagnosis went from 1.5 million to 1.9 million. What you're seeing there is that there are more patients that are being diagnosed. And most importantly, they're getting into the specialist offices that were calling on it so that there is a potential for them to get a Rezdiffra prescription. So I think our efforts -- and this is where we believe Novo's helped as well by creating more awareness of the disease.

So I think that we've already seen the proof point that by having a product, by having more than one company, the market is growing. Now specifically on diagnostics, what we're also seeing is more and more interest by practices purchasing NITs and being able to do point-of-care diagnosis. And that's another good trend that we expect to continue over time. So I think that will also facilitate staging of patients and then the ability to treat and then most importantly, to see how the patients are doing over time. So maybe what I'll do now is turn it over to Mardi to answer the rest of the questions.

Yes. Thanks, Ritu. And I think you had a number of questions embedded in there, so I'll pick through them. Starting with SG&A. Yes. So clearly, we want to support this what we think is going to be a mega blockbuster brand through the efforts of our sales force and our commercial efforts, including marketing campaign and DTC. And we talked about that -- and we talked about SG&A for the rest of the year, you're going to see an increase in Q2 and then steadies for the rest of the year.

But absolutely, we want to be in front of the growth and support the brand as best we can. And then that leads to a question about gross to net for the year as well. So how did that look? So gross to net, as we said, we believe we have some favorability going into the rest of the year. We now have better clarity after we got through Q2. Remember, we -- this is a new brand. So we get clarity every quarter. This was a Q1 quarter that we look at what the various components are. And I would say the team did an excellent job managing gross to net for the quarter and set us up for the rest of the year. So we believe we'll be in the mid- to high 30s for the rest of the year. And I would say, for Q1, we were even a little bit more favorable to that, but we're in good shape on the gross to net side.

So that leads us to now SG&A and gross to net, what we think for the full year. So the full year, yes. We are good with the consensus that you mentioned for the full year. That sounds good, and we're also looking good for with the same analogy. So we seem to be right on track and feel good about the rest of the year. And then the last point that you brought up was about profitability. As we look at it, profitability, we believe is inevitable. We're going to be a profitable company, and that's why we're preparing for profitability now. If we look at 2026 specifically, we're not going to be profitable in 2026. And specifically in Q2, with the PNPLA3 acquisition, we will not be profitable in Q2 either.

Could there be other quarters where we tip into profitability perhaps, but it's really going to depend on our onetime spend. But beyond 2026 without specifics, profitability is inevitable, and we're planning for that.

The next question comes from the line of Yasmeen Rahimi with Piper Sandler.

Congrats to a strong quarter and also really great news on hearing gross tomato go down with one of our favorite questions. But let we transition to MAESTRO outcome. I mean we're almost halfway through the year. Would love to understand at what point do you really get visibility on how the events are tracking and fine-tuning guidance? And sort of also helping understand expectations. I know you take point that looks at the event rate you've been consistent saying they're tracking. Would love to kind of get sort of color on how you're thinking about what we could learn more around [indiscernible] outcome and the upcoming between now and sort of year-end to kind of crop us for a very important pipeline expansion opportunity.

Great, Yas. Thank you very much for the question. And it represents a huge opportunity for us. This is a really high unmet . Dave, could you -- could I pass it over to you to answer the specific questions, please?

Sure. Yes. Thanks, Yas. Yes, I mean, obviously, a critical study for us. And as we said, we're seeing events track in range of our expectations. -- and we continue to project the trial to deliver in 2027. With these smaller-sized trials, precision is sometimes difficult, and we want to give you a good estimate of when to expect that. And so when we have that precision, we'll provide you an update. But right now, we're still saying '27 events are tracking and we're excited to see the results.

The next question comes from Eli -- more with Barclays.

Bill, you alluded to this with patients coming in already on GLP-1, but can you elaborate on what you're seeing in terms of combination use with GLP-1 specifically, maybe the latest in terms of the proportion of risk creation also -- and then, I guess, what does payer coverage for combination looked like since [indiscernible] got the formal label for MASH?

Great. Thanks, Ellie. We're still seeing around 25% of patients that are concomitantly on GLP-1 with Rezdiffra. And we think that's going to increase. That's our belief is that it's just inevitable. I mean there's just really so many patients that are on a GLP. Regarding access, we have great access. I have to say. I mean, since day 1 of launch, we have had, I would call it even exceptional access. And as we moved into 2026 with the contracting that we bid, we maintain that great access. I think it's like everything else, it's a subtlety. You can use a GLP-1 in combination with Rezdiffra if the GLP-1s prescribed for one of the other indications that GLP-1 is indicated in.

Now what we haven't seen and don't have good data on is just if there's any that have a double mass prescription, we don't think payers would allow that, but they're certainly allowing a GLP-1 to be used for another indication and then Rezdiffra being used for MASH. And I think from what we're hearing more and more from prescribers is that having the combination makes sense in a lot of ways. And certainly, we believe that based upon us going out and getting an oral GLP-1 last year, we think that it is a combination that could make sense. If you recall, if we saw a greater than 5% weight loss in patients that were not on the GLP-1 and our Maestro NASH trial, that it led to an improved effect on fibrosis for Rezdiffra. So we're going to pharmacologically induce that, so to speak, with the GLP-1. That's the hope, and that's the study that, as Dave said, or we said previously, we have that Phase I study of our oral GLP-1 kicking off in the next weeks.

The next question comes from Thomas Smith with Leerink Partners.

Congrats on the quarter. Your pipelines expanded substantially here over the last 12 months, multiple [indiscernible] programs. The oral lift that you got 2 inhibitor. It sounds like a lot of optionality, but can you just provide some updated thoughts on the clinical strategy and positioning across these doublet or triplet combos, maybe the criteria you're going to use to advance these programs beyond proof of concept. And then can you also comment on your appetite for additional deals in BD following the string of recent deals?

Thanks, Tom. Let me just provide maybe some context about how we're thinking about our pipeline. And then Dave, if you could jump into the specifics. It goes back to this opportunity that we have. We're at the very beginning of the treatment of the disease that's had no therapies and is an incredibly high unmet need, #1 cause of liver transplants for women in America, #2 for men. We have the foundational therapy and we expect that this market is really set up for decades of growth. We're at the front end with a foundational therapy that is really effective, and we're seeing that in the real world. Feedback has just been truly impressive from what we're hearing from prescribers that are using the product and from patients as well.

So when you've got this opportunity with a product that's already a blockbuster to think about long-term leadership, you take that opportunity based on the success of Rezdiffra and the future dynamics of the market and the fact that so many people have decided to step out of the market. Pfizer steps out, J&J steps out, BMS steps out, et cetera, et cetera, based on failure with some of the mining Pfizer actually just -- they just can't bring it -- they couldn't bring it forward. So it was better in our hands. So what we've done is we've gone out and looked for mechanisms of action that we think make sense in combination with Rezdiffra. Those mechanisms may not have been strong enough, good enough to compete as a monotherapy. But if we can put them together with Rezdiffra and get even more efficacy across the whole population or a subpopulation, that is a step to long-term leadership. Either as a fixed-dose combination, if it's oral or is a regimen where you've got a once-a-day pill and in every 3- to 6-month siRNA, just like the deal that we did with Arrowhead, which we think is fantastic.

We've also been able to do this in an incredibly capital-efficient manner. For under $300 million, we have assembled a leading pipeline. You just don't see that. I haven't seen that in any other therapeutic area. And we -- because of our leadership position, I think, have been able to access opportunities that others it probably wouldn't make sense for. So that's how we're thinking about it. And yes, we've done a really good amount of BD in the last 10 months now, I guess it is. what's our appetite going forward? Look, we're still constantly looking at everything out there that is potential in MASH. And where we see an opportunity that could make sense with the mechanism that we like and we don't have we would look at that opportunity and bring it in. But again, Think about how we've done it already, which is extremely efficiently, and we will keep that discipline going forward. So maybe with that, I'll just pass it over to Dave to comment on any specifics.

Yes. That's a great summary, Bill. I mean I think the one way to think about it, as Bill was highlighting, is we have the foundational therapy, right? So we Rezdiffra to look for combination partners with to improve efficacy and improve outcomes for patients. So it's the idea. And our approach has been, we look for validated targets with complementary biology, and we're modality agnostic. So that's how we built the pipeline. We have small molecules. We have siRNAs, anything that could potentially work more effectively with Rezdiffra, that's great. Now it's important to start off with -- Rezdiffra also sets a high bar. Rezdiffra works very well across all subpopulations as we've seen from MAESTRO NASH. So our bar for bringing products forward when we conduct Phase II studies is that they have to be meaningfully that could deliver an potential meaningful benefit to patients at the end of Phase II.

But our decisions will all be data-driven. And we've talked about a couple of different examples where we talk about, for example, PNPLA3, where there's a very specific patient population that we're targeting. So patients who are homozygous for I148M, PNPLA3 mutations, again, highly prevalent mutation, highly burdensome in terms of clinical outcome. But we believe that with Rezdiffra as the foundation, adding PNPLA3 may provide an even greater benefit for those patients. And as Bill was just highlighting for GLP-1, it's a different strategy, right? So that's to produce modest but important weight loss for patients that can drive Rezdiffra's antifibrotic effect. So what we're looking for in early clinical development in these sort of initial combination studies are primarily will be biomarkers like changes in MRI-PDFF, but also other biomarkers of fibrosis and other blood-based and imaging biomarkers to help us make decisions about what to move forward into Phase III. But that Phase III transition has to be underpinned by data that leads us to believe that these products are going to be meaningful additions to the therapeutic armamentarium. And in every case, we believe that these programs all have that potential.

Right. And just maybe to put a finer point on it as well. If they show a benefit, move them forward fast, if they don't, kill them fast. And that is a little bit of a -- again, another difference at Magical because we're not beholden to a single pipeline asset performing for the company to actually be something, we can be ruthless in our prosecution of these trials and we will. If it works, great. If it doesn't, I mean, great, we move on because we're already starting with the product that we have, which is Rezdiffra, which is the enabler of this strategy.

The next question comes from Akash Tewari with Jeffries.

This is Manoj on for Akash. Just one on from [indiscernible] So master outcome baseline post show around 150,000 mean platelet count in the population. While this seems lower than the around 180 in the symmetry Phase II, it still seems to be higher than the FC, the LA data you were showing like which was, I think, around 120,000. So -- in the oil data you saw around 2% to 3% of [indiscernible] even, but given this outcome that baseline population platelet count is above that data. Do you expect to see some difference in the even rate there based on this platelet count difference, mean platelet count difference?

Great. Thanks for the question. Dave, I'm going to pass it over to you.

You got it. Yes, so you're highlighting a really important point, which is in these F4c trials, you have to ensure that you enroll the right patient population within the F4c population. F4c is not a monolithic disease, right? So patients who've just transitioned, for example, from F3 to F4 might take them a while to progress to decompensation, whereas patients who have CSPH, plenty significant portal hypertension are right on the cusp of having a decompensation event -- and those are the patients that are more likely to drive events in the near term. So as you're highlighting, one way that you measure clinically significant portal hypertension is including platelet counts, along with liver stiffness measurements, using the Baveno criteria.

And as we've talked about before, in our -- both in our open-label extension study and in MAESTRO outcomes, we've allowed patients with low platelet counts, so greater than or equal to 70,000 to enroll in the study. So there are patients with quite low platelet counts. And that's not uniform across all Phase III protocols. So we believe that our outcomes trial is enriched exactly the right way. So using a variety of criteria to enrich the population to make sure that we see the outcomes as we are and yet have an opportunity to bring these patients back from the brink of big on the cusp of decompensation and bring them into less urgent stage of their disease. So I think on that basis, if you look across the open-label extension period -- open-label extension study and MAESTRO outcomes, the populations are broadly comparable. There are going to be some differences just because the sample sizes are very different. But the inclusion criteria are very similar and we are seeing rates of CS PH in both studies that give us confidence. Paul, I think we'll leave it there.

The next question comes from Michael DiFiore with Evercore ISI.

Congrats on all the progress. Two for me. First, on PNPLA3, that was previously partnered and later returned to Arrowhead. And without asking you to speak for J&J, can you walk us through what Madrigal saw in the asset that made it attractive today? And what diligence gave you confidence in the program? And then I have a follow-up.

Great. Look, maybe just a general statement, and I start with that, then I'll pass it to Dave. A lot of companies, big pharma have opted out of match, right? They either had failures or they thought they have a single asset, maybe it's not enough, which is a little bit different than us. But Dave, I'll pass it over to you to ask a specific question about why we're so excited about this asset.

Yes. Look, I think -- I mean, you touched on it before, Bill. I mean, I think starting with the fact that we have Rezdiffra we think in our hands, adding a PNPLA3 targeted agent could deliver even better efficacy of patients who are homozygous. So again, coming back to the strategy, so validated targets complementary biology to Rezdiffra and being modality-agnostic, so why did this asset sort of fit into this? So well, clearly, it's a validated genetic target. PNPLA3 is a validated genetic target clearly linked to more rapid and progression of disease of mash and emergence of liver-related events in patients who are homozygous versus those who are wild type. And I think second, it's a proven modality. So siRNA as we've seen with other products getting to the products -- siRNA getting to the market, it's a safe modality that you can deliver once every 3 to 6, even up to 12 months. So a highly attractive modality with great tolerability.

And then last, there are clinical data, right? So we had we had Phase I data in patients where we could see reductions of liver fat. So we had a proof of concept in Phase I and as we've seen with the Maestro NASH data with Rezdiffra, if you can reduce more liver fat, we can see more efficacy with [ resmetirom. ] So again, the complementarity of these 2 mechanisms was particularly compelling as well. So I think for all those reasons, we bring in a clinical stage asset, advance our pipeline and have a potential offering for patients who really need a therapy.

Yes. And I mean, look, it was a 46% reduction in liver fat. So I mean, that's pretty impressive efficacy from our perspective. And let's see what happens when you put it in combination. I think it's a really exciting question to ask. And look, it's been through Phase I, right? This is an acceleration of our siRNA efforts.

The next question comes from Andy Chan with Wolfe Research.

This is Brandon on for Andy. We're curious to know if you can rank order the different NASH combos that you have, which one are you most excited about clinically? Thanks for the question. I'll pass it over to my view is it's whichever one works the best is going to be the one that we like the best or those that work the best. But Dave, how are you thinking about it?

Pick amongst our children. I mean I think they're -- look, we brought them in. We brought each of these assets in for the reasons that we've talked about because they all have the potential to significantly move the needle on efficacy for a subpopulation or within the broader group. The decision is about which to move forward into Phase III programs and ultimately to registration, depends on the combination data. So as we've outlined, we have -- because we're focused on MASH and we have experience in this field, a lot of experience running clinical trials in MASH. We know the sites well. We know how to run the trials. So we're going to be able to be efficient, run these studies and deliver the data that helps us make that decision.

But as I said, the data have to be meaningfully different. So for PNPLA3, like Bill said, 46% reduction in MRI-PDFF is great. combined with Rezdiffra, if that's even more, we push more patients into that super responder category, amazing. We're going to bring that program into Phase III. And that's true for all of these programs. So it's really will come Phase II, and we'll move the programs forward in a way that's going to make sense to build the pipeline and to deliver value to patients.

The next question comes from Jon Wolleben with Citizens.

Congrats on the progress. Bill, you made a comment about, I think, a path to peak sales. And I'm wondering if you could talk a little bit about what that path looks like in terms of timing, how long you get there and how big you think reefer could be down the road?

Thanks, Jon. You noticed. Look, I think that in our belief, this is going to be a mega blockbuster. How do we get there? We continue to do what we're doing. We have the diagnosis rates increasing. We have more patients get on drug, we steadily add patients and we build our path to feed sales. I think it's pretty straightforward. We just continue to do the hard work we're doing. There's plenty of patients. The market is growing penetration rated low diagnosis rate at the moment is low. All of these things are increasing. So there's literally years and years and years ahead of this market expanding.

And as I said earlier, as more companies come in, it actually helps us because it drives market expansion. Our initial focus was always on that 315,000 just who was sitting in those prescribers' offices, at the moment. Fortunately now, we even have more potential with the advent of other companies coming in and driving diagnosis, et cetera. So keep doing what we're doing, steadily add and we'll find our path to peak.

Great. Thanks, Jon. Operator, we have time for 1 more question, please.

And the next question comes from William Wood with B. Riley Securities.

Congrats on a very nice quarter. Just thinking about in terms of your pipeline, as you said, you've got about 10 pipeline assets as is. should we expect any more add-ons to your pipeline? And if so, what might you be looking for, whether it's more oral options, more siRNAs or maybe something that we're not really discussing here. And then also in terms of just sort of in terms of that go, no-go situation, I was curious if any projects that you've sort of brought on or been developing internally has sort of hit that threshold that you've already called and maybe speak to anything might have changed where you're looking in the future or if you're pretty content with what you're guiding now you're just looking to execute.

William, thank you very much for the question. Look, we have assembled, I think, the leading pipeline in NASH, and we've done it for less than $300 million. again, as I said a few things, it says a lot of people still aren't interested in mesh, which is great because we are, and we're in a better position to lead the innovation based on our ability to use Rezdiffra's foundational backbone therapy. So yes, we're still looking. Clearly, we've taken quite a bit off the table for us to pursue. But it will be very mechanistic-driven is there something that we think looks particularly interesting. There's still I would say a couple of mechanisms out there, which look interesting. Then the question becomes finding one and finding one that's transactable.

So expect that there may be additional. Certainly, we'd like to kind of round out the pipeline, if you will, with our -- with the remaining -- some remaining mechanisms, but we're a big way through it now. Efforts are really focused towards now getting these in the clinic generating data and being able to make decisions. So that's how we're thinking about it. But it's really, again, in less than a year's time to have come from a single asset company, that has an incredibly promising future growing into a mega blockbuster to now, because of that success, be able to build that next stage of leadership, which we think is really long-term focused.

Great. Thanks, Bill. And thank you, Brilla, and thank you all for your time and interest today. This now concludes our call. A replay of this webcast will be available on our website in about 2 hours. Thanks for joining us.

Ladies and gentlemen, thank you for your participation in today's conference. You may now disconnect. Have a wonderful day.

Good morning, and thank you for standing by. Welcome to Madrigal Pharmaceuticals Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

Thank you, Michelle. Good morning, everyone, and thank you for joining us to discuss Madrigal's Fourth Quarter and Full Year 2025 earnings. We issued a press release this morning and posted a slide deck to accompany this webcast on the Investor Relations section of our website. On the call with me today is Bill Sibold, Chief Executive Officer; Dave Soergel, Chief Medical Officer; and Marty Dier, Chief Financial Officer. They will provide prepared remarks followed by Q&A. Please note on Slide 2, we will be making certain forward-looking statements today. We refer you to our SEC filings for a discussion of the risks that may cause actual results to differ from the forward-looking statements. With that, I will now turn the call over to Bill on Slide 3.

Thanks, Tina. Good morning, and thanks for joining us. Today, I'll provide an update on the Rezdiffra launch, where we ended our first full year on the market at nearly $1 billion in net sales and solidified Rezdifra as the foundational therapy in Match. We'll discuss the significant growth in the U.S. MASH market, which is up nearly 50% since the end of 2023 and growing at a double-digit pace. And then Dave will provide an update on our R&D strategy, where we now have more than 10 programs in our pipeline. Before turning to our fourth quarter results, I want to reflect on what we accomplished in 2025 and in just the first 6 weeks of this year. In a remarkably short period of time, we've built the leading company in MASH and assembled a pipeline we believe will help define the future of this category.

We continue to execute on a fantastic U.S. launch extended Rezdiffra patent exclusivity to 2045 and initiated our ex-U.S. rollout beginning in Germany. We're advancing our F 4C trial for Rezdiffra, and we're accelerating evidence generation to further differentiate the product. At the same time, we moved quickly to build a high-quality pipeline around Rezdiffra, completing 3 transactions in roughly 6 months, adding an oral GLP-1, a late-stage DGAT2 inhibitor and a portfolio of 6 preclinical siRNA targets, each designed to be studied in combination with Rezdiffra. The reason we're moving with this level of urgency is simple, assets like Rezdiffra don't come along often. We have a high-quality, high-growth foundational therapy, driving strong top line performance with patent protection into 2045.

When you have an asset like that, you have an opportunity to build a sustainable and durable franchise for the long term. That's exactly what we're doing. Rezdiffra gives us a unique ability to pursue combinations to attract high-quality assets and to shape the market in ways other companies simply can't. As a result, we are fundamentally a different company today than just 6 months ago. transitioning from a single asset launch story into a fast-growing biotech with a pipeline designed to extend our leadership for years to come. Let's turn to net sales performance on Slide 5. We delivered fourth quarter 2025 net sales of $321 million, more than tripling fourth quarter 2024. For our first full year on the market, net sales totaled $958 million an exceptional launch by any industry standard. That nearly $1 billion result took a lot of work.

We didn't just launch a product. We've built a market from scratch. Let's take a second and really think about that. Remember, MASH was long viewed as the graveyard of drug development. no treatment, no market and skepticism that 1 would ever exist, particularly with GLP-1s on the horizon. We took a different view. The unmet need was substantial and demand for an effective therapy was real. We believed in the science and Rezdiffra's ability to become the standard of care. We built the right team, people who have created categories and launched blockbuster brands, and we got to work. We executed with a long-term mindset, wiring the system practice by practice, educating prescribers, establishing care pathways, expanding prescriber breadth and depth and securing first-line access through disciplined contracting, and we continue to iterate and improve.

The results speak for themselves. We were first to market, and that matters. Rezdiffra with its liver-directed and differentiated profile has established itself as the foundational therapy in MASH. The market is real and only beginning to take shape. GLP-1s are here and as we expected, we're still steadily adding patients. There is room for competition, which we believe will further expand the market, and we are building a pipeline designed to extend our leadership over time. As a result of the foundation we've built and our large base of prescribers, we continue to steadily add patients quarter-over-quarter as seen on Slide 7. Remember, the number we report reflects the net of new starts and discontinuations at the end of each quarter.

We continued to steadily add patients ending the fourth quarter with more than 36,250 patients on Rezdiffra, up from more than 29,500 at the end of the third quarter. That tells us 2 things. First, Rezdiffra's profile is exceptional and resonates very well with prescribers and patients. Second, this large and expanding market is capable of supporting multiple therapies. This represents a small fraction of the growing addressable population, and we expect to continue to steadily add patients quarter-over-quarter going forward. Let me spend a moment on the U.S. MASH market on Slide 8. We are still in the early stages of what we expect to become a large specialty market. In just the last 2 years, the F2, F3 target population of 315,000 representative of patients seen by our target specialists has expanded nearly 50% and we expect this market to grow at a double-digit pace for the foreseeable future.

Rezdiffra's approval and increased industry investment across the ecosystem has fundamentally changed the market dynamic, driving increased awareness, diagnosis, referrals, specialist involvement and patients seeking care. This is a category in its very early stages where Rezdiffra is now established as the standard of care. As the market expands, we expect to benefit from its growth, increased penetration and ultimately the introduction of additional therapies from our pipeline. MASH is a rare opportunity in biotech. Few therapeutic areas offer this combination of scale and high growth potential. That's why we expect MASH to follow the trajectory of other large specialty markets as shown on Slide 9. Markets that support 10 to 15-plus therapies and have grown over decades to exceed $20 billion in annual sales.

We believe MASH will evolve the same way with 1 important difference. We are first to market with a product that has an unmatched profile. As an effective liver-directed safe and well-tolerated oral medicine, it far surpasses the profile of first-to-market products in those other categories. and we continue to hear from our prescribers that Rezdiffra performing even better than expected in the real world. This profile positions us well to expand into compensated MASH cirrhosis or 4C the next phase of our growth strategy outlined on Slide 11. We believe F4C could double rig Differ's opportunity with approximately 245,000 patients, no approved therapies and a significantly higher urgency to treat. Assuming regulatory approval, we expect to be first to market in F4C. Importantly, our F4C trial focuses on clinically meaningful outcomes, preventing decompensation rather than relying on biopsy. Rezdiffra would be the only medicine with outcomes data solidifying it as the standard of care and MASH and supporting full approval across S2 to F4C.

Before I turn it over to Dave, I want to briefly outline how we see the MASH market evolving and why Madrigal is uniquely positioned to lead it by building on the pipeline strategy that I described earlier. MASH is a complex heterogeneous disease. Over time, we expect distinct patient subpopulations to emerge, each requiring different mechanisms, combinations and sequencing approaches, all anchored by Rezdiffra. We've seen this evolution before in other diseases where progress was driven by matching the right combinations to the right patients. That's the model we're pursuing in MASH, and it's why we've moved quickly to add these specific assets to our portfolio. And the reason we can execute on this strategy is our high confidence in the growth potential of Rezdiffra. We're able to build an industry-leading mass pipeline because we have an outstanding product. One that is performing exceptionally well today and is positioned for continued strong growth. That strong foundation allows us to develop the next generation of MASH therapies for patients. That's exciting, and it's a true differentiator for Madrigal. Dave, I'll turn it over to you to walk through our R&D strategy.

Thanks, Bill. Our objective in R&D at Madrigal is straightforward, build the industry-leading pipeline in MASH to make better therapies for patients. We're doing that through targeted business development and smart clinical execution, leveraging the expertise of an R&D team that pioneered modern MASH drug development. Our strategy has 4 goals, deliver outcomes data and full approval for Rezdiffra from F2 through F4C. Advanced complementary mechanisms for combination with Rezdiffra to deliver the best efficacy across the MASH spectrum, remain modality agnostic, keeping development to the best combination regimens as our strategic aim, note our recent addition of injectable siRNAs, leverage our experience to evolve the science, design smarter, more informative clinical trials enabled by our extensive data and operational experience in MASH.

Our aim is to use capital efficiently to take more shots on goal and advance only the most promising programs for patients. The first pillar of our R&D strategy is delivering outcomes data in F4C. The basis of our high confidence in our outcome study are the data from our 2-year open-label study. The importance of the 2-year data is better understood in the context of how cirrhosis progresses. Development of clinically significant portal hypertension or CSPH, is a critical inflection point in the disease. It marks a transition from compensated cirrhosis towards decompensated disease and is on the most serious complications like variceal bleeding and development of ascites begin to occur. Crossing the threshold into decompensated cirrhosis predicts poor prognosis with an average survival time of 2 to 3 years without a liver transplant.

From the literature, it's clear that patients with CFPH have meaningfully higher rates of liver-related events and reducing CSPH, risk lowers liver-related events. That's why the 2-year open-label 122 patient F4C data from our NAFLD-1 trial are so exciting. As shown here on Slide 14, 65% of patients with CSPH at baseline moved into lower risk categories by year 2. These data support Rezdiffra's potential in FC and reinforce confidence in our outcomes trial, particularly given that both trials have very similar patient populations. The second pillar of our R&D strategy is advancing combination therapies anchored by Rezdiffra. Slide 15 shows many of the known mechanisms involved in MASH. Mash is driven by excess free fatty acid delivery to the liver, leading to steatosis inflation and fibrosis.

While there are many potential points to intervene in the disease, it took decades and more than 20 industry failures before Madrigal cracked the code with Rezdiffra. To date, only 2 mechanisms have crossed the finish line, THR-beta agonism addressing MASH at its source in the liver and indirect acting GLP-1 agonism. But MASH is a heterogeneous chronic disease, and therefore, we expect treatment to evolve toward combinations. Rezdiffra gives us a unique solid foundation on which to build combinations to achieve better efficacy overall or in certain patient subpopulations. Our combination strategy is simple: prioritize validated, mechanistically complementary approaches that enhance efficacy while preserving Rezdiffra strong safety and tolerability profile. In Orange, you see where we've already acted an oral GLP-1, a late-stage DGAT2 inhibitor and multiple targets using siRNA.

Let's discuss why we're excited about these new mechanisms starting with sRNA on Slide 16. First, sRNAs target validated genes that drive MASH progression. Using precise mRNA knockdown, we can either enhance efficacy broadly or develop more tailored approaches for defined patient subpopulations. Second, the modality. GalNAC conjugated siRNA is well established and highly liver targeted. The clinical safety of the platform is supported by multiple marketed products. We acquired 6 preclinical siRNA assets that are highly complementary to Resmetirom, positioning us for next-generation and more personalized combination regimens. Slide 17 covers our DGAT2 inhibitor, which we're excited about for a number of reasons. First, DGAT2 inhibition is a complementary mechanism to THR-beta agonism. [indiscernible] prevents free fatty acids from being incorporated into triglycerides and resmetirom restores mitochondrial function to allow those free fatty acids to be turned into energy through beta oxidation. The 2 mechanisms together therefore, address both the production and the clearance of excess hepatic fat.

Second, we know a lot about Evergastat. It's already completed a Phase IIb trial in NASH demonstrating robust MRI-PDFF reductions and clean safety. In the MERNA study, 72% of patients at the 150-milligram dose achieved at least a 30% reduction in PDFF and 61% achieved a 50% reduction, while many experts now consider a super response, predicting a greater likelihood of a reversal of fibrosis. The combination of these 2 mechanisms has the potential to move more patients into that super responder category and drive better antifibrotic efficacy and better outcome. We plan to initiate a drug-drug interaction study this year and expect to begin a Phase II combination program in 2027 following FDA discussions. Next, our oral GLP-1 on Slide 18. Let's start by acknowledging that there's strong real-world enthusiasm for combining GLP-1s with resmetirom with an understanding of the mechanistic complementarity of GLP-1 in resmetirom.

GLP-1 act outside the liver by improving systemic metabolism and reducing free fatty acid delivery to the liver. This complements resmetirom liver-directed mechanism of action. Importantly, our focus for this program is on developing a better treatment for MASH, not maximal weight loss. And therefore, our goal is to balance the right amount of weight loss to potentiate resmetirom antifibrotic effect. So what is the right amount of weight loss to achieve better efficacy in MASH. In Maestro NASH, we saw that as little as 5% weight loss meaningfully potentiated Rezdiffra fibrosis benefit. So our aim is a once-daily, well-tolerated oral fixed-dose combination that optimizes efficacy while maintaining good tolerability. A Phase I single ascending dose study of MGL-2086 is expected to start in the second quarter. Putting it all together on Slide 19, we are translating our leadership into action with 1 goal in mind, build the leading MASH pipeline. And this is really just the beginning of an exciting journey. With Rezdiffra protected into 2045, we have a long runway to invest and innovate, building a pipeline that will define the future of MASH care. With that, I'll hand it over to Mardi.

Thanks, Dave, and good morning. Turning to Slide 20 and a summary of our financials. Fourth quarter 2025 net sales totaled $321.1 million, reflecting another quarter of strong demand and bringing full year 2025 net sales to $958.4 million, As we've discussed, we've made excellent progress contracting for first-line access in 2026, with some contracts taking effect in the fourth quarter of last year as anticipated. As a result, our gross to net impact increased from the third quarter to the fourth quarter. As a reminder, gross-to-net includes several components: commercial rebates, government rebates, co-pay assistance and channel distribution costs, The team did an exceptional job managing the dynamics resulting in a full year average at the low end of the 20% to 30% range we previously outlined, an excellent outcome for 2025.

We're off to a strong start this year and continue to steadily add patients. As indicated last quarter, we expect our payer agreements to bring our full year 2026 gross-to-net impact into the high 30% range, consistent with specialty medicine analogs. Looking ahead, we expect robust net sales growth in 2026 despite the step-up in gross to net from contracting that begins in Q1, plus the typical first quarter dynamics related to benefit plan changes and insurance reverifications. The fundamentals of the business are strong, and we're looking forward to another outstanding year of performance.

Moving briefly to operating expenses. R&D expenses for the fourth quarter and full year 2025 were $116.3 million and $388.5 million, respectively, The increase over the prior year period was primarily due to business development. In the third quarter, this included $120 million upfront payment for oral GLP-1, and in the fourth quarter, a $50 million upfront payment for ervogastat and our 2 additional early-stage MASH pipeline assets. Of note, the upfront payment of $60 million for our SiRNA targets will be paid and included as an R&D expense in the first quarter of 2026. SG&A expenses for the fourth quarter and full year 2025 were $240 million and $813.8 million, respectively. The increase over the prior period was expected to support the Rezdiffra launch. Looking ahead, we expect 2026 R&D expenses to be roughly the same as 2025 as we build our organization and begin to invest in our pipeline programs.

We anticipate SG&A expenses to increase next year as we continue to support the launch of Rezdiffra and build the foundation for exceptional long-term growth. Turning to our balance sheet. We ended the fourth quarter of 2025 with $988.6 million in cash, cash equivalents, restricted cash and marketable securities. With a strong cash position, we continue to be well resourced to support the ongoing launch of Rezdiffra and the advancement of multiple pipeline programs and continued business development. So to close, Slide 21 captures why we're so confident about where Madrigal is headed. Rezdiffra is the foundational therapy in F2, F3 MASH and is just getting started. F4C represents another meaningful growth driver that could double our commercial opportunity and our pipeline. Now more than 10 programs deep positions us to extend our leadership position as a durable category-leading franchise.

Taken together, this is a company built for sustained value creation across our launch indication expansion and pipeline. We believe we're exceptionally well positioned to lead in MASH in 2026 and beyond. I'll now turn the call back to Tina to open the Q&A session.

Thanks, Mardi. Let's move into the Q&A of the call. Michelle, please go ahead and provide instructions for the Q&A session.

[Operator Instructions] And our first question is going to come from Ellie Merle with Barclays.

So you're seeing meaningful growth in the number of diagnosed patients. Can you elaborate on the drivers here and talk about your expectations for category growth in 2026. And then second, you're also seeing an acceleration in patient starts despite the launch of WEGOVI. Can you elaborate on the types of patients you're seeing starting on Rezdiffra now versus say, in the past and any trends you're seeing across the types of different prescribers? .

Great. Ellie, thanks for the question. Yes, we are seeing really strong growth. As you saw on the slides, which I say a lot, almost 50% growth over a 2-year period. And this -- we had talked about the market is in a position to grow. -- right? The 315,000 diagnosed patients was diagnosed sitting in the offices of the target specialists that we were calling on. And what we're seeing is our efforts are really paying off on a couple of fronts. Number one, as awareness goes up, there's going to be more people that are diagnosed. I think that having another company in the MiX Novo who's really trying to drive, I would say, broad awareness and uptake in the primary care offices, et cetera. is leading to more diagnosis.

Our focus has always been the 315 as we see a path to peak essentially through what's already available. Now inevitably, though, as you bring products to market, you see higher growth in that space, and that's where we've seen the 50% and double-digit growth we're expecting into the foreseeable future. So we're really quite excited about it. And it gives us not only a clearer path to peak, but also perhaps it gives us a greater opportunity than we had even anticipated and planned around. So growth you see in all these markets, you're going to see patient growth for really years and years. And I'll leave that there. The question on patient adds, we've been saying and we continue to steadily add patients. And we've seen really no difference in the type of patients that is being prescribed Rezdiffra. They tend to be a pretty even mix between F2 and F3.

And as it relates to I think you mentioned a little bit about endocrinology or how our efforts are just in general with growing, we're seeing prescriptions mostly in the Hep GI space. That is the predominant number of physicians, obviously, more gastroenterologists than endocrinologists. They've just gone deeper into the deck, I would say. We've said that we've established really great breadth of prescribing, and now it's a matter of going deeper into their patient population. And I think what we're seeing is proof points that this is becoming the standard of care. Patients are being put on Rezdiffra, having great experiences staying on the drug, and you see that reflected in the patient adds.

And our next question will come from Thomas Smith with Leerink Partners.

Congrats on the quarter. Maybe just 1 quick clarification question on -- I just wanted to ask about the contribution of the Germany launch to the worldwide revenues and patient numbers? And maybe if you could expand a little bit on expectations for 2026. And then on the pipeline combo programs, I know you're starting to look and you've guided today to a Phase II study with revergastat next year, could you just elaborate on how you're thinking about sort of mid-stage Phase II studies from here? Do you think these studies will need to evaluate liver histology via biopsy before you progress into pivotal studies? Or is there a potential for a more accelerated path that perhaps leverages NITs. .

Tom, thanks for the question. I'll start off with answering Germany. Germany contribution in '25 was negligible. And we don't see actually a lot in '26 as well. Really, part of the driver of that is as we're launching into an MFN world. it is still uncertain how ex U.S. is going to evolve. And that's not a magical issue. That's for the whole industry. So negligible in '25, we're just getting started really in '26. Don't expect a lot of contribution from Germany or ex U.S. in 26. U.S. is the base business. U.S. has exceptionally strong dynamics to it, as you've seen, not only from a performance perspective, but from an outlook perspective, so we're very, very comfortable being able to have robust growth in 2026, the way 26 is unfolding from an international market perspective.

Maybe I'll just put on finer point about our 2026, Tom. We really do expect robust growth and where consensus is coming out for 2026 already. We feel really good about that, which reflects very good growth from where we ended up with $958 million for 2025. .

Dave, do you want to...

Yes, sure. For the combination -- thanks for the question, Tom. So it's a bit early to be definitive about our program in Phase II at this point because we do need to go to the FDA and have a conversation about their expectations for the Phase IIb program then leading into the Phase III program. However, what I'll say with respect to NITs is that clinical care has moved well past biopsy. Biopsy is not used in clinical care anymore. And FDA has shown more and more interest in qualifying noninvasive tests for use in drug development. I'd say in Phase 2, our expectation is that NITs will play a major role in our assessment as we show in the in the slides, we have a strong understanding of the relationship between PDFF production and the potential improvement in fibrosis. So as you can see, we're anchoring a lot of how we're looking at the program around valuation of NITs in Phase I.

And the next question will come from Yasmeen Rahimi with Piper Sandler.

This is Emma, on for Yas. Firstly, maybe help us understand for Maestro NASH outcomes and FRC, how are you tracking blinded event rates? And how is this like tracking for on-time data? At what point in this year might you tighten guidance in that regard? And is there any additional cross open-label NAFLD data follow-up that we could get to further strengthen conviction and success?

Great. Thanks for the question. Dave, I'll turn that over to you. .

Yes, sure. I guess thanks for the question. I think on the -- let's start with the last part. Is there going to be any additional open-label data. I mean I think we've shown quite a bit already. So we've gotten quite a lot of information out of those 122 patients in the open-label NAFLD-1 study. And I think what you can see from that that experience is that even patients with the most severe disease, so individuals with clinically significant portal hypertension, we see what look like positive effects of risk different in that population. You can move people into lower-risk categories of CSP H over a 2-year time frame. So we've already gotten a lot out of this open-label experience. With respect to the progress of mister outcomes, we are seeing events track in the range that were expected. So -- as we've talked about historically, if you look at natural history data, you see about a 5% to 10% annual event accrual in patients with cirrhosis.

We estimate in the placebo group somewhere in that range. and we are seeing events track with expectation to deliver data in 2027. With respect to guidance, we need to get a little bit further along to get more precise on our timing.

And the next question will come from Prakhar Agrawal with Cantor Fitzgerald.

Congrats on a strong quarter. Maybe firstly, on gross to net, If you could comment on gross to net for 4Q and cadence for the rest of 2026. And would you still expect broad first-line access without step [indiscernible] Rezdiffra in 2026 now that we're seeing lower contract? And maybe just another follow-up, if you can comment on compliance persistence and discontinuation rates that you're seeing, especially since Mygovi's launch in the market?

Great. So maybe I'll start a little bit with just the payer contracts. They're complete. They were in place January 1 or earlier. And as we previously said, we were contracting for broad first-line access, no step edits and improved utilization criteria where it's possible. So that holds true. We are in a really great place for contracting. I think this -- when I think about kind of the accomplishments, the way we've managed contracting and gross to net is absolutely best in industry that I've seen certainly any launch I've been a part of. Remember, we came out of the gates, we didn't contract. It's now only entering into the eighth quarter of launch that you're going to be having broad contracting.

So the focus really has been preservation of gross to net. And I think we've done a great job of it, and we've set ourselves up exceptionally well for 2026. Before turning it over to Mardi for gross, let me finish the compliance and persistence questions. Same as what we've said, well tolerated oral, well-tolerated oral at the 1-year mark is in this 60% to 70% range. Certainly, we're continuing to see that strong performance, and really encouraged. As I said, we've seen some institutions have been able to have persistence up in the 90% range. We're doing everything we can to learn from kind of the best performance and how to apply that to the broader population.

We've got an outstanding patient services team that is all over this. We work closely with specialty pharmacy and providers and patients to work on that. You asked a question about [indiscernible] and what's the impact that we're seeing there. Well, look, [indiscernible] being used, but certainly not to the detriment of Rezdiffra. In fact, we just had our best NBRx week since launch, which says to me that just as we had said, you can have multiple products in the space, but that Rezdiffra really is the winning profile. So maybe with that, why don't I turn it over to Mardi talk about gross to net evolution.

Yes. Great. Thanks, Bill. Yes, let's break down gross to net a little bit, Prakhar. Thanks for the question and maybe a little comment on Q1 as well. So nothing's really changed from what we discussed last quarter with respect to gross to net. So we ended the fourth quarter exactly where we thought we'd be, which was the midpoint of our 20% to 30% range, and that was a bit of an increase from third quarter as anticipated as some of the commercial contracting, which remember is 1 component of gross to net, took hold in the fourth quarter. so again, ending fourth quarter in that midpoint of the 20% to 30% range as expected.

Now going into 2026, none of our messages have changed here either with basically 0 to contracting that we've been discussing as we put those commercial contracts into effect as of 01/01/2026 that moves our gross to net discount, our overall gross net discount with all the components into the high 30s for 2026. And we've broken that down really by quarter. It really stays in that high 30s for each of the quarters for 2026. There's always inter-quarter variability because there are so many components that generally in the high 30s for gross to net, all as expected. And remember, as Bill just said, we get that excellent first-line access, no step at it, et cetera. So we are in very good shape and have always taken our gross to net -- our diligence around growth to net very seriously. But as we discussed about Q1, looking at Q1 and what our expectations are for Q1, not much has changed there either. So we have to take into effect which is different than most companies that we have a 0 to contracting impact to gross to net for Q1 in addition to just the normal Q1 effect.

So if we look at our analogs, all specialty medicine analogs that we refer to frequently and have since launch. If we look at what the typical first quarter impact is, it's a decline in net sales of mid- to high single digits. And that takes into effect the reverifications of the insurance plans and sort of a typical Q1 effect. And that's really reflective of where we believe our first quarter will be as well. But you have to consider not only do we have the Q1 effect. We're never immune to that. but we also have this in this quarter the 0 to contracting impact on gross to net that we just discussed. So we feel that, that's pretty impressive considering that we've been able to steadily add patients and still have a strong Q1 with the typical Q1 effect in 0 contracting. So we think we're going to be in good shape overall for 2026. And as I already mentioned, we'll have robust sales growth in 2026.

Next question comes from Akash Tewari with Jeffrey.

This is Manoj, on for Akash. Just 1 from our end. So you mentioned about like 60 to 70 percentage persistence rate. When we looked at the AASLD data, there were like some presentations showing more than 90% adherence rate in the real world, how important is to keep the adherence rate to that 90 percentage to maintain the current patient adds and the revenue growth? And also do you expect any acceleration in patient adds going forward now with all the contracts in place? Or should we think about like probably around 6,000 to 7,000 patients, net patient adds every quarter? Just trying to understand that point. .

Great. So thanks for the question. Let me start with the patients. Look, we've said that we have been steadily adding patients, and we expect to steadily add patients going forward. And I think that is -- it's certainly an important measure as we show you this quarter, how we did in light of having another product on the market. So the fundamentals are really, really great. And we would expect in this environment to continue to steadily add. The contracting, remember, we've had great access from the beginning. The contracting doesn't really accelerate anything because we -- through -- if there was no policy in place if you had a medical exception, those were flowing through very quickly. But in this next phase of launch, we've partnered with the payers. I think we've had some really great discussions.

I think they've understood the value of rents differ. They see the cost of these patients in their systems. And I think we've landed in a really good place for the future with them. And we do appreciate the partnership that we have. Now regarding persistence, -- we are in that well-tolerated oral range, as I said, the 60% to 70%. And yes, as you point out, there are some institutions that have reported rates all the way up to 90%. Now what we will always try to do is look for ways to help appropriate patients stay on product as long as they need it. And I think that sense of urgency has increased coming out of AASLD, where we presented data from both the F2-F3 population and the F4C population, if you discontinue therapy, disease comes back and it comes back quickly. So we do believe this is a chronic therapy and that it's in patients best interest, obviously, prescribers best interest and overall for the system best interest that they stay on therapy. So we have a lot of initiatives underway that we're doing with our own patient services group, partnering with specialty pharmacy and institutions, and working with patients as well directly to try to help that persistence rate improve to a level which is even higher than the well-tolerated oral range. But that takes a lot of work. And there's just people look, regardless of whether it's -- regardless of the type of indication, people tend to drop off drugs in time, but we're going to do everything we can to educate keep people on appropriately.

The next question will come from Michael DiFiore with Evercore.

Congrats on the continued progress. Two for me. The first, over the past several months, you've added multiple combination assets around Rezdiffra including DGAT2 and GLP-1 and siRNA programs. My question is, how do you avoid diminishing return from putting too many synergistic mechanisms into the pipeline? And what is your go/no-go criteria for advancing a second agent, both clinically and commercially. And then my second question is, briefly, has there been any change in expected timing of MASH or NASH outcomes now that the FDA has approved AI-supported pathology reads?

Okay. Dave, I'm going to pass it over to you in a second, but just -- let's just take a step back, what we're trying to do here, Mike, and thanks for the question because I think this is really important. So with Rezdiffra , we have what has become standard of care and is truly a foundational therapy. And that's just not from use -- looking at the clinical data, 1 of the things that is really striking is that across all subgroups, you have essentially a consistent effect. So in other words, it tends to be that -- all these F2-F3 patients do well. And it's not as a 1 group that's like a super responder group. Now that is a great therapy. And rarely do you see something that has that type of result.

Now if we can, through the addition of new mechanisms of action, find a way to have the whole population or a subpopulation do better, then that really provides an opportunity for better patient outcomes. And that's how we're thinking about this. So when we're going out and looking at any of the mechanisms we're bringing in, it starts with -- we believe that there is a strong mechanistic rationale that in combination, we could see a better effect for all or some patients. Now we have to test that theory and that's why we're going to do these trials to quickly determine whether we -- if there's a bear there, and we will kill or move forward quickly.

The goal is not to have a lot of straggling things in the pipeline that never do anything except for suck up resource. We're not doing that. We're going to try to only take forward what is meaningful for patients. Now we also see the market evolving though, where various subpopulations or let's call them segments, may emerge. And we're well positioned not only with Rezdiffra, but now as we make these combo programs, to provide a better product for those segments. So this is extremely -- when I say well thought out, it's well thought out. It's deliberate. It is based on mechanism, what we like, and it all starts with the fact that Rezdiffra is a foundational therapy that is really 1 which is amenable to either fix those combinations or combinations, for instance, with siRNA where you may have a pill in an injectable, but in a very favorable regimen.

So that's -- just to give you the thinking of it, Dave, maybe just over to you for a little bit more color around it.

Yes, yes. I think the only thing I would add there is that when you start with a solid foundation that works in everybody, that's not necessarily true of every combination partner you add, right? So it could be that a particular combination partner, for example, DGA or the GLP-1 or 1 of the SiRNAs does better for certain patient subtypes, whether they're a genetic predilection to disease progression or they have some comorbidity that sort of the combination partner happens to target more effectively. So there -- the other thing I think that's really important about our strategy is that it's adaptable, right? It's adaptable to the science. So as we run our Phase II studies, we'll be able to determine whether or not the drug is kind of going to be broadly applicable in the population and broadly does something that's going to be meaningful for patients with NASH or a subsegment within that the NASH population is going to be a better target for that combination treatment.

So I would just add the adaptability part for how we're thinking about pursuing these agents. Then I think your second question was about Maestra outcomes and AI path reading. So it's great that the agency, again is sort of evolving their perspective on MASH drug development. Mister Outcomes is an event-driven trial. So it doesn't -- it's not a histology driven study. So AI path reading really wouldn't be relevant there. For Maestro NASH, our FI study, that is a biopsy-driven trial, but it's a landmark study. So in other words, everybody gets a biopsy at month 54, which is then compared to baseline. So we would certainly consider using AI path reading as part of our analysis, but it's not the primary assessment we would do.

Next question comes from Jay Olson with Oppenheimer.

Congrats on the impressive progress. Just to follow up on the previous question. Since you have 2 oral combos, where do you envision the siRNA modality to fit into the future treatment landscape of MASH. And is there any color that you can share with us on the targets of those 6 siRNA programs? And when should we expect the timing of clinical development.

Thanks, Jay. Look, first of all, on the siRNA targets for competitive reasons, we're not going to disclose the targets at this point. But stay tuned as we move along, we'll certainly be sharing that with you. Look, where does it fit? So first of all, we thought any of the targets that we're looking at, we believe there's a rationale for MASH and potentially making a better product. As I said, it starts with mechanism and the rationale to make a better drug. I'm going to let Dave kind of walk through kind of our whole S SiRNA strategy. But we really think it's a nice combo when you think about it, every 3- to 6-month injection and a daily pill. Pretty easy. If you're getting -- if you get a better effect from that, that is not a -- that's a pretty strong value proposition.

What makes it an even stronger value proposition is it's all within the same company. So this isn't going to be a -- it's not a battle for somebody having to optimize a single product, it is us being able to look holistically across the disease and say, what's the right solution for that patient or segment of patients. And we can provide that in an efficient manner. And so it will always be about what's the right therapy rather than having to sell a therapy. So Dave, maybe I'll pass it over to you.

Yes. I mean I think just to add on, I mean, from a scientific standpoint, as Bill mentioned, SiRNA technology has really had a breakthrough over the last 10 years or so. And we can develop now a highly targeted, well-tolerated therapies that last 3 to 6 months as Bill said, or even up to 12 months. The latest technology can even get you that much further. So we're very fortunate to be working with Ribo Life Sciences, a leader in siRNA technology. to be developing these drugs. And I think the key is that, that sort of -- that combination regimen that sort of approach will make sense for either all patients or some patients. Again, we look for drugs that either have preclinical, clinical or genetic validation and all of these targets kind of fit within within those categories. And so we think that with Rezdiffra is that solid foundation to add on these long-acting therapies, this could be a real advantage for patients with NASH.

Next question will come from John Walden with Citizens .

Congrats. You guys have talked about this growth in the market. This is the first time you guys have put some numbers to it. And it doesn't seem like any of these dynamics you're attributing it to are going to go away anytime soon. So wondering how should we think about 5 years from here, the F2, F3 target population growing? And then also, should we expect further growth of the F4 population as well with patients still advancing? Just trying to get a bigger picture about the road ahead. .

John, thanks for the question. Yes. I mean, look, what we said is that we'd expect double-digit growth for the foreseeable future. That's certainly for the 5-year period. So pretty robust growth. I think now, again, you've got a therapy that works. People are talking about the disease. And as I said, we're benefiting from having a competitor that's out there talking a lot about it. And as we know, they need really lots of patients in order to make MASH a meaningful indication for them. So we think that it's positioned for years of growth.

And your other question was -- F4, yes, we would expect to see similar -- not similar growth, but growth there. We're still working through the details of what that F4C population looks like. But I think you can assume that there will be growth. As we get a little bit further into our analysis of the market and we're getting closer to our launch, we'll provide updates as to where that's going. But overall, as MASH grows F4C will grow as well.

Next question is from Ritu Baral with TD Cowen.

This is Nicole on line for Ritu. I'm just wondering about the extensive script growth needed over the fiscal year '26 to grow revenue off of the increase for the growth tonight. And just a quick second question. What do you think companion diagnostics would need to be developed to show any genetic predisposition for MASH, if you are getting to eventually move forward with the SIRNAs data is positive. .

Nicole, can you just clarify your first question? It was the...

We missed a word.

Sure. Yes, absolutely. The extent of script growth or patient adds needed over fiscal year '26 to see a growth in revenue to offset the increase in gross to net. .

Well, okay. So let me start -- let me be clear. There's -- we're growing. The fundamentals of the business are exceptional. We're steadily adding patients, we're going to see robust growth in 2026 and into the future. So I mean, let me just be crystal clear. When we talk about Q1, Q1 has 2 -- Q1 things going on.

First of all, the Q1 effect that every single product in the industry experiences, reauthorizations, et cetera. On top of that, though, we have this 0 to contracting. So instead of contracting for the 2 years previously and having a steady increase in gross to net, we held off contracting until the seventh quarter of launch and or eighth quarter of launch, I guess, -- and so you have this 0 to contracting effect. So we are still -- despite that in the range of the comps that we look at, which is kind of really remarkable. It says how strong the underlying business is. So expect to see growth. Our -- look, we're not going to do -- the model is the number of patient adds, et cetera, but robust growth now and in the future. Mardi, do you have any other comment on that?

Exactly. We talked about it, Nicole for 2026. From a consensus standpoint, we feel really good where -- the Street is right now for 2026, which reflects robust growth from where we ended in 2025. So we feel like we're in good shape. We already talked about the Q1 effect and gross to net, it's daily adding patients. And I'll just reiterate what Bill said last week was our best NBRx week ever. So the underlying business is in really good shape, and we anticipate that growth through 2026 and beyond, quite frankly. .

Yes. So companion diagnostic. Interesting question. I mean, it's early to sort of comment on that because to consider a companion diagnostic, you've got to be looking for a particular, for example, genetic or biomarker type target to tie your therapy to. So as Bill mentioned, Rezdiffra , of course, doesn't need that because it works very well across all patient subpopulations. We'll see as the combination products move forward. If there is a need to develop a companion diagnostics. But as of right now, we don't foresee that with these programs. .

Just really quickly to follow up, are genetic screenings comment in the clinic already? .

They're becoming, I think, generally speaking, I can speak in MASH, in particular, necessarily. But across general clinical care genetic screening is becoming more common, yes. But I think producing a genetic or another biomarker companion diagnostic takes an additional lift for sure.

Yes. I just remember, we're -- let's just put a fine point on this. we are 7 quarters into the launch of an entirely new category. There are decades of growth and evolution in front of us. The decisions that we're making today with the pipeline aren't 2026 decisions. They're not even '27 decisions. These are helping to form treatment, which will include diagnosis any kind of test that obviously will be done to segment patients, et cetera, that will evolve in time. So we are very much on the forming side of this. And remember, we're less than 12% penetrated into the 315. It's less than 8% into the 460 that we talked about. This is at the beginning of a very significant specialty market -- we are the company at the front end of it that can drive it, not only for the coming years, but for, we believe, decades in advance. .

Next question is from William Wood with B. Riley Securities. .

Congrats on a very nice quarter. Just sort of sticking with what you were just talking about, Bill, in terms of the market increase from 315 to 460,000. Just curious if you see that correlated with the increase of patient prescriber interest and potentially how we should think about that as reading through to sort of new patient adds? Is this more of a longer term, just more runway in terms of patients? Or is this actually feeding increased new patient additions? And then I have a follow-up. .

Yes, thanks. Look, so I think 1 of the real important pieces of this -- of the update is if you look and see where that real growth is taking place is in the target specialists that we are calling on. And I think that's really important. What it's saying is that our efforts really are working in that. Patients that are diagnosed are making their way to the specialists that treat MASH. And we've been clear from the beginning. We think this is a specialist disease. That's why we're focused on hepatology, gastroenterology and now some endocrinology as well. That's where the patients are. Those are the experts that should be treating it, and that's where we're seeing the biggest growth taking place, which is indicative of our wiring of the system being extremely successful.

So I think what you're going to see is, remember, we're still at a very low penetration rate in the already diagnosed, and so we still have a lot of patients to get through just in that initial 315. And then as more and more come in and this becomes standard of care, that's when you see just treatment rates get higher as well as diagnosis rates get higher. So that just gives you a little bit of flavor around it. And you said you had a quick follow-up, maybe it's just real quick because we got to move on.

In reference to your GLP-1 and your [indiscernible], it looks like GLP-1 might be initiation starting for Phase I, it looks like it might be pushed back slightly from first quarter to second quarter. In terms of both those programs, just curious what remaining gating activities still need to be completed.

Yes. So we -- I think we guided initially to first half, and then we find it the second quarter. So there's been no delay in the.

No change, no delay.

The last question will come from Srikripa Devarakonda with Truist .

This is Alex on for Kripa. Congrats on the progress with the progress. Now that we are seeing more and more patients on Rezdiffra for longer time periods, we want to know, have you seen any challenges in the reimbursement process to keep patients on drug for the extended time periods. We can imagine that for many patients with Rezdiffra that their fibrosis scores could improve and they might technically be outside of the label requirement. .

Okay. Thank you very much for the question. So first of all, the reauthorizations we said are very routine. Oftentimes, it's physician attestation are showing some kind of stabilization or improvement in 1 of the NITs that has been used initially. I think -- look, we're -- again, we're really early into the treatment of the disease. I think what is very compelling for the community is -- I'll go back to the AASLD data, which showed that discontinuation of Rezdiffra led to a return of disease in both F2 and F3 and also F4C patients. So I think that more and more of the belief is that this is a chronic disease. And you can't stop the medicine even if you have a response because you will have done all that hard work and then you're just going to have disease come back.

So we think that's how it's going to evolve in the future again, though. Look, it's early, but our belief is that this is a chronic therapy. That's the way the community tends to be using it. So we feel really quite confident that will be the case.

May be I'll finish off just with a remark of just kind of what's the state of the [indiscernible] will. Rezdiffra is performing exceptionally well. This is truly a best launch I've ever been associated with. And I can tell you that is from a -- that's a factual perspective, nothing's done as well as this. and it's poised for substantial long-term growth in a rapidly growing market. It's because of those 2 things that we can build a pipeline now to establish long-term leadership. Most companies have a pipeline looking for a great product. We have a great product that is performing exceptionally is poised to perform exceptionally for the future.

Now we have a chance to build long-term leadership. It doesn't happen often. This is an opportunity. We are not going to waste the opportunity. So with that, we'll close the call.

Perfect. Thanks, Bill. And thank you all for your time and interest today. This now concludes our call. A replay of this webcast will be available on our website in about 2 hours. Thank you for joining us.

Ladies and gentlemen, thank you for your participation in today's conference. You may now disconnect. Have a wonderful day.

Good afternoon, everyone, and welcome. I'm Pradyumna from JPMorgan's healthcare team. Thank you for joining us for the call Madrigal Pharmaceuticals presentation today. Madrigal has been one of the most consequential companies in the metabolic and liver disease over the last few years. And today, we're pleased to be joined by Bill Sibold, the Chief Executive Officer; Dr. David Soergel, Chief Medical Officer; and Mardi Dier, the Chief Financial Officer.

Bill and David will speak for about 20 minutes, after which we'll move into a live Q&A session. At that point, we'll also be joined by Mardi Dier. With that, Bill, I'll turn it over to you.

Thank you, Prad, and thank you to JPMorgan for having us here. This is always a great way to kick off the year and to provide a progress update for how we're doing. I'll start by saying that this is an exciting time at Madrigal. You've often heard me say that I think this is the best opportunity in the industry. Everything that we've accomplished in the last 12 months, 24 months and looking ahead, I firmly believe that more than I did when I started in this role in September of 2023.

On the slide here, leading the fight against MASH, that is our purpose statement. You don't have to look much further than that to understand what we're about. We're about MASH. We're about leadership, and we think we have to bring a little bit of an edge to this to truly fight on behalf of patients. So that's what you can hear about us. We're clearly the leader now with the first ever approved product for MASH after a graveyard of drug development for many, many years.

Hopefully, today, you'll be able to see that we have taken steps, and we've positioned ourselves for long-term leadership in the space. Just a reminder here, I'll make some forward-looking statements today. So let's take a look at the impressive progress towards our strategic growth priorities, maximizing the value of Rezdiffra and building our pipeline. We're executing on objectively one of the best launches in the specialty space in the last decade.

And with sales annualizing now at over $1 billion, and that is after 6 quarters of launch. Now remember, we're talking about Q3 here through Q3, but really actually quite amazing that we've had that type of trajectory at originally in a market that people wondered, is there even a market and will you be able to have -- is there any unmet need for a product? Well, I think we've shown that clearly, there's a market and that Rezdiffra is quite a special product.

The next chapter of growth for Rezdiffra will be F4c indication. That's something that we're expecting data in 2027. And we have an opportunity to double the opportunity for Rezdiffra with the expansion into that indication. And we benefit there actually first-mover advantage and from the product profile that we have. So we're very excited about it.

Now the future of Madrigal and where are we headed, and that's building our pipeline. And we have done 2 deals to date. We will hear a little bit more about the DGAT-2, which is something that we announced last week. We're really excited about that. And that's just the start with the 2 deals. We're adding new mechanisms of action. We're really looking at setting the table for us to be the ones that explore looking at combination therapy or stand-alone, but we think really with the wonderful profile that we have with Rezdiffra that it's going to be very amenable to combination therapy to look for additional benefit for either the whole population or for subgroups.

So talking a little bit about the progress. And as I say, one of the things I like about JPMorgan is you can look back and see what have you accomplished over the years on an annual basis. And when you look at 2025, it was an extremely, extremely busy year for us. As I said, we have an exceptional launch that's taking place after the sixth quarter. We had new IP, which extends to 2045, which actually that foundation allows us to think about even preclinical stage assets to bring in because we're not in rush of a patent cliff or a pending patent cliff or we have to go fill any holes. We also did the oral GLP-1 deal that I mentioned.

Now we're moving into '26 and '26 is going to be a very busy year for us. a good prognosticator for launch success in 2026 is the market access that we have secured. There were some questions about that. I'll spend a minute on that in a few minutes. We'll continue to make progress towards F4c. We'll continue to accelerate Rezdiffra's evidence generation. I think that it's important as you're building a mega blockbuster drug, is that you don't move on from it without asking the questions that the community has and where you can further differentiate and show the value of your product.

We also have -- starting off the year strong with our DGAT inhibitor that we and again, you can expect to hear about more BD from us throughout pardon me, throughout the year, it's something that we feel very strongly that we are, as I said, going to set the table with a number of mechanisms of action that allow us to look at a combination strategy with Rezdiffra.

So just to recap on the launch that we have going on. And first of all, we've been saying from the beginning that we will -- we have and we will continue to steadily add patients. And on the left panel here, we see the active patients on therapy. And remember, that is net of new adds and any discontinuations. The number of patients that are on Rezdiffra at the final day of the quarter. And at the end of Q3, over 29,500 patients, which is really a very impressive number. And the 10,000 in the center of the screen here, that is total Rezdiffra prescribers. Really important have enough of a breadth of prescriber and the 10,000 point from my experience is a milestone that sets you up for long-term continued growth.

So as we look towards the future, we will be increasing the breadth. But really, the next step is to go deeper into that prescriber pools, have them have more and more patients on therapy. And as you can see, what does this all translate into from a sales perspective, $287 million in the third quarter of 2025.

So I think from all measures that we look at from a launch perspective, with every metric, we are objectively at or near the top of all the launches in the last 10 years that we've been looking at. I had mentioned the great access as we set up for 2026. We have first-line access, no step edit requirements and improvement in utilization management criteria at some of the payers as well. This is a question that we have been asked a lot of last year. in the advent of having a competitor, will you be able to maintain your first-line access on the strong access that we've had since launch in 2024. The answer is yes. I think this demonstrates the quality of the product that we have that it shows the value to payers and that you can have multiple products coexisting in a disease and with that, including GLP1s.

So we're really excited about the team. We have an extremely experienced team, just like we do in all parts of the organization. Our market access team is outstanding and really did an incredible job for us to get us set for 2026. So let's take a look at the market a little bit here and a couple of things to point out. You've heard me talk about the 315,000 patients the initial target of patients, those are diagnosed patients that are in the prescribers' practices that we are calling on, and that's -- these are diagnosed F2/F3 patients.

Only we are -- well, we're 10% penetrated into that 315,000, and the disease is about 10% diagnosed. So think about that for a second. We are 10% of 10%. We are at the very beginning of a market that we see expanding into being a large specialty market with the profile that is a durable profile. We have a great, great asset to build from. So I think this is really exciting for us. And as I say, we expect MASH to follow in the footsteps of some of these other large specialty markets here. Here, we have IBD, RA and psoriasis. And I want to point out is they're all large markets, over $20 billion in sales, almost 30 years after the first products were launched. -- and they support multiple products and multiple mechanisms within those diseases.

You go back looking at MASH, where we were in 2024, a $180 million in sales. There's now 2 products on the market. So we see that these dynamics, and I don't think the market really appreciates as much the opportunity that lies ahead of us with Rezdiffra and specifically because of the dynamics of minutes.

I've talked about the profile of the product. You've heard me say before, this is a holy grail profile, a once-a-day pill effective, safe, well tolerated. And I think that is something which not only provides us a lot of runway in F2, F3, but as we look at the F4c population, that profile also carries over very well. And when looking at F4c here, it's a sizable opportunity with 245,000 patients. And this is if you were to do a comparison to the 315,000 F2. F3s, the difference being is that these are even higher unmet need patients higher risk of liver-related mortality. So we think that although fewer patients will be a higher urgency to treat and higher penetration. We are going to be the first to market here.

And as I said, it's only first to market, but it's first to market with a great profile that will add tens of thousands of patients already on the drug. So familiarity by the prescribers will be extremely high. All of our system will be wired, et cetera, so that we're in a very favorable position just to have somebody -- the physicians begin to move from F2/F3 to F4c as well. We expect to read out from our outcomes trial in 2027, and we're really optimistic about the outcome, and that's partially driven by a cohort of 122 patients from our NAFLD-1 study. where we showed very, very promising results in this F4c population.

What gives us further encouragement is that the baseline characteristics of these studies are almost identical. So lots more to come. So how do we see the market shaping for MAS. And look, it's a complex heterogeneous disease. There is a broad spectrum of comorbidities and we think in the future to address the full potential of it and the subpopulations that emerge, you're going to need more than 1 therapy.

And we look here showing where MASH is today, where it goes in the future. And really, it's going to be Rezdiffra and Madrigal that drive that transition from treatments only for F2 to F3, to F2 to F 4C will be the leaders there.

Combination therapies now. There are some that take place, but it's not very well defined. But we think that we can drive combination therapy and really drive outcomes that way. And as I said, 10% of 10%, we're at the very beginning, and we expect with awareness of the disease, more screening that will go on as there's more of a pipeline of products that are entering the space that's going to bode very well for us. So we are in an exceptionally strong position to drive this disease forward, the treatment of this disease and outcomes for patients.

So maybe with that, I will transition to Dave, who can walk us through a little bit how we're going to accomplish that with their pipeline. Dave?

Thanks a lot, Bill. Yes, I mean, so great setup. So we have a very straightforward goal in R&D at Madrigal, build the leading pipeline in MASH in the industry. And the way we're going to do that is essentially through targeted business development and then utilizing our internal expertise and capabilities for internal innovations and be able to deliver new therapies more efficiently and more effectively than anybody else in the industry can do.

The team in R&D pioneered the development of MASH drugs. They developed the first effective and safe therapy for these patients who had no hope. And so we have a specific opportunity to leverage that expertise. So the 4 pillars that we're working in right now, ensuring that we deliver transformation outcomes data. As Bill referenced, we have the MAESTRO OUTCOMES trial and F4c reading out in 2027, and we have the ongoing MAESTRO NASH study that will deliver data in F2, F3 in 2028. And that will allow us to secure full approval in F2 through F4c. MASH.

Second, as Bill alluded to, the field is going to move towards combination therapies, every complex heterogeneous disease does that. And so we're looking for mechanisms of action that are complementary to Rezdiffra can deliver better efficacy to patients with MASH and still deliver a great tolerability profile for these patients.

Third, look for new modalities where we can broaden patient reach and deliver efficacy to different patient subpopulations and individuals with risk sets. So we're looking across the spectrum, not just oral small molecules, but we're looking for injectables or really anything that can drive efficacy in these patients.

And then last, as I alluded to, execute disciplined capital efficient clinical development trials to get to go/no-go decisions effectively and efficiently.

So as we've talked about, MASH is a complex disease, and this is a complex slide. describing all of the potential pathways or many of the potential pathways that are involved in MASH. So the key -- the fundamental issue in MASH is over-delivery of free fatty acids to the liver where they then converted into lipid droplets that are abnormally stored in the hepatocyte. And that causes inflammation and fibrosis ultimately and leads to progression of disease -- the second issue with MASH is hypothyroidism in the liver, which leads to mitochondrial dysfunction, which makes it so the liver can't properly clear those fatty acids.

And so of course, THR-ß agonism addresses that liver hyperthyroidism. So this is where we see the opportunity for combination products where if you can intervene at multiple pathways within this disease process, you'll be able to deliver better efficacy for these patients ultimately.

So we already have a solid foundation for combination therapy in Rezdiffra. And so we're looking for mechanisms now that can be added on to Rezdiffra and deliver better efficacy. And we've already acted in 2 areas. First, GLP-1, as Bill mentioned, we in-licensed an oral GLP-1 molecule last year, and we'll talk a little bit more about that. And then most recently, we in-licensed a DGAT-2 inhibitor, which targets a distinct pathway within hepatocyte that's linked to MASH pathophysiology as well. And so in our hands, we believe that these combination products can deliver better efficacy and ultimately better outcomes for patients with NASH.

So let's talk a little bit more about Ervogastat, the DGAT-2 inhibitor we just in-licensed. So a couple of things we found particularly attractive about this molecule. The first is that it's clinically validated. So there was a Phase IIb study conducted with Ervogastat that gave us data to show us that there's reassuring pharmacology with this medicine that we believe can work mechanistically in a complementary way with resmetirom. And so that's the second key characteristic, having a scientific rationale for why combining THR-ß with another mechanism would make sense. In this case, we'll go through why that does make sense.

Of course, it's an oral molecule, which has an opportunity to develop a fixed-dose combination is particularly attractive to us. Mechanistically, the way this -- the way DGAT2 inhibition works is it inhibits the final step of de novo lipogenesis in the hepatocyte. So it prevents the addition of the final free fatty acid to the triglyceride droplet and therefore, prevent the inhibition of that enzyme prevents accumulation of hepatic fat. And what we've seen from the Phase IIb data is that, indeed, that's what this molecule does. It reduces hepatic fat.

And we predict when you combine it with resmetirom, it will reduce fibrosis even more effectively, and we'll get into that in a second. So our next steps for the program are our drug-drug interaction study with resmetirom and Ervogastat in 2026 with consultations with the FDA to discuss combination rule development and then ultimately, a Phase II program in 2027. So we'll go a little bit deeper into the data with Ervogastat. So what we show you on the left-hand panel of the slide is the MRI-PDFF effects of Ervogastat. MRI-PDFF is a way of quantifying hepatic fat and a 30% reduction in MRI-PDFF has been strongly linked to improvement in fibrosis in patients with MASH. A 50% reduction in MRI-PDFF is being called a super responder level, which is even more likely to result in better fibrosis resolution in patients with MASH.

And as you can see on the far left, Ervogastat at 150 milligrams reduces MRI-PDFF by 30% in 72% of patients. and 50% reduction in 61% of patients. So this is a very profound effect on liver fat that we think could be compelling when you add it to the resmetirom mechanism of action. What we show you on the right-hand panel of the slide is a really strong connection between reduction of hepatic fat on the X-axis and improvement in fibrosis on the Y-axis in patients treated with resmetirom.

So this is an example of some of the data that we have that helps us identify targets that would be useful combinations for resmetirom. So we believe that if you can get more patients into that super responder category with the combination product, we'll be able to get better antifibrotic efficacy in patients with NASH.

So the way these 2 mechanisms work in a complementary manner, so DGAT-2, as I mentioned, inhibits that final step of de novo lipogenesis, the free fatty acid that's not incorporated into the triglyceride because the DGAT inhibitor is inhibiting that from happening. Normally, the question would be what would happen to that free fatty acid. In a patient who has MASH, as I said, typically, the mitochondria don't function properly. And resmetirom, we know, can reverse that mitochondrial suppression and therefore, allow that free fatty acid now that's free floating in the cytoplasm to be burned up into energy by the mitochondria.

So we see that these 2 mechanisms by correcting both the mitochondrial dysfunction and by inhibiting the lipid production, we're going to be able to get even more fat reduction, less lipotoxicity, less inflammation and less fibrosis.

So now we'll turn the page and take a look at the oral GLP-1 program that we in-licensed last July. So what we noticed from the MAESTRO NASH study is that in patients treated with Rezdiffra, only a small amount of weight loss, 5% weight loss potentiates resmetirom antifibrotic efficacy. So that led us to the conclusion that if we could drive more patients into that modest weight loss category with a pharmacologic agent, i.e., a GLP-1 inhibitor agonist, we could get better antifibrotic efficacy with a combination product, while still maintaining a great tolerability profile.

So with this program, we're not tolerating 10, 15 weight loss, we're targeting modest weight loss and introducing it gradually in order to potentiate the antifibrotic effects of resmetirom.

So the next step for this program is to start a Phase I study, first in human, single-ascending, multiple-ascending dose in the second quarter of this year and then conduct some additional drug-drug interaction work, FDA consultations and combination development next year in 2027. So we're really excited about this because we think that the combination of both GLP-1 and resmetirom and DGAT2 and resmetirom offer 2 complementary combination approaches that could deliver even better efficacy to patients living with MAS.

So the way GLP-1 works, as everybody knows, is that you eat less food. So when you deliver fewer calories to your body, fewer free fatty acids to deliver, you improve insulin sensitivity and also on that basis, reduce free fatty acid delivery to the liver. And again, THR beta regulation will allow that fat to be cleared more effectively and more rapidly and provide a much more effective antifibrotic effect. So at the end of the day, you clear the hepatic fat, you improve lipotoxicity, inflammation and fibrosis.

So it's an exciting time. We have a growing pipeline. We're bringing our strategy into action, and we're going to have multiple products in development now patients living with mash and be able to address the growing unmet need in this population and hopefully make a big difference.

I'll pass it back to Bill.

Thanks, Dave. So here just shows you how we see some of the -- how we Rezdiffra cutting across F2 to F4c. Obviously, F4c is dependent on our outcomes trial that we'll read out in '27 and then resmetirom and our Madrigal MOAs that we're adding, also will bridge across this as well. So we're in a very strong position to lead the market, not only now but in the decades ahead.

So maybe in conclusion, just to summarize where we're at here, we are in an outstanding position. I just don't think you can find a better setup of market dynamics. We'll actually go back to disease, high unmet need disease, great market dynamics where you get to enter the market as the first product with an exceptional profile with an ability to add to it, we believe, to make it perhaps even better for at least some patients.

We're off to a great start annualizing at over $1 billion in just the sixth quarter of launch, steadily adding patients, optimistic about '26 and beyond robust growth. We have our indication expansion opportunity, as I mentioned, with outcomes, which is essentially a doubling of the opportunity and just an exciting chance to help more patients that are even in more need. Pipeline. We're well on the way to building. We have 1 new Phase II. We have 2 ongoing Phase III trials, and we have 3 clinical stage assets.

We are becoming a company that has a present short-term future and a long-term future as well, and we're really excited about it. And as I say, we're leading the fight against MASH and take that very seriously. So thank you for coming.

We'll now turn it over to some Q&A.

Well, thank you, team. We'll move into the Q&A portion. We've had a number of questions come in. So I'll start us off and then time permitting, we can also open it to the floor here. So the first question is for you, Bill, around the pipeline strategy.

As you laid out in your presentation, you're focused on building an industry-leading pipeline in math. Just philosophically, can you discuss that in more detail, i.e., are you only looking at mash? Are you looking at oral medicines or later-stage assets and then a decade from now, based on your strategy and the pipeline you want to build, what does Madrigal look like?

Great. Thanks for the question. Look, -- it's very rare when you are at the beginning of something that is such a big opportunity. It's even rare that you have a great asset to start to tackle that with.

I mean I've been in the industry over 30 years now, and the setup for this is better than anything that I've seen. I've seen what some companies have done is they kind of squander an opportunity to extend leadership in a disease or an indication and try to diversify into something else prematurely. That's not what we're doing.

Before the table is set by somebody else, we want to be the 1 who sets the table to have not only Rezdiffra as a fantastic asset, but then what can we do enhance it and enhance our leadership in the space. So that's why, as Dave said, very clearly, we're looking at all mechanisms, all modalities, et cetera. If it's going to help patients, it's something that we're really interested in.

There's a really good example of somebody who has taken a combo approach, and that's Vertex. Vertex is the unmitigated leader in CF. We see no reason why we can't be the unmitigated leader in MASH. And I think you've seen how that's worked out for them. So the focus is MASH. Let's win here. We will be driven by the science, if there's an adjacency we want to move into or if there's an opportunity down the road. But remember, this industry is driven by great assets, first and foremost. We have a great asset today. We think that we can extend within MASH. And we will be on the look for great assets in other areas in time, but we don't want to move prematurely from really setting ourselves up for success in helping a lot of patients in this disease first.

Next one is for Dave. It's about the DGAT-2 deal. You said you announced last week and spoke about that you got to inhibitor you in-licensed. Can you tell us more why you're excited about that compound? What are you looking to see in the drug-drug interaction study? How do you expect the DGAT-2 and resmetirom to work together to achieve efficacy, more importantly, how do you see the gap fitting in with your oral GLP-1 that you also in-license?

Yes, great questions. Yes. I think -- well, when we think about the mechanisms of action, as I pointed out, there are a variety of places where you can intervene in this complex disease. And the goal has to be to identify mechanisms that are complementary and don't overlap too much. So the reason why we liked DGAT is because it's in a completely different aspect -- it occurs the enzyme is in a completely different part of the disease process, the de novo lipogenesis process. We like the molecule itself. Pfizer did a very -- we did a great job. They did a big pharma job developing the drug and have a lot of great data for us to evaluate during the diligence.

And when you think about the efficacy and tolerability profile, if you think about other targets in de novo lipogenesis like ACC inhibitors where you have triglyceride elevation that could be difficult to manage or fashion where if there's systemic exposure, you can have hair loss and other issues, DGAT really seem to be a standout kind of enzyme to target.

And then as I said, the idea of intervening de novo lipogenesis and at the same time, sort of opening the plug on the sink to allow the free fatty acids to flow out through the mitochondrial beta oxidation process was very attractive.

So from the -- with respect to the drug-drug interaction study, we're at a minimum, what we want to do is make sure the 2 drugs don't have a pharmacokinetic interaction. So that's 1 key outcome. We're still in the process of deciding exactly how we'll run the trial. There's a possibility we could enroll patients in the study, for example. And maybe you got some early measures, but we haven't made that decision yet.

Yes. And just to comment on DGAT-2 as well, we were at MASH-TAG, which was -- which is a MASH-focused meeting with KOLs in the space. We just came from there yesterday. And there was a lot of discussion about DGAT-2 and I can say a lot of enthusiasm. I think people had perhaps underappreciated it, but they're very happy to see it in the hands of a company that is dedicated towards MASH.

Did you want to address me to GLP-1 -- yes. So the GLP-1. I mean, look -- so GLP-1 acts at a completely different part of the MASH process. So -- as Bill alluded to earlier, we want to take multiple shots on goal, and that's one of the reasons why we need to stay capital efficient in our development programs and in our expertise and capabilities and sort of the history of our R&D team, We think we can do that. So we'll have multiple opportunities.

We can evaluate which programs look the best and maybe even do more complex combinations in the future. more than 2 products, for example.

Just to double click on your GLP-1 combination strategy. So if you've pointed out to analyses suggesting that a greater than 5% weight loss may amplify reflects on resmetirom. What weight loss sweet spot would you be aiming for in the MASH with an oral GLP-1 approach? And what are you looking for in a single ascending dose trial that you expect to start next quarter?

Yes. So maybe I'll start with the second question first. So from the Phase I single ascending multiple ascending dose study is sort of the meat and potatoes of drug development. So it's a new chemical entity. So healthy volunteer trial, pharmacokinetics. The good news about GLP-1 as a target is that we can measure pharmacodynamics in a multiple ascending dose. So we can see some weight loss and get an idea of the efficacious dose range multiple ascending those studies. So that helps us.

The partner -- our partner companies, CFTC did a very nice job for clinically developing this molecule, and they did a lot of the preclinical experiments directly compared to orforglipron and MGL2a6 is a derivative for orforglipron. So we have a pretty good sense already of where we need to head in terms of dose. So that's the idea for the early trial.

Super. Thank you. The next one is on the F4c. You referred to the market opportunity. You position it as potentially doubling Rezdiffra's opportunity outcomes data expected in '27. Commercially, how are you thinking about uptake dynamics about Fc4? And Dave, how does the 2-year open-label experience inform confidence in the '27 do you have?

Go ahead, Dave. Why don't you start?

Yes, sure. So Bill alluded to this earlier in his presentation, but -- so we have 122 patient cohort from one of our earlier trials called MAESTRO NAFLD-1 where these individuals have been -- have gotten resmetirom now for 2 years, and we recently showed those 2-year data. So these patients at baseline have stiff livers, they have cirrhosis, they are kind of right on the cusp of having decompensation.

And what we're able to show is that over that 2-year treatment period, we can have patients liver stiffness decline substantially. -- to levels that you would predict they would be at lower risk now of progressing to clinically significant portal hypertension, which is really kind of the end stage of liver disease. So that gives us a lot of confidence just in terms of the response to the drug. So that's liver stiffness. There were a variety of other biomarkers in the study as well that gave us even more confidence.

And as Bill mentioned, the patient population in that open-label cohort mirrors the patient population we enrolled in MAESTRO outcomes. So those who pieces of information, both what we're seeing in terms of the efficacy measures, but also the fact that the patient populations are similar gives us a lot of confidence.

And then commercially, the setup is great, right? Because it's a really, really sick population that's in need of medicine. And we believe that uptake quite rapid, more rapid than an F2, F3, and you're going to have a prescriber base that is several years into prescribing Rezdiffra they're extremely familiar with it, how to get it, et cetera. So it's a very simple transition we believe.

Perfect. Thank you. Mardi, moving on to you. This is about spend and profitability. So how are you thinking about expenses in the near term and the longer term based on the SG&A spend on launch as well as spend you're planning with the new pipeline programs? And when do you expect to reach profitability?

Yes. Great questions. Thank you, Brad. So we're very much, as Bill has said and David said, very focused on our top line growth and then our pipeline development. So that's our focus. Profitability is really not a matter of if but when. So again, we're doing what we can with SG&A to support our top growth with Rezdiffra and of course, with Dave, with the R&D spend, that will take some time to ramp up because it will take a little while to get to the Phase I and then into the Phase II.

So you won't see a big change in R&D in the short term. But really, in terms of spend paradigm going forward. And in the near term, there may be a quarter or 2 where we dip our toe into profitability, but it's not our focus for the near term. But eventually, you'll see the growth rate at the top line is going to diverge from how much we can spend and we will be in a profitable position. But again, right now, we're just focused on moving the business forward as best we can.

Perfect. Just adding on that also on gross to net. You've talked about the step-up to high 30%. GTN in '26 is commercial contracting begins. Can you talk more about the components of the gross to net and why the significant change?

Sure. Well, we've gone from commercial contracting, which is 1 component, of course, of our gross to net. And first, you have to look at business mix, we have 50% to 55% of our business is 30% to 35% Medicare, and the rest is Medicaid and other. And we were very fortunate that we launched almost 2 years with no commercial contracting. So as time goes on, will be coming on the market in August, just the way our business -- our general industry business is set up to start contracting with the commercial and Medicare PBMs. And so we're going from this point from 0, where we have great access to contracting with all the major PBMs.

Again, preserve our great access. So first-line therapy, no step-throughs and in some cases, improved utilization. So we're in a very good position. But that will step up into 2026. Those contracts start 12. Of course, there's some domino effect of the downstream plans coming on board as well, but you'll see our gross to net for commercial payers go into the high 30s as we said, the impact. I would say, though, that our growth is continuing to be strong. So we're going to steadily add patients to 2026. And despite the changes in gross to net, we expect robust net revenue growth for 2026.

And just to confirm, the high 30s is all the components of gross to net put in, right, co-pay assistance, et cetera.

Super. Just continuing on that, on the growth, what is the nature? What's driving that growth the breadth of prescribing that depth of prescribing, our endo expansion, payer access? And how does that ramp over the course of the year?

Yes. The answer is yes. All these things are driving it again because we are at the -- we're at the very beginning here, 10% so there's lots of room to grow. Where is it going to come from mostly though, it's going to be more depth driven than breadth with over 10,000 prescribers, breadth is not really objective though we have new prescribers every day. It's going deeper. And just moving people along that distribution curve where they move from a few to many to of patients.

And what we're hearing from every prescriber is nobody is maxed out yet, and there's plenty of patients that are still in their practices that could benefit potentially from risk difference. So tons of room to growth. What we've done is we removed the barriers that could have come into place in 2026 and that being one of the access. So we've lined up extremely well as we move into this year, and we think that carries through not only '26, but into the future.

Another interesting -- at the end of last year, and you mentioned it, but an old version of semaglutide was approved. How do you see it having an impact on the MASH landscape?

Yes. Well, look, this is high-dose Rybelsus, right? This has been a product that has been approved -- so this is not a new product, those -- some of the press may speak a little bit differently about that. It's a GLP-1, and we know that what we're seeing with real-world data is that a, hard to keep somebody loading somebody to a therapeutic dose and b, to keep somebody on any GLP-1. Now this GLP-1, as I said, has been on the market. It just has -- since 2019, it has a higher dose, and it's not for MASH. So what -- hopefully, if it leads to a little bit more awareness and people using the product, ultimately, we believe that would just set up a lot more people to be potential candidates for Rezdiffra use.

But I think it falls in pretty much the same message as with the other GLP-1s oral or injectable. It's just really hard to get to that target dose and stay on long enough effect on this disease.

Perfect. We're just coming up on time. So I will add one last question [proceeds]. This is about your launch strategy. So you've launched in Germany last year. How should people think about that as a contributor to your net sales in '26? And more broadly, longer term, how do you expand beyond how do you see the ex U.S. opportunity.

Yes. Look, I think that there's still a significant opportunity outside of the U.S. It's just going to take a little bit of time. Don't look for much contribution in 26. It's something that scales over time. Germany is the only country that we're launched in at the moment. There's other countries that we're looking at.

For instance, countries in the Middle East, we think that, a, there's a high unmet need there and reimbursement is actually quite favorable. So it's going to take a little bit of time. We're living in an MFN world. We are very aware of that, and we are following the principle of that. We launched in Germany at the U.S. government price. So parity the U.S. government in a something that we'll see how things unfold as we get more clarity with MFN along the way and so forth.

But we're going to be very pragmatic about it. The U.S. is market that is the biggest, it is the most important, and we're not going to sacrifice the U.S. market in any way.

Thank you very much. With that, I would just like to extend a thank to all the Madrigal team here and to all of you for being here with us today that would bring us to the end of this presentation. Thank you.

Great. Thank you for having us.

Good morning, everyone. We've made it to our last day of our London Healthcare Conference. It has been absolute pleasure seeing everyone, and it's great to see also just the atmosphere in the room. My name is Akash Tewari. I'm a pharma and biotech analyst here at Jefferies. I have the pleasure of hosting the Madrigal management team. Bill, why don't I hand it off to you for some intro remarks, and we'll get started.

Well, first of all, thank you for having us here. It's a real pleasure to be here, and it's an exciting year for us, an exciting time at Madrigal. As I think about the opportunity here, it's hard for me to find or think or even refer back to anything that's as great an opportunity as this. It really starts with the high unmet need that exists in the market. Patients have been searching for a solution for years. It's not from a lack of trying. Industries failed over 20 times to find a product, and Madrigal was successful in doing so with Rezdiffra.

We put together a team, which is an outstanding team, best team I've ever worked with, hand selected, handpicked. And now we're in the next phase, which is launching. Objectively, it's an outstanding launch. And we're also building a pipeline. We've started that this year with an Oral GLP-1 that will look to create a fixed-dose combo to make Rezdiffra even better. Maybe we can talk a little bit more about that today. And we secured IP out to 2045 with Rezdiffra.

So we're really at the beginning, less than 10% of patients of the initially identified patient populations being treated right now. We see this disease category growing for decades, just like big areas like RA, cirrhosis, IBD, where after 15 -- 20-plus years, they're over $20 billion categories with over 15 products in the space. We have two products approved right now. And in 2024, sales were under $200 million total.

So you look at that and you start to draw a line of what is possible here, there's a lot possible. And we're starting off with a great profile of a product that is, we believe, going to be the leading product for a long time, but we're not going to be satisfied with that, and we will extend our leadership pipeline. So great quarter, great year-to-date, great future ahead.

Great. That is a great story. Now, Bill, every time I talk to you, it's clear you're very results focused. And even from the beginning, you're like, look, we're looking at this group of specialty launches, this rate of adoption. And you always refer even intra-quarter, we're tracking ahead of our expectations. I want to think more high level.

And you look at Rezdiffra as this foundational therapy for the treatment of MASH. You're previously at Sanofi. Even now, when we think about DUPIXENT in atopic dermatitis, I think the biologic penetration rate is around 10%. You're already at kind of 10% with your identified -- the early identified group for MASH. When you think about -- forget other products entering and your combo approach too, where does that adoption rate go as we enter into the next decade with just Rezdiffra, right? How much does a "foundational therapy" for MASH get in terms of penetration in that initial kind of 315,000 -- 350,000 patients in the U.S.

Yes. So maybe just to frame it a little bit as well. So when we launched, we started with what's the diagnosed patient population within the United States. So looking at claims databases, et cetera, it was 1.5 million patients. F2, F3, which is our indication, was about 525,000. Now we weren't going to be calling on everybody because some of these patients could be in primary care or specialties that we're not focusing on. When you looked at the 14,000 prescribers that were our targets, that took that 525,000 down to 315-- 315,000. So just to make sure that it's framed. Now that's diagnosed. That's not prevalent. So that's an important concept here.

So when you say how far can we get into the 315,000 with the 315,000 we're around 10% now. Lots of room to growth. We've built our future kind of forecast, if you will, based upon penetration into just the 315,000, and we see a path to peak just in that 315,000. Other side of the story, diagnosis rate is about 10% right now. So there's lots of room for growth here. That's why there's -- you hear differences in what other companies that have recently launched Novo, are talking about a prevalent population of 22 million people in the United States.

We're talking about 315,000. So there's a lot more of growth that can happen just with diagnosis and treatment. Now how far do we get into that? Well, I mean, look, I think that you always have to look to other markets to see where do you land from a peak penetration. Something like Hep C, although there's a single test and you have a cure, you're only about 50% treated of the population. Things like multiple sclerosis, it's more up in the 80% to 90% and then you're down with cirrhosis down in the 25% range.

IBD, 35%, 40%. So there's somewhere in that range that you end up with total penetration into approachable patients that you're going to end up as a category. Does this end more in the 50%, 65? Or does it end more in the 35%? I think we still have a little bit more time to figure that out. I think the 315,000 will be well penetrated.

Right. Understood.

And I think we'll be -- going really back to your question, the profile really matters and having a once-a-day pill that's effective safe, well tolerated. I always refer to it as kind of the Holy Grail profile. That's always what we've been looking for in the industry. Give me a once-a-day pill, give me something that's easy. It's easy to remember, easy to take. That puts us in an outstanding place to be the foundational therapy.

I can't help, but also notice any of the ranges you just gave would imply Rezdiffra is not, let's say, a -- it would imply Rezdiffra is a $5 billion to $10 billion opportunity within MASH, maybe even higher, obviously, the TAM can grow. Like how do you kind of conceptually see about this product?

Because I think -- again, I think on the investor side, we're focused on next year's numbers and the near term. You have until 2045 if you have IP. So you have time to really develop this market. And I think you certainly look at it from a long-term perspective. So what -- when you think about the long-term opportunity here for Rezdiffra, what's the right ballpark? Frame that out for me.

Yes. That's something that I'm not going to frame out specifically for you today.

But would you agree with the range-- okay actually...

I would agree that's what consensus says that peak is in the -- anywhere from $5 billion to $10 billion. When I say I agree, I'm only saying factually, that's what consensus say. I'm not saying I agree with where that is. I think there's still a lot of unknowns here about how the market unfolds. But any way that you cut it, there is a path to this being a big product.

And I think the thing that this industry, companies that are successful, you can point to the fact that they have a big product that they've built around. Now a lot of companies have pipelines looking for a big product. We have a big product now. We can thoughtfully and strategically build a pipeline, which is going to sustain our leadership in MASH.

We're the leader right now. Our goal is to be a leader for decades. And you are going to need a pipeline for that. We've got a great asset to start with those. So yes, can it be a big product? It's going to be a big product.

Understood. Now you mentioned something on the Q3 call, and I actually gave a similar question to Lilly at breakfast this morning. What's the incentive to look at -- now that obesity is getting recognized in of itself as a disease, and I think that's quite important. I think when you looked at Lilly and Novo, the entire strategy in terms of penetrating into the Medicare population "through the backdoor" was through getting the secondary indications on label.

Now with the TrumpRx announcement, you're able to get adoption because of obesity in of itself. You made a comment on the Q3 call that kind of stood out to me. You said, Novo's launched. We think they're out there, and -- but we're not actually seeing them that much. That was really surprising to me. What are you actually seeing on the ground level as semaglutide entered the market? And what do you think about the endocrinologists versus the hepatologists, where do you feel like you're actually seeing their sales force on the ground level?

Yes. I mean, look, you have to remember that is a product with multiple indications, multiple audiences, so multiple priorities within the company. We have a single asset in a single indication, and it makes our focus just very clear from the beginning. They've got a lot of -- they've got a lot that they have to cover. So when we launched the next day we were out, we were ready to go from a communication with the community, engaging with the community and really educating about Rezdiffra.

For them, it's part of a mass of things that they have. So I think that perhaps I can't speak for what Novo has done, how they've done it, but their presence wasn't immediate that we could see. I think that they are -- we just came off AASLD, great meeting for us. I kind of use the term, we were ubiquitous at the meeting. We are everywhere from a data perspective, from a presence perspective and so forth. But -- and Novo was certainly there with Wegovy. But it just -- it's not like a product that is dedicated for a single disease with a company focused on that single disease and so you really can't compare.

It's more of a primary care product in general, where it's trying to be to a lot of different people where we're very focused on the specialists. So we've seen them, I think, that they're 3 months plus 4 months after approval now. But yes, I mean, our focus has stayed with the HEPs GIs. You're, I think, referring to a little bit of endocrinology that we've started to expand into. And that was really a pull rather than a push from us.

We had a lot of endocrinologists calling saying, we're seeing a lot of MASH patients, and we would like to learn more about Rezdiffra. So we've gone out and built a separate team to focus on that. It ends up being a couple of thousand physicians that are the real targets. And remember, all these patients that are in an endocrinologist office have probably been exposed to a GLP-1. So clearly, a GLP-1 by itself wasn't providing the solution for them and they're still MASH patients.

Understood. I think the point you mentioned is quite important. You look at the market and then you adopt a sales force and a team around that, not kind of vice versa, you have a primary care product like sema and then you're adopting it to MASH. You've talked about a specialty launch and white glove service.

And that also, I think, is starting to have an impact from what we're hearing on adherence rates and adoption. In fact, we did a KOL call where we're seeing adoption rates in some of these specialty hepatology clinics as high as 80%, at least on a rolling basis right now. So where -- first of all, where is the adherence for your team right now? How come it may have been actually surprisingly gone out of the gate. What are you doing in terms of white glove service? And then also talk to us about how you're getting patients both into the funnel, but actually getting a script in 2025, where it may have also been medical exemption.

Okay. There's a lot there. So please follow up with specific questions about it. I want to make sure that I get everything. I mean, look, it's not as easy as writing a prescription and having it filled in the United States, right? You have prior authorizations that are required everywhere along the way, you can be losing patients just from prescription to actually fulfillment. So when I talk about white glove service, it's important that we educate practices, educate the patients, provide support for the patients in a number of different ways, utilize technology, et cetera, to try to get people on. And that's specialty -- you do that with all specialty products.

And if you're -- if you can do it well, it obviously makes a big difference. If you've got a product for millions and millions of people, it's harder to do that, right? It's just you don't have the ability to have each patient be the focus of what you're trying to do and have teams built around it. So that's a big differentiation. And the reason it matters is these are specialist writing products. They don't like having to navigate the system to have a patient get on drug.

They have to build staff. That means they're -- it's taking away from patient care. So the easier that we can make it for them, the better it is. Now the profile is already easy with a once-a-day pill. Can we match that with the service that we provide so that you write a prescription and you're certain that someone is going to help you get that patient to ultimately being on therapy. And that's what we've worked on, and we think that we've done a really good job with it.

Now from a persistence perspective, what we've talked about is Rezdiffra. Now we have patients coming through the 1-year mark, but it's still not a huge sample because of the uptake curve that you have. And we say that it's like a well-tolerated oral and benchmarks for well-tolerated orals are about 60% to 70% being on product after a year. Now there have been reports and even at AASLD posters in the real world that showed that persistency at 12 months was closer to 90% for some people. So how do you reconcile the two? Well, we've got good visibility to patients across all channels, et cetera. And that's where we say well-tolerated oral.

It's very encouraging, though, to see that in whether it be an institution that published data or other real-world evidence that suggested it can be higher so that we will put our services towards how do we try to move to an even better persistency. But the reason that we have very strong persistency, I think, goes back to the profile of the product. We are hearing that physicians are reporting that patients are tolerating the product, that they're seeing results as early as 6 months, certainly by 12 months and that the thing that -- you never know how a product is going to behave in the real world.

One of the more surprising things, even though we had data on quality of life that was -- has been published post the trial, physicians, some are saying patients just come and report feeling better. And it's not like they can point to their liver and say, "my liver is feeling better". Whether it's hope or something, they know that they're doing something for a very serious disease and perhaps that's leading to it. It's something we'll explore some more, but it's actually really encouraging when you hear that.

By the way, I think we talked about this last night. You guys have talked about impacts on mitochondrial function and kind of turnover there. So it would be interesting. Mardi, I want to get you involved in this because you start thinking about next year, the moving parts and then also potentially adherence improving. And it's a bit complicated. Let's start off with just on the gross to net side.

The joke, I think, with some investors is, well, Madrigal is telling me that we're going to get into the high 30s on gross to net. I'll believe it when I see it because I was expecting this 500 basis point decline in the back half of '25 and I'm pretty sure my gross to net just improved quarter-over-quarter. Now it doesn't seem like you're joking for next year. So talk to me about the -- why there was maybe error bars in terms of gross to net in 2025, but there's more certainty in 2026. And then how should we model it in terms of the time course of the year?

Going forward, yes. Thanks, Akash. Yes. No, we weren't joking about gross to net. There's a lot of estimates and projection on gross to net, particularly in the early parts of the launch. And in 2025, what we had said is that we're beginning our contracting with commercial payers in the April time frame. But what actually happened, which -- so we were forecasting a step-up in gross to net throughout the year in between that 20% to 30% range.

But what happened was most of the payers actually waited for a market event or the approval of Novo in MASH. So it's just the impact of the commercial contracting was later than we anticipated. No way to know that in front of that. So it's just -- we were trying to estimate. But now the contracting is real. So we have contracts and starting in the fourth quarter of 2025 and then moving into 2026. So we've been very clear about what we believe the impact is in 2026, starting on January 1, 2026.

So we believe the gross to net impact will be in the high 30s throughout the year in 2026. And that really -- the step-up, our 0 to contract, remember, we've taken a very disciplined approach to gross to net and haven't contracted to date, right? So we're seeing the effect now. But that 0 to contracting in 2026, we will feel that throughout the whole year.

Now that's on the commercial side. We also have a little bit of the Medicare contracting in 2026 as well. And you'll see that step up a little bit more, not the 0 to contracting step, but a little bit more into 2027 to take care of the Medicare contracting. So that's -- yes, there's a little more reality to the gross to net going forward. So we believe it's high 30s in 2026.

And just remind us the split in terms of Medicare, Medicaid, commercial. And also just now we have like Medicare Part D reform. I know that was a big topic. So talk about maybe the change on gross to net from Q4 to Q1 on the Medicare population because I know that's a little tricky.

It's a little tricky, but less tricky than it used to be with the reform. There's a $2,000 cap for patients of what they pay. So we will always see a little bit of impact in Q1. In fact, we'll always have the Q1 effect more broadly besides the Medicare Part D. So when we go into Q1, just an aside, you see revenues kind of flat to down typically with the analogs, and we're going to be right in that boat, too, because not only will we have the contracting impact, but we'll also have the Q1 effect.

But anyway, more to your question on the business mix, split is 50% to 55% commercial payers and then 30% to 35% Medicare and the rest of Medicaid and government. And they're staying pretty steady.

And maybe just lastly, just before David -- I have F4C question for you. One of the things that you've heard throughout 2025, and Tina gets this all the time is, are there inventory changes? The patient adds are consistent. I can't understand why revenues are growing where they are. And I think help us understand the number you give in patient adds are net. And you think about what's maybe not getting captured. And I mean, maybe to what Bill just alluded to, how do we improve our conversion rate and our adherence. Talk to me about what happened in 2025 and then going into next year.

Yes. So inventory stays pretty steady. We say 2 to 4 weeks. And every quarter, we pretty much have said the same thing that they've been demand quarters. So inventory stays pretty steady. With the patient adds, we give a very conservative number.

So last quarter, we said over 29,500 patients that we've had and steadily adding patients, but those are net patients, meaning at the end of the quarter, how many patients are on Rezdiffra. So throughout the quarter, because we have adherence rates that we've discussed, you may see patients come on, you may see patients come off, but we give you the net number. So there is some fluctuations throughout the quarter that need to be accounted for.

And maybe just when we say conservative, it is the most conservative way to do it. You have some companies that just say we added X new patients, but we take the net, as Mardi said. So it's a leaky bucket, right? You're adding to the top and then you have people discontinuing. That's why persistence becomes so important. So you have to work both sides of it, drive more into the top of the funnel and preserve as many in that are appropriate to stay in.

Understood. Maybe, Bill, when you think about -- you got to 10,000 prescribers, you're expanding that over time. And then you said we're at a point where we're up a nice base. Now it's more about having maybe a doctor, that wrote the first 2 or 3 prescriptions Rezdiffra, now suddenly accelerating. When you think about accelerating net patient adds, it doesn't seem like that's what you're talking about for 2026.

You've consistently said steady growth. So when we do think about an acceleration on patient adds, especially now that you've gotten access secured at parity or better with Wegovy, when does that patient acceleration story start to play? Is it a 2027, 2028 -- longer-term effect? Or could that actually happen next year?

Well, I mean, look, I think steadily adding is what we've been doing. As you have a bigger base of patients, that's part of the bucket can get leakier over time, right? If you have more patients that have been on over a year, you have more that are leaving, so you've got to work that much harder to add to the top.

So that really does get you to this steadily adding. I mean our intent is, and it has been from the beginning, we talked about wiring the system. The reason why we talked about wiring the system was so that you could take the patient flow through for many years. And it's -- you have to wire the system structurally. That's from a reimbursement perspective typically. But on each practice, so of the 10,000 prescribers, there's a bunch of them that have one prescription.

So they are just at the beginning of their journey, and we've got to help them. So when you get everything turned on and fully running, so to speak, and when that is, that can take a long time. But there's enough prescribers, there's enough patients and there's enough adoption on an individual prescriber basis that we see this long term steadily adding patients, regardless of whether there's a competitor around or not. Do you want to do the F4C?

Yes. So I'll phrase it this way. Very hard for us to do diligence on this because we don't know what liver events are in that population. I think Gilead data back in 2018, but this is really difficult to model. There's been a noticeable change in confidence from your team about your likelihood of hitting in this population.

And it seems like it's not just the trial design. It seems like it's your open-label data. What did you present at AASLD that we really should be paying attention to? And what should you think about patient enrollment and how you design this trial that might be different from your peers?

Yes, really important question, Akash. So the ongoing study is MAESTRO Outcomes. So that's our F4C study that's designed as a prototypical outcomes trial. So it runs until a particular number of events is accrued and then you unblind the data and you evaluate the effect size and determine whether or not you're successful. So it runs to a certain number of events.

So the reason why we've gotten more confident about F4C is the open-label experience that we showed first at EASL in 122 patients, open-label trials, no placebo control, but where we saw very significant decreases in liver stiffness measurements as well as a variety of other biomarkers that are correlated to outcomes in patients with F4C.

And you're right, I mean, the historical data gives us a range of event accrual in the 5% to 10% per year annually. And what we're seeing in MAESTRO Outcomes is an accrual events that we would have expected. So we expect the trial to deliver in 2027. And our confidence is really based on that open-label experience and all of the positive effects we see in that population.

And maybe just the last point on this. Talk to me about the importance of baseline platelet counts in terms of event rates and also your confidence in the study.

Yes, right. So that's the key differentiator here, right? So events accrue in patients with F4C when they're kind of right on the cusp of decompensation. And the way you evaluate that in patients with cirrhosis is a combination of liver stiffness measurement and platelet count.

Those are the Baveno criteria. So patients with low platelets between 70,000 and 100,000, for example, have splenomegaly usually. And so those are the folks who sequester place platelets in their spleen and therefore, have low peripheral platelet counts. So those are the people who have portal hypertension and are more likely to decompensate. Our study enrolls patients with platelet counts between 70,000 and 100,000, whereas the other F4C studies that are ongoing right now limit to 100,000 platelets and greater. So it's a different population that's less severe. Ours is kind of more severe.

Understood. With that, we'll call it. And we have a cardiometabolic panel coming up. So we'll -- thanks so much, everyone. Appreciate it.

Good morning, and thank you for standing by. Welcome to the Madrigal Pharmaceuticals Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded.

I'd now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

Thanks, Marvin. Good morning, everyone, and thank you for joining us to discuss Madrigal's third quarter 2025 earnings. We issued a press release this morning and posted a slide deck that accompanies this webcast on the Investor Relations section of our website. On the call with me today is Bill Sibold, Chief Executive Officer; Dave Soergel, Chief Medical Officer; and Mardi Dier, Chief Financial Officer. They will provide prepared remarks, and then we'll take your questions.

Please note on Slide 2, we will be making certain forward-looking statements today. We refer you to our SEC filings for a discussion of the risks that may cause actual results to differ from the forward-looking statements.

With that, I will now turn the call over to Bill.

Thanks, Tina. Good morning, and thanks for joining us. We have delivered another excellent quarter as we continue to execute on our strategic priorities. We're maximizing the value of Rezdiffra and building our pipeline, which sets us up for continued value creation. Rezdiffra is quickly becoming one of the most successful specialty launches in the industry with sales now annualizing at greater than $1 billion in only its sixth quarter of launch.

More than 29,500 patients are being treated with Rezdiffra and more than 10,000 healthcare providers have prescribed it. We've made great progress on our 2026 payer contracting strategy for first-line access. Our new U.S. Rezdiffra patent was listed in the orange book. It extends Rezdiffra's value into 2045. And we're expanding globally with our launch in Germany following European approval.

On the pipeline front, we're advancing our Phase III MAESTRO-NASH outcomes trial in F4c, where we could once again be first to market this time for compensated MASH cirrhosis. We look forward to sharing more from our F4c open-label cohort at AASLD later this week. We're executing on our Rezdiffra combination strategy, where we completed the transaction of our new oral GLP-1, and we continue to evaluate opportunities to add additional assets to our pipeline through business development.

So today, we'll focus on our 2 key priorities, our top line and our pipeline. Starting with Rezdiffra's third quarter performance on Slide 4, we delivered net sales of $287 million, up 35% quarter-over-quarter. The significant demand we're generating is driven by the positive response to Rezdiffra from prescribers and patients and the strong execution by our team.

As shown on Slide 5, we ended the third quarter with more than 29,500 patients on Rezdiffra, up from more than 23,000 patients at the end of the second quarter. This number represents patients actively on therapy accounting for any discontinuations. As we've discussed since the beginning of our launch, we've been steadily adding patients each quarter, and we expect that to continue going forward.

It's incredibly gratifying to see Rezdiffra already making a meaningful difference for so many patients. But what's most exciting is that we've only just begun. More than 90% of our 315,000 target population remains untreated. That leaves tremendous room for growth driven by Rezdiffra's highly differentiated profile and our clear first-mover advantage.

Moving to Slide 6 and our continued progress on physician penetration. As I've said before, building a strong prescriber base early in the launch is one of the best indicators of long-term success. That's why the pace of adoption has been so encouraging. This quarter, we hit another launch milestone, more than 10,000 prescribers. This breadth achieved this quickly is at the high end of the benchmarks we track, and it reflects the work we've done to wire the system.

Looking ahead, our focus will increasingly shift to depth. This metric is already tracking at the high end of best-in-class launches. We're also continuing to enhance our targeting. While our efforts have mostly centered on hepatologists and gastroenterologists, we're seeing growing interest from endocrinologists. These are specialists with a deep expertise in metabolic health who are interested in Rezdiffra's mechanism and its potential in MASH. In response, we've expanded our field team to further target this group. These efforts substantially started in the fourth quarter.

On Slide 7, let's take a look at how we see the MASH market evolving. We see clear parallels between MASH and other large chronic disease markets like IBD, rheumatoid arthritis and psoriasis. Each of these evolved into multibillion-dollar categories through continuous innovation driven by new mechanisms and tailored treatment regimens that address diverse patient needs. We believe MASH will follow that same path.

Today, this market is still in its early stages, essentially where those categories were 2 decades ago, but with one important difference, Rezdiffra's profile. As an effective liver-directed well-tolerated oral medicine, it far surpasses that of the other first-to-market products in those diseases. We believe this gives us a durable advantage and a unique opportunity to lead and shape the market's evolution, first with Rezdiffra and next with the pipeline we are building.

So, we welcome new entrants to this evolving market. Wegovy's recent approval in MASH adds momentum to a market that's just starting to take shape. As seen on Slide 8, our focus remains on the 315,000 diagnosed patients with moderate to advanced fibrosis. Novo is targeting a much larger population, which will raise awareness and drive more screening, diagnosis and treatment.

As a reminder, GLP-1s aren't new. They have been available for over a decade and are already used to treat the metabolic comorbidities that oftentimes accompany MASH. As we've reported, about 50% of Rezdiffra patients are currently on or have previously been on a GLP-1. We also understand the limitations of GLP-1 monotherapy in MASH. Few patients reach and sustain a therapeutic dose and tolerability remains a real challenge.

Real-world data show that 70% of obese patients discontinue within 1 year. New data to be presented at AASLD show similar discontinuation rates in patients with MASLD. So, looking ahead, we expect Rezdiffra to benefit in 2 ways: as first-line therapy in a market that will expand and from the high real-world discontinuation rates of GLP-1s. We're in a strong position and are confident in Rezdiffra's growth potential going forward.

As we've already mentioned, it's Rezdiffra's best-in-class profile that gives us such strong confidence as summarized on Slide 9. It is a liver-directed medicine that delivers consistent efficacy across F2/F3 fibrosis, BMI, genetic makeup in patient subtypes, including those with type 2 diabetes who comprise approximately 60% of the MASH population. It's also simple to use. It's a once-daily, well-tolerated pill with no titration requirements. That simplicity matters to providers, to patients and ultimately to adherence. We continue to see strong adherence consistent with other well-tolerated oral therapies.

The seriousness of MASH and Rezdiffra's compelling profile continue to resonate with payers. Our objective is to provide first-line access to patients, preserving treatment choice for patients and providers, and we're pleased to share an update on Slide 10. We're making great progress with our payer negotiations for 2026, which to date have resulted in contracts for broad first-line access, no step edit requirements and improvements in utilization management criteria that are better aligned with clinical practice.

Overall, the dialogue has been collaborative and productive and discussions are progressing really well. Payers understand the seriousness of the disease, the unique clinical value of Rezdiffra and the importance of access and choice for patients and providers. We've already achieved favorable outcomes with several national payers, while continuing constructive dialogue with others. We're encouraged by the progress and expect contracts to be finalized by the end of the year, covering the vast majority of commercial lives.

Gross to net management remains a core component of our strategy and guides how we approach payer contracting. We started contracting in April of this year. And as we've said, it wasn't everywhere and wasn't all at once. In fact, through the third quarter, contracting had a minimal impact on gross to net, reflecting our disciplined approach.

Now that we expect to have payer contracts finalized in the fourth quarter for either an immediate or a January 1 implementation, we expect the fourth quarter gross to net to be at the midpoint of the 20% to 30% range we had previously discussed.

Starting in the first quarter and continuing throughout 2026, we expect our gross to net impact to be in the high 30% range, which is consistent with other innovative multibillion-dollar specialty medicines. So objectively, we're in a great position. We are executing on one of the most successful specialty launches in the industry with less than 10% of our target market treated, the growth opportunity ahead is substantial.

We have taken a thoughtful approach to contracting, which provides for outstanding patient access and durable long-term growth. In short, this strategy paves our path to peak sales. Beyond the U.S., we are expanding access to Rezdiffra as shown on Slide 11. We're taking a focused country-by-country approach in Europe and launched in Germany at the end of September.

Just like in the U.S., the team is wiring the system for a first-in-disease launch. This requires educating physicians on the risks of MASH and the urgency to treat. We are also driving change in clinical practice to develop processes for patient identification, diagnosis and use of noninvasive tests. This work happens practice by practice to help develop the infrastructure for sustained adoption. The team is off to a great start, and we anticipate our efforts will start to make an impact in 2026.

Now I'll turn it to Dave to discuss the second pillar of our strategy, expanding our pipeline to extend our leadership and build long-term value. Dave?

Thanks, Bill. It's an incredibly exciting time to be at Madrigal. Over the past 6 months, I've had the opportunity to work closely with this exceptional team. And the more I dug into our programs, the more energized I've become about what we're building. We're not just advancing a pipeline, we're laying the foundation to transform how MASH is treated.

As shown on Slide 12, we already have a robust clinical program for Rezdiffra. Our Phase III MAESTRO-NASH outcomes trial in compensated NASH cirrhosis or F4c, is expected to read out in 2027. Positive results could make Rezdiffra the first approved therapy for F4c and support full approval in F2/F3. Our ongoing Phase III MAESTRO-NASH trial in F2/F3 MASH is expected to read out in 2028 and would also support full FDA approval.

Beyond Rezdiffra, we're building a pipeline through our business development efforts. To date, we've added an oral GLP-1 now called MGL-2086, which we intend to develop in combination with resmetirom to deliver a best-in-disease, well-tolerated oral combination. As we think about how to build our pipeline further, we're looking for mechanisms that fit scientifically, strategically and commercially, those with complementary biology and combination potential.

Continued success in treating patients will come from combining mechanisms and tailoring treatment regimens to specific risk factors, much like what we've seen in other chronic complex diseases. With Rezdiffra's patent protection into 2045, we can be thoughtful and disciplined and build the right kind of pipeline that will define the future of MASH care.

The combination of our oral GLP-1 and THR beta agonist is a great example of this approach to building the pipeline. For MAESTRO-NASH, we know that even a modest amount of weight loss enhances resmetirom's efficacy. So unlike incretin monotherapies that strive for double-digit weight loss, we've seen that as little as 5% weight loss can enhance Rezdiffra's efficacy in MASH.

This will allow us to dose escalate the MGL-2086 component of the combination with the goal of optimizing both efficacy and tolerability in a once-daily oral pill. It is also important to note that with the combination, patients would be on an effective dose of resmetirom on day 1 as the MGL-2086 dose is being adjusted in contrast to injectable incretin monotherapies that require a lengthy titration period.

On Slide 13, we see how these mechanisms could work well together. GLP-1 works from the outside in, improving systemic metabolism, insulin sensitivity and weight loss. Rezdiffra works from the inside out, reversing hypothyroidism in the liver, restoring mitochondrial function and increasing fat processing through beta oxidation. The combined mechanisms lead to lower levels of inflammation and inhibition of stellate cell activation and downstream fibrosis. By combining these complementary mechanisms, we expect to see greater reductions in both liver fat and fibrosis. We plan to start a Phase I trial for MGL-2086 in the first half of next year.

Next, let's move to our Phase III MAESTRO-NASH outcomes trial in compensated MASH cirrhosis or F4c on Slide 14. People living with F4c MASH today have no effective treatment options that prevent progression of their disease to decompensated cirrhosis. Our 2-year open-label extension data presented at EASL earlier this year demonstrates sustained efficacy of Rezdiffra in this population and supports our confidence in the ongoing MAESTRO-NASH outcomes trial.

Knee liver stiffness decreased by 6.7 kilopascals at 2 years, a statistically significant reduction from baseline. More than half the patients achieved at least a 25% reduction in liver stiffness, a level tied to improved outcomes. And 65% of patients with clinically significant portal hypertension or CSPH, at baseline moved to a lower risk category by year 2.

CSPH is a key driver of the most severe outcomes of cirrhosis and marks the tipping point into decompensated disease. Improvement in CSPH suggests Rezdiffra could delay or even prevent life-threatening complications. We'll be presenting new data from this 2-year open-label F4c cohort at AASLD later this week, as noted on Slide 15.

And what I'm really excited about is that this data shows promising efficacy in even the most advanced F4c patients who are on the cusp of progressing to liver decompensation. This is the first time any data will be shown in such a severe population, which gives us additional confidence in our outcomes trial. Also at AASLD from our Phase III MAESTRO NAFLD-1 trial, we'll highlight how F2/F3 patients progress when Rezdiffra treatment is interrupted, demonstrating the importance of staying on therapy.

We'll also share multiple posters that examine early real-world experience with Rezdiffra and the burden of uncontrolled MASH across health systems. In total, MASH will have 15 abstracts, including 2 oral presentations and 2 posters of distinction.

With that, I'll hand over to Mardi.

Yes. Thank you, Dave. Turning to Slide 16 and a summary of our financials. Third quarter 2025 net sales totaled $287.3 million, up 35% from the second quarter of 2025. This was another strong demand quarter. As Bill mentioned, we're making great progress with our contracting discussions for continued broad first-line access to Rezdiffra in 2026, with no step-through requirements and improved utilization management criteria.

As a reminder, there are several components to gross to net, including commercial rebates, government rebates, co-pay assistance costs and channel distribution costs. Across the board, the team has done an exceptional job managing these dynamics, and we're seeing minimal impact through the third quarter of this year.

As certain contracts take effect in the fourth quarter, we anticipate a step-up in the gross to net impact to the midpoint of our 20% to 30% range, resulting in a full year average near the low end of that range, a great outcome for 2025.

Looking ahead to 2026, we expect the full effect of our payer agreements to begin January 1, bringing our total gross to net impact into the high 30% range, consistent with specialty medicine analogs. As noted, we are confident that we will continue to steadily add Rezdiffra patients, and we expect robust net sales growth for Rezdiffra in 2026 and beyond.

R&D expenses for the third quarter of 2025 were $174 million compared to $68.7 million in the third quarter of 2024. The increase was primarily due to the one-time $117 million expense associated with the global licensing agreement for MGL-2086. This was expensed in the third quarter and will impact fourth quarter cash flows.

SG&A expenses for the third quarter of 2025 were $209.1 million compared to $107.6 million in the third quarter of 2024. The increase primarily reflects the annualization of higher commercial investment to support the Rezdiffra launch.

Looking ahead, we expect fourth quarter R&D expenses to be modestly higher than third quarter levels, excluding the third quarter one-time expense for our oral GLP-1 and expect fourth quarter SG&A expenses to continue to increase quarter-over-quarter as we continue to support the launch of Rezdiffra.

Turning to our balance sheet. We ended the third quarter of 2025 with $1.1 billion in cash, cash equivalents, restricted cash and marketable securities. The increase reflects the $350 million initial term loan under our senior secured credit facility, a portion of which was used to repay all outstanding obligations under the Hercules loan facility, offset by the funding of operations.

With this strong cash position, we continue to be well resourced to support the ongoing launch of Rezdiffra and advance multiple pipeline programs. With that, on Slide 17, let me briefly recap our third quarter progress where we remain focused on our top line and our pipeline. We are driving strong performance in our sixth quarter of our launch with Rezdiffra now annualizing over $1 billion in net sales and expect continued strong growth in 2026 and beyond.

More than 29,500 patients are on therapy, and we expect to continue to steadily add patients going forward. We've reached another major launch milestone with greater than 10,000 prescribers. Our payer discussions are progressing very well, and we expect continued strong access for patients in 2026, and we're working to further expand our pipeline to solidify our leadership in F2 to F4c MASH.

And now I'll turn the call back over to Tina and open up the Q&A session.

Thanks, Mardi. Let's move into the Q&A portion of the call. Marvin, please go ahead and provide instructions for the Q&A session.

Our first question comes from the line of Yasmeen Rahimi of Piper Sandler.

Congrats to a great quarter. Team, with AASLD right around the corner, would love to learn sort of how this 2-year data, especially the NIT-driven responses could further derisk MAESTRO-NASH outcome, which is reading out in 2028? And also maybe also some color on what visibility do you guys get in terms of that it's on track based on event rates to come in at that time point? And I'll jump back in the queue.

Yes. Thanks for the call. And look, we're really, really excited about AASLD. I'll tell you, we're just coming off of the ACG meeting in Phoenix. I guess it was just last week. And what a difference a year makes when you think about the progress that we've made with the gastroenterologists. I mean a year ago, people didn't know about NITs. They were still putting their pathways in place. And now we're seeing that Rezdiffra has really moved to being the foundational therapy standard of care with that audience and a lot of positive feedback.

So, we're headed into the Super Bowl this week with AASLD. We're really excited about it. We have a lot going on. But maybe, Dave, do you want to provide a little bit of context around some of the data and so forth?

Yes. I think your question, yes, had to do with the data that we're reading out at AASLD and how it reflects on MAESTRO outcomes. Is that correct?

That's correct.

Okay. Great. Yes. So, as we presented at EASL and as we showed in the presentation, we have an open-label cohort of individuals from the MAESTRO NAFLD study where we've been able to show sustained efficacy of Rezdiffra in this cohort, both on liver stiffness and on a variety of biomarkers, including LFTs and so forth. So, at AASLD, we're looking more deeply into this cohort and examining some of the more severe patients within this cohort and understanding whether Rezdiffra's efficacy in this group as well. And what we see is really exciting and gives us a lot of confidence about, about MAESTRO outcomes.

And so the reason why this is important is because when you think about MAESTRO outcomes and you think about this open-label cohort, the patient populations are really very similar. So, the baseline characteristics are similar. And so when we see efficacy in the open-label group, it gives us evidence and a lot of confidence that the outcomes trial will end up being positive as well.

Our next question comes from the line of Jay Olson of Oppenheimer.

Congrats on the quarter. Can you talk about the pros and cons of combining resmetirom with MGL-2086 versus some other oral GLP-1 like orforglipron? And then any other potential mechanisms beyond GLP-1 that might be synergistic with resmetirom?

Jay, thanks for the question. Just for clarification as well, our oral GLP-1 is an orforglipron derivative. So, we were very, very specific in the criteria that we had for selecting a oral GLP-1, and we wanted to be in an orforglipron derivative. But maybe, Dave, do you want to talk a little bit about it and a little bit about the future mechanisms and just how we're thinking in general about potential combinations?

Yes. So, I mean first, the GLP-1 mechanism and why one would combine resmetirom with the GLP-1. So, what we know from MAESTRO-NASH from the 52-week experience in MAESTRO-NASH is just a little bit of weight loss enhances resmetirom's efficacy. So, we see better antifibrotic effects with resmetirom in people who lose as little as 5% of their body weight. So, it's a natural sort of extension of that to consider combining with the GLP-1 that can produce a bit of weight loss, have some metabolic benefits and enhance resmetirom's efficacy in a fixed-dose combination.

So that's the rationale for combining with the GLP-1. But your point is a great one. There are other mechanisms that may also be attractive to combine resmetirom with. And there are multiple pathways in this very complex disease of MASH that lead to hepatic steatosis, fibrosis and ultimately poor outcomes in patients. So, as we've said before, we're looking at pretty much every mechanism of action to potentially combine with resmetirom where there's a good scientific rationale for it and where we believe that the combined efficacy is going to be an advantage to patients. So, we're casting the net wide, and we're looking for the best opportunities.

Yes, Jay, and just also a little context as well here. With the IP to 2045, that gives us time to really thoughtfully think about building this pipeline. We're not in a rush just to try to fix a problem of a pending patent cliff. We can thoughtfully think about building a franchise that's durable because starting with the 2045 IP for Rezdiffra. Thanks for the question.

Our next question comes from the line of Michael DiFiore of Evercore ISI.

Congrats on the continued progress. Just 2 quick one for me. In light of the recent M&A in the space, I would love to get your thoughts on Madrigal's future competitive positioning and market access once large pharma inevitably bundles their MASH assets, if approved. And the second question I have is just any thoughts on Sagimet's plans for testing denifanstat with Rezdiffra. I realize your priority is focusing on the combination therapy with your own GLP-1, but would Madrigal be open in principle to combinations such as this? Or is this just too early at this stage?

Yes, Mike, thanks for the question. Let me start with that one. We don't know what Sagimet is doing. We haven't spoken with them, don't know any of the plans. So, is it a combination that makes sense? Maybe, but we're not involved in that and don't really know. So that's all I'll comment at the moment there.

Look, the recent M&A really for us is a validation of the MASH market. Ultimately, what we see happening in these markets, and we talked about IBD, RA and psoriasis. You would have -- and we're a little bit like that where you have a company shows that there is a market and an attractive opportunity. And then the investment in innovation, science and ultimately more products really accelerates. And that's what we think is going to happen in MASH. We're leading the way in this case.

Now the recent moves of the big pharma to get an FGF21, we think validates that. And we're excited about it because that means there's going to be more attention on the space, which ultimately leads to greater diagnosis, treatment. And with the profile that we have with Rezdiffra, we think it ultimately favors us. So we -- in creating our market access strategy, we've taken a very long-term approach, just like we did from day 1 when we announced approval of the product, you almost have to start with 2045 where Rezdiffra's IP goes out to, that we're going to have F4c, that we're going to have a pipeline and there's going to be other products that enter. So, everything has been thoughtfully designed with that end in mind to preserve the most value for not only Rezdiffra, but for our franchise of the future. So, we feel we're in a really strong place.

Now Dave just talked a little bit about F4c. We're really excited about the data that we've seen, and we're very confident about hitting in our MAESTRO-NASH outcome study, which we are reading out in 2027. Of course, we've got to read out. It's an event-driven study, and we'll anticipate those results.

We think that from a competitive perspective, our data is going to be the leading data in that space with that population so that we will be the leaders not only in F2/F3, but from F2 to F4c. So all of this is thought out. We're thinking of things in the long term. We think of that how we build a pipeline, how we evolve gross to net and how we interact with the community. Let me just be crystal clear.

Our goal is to not be leaders in the short term, but to have long-term leadership in MASH.

Our next question comes from the line of Akash Tewari of Jefferies.

So, we're hearing feedback that Rezdiffra's adherence rate is meaningfully higher than the kind of 40% to 60% your team cited for drugs in this category, more in the order of 80% plus. Can you confirm that? And then also, how should we think about Rezdiffra net pricing? I know you've talked about -- we've heard GLP-1 players talk about mid-single-digit net price declines annually. Is that a similar dynamic for Rezdiffra? Or should we see stable net pricing after you get into like the high 30s range on gross to net next year?

Thanks for the question, Akash. Look, first of all, on the adherence, I think what we've said about -- at the 1-year rate, well-tolerated orals are in that 60% to 70% range. So that doesn't -- that hasn't changed our view. And we are -- the data that we have today, remember, there's still only so many patients that are getting to that 1-year mark that we are similar to well-tolerated orals. And like you, we've heard very positive feedback from a lot of clinicians that are treating patients and seeing very strong adherence. And I think that again goes back to the profile of the product. So, all encouraging and as we would expect.

To the question of gross to net and what we would expect to see. Look, I think that you looking ahead to the future, gross to net only goes in one direction, right? And the difference after '26, you don't have this 0 to contracting effect. After '26, we'll have contracting right now, we're going to be bidding on 2027 Medicare. We have some Medicare in place for '26. So, you expect to see some future decline in gross to net because that's just what happens. But again, we had this effect of 0 to contracting in -- as we enter 2026.

So, look, we think that we are in a really great place. Our strategy is for broad first-line access, no step edit and improved utilization management criteria. That was the goal. That's what we're achieving. So, we're really, really excited about where we are entering 2026. In fact, I would say, in my experience, I really believe that this is as good as you could possibly be for a product of this stature at this point in launch. In fact, I would go as far as to say, I think this is the best market access from a criteria perspective and everything that I've seen with any of the launches that I've done.

Our next question comes from the line of Thomas Smith of Leerink Partners.

And let me add my congrats on the really strong quarter. Another one on coverage. I appreciate the high-level comments here on the payer contracting efforts, I think everyone saw the recent Aetna formulary coverage decision. Could you just comment specifically on that and the potential impact of noncovered decisions? And then any comments on kind of where you are with respect to the contracting for commercial lives next year? Is there an explicit goal or expectation for what percent of commercial lives you think will continue to have that broad first-line access to Rezdiffra for 2026?

Yes. Thanks, Tom. Maybe I'll start there. Look, we're expecting broad commercial live coverage. So, we feel really good about that at this point. As it relates to Aetna, let me start with Rezdiffra wasn't on formulary in 2025, and it's not again in 2026. So that is really no change. So, we don't expect to see a meaningful impact here. It will be available through prior authorization or medical exception. And so that's not a practical change in access for patients. And our Madrigal patient support team are really experts at helping patients navigate and helping practices navigate through that. So yes, no change, no effect.

Our next question comes from the line of Andrea Newkirk of Goldman Sachs.

Bill, recognizing it's still early here, but just curious if you've observed any signs of Novo's marketing campaign broadening the pool of addressable patients to date. Do you still believe that 315,000 patients is the accurate number for Rezdiffra's target population? And then, Mardi, if I can just ask quickly, just in the context of the successful launch that you've seen to date, how are you thinking about the path to profitability from here?

Thanks, Andrea. Well, look, this is the first quarter where we've had Novo in the market. And you saw that we continue to steadily add patients. And I think by all measures, had an absolutely outstanding quarter. So, 3 months in, we haven't really seen too much. We know that they seem to be educating PCPs and trying to drive diagnosis, which we think is ultimately great for patients in the market. We're starting to hear some practices say, and this is very anecdotal at this point that they are reporting more referrals that are coming in. But it's a little early to quantify if there is additional growth to the market as we get through the end of the year and be able to do a more proper analysis, we'll come back with any real growth rates.

Now the 315,000, great question. Look, let's just remind people, the 315,000 are the diagnosed patients in the 14,000 prescribers that we're targeting. And we know that we have patients that are on Rezdiffra now that weren't part of that 315 that they were newly diagnosed. And we also know that the diagnosis rate at the moment remains quite low. Originally, we saw it as around 10% diagnosis rate. So, we know that there are more prevalent patients out there. And I think what we will see and what we're excited about is having somebody else that is going to help us carry the load of increasing diagnosis. It's not something that's been a focus of ours. It still remains not a focus of ours. But when we have somebody else who needs to have literally millions of patients that are diagnosed in order to serve their needs, that ultimately helps us. That's why we said in the script, it's also -- it's the 315,000 that we win from and the increased diagnosis and ultimately people that can't tolerate or have an effect with a new competitor that will ultimately come to us.

So, a little early to quantify. We'll do so in later quarters, but we see some signs that we're starting to see additional growth. Novo, we just don't really have a lot of information, haven't seen them too much out there. But clearly, they are there and starting to drive a little bit more diagnosis.

Great. Yes, go ahead. Yes. Thanks, Andrea, for the question on the path to profitability. And our focus right now and into 2026 is really focused on driving our top line and then building out our pipeline, which Dave described. That's going to be our focus going forward. It doesn't mean profitability won't happen at some point. But again, we're focused on the top line and building out R&D and continuing to support our efforts in building out the MASH -- our leadership in MASH.

Our next question comes from the line of Andy Chen of Wolfe Research.

It's Emma on for Andy. Rezdiffra uptake has been strong so far, and you mentioned the strong 60% to 70% adherence rate. I know it's still very early days in the launch, but I guess how do these dynamics inform your view of the drug's chronic use potential and just steady-state demand over the long term?

Thanks, Emma. Look, I think that this is where we win. We have a profile once-a-day pill that is well tolerated and the feedback, some have reported extremely high adherence rates. So, we feel extremely well positioned for this to be a long-term chronic therapy. It's really one of the exciting parts of Rezdiffra. And as I said, versus other categories, which have become really multibillion over $20 billion categories, the profiles, especially the profiles initially of products to launch were kind of hairy, right? They just -- they weren't orals. They had tolerability issues, sometimes safety issues.

We feel that we have got -- and you've heard me refer to it in the past as what I believe is kind of like a holy grail profile. That's something which is where we win in this category, frankly. At the end of the day, profiles matter. This is a product which is really designed for chronic use. So, we feel really good.

Can I just add on one thing. The other part that also, of course, matters is sustained efficacy. And I think what we're showing at AASLD gives us a lot of confidence in the sustained efficacy of resmetirom in this group. And in fact, what we show in the F2/F3 population is that if you come off of therapy, you have reversion of your disease, which is, of course, a big challenge. So, I think those 2 facets, both the efficacy, sustained efficacy and the sustained tolerability are 2 big.

Our next question comes from the line of Ritu Baral of TD Cowen.

I wanted to ask, well, 1.5 questions. One on this growth forward given the 2 strategies, Bill, that you outlined, one, sales force expansion and marketing to the endocrinologists. But at the same time, you mentioned that you want depth in the going-forward marketing strategy. So, can you help us reconcile the 2 and what sort of metrics and current targets for depth that you hope to report and how GLP-1s figure into all this? And this is a very quick e-mail that we've been getting from clients. We're having a problem sort of stretching the patient numbers with the revenue numbers. Are there any elements to either stocking or Europe or some other aspect of those numbers that need to be addressed in our models to reconcile everything reported this morning?

Yes. For the quarter, nothing to do with inventory, nothing to do with Europe. I mean, just to be crystal clear, U.S. demand is the driver of the success for the quarter. So let me take that one. Next, let's talk about growth going forward and your question about how do we manage expansion, if you will, of into endocrinology and death otherwise.

We can walk and chew gum at the same time, so to speak. We have to continue to be building for the future as well. Remember, we've got 20 years ahead of us from an IP perspective. So, we are going to look for where to currently focus and where do we want to explore. And that's exactly what we're doing here. We've already from -- and you know we've been always looking at a basket of products in the last 10 years that have been great specialty launches, and we look at each metric, and we're kind of at or near the top on a number of those. Breadth, we're doing great as well.

But you need to continue to grow your depth of prescribing, right? I mean we have 10,000-plus prescribers. Now your next step, and I consider that like a checkmark, now you go deeper and deeper into that set of core physicians, which are gastroenterologists and hepatologists. Now the pursuit now of the endocrinologists, that we had endocrinologists targeted as part of the 14,000. But what we've seen is additional endocrinologists have come forward and said, "you know what, I'm still seeing a lot of MASH and would like to learn more about Rezdiffra.

So, there was enough interest that we said, let's put a dedicated team on that opportunity. Just to give you a sense, it's not a huge number. It's a couple of thousand physicians that we add to the target list. And that can be handled with a very concentrated dedicated effort. And we'll see how that evolves. And one of the interesting things is, as you talk about GLP-1s, if GLP-1s were truly solving MASH, there wouldn't be a need in this prescriber group that uses GLP-1s predominantly that another product would be needed. So, I think that, that is a very good sign for us as well that GLP-1s aren't the solution. They've been on the market for over 10 years. You've got a specialty that uses them, and they still are looking for Rezdiffra.

So, we're putting an effort there. So, this is a little bit of a -- we have our present focus, which is driving breadth, and we are starting with these endocrinologists, which you have to wind the clock back to even before '24 because they're not familiar with NITs. They're not -- they don't have their system wired at all. So that's going to take a very long time for them to really get catch up to where gastroenterologists and hepatologists are now. But we think it's worth effort, resource, and we think there's promise for the future there as well.

Our next question comes from the line of Jon Wolleben with Citizens.

Bill, wondering if you could comment a little bit as we look down the road at expected GLP price erosion how that might affect access and payer decisions for Rezdiffra?

Thanks, Jon. Well, look, I think if you -- I'll take you back to the comments that we made on the call that in January, we would expect to be in the high 30% range. That is in the presence of a rapidly, I would say, eroding gross to net of GLP-1s. So, we believe that we are well positioned for the future. As I said, gross to net only goes in one direction. But I think you have to start with the problem that we're trying to solve. This is an expensive disease. I think if you take a look at ICER recently commented again on products that they have recently reviewed. And we're seeing that once again, Rezdiffra is highlighted as a product that is looked at as cost effective and really is offsetting the very costly disease without intervention.

So, I think that you have to start with the problem you're trying to solve. This is an expensive disease. I think payers understand that. Certainly, the system is starting to understand that. So, you're always going to have products that have different prices within the category. And we've seen even with the categories that I mentioned today, IBD, RA and psoriasis, there's huge variability. But there's a need for more than one medication. There's a need for multiple mechanisms, and you ultimately have to try to solve the problem in front. And we, through an independent third party, ICER, have proven twice now about the cost effectiveness of Rezdiffra.

Our next question comes from the line of Prakhar Agrawal of Cantor Fitzgerald.

And congrats on another strong quarter. So, appreciate the clarity on the gross to net for 4Q and 2026. But maybe if you can talk about your expectations for 4Q growth and comfort around 2026 consensus estimates with this set? And maybe second question, what percentage of Rezdiffra volume currently is Medicare? And how are you thinking about the implications of semaglutide IRA pricing decision on the long-term prospects for that channel?

Great. So let me just give you -- I'll give you the quick answer on what the distribution is. We're anticipating it's 50% to 55% commercial, 30% to 35% Medicare and then about 10% Medicaid and other. We're still -- remember, we're at less than 10% penetration here. So that's going to evolve a little bit in time, but we're staying in that range at the moment.

Maybe, Mardi, do you want to talk about Q4?

Yes, definitely. Hi, Prakhar, thanks for the question. So, listen, we've had a great 2025 so far in fourth quarter. We expect that to continue in terms of steadily adding patients, really sort of the driver for our business. We don't see any change there. We did have a very high base in our revenue coming into third quarter that was very much patient demand. We did have some favorability in gross to net, which we discussed in a high demand quarter from an inventory standpoint. So, we're in a very strong position.

But going into fourth quarter, working off that base and taking into effect that there's fewer selling days in the fourth quarter in general, and that as we discussed, the gross to net begins to -- we'll see the commercial rebating starting to take effect in the fourth quarter. So, we'll be at the midpoint of that 20% to 30% range. All that put together, we think we'll see high single-digit growth quarter-over-quarter going into the fourth quarter, but still a very strong quarter. And of course, we're on over $1 billion run rate in revenue. So fantastic.

And Prakhar, maybe just one comment there as well. I think more and more the measure turns to patients and patients being treated. And as you can see, we are doing really, really great in our steadily adding patients, and that's something that is going to, we've said, remain to be steadily adding in the future and feel really, really great. Again, where we are, it's less than 10% penetration. There's a ton of patients that are out there that still need to be treated, and that represents a great opportunity for us.

Yes. And I just wanted to come back to 2026 that Prakhar asked about, too. So again, everything Bill just said for the steadily adding patients, we see that going into 2026 as well. So steadily adding patients, we anticipate and we said in the script, robust net sales growth in 2026. But if you think about -- just think about the phasing, right? So we're going to have the impact of the gross to net starting in January right at the beginning of the year. So you're going to see that step up from the contracting and we will be in the high 30s. And of course, we always have the Q1 effect on top of that, right?

So, in terms of the phasing, you'll see some of that play through in 2026. But net-net, we see robust growth going into 2026.

Our next question comes from the line of Srikripa Devarakonda of Truist Securities.

Congratulations on the quarter. I was wondering if you can talk a little bit on the expected cadence for EU launch and how that -- when we think about 2026, that might add to the growth? I know it takes time for EU launches. And also the SG&A that was reported, does that include sales force in Europe? Or should we be thinking about slight increase in SG&A over the next several months to reflect sales force on the ground in Europe?

Mardi, do you want to take that first?

Yes, I'll definitely answer the SG&A question first, and we can talk about just EU launch in general. So, SG&A for building out Germany, right? So that where we're only launching there as of right now is included in our SG&A expenses. And you'll continue to see that included in SG&A. But as we said, when we move into country by country, we're going to be very disciplined, and we look at a 2 to 3-year positive contribution metric for each country. So, the spend will increase with Europe. But again, we're mindful with each country.

And then just the EU launch, let's just talk about that. I'll start and Bill, I don't know if you want to add? But we did start launching in the third quarter, but really, we were just testing the channel. So just de minimis amount of revenue for 2025, we believe, and where we said we can start that -- we can start seeing some impact in 2026. So, I would say the robust sales growth that we're talking about 2026 is by far and predominantly the U.S. sales growth and adding patients, which we've discussed. And Europe, again, it's going to play out. It is slow. We have to build the system. We have to wire the system in countries in Europe. It will just be Germany next year. So it will be -- it will add, but not a significant amount.

Yes. I think that's really, really great comment. It is Germany right now, and we're really excited. I mean, first of all, we've hired an outstanding team there. The team is great. The feedback that we're getting is that MASH is -- needs to be treated. It's prevalent, very similar to the U.S. in that sense, but it takes time, right? You got to wire the system. It's practice by practice, it's prescriber by prescriber. And we're taking all the steps in the usual next countries to look at as well. We've started putting teams in place that are evaluating the market and our launch strategy there. And again, just absolutely high-quality team that's in place. So, we feel really good about the long-term prospects, but we also know that there's a lot of wiring to do, and we've got to navigate the reimbursement process in each country, which takes some time, but we got a great team to do that.

Our next question comes from the line of Kaveri Pohlman of Clear Street.

Congrats on the progress. Are there any systemic differences or challenges in insurance approval rates for Rezdiffra depending on whether the prescription comes from an endocrinologist versus a hepatologist or gastroenterologist. And maybe just like a connected question to that. Besides the clinical data that you showed on Slide 14, is there any real-world evidence that you have collected or showing that Rezdiffra can prevent or delay the progression of F4 cirrhosis perhaps based on the feedback from its current use by physicians? In other words, is there like any evidence leading to the preference of Rezdiffra or GLP-1s in F2/ F3 MASH patient?

Yes. Thanks for the question. Maybe starting there. We're seeing more and more real-world evidence that's coming to life. Some of it will be presented at AASLD this week or this week into next week. And we expect as more patients start to hit the 1-year mark and beyond that there will be more. Anecdotally, we're hearing really, really great feedback. When you launch a product, you never know what's going to happen in the real world. You have your clinical data and you're not sure what real-world experience is going to be. So far, the anecdotal feedback has been extremely strong by prescribers, and they're seeing effects on, obviously, liver fat. They're seeing effects on fibrosis and all the other myriad of other things, LSTs, lipids, et cetera. So, we're really excited about the real-world evidence reading out. And we've done work with claims databases, et cetera. So more to come, but early indicators are extremely strong. So really excited about that.

To your first question, it really is payer to payer about, this is this utilization management criteria, who can prescribe, et cetera. And for the most part, it is -- it refers to specialists. And in the specialists, that can be hepatologists and gastroenterologists. And then in some cases, it may or may not name endocrinologists. So, it's usually either a requirement to be prescribed by a specialist or in consultation with a specialist. But again, that's something which really varies on a plan-by-plan basis.

We don't see that as a any kind of a hindrance now. And remember, our focus is the specialists. We believe Rezdiffra should be prescribed by these specialists. Now in time, that may change, but we think that this is a very serious disease. It is a very serious disease, and we want to have the specialists get experience with Rezdiffra in treating these patients before it would ever extend beyond that. And that's crystal clear we make that crystal clear with payers as well. That is our intent.

Great. Thanks, Bill. And thank you all for your time and interest today. This now concludes our call. A replay of this webcast will be available on our website in approximately 2 hours. Thanks for joining us.

Ladies and gentlemen, thank you for your participation in today's conference. You may now disconnect. Have a wonderful day.

Good morning, everyone. Very excited to be kicking off the Morgan Stanley Healthcare Conference with the Madrigal team this morning. Thank you guys for joining me. I'm joined by CEO, Bill Sibold; CFO, Mardi Dier; and CMO, Dave Soergel. So thank you guys for joining us early on a Monday. We're very excited to be starting this conference in this way.

Before I dive in, I'm going to read a brief disclaimer. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

Okay. So let's get into the latest developments at Madrigal. Bill, let's start with you. The company has had significant progress since the beginning of this year, new IP, and EU approval, a new licensing agreement, you guys have been pretty busy. There's a lot happening. Can you give us the highlights and kind of summarize how this has been impactful for Madrigal?

Yes. Look, it was a fantastic quarter. It's been a fantastic year. As you said, lots going on. We've really created a stronger foundation and given ourselves a really bright future with a long runway. First of all, with our launch, again, we had a great quarter, exceeding expectations. And I think it was -- it just shows just the unmet need that is out there and how great a product Rezdiffra is and also how great a team we have. Big news, of course, with the IP going out to '45, we had EC approval. So Europe is our next destination, so to speak, we'll be starting in Germany. We did the deal, oral GLP-1, and we secured $500 million in financing to help us execute on all of this. So that sounds like it is progress over the course of a year, let alone a quarter. So we're really excited about what's happened so far.

Absolutely. You mentioned the launch of Rezdiffra, which is, of course, front and center for everybody and being the first to market, you're kind of paving the path in MASH. So can you talk a little bit -- I know you just put out your quarter a few weeks ago, how that has gone, what you've learned from that launch experience about the market you're looking to address?

Yes. Look, we had a $213 million quarter. What we do is we track our metrics against other great launches over the last 10 years. And we are meeting or exceeding each of the metrics that we track. It's the most objective way to look at the launch. And we can say without question, this is one of the best specialty launches in the last 10 years. So the metrics that we look at, a key metric is the breadth of prescribing. And we had a target of 14,000 prescribers as we went into the launch and a sub target of about 6,000. And we announced on the call that we had 80% of the 6,000 had written a prescription and 60% of the 14,000 had written a prescription. And that's really important because breadth of prescribing in a launch early on is a great predictor for future performance. You need to -- it's kind of simple in some ways, the math.

You need to have enough prescribers prescribing enough product to get you to your ultimate objective. And this is one where we really stand out in metrics versus other launches. The other thing that we have is -- and which is going to the patients, which is why the breadth is so important, over 23,000 patients on drug. Now that in itself is a big number, and we use a very conservative at a point estimate June 30, how many patients are on. So that's net of any discontinuations, et cetera. So on each of the metrics, the launch is going just really, really well. And we think that we're still just at the beginning of a 7% penetration into 315,000 patients. And we described this as multiple paths to victory, so to speak. We know that there's patients that are going to continue to be diagnosed. We know the opportunity is going to get bigger, and we're really just at the beginning.

So you mentioned a lot of the statistics supporting the launch and how great it has been. Anecdotally, what are doctors saying about their experience with Rezdiffra in the real world? How does that support what you've found on paper?

Yes, it does. A lot of times when a product launches, first of all, you never know how it's going to perform in the real world. You have your clinical trial data and then you try to project to say, what's it really going to be like? And in this case, what we're hearing is it's really overdelivering Rezdiffra efficacy. And I think it's part of -- for a number of reasons. First of all, it's a great drug, right? So profile, liver-directed, once-a-day pill, no dose titration, et cetera. And you have to be able to take a medication for it to be able to work. And what we're hearing instead of -- for a clinical trial where you have a regulatory composite endpoint, in the real world, you're looking at the metrics on a quarterly, semiannual, annual basis, liver stiffness, liver fat, lipids, et cetera.

And with the broad effect that Rezdiffra has, that allows the physicians to -- and prescribers, I should say, to see the effect across a number of things. Now it's still early. We're just over a year. We're 5 quarters into launch. And so there's just a cohort of patients coming through now that have been on for a year. What's probably the most exciting that we're hearing is that even at the 6-month mark and then at the 12-month mark, physicians are seeing an effect on liver stiffness. And that is a really strong indicator for us. And we've heard of people that have reversed 1 and even 2 steps back in their fibrosis stage. And that's ultimately what we're trying to do. If you can take somebody from an F3 to an F1 or an F2 or hold an F3 and prevent them from going to F4c, that's something which is really, really important.

So we're hearing -- and I think what we're hearing is the product has been well tolerated. People find the titration schedule, which there isn't one, makes it really easy. And so I think this is one of those times where the surprise is it's just performing a lot better than what expectations initially were based on, as I told you, a composite endpoint in the clinical trial.

Terrific. What else can you share on patient adherence with the drug? And maybe also talk about reauthorizations, how are physicians approaching that for the patients that you've mentioned are reaching 12 months?

Yes. Look, it's still a little bit early, but we're seeing really strong adherence. We would expect this to be like a well-tolerated oral. People ultimately are going to stay on a drug or not for 2 reasons. One, can they tolerate it and were tolerated? And two, is there an effect? And because we're seeing good efficacy in the real world, really strong efficacy and it's so tolerable, we're seeing that adherence rates look really, really strong at this point, which is always, again, reassuring. You're not sure how it's going to perform. Some people have said that it's an asymptomatic disease. So maybe patients won't want to stay on it or they won't know. We're not seeing that at all. I think that we're hearing that patients are incredibly interested in doing something about this very serious disease.

Once the prescriber explains to them the serious nature shows them in various liver models and so forth, there seems to be a high interest in taking the product and staying on it. So adherence, we expect to be like a well-tolerated oral. As far as reauthorization, nothing different with Rezdiffra than any other product. Usually, you have to go through a reauthorization at the 12-month mark. And that's not -- hasn't been an issue. They seem to be criteria such as physician attestation or showing improvement on one of the metrics such as stiffness, fat, LFTs, et cetera. So we are seeing that. So we don't consider that to be an issue.

Okay. You mentioned obviously extending the IP for Rezdiffra. Can you talk a little bit about is that -- how significant that is for the franchise?

Yes. Look, as I listed a bunch of things that happened leading up to the quarter. And the single most important accomplishment was the IP. And I would put that above everything else that we've done for the simple reason that, that creates a foundation for us for a very long time frame to build Rezdiffra to really to build Madrigal. And the way we're thinking about now how do we want to do business development. Strategically, what do we add next through business development, we can take a longer view, for instance, even with the oral GLP-1. It's a preclinical asset, but we can afford to be picky and get the product, the asset that we want because we have that long runway with Rezdiffra. And that is -- it's a really, really important patent. And maybe just to spend a minute on it. This is something that was really not obvious. It was an unexpected finding from our Phase III clinical trials.

So this is a -- from claims in the label that we have, our commercial threshold dosing regimen. And it was an unexpected finding. Typically -- well, in our Phase II, we had nothing -- no prior art that would suggest that. We had no results that were prior art that would suggest that we would see this result. And in our Phase III protocol as well. So what happened was you had 2 cohorts of patients at different doses that based upon weight, ultimately had a better outcome for safety and for efficacy. And that was really unexpected. And this is for us, as I said, it just creates such a great foundation. And it's a strong patent, and we are really, really proud of the team's work to get this. So again, if you ask me, that is the big piece of news that gives us confidence in the long term of the product and also the foundation for the company.

Congratulations on that.

Thank you.

All right. I'm going to get Dave and Mardi involved. Another high unmet need and value driver for Madrigal is this potential F4 population. Dave, can you talk about the data you presented at EASL recently and your outcomes trial and then kind of how you see Madrigal potentially competing against other, particularly FGF21s that are going to be pursuing that patient subset?

Yes. Happy to. Maybe, Bill, do you want to talk about the population and some of those details first, and then I can go into the data.

Yes, sure. Look, first of all, you say that us competing against FGF21s, I think it's the other way around. We are years ahead. We're going to have tens of thousands of patients that have been on F2, F3. We're really excited about F4c. It's about 245,000 diagnosed patients in the United States. That's sizable, and we would expect that we will be able to be a smaller number of patients than F2, F3, but certainly higher unmet need even. So we would expect higher penetration. So it's an opportunity to potentially double the opportunity for Rezdiffra. So I think that we are in a really strong position based on what Dave will tell you about the data, we're setting up really nicely to really be in this F2 to F4c range.

Yes. So right. So with respect to the data we showed, so at EASL, we shared 122-patient open-label experience from the MAESTRO-NAFLD study, which is one of our earlier Phase II/III studies. And in that population, we showed very important changes in liver stiffness, improvements in liver enzymes and other biomarkers, for example, MRE and other things in the study. And that data set in its totality gives us a lot of confidence in our ongoing Phase III MAESTRO Outcome study. So the trial that will open up that indication for us on the label will be the MAESTRO Outcomes study.

So translating that open-label experience to MAESTRO Outcomes is really the critical thing. And there are a couple of things that are important to take away from the open-label experience. First of all, the baseline characteristics of the population that we presented is very similar to the baseline population characteristics from MAESTRO Outcomes. So the data that we saw from that open-label experience gives us a lot of confidence that we should see a beneficial pharmacologic effect in the outcomes trial.

The second thing is obviously the data itself, so showing important changes in liver stiffness. For example, we showed a reduction of 6.7 kilopascals in VCTE in this population, which translates to over a 25% improvement compared to baseline. And it's really that 25% improvement that puts patients into a lower risk category in the cirrhosis population.

So the other way of looking at those changes is in the F4c population, you actually have a further sub-stratification you can do on the basis of clinically significant portal hypertension. So the risk of having the really bad outcome from cirrhosis, which is developing congestion in the portal system and then having all the bad outcomes related to that. And so the way that's measured typically is using certain criteria to determine whether or not somebody is at high risk for having CSPH. So at baseline, 35% of patients in that open-label experience were predicted to have clinically significant portal hypertension. They already had it. And in those patients, we saw that 2/3 of them were able to improve their status after 2 years of therapy. So they became either low risk or modest risk of having CSPH as opposed to definitely having it. It's really that kind of aggregate look at the data and then comparing it to what we expect coming out of MAESTRO Outcomes that gives us a lot of confidence in that population.

Perfect. So of course, as the first kind of mover in this space, you're right, other people are going to have to compete with you guys. So now we have sema recently approved in MASH. Can you comment on kind of the label thoughts on potential step edits and payer insights you can share on that approval?

Yes. First on the label, no surprises there. That's what we had expected based upon the Phase III data. From a payer perspective, look, it's -- let me first of all, provide the market dynamics and then let me get to the payer. This is a good thing for patients. It's a good thing for the market evolution to have another product there. I mean, as we said, we're 7% penetrated into a population of 315,000. Growth occurs, penetration increases as you have more companies that are out there educating and talking. So talking to prescribers and to the community overall.

So we think that what it does is it leads to greater diagnosis, greater treatment and ultimately, an opportunity, we think, for Rezdiffra. So I've seen that in every specialty area as you add more, it just helps. So then it comes down a little bit more to profiles. And as I said before, we've got a once-a-day pill, no dose titration. We work in all subgroups, so type 2 diabetes, et cetera. We were consistent across the board, and we are getting this growing real-world evidence. All those things matter. So you're now going to have a competitor that is out there, as I said, increasing awareness. And I think this is where Rezdiffra will really stand out.

Now 2 things. One is we know that the way Novo has talked about this opportunity is millions and millions of patients with F2 and F3 in the United States, and we've been talking about 315,000. So they do need to have that top of the funnel expand dramatically in order to make it an interesting opportunity. Now there's the reality though that tolerability with GLP-1s is a challenge. So as you expand the funnel, if people try a GLP-1 and look, there are, I think, 10 million people on a GLP-1 last year or this year total. And if you have tolerability challenges, you'll be looking for the next product as well. So we feel extremely well positioned as they're driving the top of the funnel, if people start a GLP-1, Novo has reported that about 70%, 7-0 percent of patients discontinue within a year. That leads to a tremendous opportunity, many times greater than the 315,000.

Now a couple of other market dynamics here. Right now, about 50%, 5-0 percent of patients that are on Rezdiffra have been on a GLP-1 already. and 25% are with combo therapy. So they are on GLP-1 for another indication. They've had MASH so that Rezdiffra was prescribed. So we think that this dynamic is going to remain now. When you ask about kind of payers and step through, first of all, it's early. We're in discussions with payers now. 2026 gets resolved a little bit later this year. But it's not a simple thing to think about how you would implement a step edit here. So let's say you have a patient on tirzepatide who is -- for diabetes. Are you going to make that patient discontinue, move to Wegovy dose titrate and see how you do or if you have somebody else on Ozempic, et cetera.

So I think that -- and with so many people, as I said, that are already on one. So I think we're working closely with the payers. I think we've established good relationships, good partnerships. But we feel that regardless the opportunity gets more significant for us as you have somebody else who's driving this new diagnosis and awareness. Certainly, what we've said is that we're steadily adding patients. We showed that in the Q2 results. And we said that we believe that we will continue to steadily add patients through the launch of Novo this year.

Maybe just one more on this topic, which is just in terms of pricing dynamics and how do you see gross to net evolving with them now -- on market, with sema now on market?

Yes. Mardi, would you like to talk about gross to net?

I would love to talk about.

Over to you.

Thank you, [ Kelly ] and good morning. I mean, for all the reasons that Bill just discussed with sema coming on the market, we believe that everything is going as expected with competition, relationships with payers, et cetera, all flowing into our discussions with gross to net in the future. So it's something we're very focused on. We do look for the long term as well. So we look at competition, we look at time, but we also look at F4c and how we're going to evolve gross to net in the future. But right now, gross to net has been well within our expectations. We look at other specialty launches and where they are at this point in the launch, and we're following that right on top of other specialty launches for this point in our launch.

And also from a contracting perspective, which is one component of gross to net, we really started from a position of strength. So for the first year of our launch, we didn't commercially contract with payers, but we spent that time really developing our relationship with payers. And then we've also said that we started contracting this past April in the beginning of the second quarter. So we've just started the commercial contracting, and we'll see more of that in the second half of 2025 as gross to net continues to evolve. But the overarching theme here is it's all within our expectations. It's something that we focus on. And so far, everything is going as planned.

And especially now with the 2045 patent, we have to be thinking in terms of just the long term. And as we entered in market and launched, we -- gross to net was top of mind, right? I think it's really important. That's why we didn't contract initially. We didn't believe that was necessary. Now we've started and which is necessary, and it's something about being -- it's about being a good partner with the payers as well. But we're really looking at things through this lens of the long term -- what's the right thing for the long-term value of the company.

Okay. Thanks for that. Just running down the list of exciting developments, the EU approval came through recently. Maybe, Bill, you want to comment just on how the launch prep is going, anything you see playing out?

Yes. Really exciting. We become a global company. And we had, had a lot of questions initially of EU, why are you doing it? Why don't you find a partner? Well, I think the answer is simple is because we can do it, and we think we can do it better. And also, we want to preserve the value for ourselves. Every decision that we're making at the company, we're looking 3, 5, 10 years ahead. And when it came to a decision about would you commercialize in the EU, a year ago, 2 years ago, when we were focused on just trying to get ready for a U.S. launch, one could say, well, it was -- it's a big decision, and it's a real stretch of management time. And if we had just taken that view, we may have said, well, let's do some kind of deal and just worry about the U.S. But that wasn't the aspiration of the company to build truly what we believe will be the next leading specialty company.

So we said, no, let's double down. We will take on that responsibility, hire the right team. And in 3 years' time, we're going to look back and say that was a great decision because we didn't trade away the economics, trade away the value, trade away the control overall the company. So we fortunately have had a great U.S. launch, and we have learned a ton from the U.S. launch. Probably the biggest learning from the U.S. launch is get a great team. And so that's the way we started in Europe. So we put together the right leadership team of the region. We're starting with Germany, obviously, and have put together the leadership team, the whole field team, all the resource, et cetera. So it is a team that is ready to go, that's excited to go that has taken all the learnings from the U.S. and from all of their own backgrounds to be ready to launch in this back half of the year. So we're really, really excited about that.

And when you think about Europe, the EU, it's about 370,000 patients that are F2, F3 that are under the care of a specialist. So a pretty sizable opportunity, though you have to go to a country-by-country basis because we're not launching everywhere. We're going to only go to countries where it makes sense. And we have very rigid guidelines. We want to be in a positive contribution position in 2 to 3 years. So we have our criteria. We have a plan on how to get there, et cetera. Now of course, from a pricing perspective, we're very aware of the macro environment and take that into consideration. So as we start finishing off our launch prep here, that's obviously one of the components of it, and we'll report out on that as we get closer to officially launching outside of the U.S. in Germany to expand ourselves.

Okay. Great. I want to spend the last 5 minutes talking a little bit about your BD strategy. You've taken steps already to expand your pipeline. You brought in this oral GLP-1 from CSPC. So maybe, Dave, do you want to talk a little bit about why you decided on this mechanism, maybe some of the key differentiating attributes of this particular compound you went for?

Yes, yes, sure. Well, I mean, first of all, we've kind of scoured the landscape in MASH, kind of modality agnostic, target agnostic and really are looking for the best additions to our pipeline. And this molecule, which is currently SYH2086 from CSPC, kind of rose to the top in a couple of ways. The first is it's derisked from a target standpoint. So I already talked about GLP-1s. Obviously, GLP-1s have an effect on metabolism and can possibly affect the pathophysiology of MASH. So from a target standpoint, it was straightforward. From a chemical standpoint, it's an orforglipron backbone compound. So we already know that orforglipron has been in thousands of patients already. It's had a very good tolerability and safety profile thus far. And so from those 2 -- and then it was available and there was an interest in doing a partnership. So from those perspectives, it kind of rose to the top.

Now from a scientific standpoint, the great thing about resmetirom is that you only need a little bit of additional weight loss to really boost its efficacy. So what we showed from MAESTRO-NASH is that patients who lost about 5% greater than or equal to 5% of their body weight had an enhanced effect of resmetirom. Now interestingly -- so then you say yourself, okay, well, the GLP-1 that we have in our portfolio is then going to be differentiated on the basis of its combination with resmetirom, right? So you don't need to get to 15% weight loss, 20% weight loss, which is where the current battle, the titans is happening in weight loss therapy. You only need to get 5% weight loss. So if we can get instead of 20% of people to 20% weight loss -- to 5% weight loss, instead we can get 80% or 90% of people to 5% weight loss, we can enhance resmetirom's efficacy. So that's the approach there. And we continue to look for new opportunities for the pipeline.

Yes. I mean, look, I think that we've got this opportunity in front of us where we are at the very beginning of what we think is a very significant specialty market. And we're in a leadership position. Our goal is to maintain that leadership position. Now we've got -- again, we've got a long runway for Rezdiffra now out to 2045. So we have this opportunity to really thoughtfully build. So we're looking at next best mechanisms of action or something that could enhance in combination with Rezdiffra, the product profile, et cetera. So we're looking at everything. Anything that is MASH related, we're looking at it. And it's a matter of finding something that we think is just right and is something that we can get done as well. So expect more from us, but it's going to be something which is going to make sense in the context of everything else that we've said. And we have the financing runway. Mardi, maybe you want to comment on that to help us execute on the strategy.

That's right. So BD is very much a main pillar of our strategy moving forward, and we did complete an up to $500 million senior debt security this quarter as well with excellent business terms. And we did it from a position of strength. So it gave us ultimate flexibility to do more BD in the future. And what Dave and Bill just said, not only are we looking and actively looking, but also we can be very thoughtful since our IP runs to 2045 now. We can take our time that we find the right opportunity, we're in a great position to move forward and from a position of strength from a cash standpoint.

And what are the next steps on the GLP-1 Dave in terms of clinical plans? And do you need to do more preclinical work?

Yes. it's a preclinical asset. So we have a really great pharmacology package. So we know that the drug in preclinical species is an effective GLP-1 agonist. We're still waiting on the completion of some of the IND-enabling work and then expect to be in the first-in-human study first half of next year.

Okay. We'll stay tuned then.

Yes. Look, that's -- it's a really exciting program for us. We were really thoughtful about what we were looking for. And as Dave said, if we can just get that little bit of weight loss. So it allows us to kind of reframe the whole oral GLP-1, GLP-1, GGG, et cetera, race that's on. People are racing towards who can get that extra percent of weight loss and differentiate themselves and companies move kind of wildly based on that move. We're not interested in that. Our focus is how do we make a better MASH product. And therefore, when we went through the whole diligence process, it was something that, first of all, we made the decision pretty early on.

We wanted an orforglipron derivative, which leads you down one path. It had to have the ability to be amenable to a fixed-dose combination. That's the objective. So we are very, very thoughtful about it, and that's what we plan to do with the rest of the pipeline to expand it. So we feel like by being the leader with a foundational therapy like [indiscernible] we can think about things differently because we are in a white space, which is yet to be defined and the company defining it is Madrigal with Rezdiffra at the front of it. So it just allows us to really think towards leadership differently than anyone else in the space.

Well, congratulations on all the progress. There's a ton of great execution behind you. Maybe we'll just finish with a comment from Bill. What excites you sitting here today? What excites you the most looking forward for Madrigal?

I mean, look, the opportunity is just so exciting. 7% penetration. We're just getting started. We have a long runway out to 2045. We have a pipeline now. We have performance, which just indicates that we know how to launch. We have -- we've done, I think, an outstanding job. This is an objectively outstanding launch when we look at metrics from other product launches over the last 10 years. I mean we are well on our way to having a long-term leadership position in MASH. We are well on our way to building a mega blockbuster. We are well on our way to building a specialty company that is durable and I think really can compete with the best specialty companies in the industry over time.

Terrific. Thank you to the Madrigal team for joining us. Enjoy the rest of your conference.

Thank you very much.

Thank you

Good morning, everyone, and thank you for joining us. My name is Edward Nash. I'm 1 of the senior biotech analysts here at Canaccord Genuity. I'm pleased to have with us today the management team from Madrigal Pharmaceuticals. This is a name that I currently cover with a buy rating.

Joining us, we have Dave Soergel, Executive Vice President and Chief Medical Officer; Carole Huntsman, Executive Vice President and Chief Commercial Officer; and Tina Ventura, who is the Head of Investor Relations. Thank you all for joining us today. I really appreciate you taking the time.

So we see a number of major announcements of over Madrigal's -- that Madrigal's had over between the first quarter and second quarter of this year. Could you maybe provide a quick update on some of those important things that you guys hit over that time period? And then maybe talk about the Rezdiffra watch experience that you've seen to date?

Absolutely. So it's been a really busy and exciting past few months. We've accomplished a lot and each has been the deliberate execution of our strategy. So first, we have a new U.S. patent that extends out to February of 2045 that we're really excited about and building long term. We also have received CHMP opinion in June and we're expecting an EC decision later this month, we'll be launching in Germany in the near term. We also shared a compelling 2-year F4c data from our OLE study at EASL and that data gives us great confidence in the outcome study that will read out in 2027 in F4c. And then we in-licensed an oral GLP-1 most recently to combine with Rezdiffra. So really, really exciting news and milestones.

But also what really underlies and is critical to our success is the execution of the U.S. launch. We had earnings last week, and we announced $213 million in sales, so annualizing now over $800 million. And we reached a major milestone in that 80% of our top targets have begun to prescribe Rezdiffra and 60% of our total targets, so 14,000 have now prescribed Rezdiffra, and breadth and depth are really critical to the long-term success of a product.

We also announced more than 23,000 patients on therapy, and that's super exciting. We have steadily added patients and will continue to do so throughout 2025. And then -- that's at the end of the second quarter. And so we're really, really excited about how the launch is going and really excited about what's going forward, especially as you think about what we look at, which is -- we look at the best specialty launches over the last 10 years, and we're tracking aligned to those launches and all of the KPIs that we follow. So very exciting news that we shared last week.

So definitely on the metrics you just went through that shows that there's obviously it's been a very successful launch to date. Maybe could you give us a little bit of color on what have been some of the feedback from KOLs in treating patients because you guys have advantage of being the first approved drug in the mass space. So that would be great to kind of hear with what the docs are saying on a qualitative basis.

Absolutely. So a lot of times, when a new medicine is introduced, if their profile looks the best that it's ever going to look, it diminishes after entering the real world. We see really just the opposite with Rezdiffra. We are hearing very positive feedback from providers on all of the metrics that matter to patients. So liver stiffness, liver fat, liver enzymes, LDL, triglycerides, really, really looking very positive in their experience.

Recently, I was at a dinner in New York with about 25 hepatologists and they were sharing their experiences and talking about how Rezdiffra has really outperformed their expectations. Our label includes a composite endpoint, biopsy-driven endpoint, and people don't do that in the real world. They really follow patients with noninvasive tests. And so what they're seeing is that at a year, patients are improving 1 or 2 fibrosis stages at a year and really exceeding expectations. And that was really the consensus in the whole room of hepatologists that were there. And so that consistency of effect was really -- is really what our feedback is. And when you think about consistency, it's also consistency of effect across patient subtype. So for instance, patients with type 2 diabetes. These patients are at more risk of progression and often have more difficulty losing weight. And about 60% of patients with MASH, actually a type 2 diabetes, so this is a very important subtype and Rezdiffra is consistently effective regardless of whether you have type 2 diabetes or not, but also regardless of your fibrosis stage, of your BMI or even your genetic makeup, very consistent efficacy results, which gives prescribers a lot of confidence in prescribing and knowing that the patients will actually respond.

It's also very easy to prescribe and to take. So it has a very easy -- it's a once-daily, well-tolerated pill. And that kind of simplicity matters. It matters to prescribers. It also matters to patients. So we're really positioned well moving forward.

So the -- it's often with the case, you have to adjust as things happen on the fly and as much as you plan, especially for something as major and important as a new drug launch. How -- has the commercial strategy at all changed from what you initially had planned and have enacted in any way? Is there anything that's kind of you've learned on the fly and really kind of had to adjust for it?

Well, we hired a very, very experienced team at Madrigal, and we've taken a long-term view. This is really just the start of treating MASH in this category. It's going to be a very, very significant category over time. So we've really planned for the long term.

And for a first-in-disease launch, there's been a lot of work to do in terms of education, in terms of really ensuring that providers not only understand the disease, but also have access to noninvasive tests, and they also understand the product. So we've had a lot of wiring the system to do so to speak. And we have field teams that are working with providers, educating not only on the disease, but also on Rezdiffra. And then we've begun to educate patients as well, and we've initiated DTC to really activate patients to go into their provider and ask for Rezdiffra.

And so in the second year of launch, we're really continuing to execute the plan. We talked a little bit about breadth and depth and how important that is to your long-term success. And now that very positive experience with the product, the very positive real-world profile is leading to further focus on depth. Now we certainly watch what's happening very quickly, very closely. And we listen to what's happening in the field from the community, from providers and advocacy organizations, patients about what's happening in MASH, so we're constantly looking to course correct, minor course corrections, tweaks to our strategy. But for the most part, we're really executing our launch plan, and we're very confident that we'll continue to see additional success and growth in the quarters and years to come.

One of the things you mentioned at the top is the new patent that you guys had issued. Maybe you could talk a little bit to the importance of that patent and your confidence that it's something that's very defendable.

Absolutely. This patent, which was just listed last week is a game changer for our company. And it's a game changer in 2 ways. One, it really gives us the benefit of time and flexibility to be very thoughtful and deliberate about how we build our future pipeline. And two, it gives us another decade of protected sales, which really is, of course, a big value driver for the company.

The protection takes us out to February 4 and 2045, and it will be listed in the FDA orange book. It covers claims directed to commercial dosing of the product. And there's a clear and compelling finding that our internal clinical teams found related to dosing of the product. And basically, they found that different doses of Rezdiffra that were provided to different subgroups of cohorts of patients comprising different body weights really optimizes the efficacy and the safety of the product. And our teams did this -- had this finding and shared it with the FDA, and now it's part of our label. And it's really important to note that there was nothing in the public domain either from the study design or the publication of the study results itself from MAESTRO-NASH prior to filing the patent. So we feel really confident about the patent. It's also supported by precedent U.S. case law, and we're so confident in the patent that we're actually -- this has become our new base case in terms of planning moving forward.

The bottom line is that any potential generic competitor would take on our label. And then by definition, they would be infringing on our patents. So we feel really, really confident about this moving forward.

Thank you for that. So 1 of the other key milestones you mentioned at the top is the F4 compensated cirrhotic patient population. This is another real driver for the company. Could you talk a little bit, Dave, just about the data that was presented at EASL in your outcomes trial? And then how do you see Rezdiffra kind of competing with the FGF21s?

Sure. Yes. So maybe I'll comment on the data first, and I'll ask Carole to talk a little bit about the implications on the opportunity for Rezdiffra in the market.

So the data we presented at EASL a few months ago were from 122 patient cohort of individuals with compensated cirrhosis, so F4c, as you said. So these are folks on the far end of the spectrum of MASH and are really kind of at that tipping point towards decompensated cirrhosis. And that's where morbidity and mortality really escalates in this population. And -- so historically, 1 of the biggest issues in this population has been nothing has worked and there's been nothing that's really been effective to reverse their disease. So it's particularly exciting to see these data where we showed that resmetirom actually did have a beneficial impact on these patients.

So let me come to the last question you asked about FGF21s first. After we presented these data, 1 of the leading experts in the field came up and said, "Well, basically, these data look like in FGF21." And the only difference, and it's a crucial difference, is that resmetirom is a single day oral pill that's well tolerated. FGF21s are injectables, obviously. And secondly, they come along with certain side effects, especially bone mineral density which in a cirrhotic patient population are particularly challenging to manage. So these are folks who are already frail and fragile. So reducing bone mineral density in that population might be an even bigger issue. So we think the profile of resmetirom for F4c as a chronic therapy is much more compelling.

So let's talk about the data. So what we showed in this 122 patient cohort is that over a 2-year period, we're able to reduce liver stiffness. And liver stiffness is a measure of fibrosis. It's a pretty well-validated measure of fibrosis. So we'll be able to reverse their disease and show a beneficial effect on stiffness. In addition, beyond VCT liver stiffness measurements, we showed improvements in MR Elastography, which is another measure of liver fibrosis and other biomarkers that are consistent with protecting the liver like reduction in liver enzymes, for example, and other effects on lipids like Carole mentioned earlier.

So these are all very compelling findings, I think, from this open-label experience. And importantly, the cohort that we enrolled and presented in this study is very similar to the cohort of patients that we've enrolled in the Phase III outcomes trial that we're currently prosecuting, called MAESTRO OUTCOMES. So that gives us even more confidence that the MAESTRO OUTCOMES study could be positive. And that study, of course, we expect in 2027.

So on balance, I think very exciting data in this very difficult-to-treat patient population. We're years ahead of the competition in this space and in this indication with a really compelling profile.

And so just to add on to that, Dave. I mean, very exciting that we're going to be first to market in F4c, there's a huge unmet patient need there. And when we look at the population in the marketplace is about 245,000 patients with F4c. So a smaller patient population than what we target in F2, F3, which is 315,000. However, because they're much sicker, we would anticipate a deeper penetration and a more rapid uptake in this group. So essentially, this doubles our opportunity, the F4c indication doubles our opportunity in MASH. And since there's so much positive experience with Rezdiffra based on their -- the positive profile that we have, we really see providers being quite comfortable by the time these study results are released in prescribing an F2 through F4c period to really cement our leadership in MASH going forward.

I mean, obviously, you don't market it this way, but I assume you see much off-label usage already in the F4 patient population because there's nothing there that doctors are saying we're going to go ahead and put it there because -- we put it in there because we've seen in 2 other studies where you had patients who head up for, the drug is effective in that patient group.

Yes, certainly, there is some off-label use. We don't track that. So essentially, what we're seeing right now is about a 50-50 split between F2 and F3, and we're actually really dissuading the F4c patients from going on until we get the study results. But you're right, as the data is released and we get closer to that date, there's certainly -- because of the great unmet need, a temptation to go there.

So you recently announced the acquisition of an oral GLP-1 that you're looking to combine with Rezdiffra. Could you maybe discuss a little bit how you decided on this particular mechanism? And is oral delivery the most important attribute of the drug? Or are there other attributes that you guys saw that you think would be very amenable to use in combination with Rezdiffra.

Yes, yes, yes. Well, I mean, look, combining a GLP-1 with Rezdiffra, I think just makes a ton of sense just from a clinical standpoint from a scientific standpoint. So if you think about it, GLP-1 reduces the excess intake of calories, which is going to reduce liver steatosis. And we've seen that from the ESSENCE study and from other Phase II experiences with GLP-1s. So we know that the reduction of external caloric intake is going to improve leber steatosis, and combine that with resmetirom that works in the liver to improve the efficiency of burning liver fat. So those 2 combined mechanisms will reduce liver fat more effectively together. And that reduction of liver fat then reduces the stimulus for inflammation and fibrosis and scarring, which leads to mash and progression of disease. So we think combining the 2 mechanisms makes a lot of sense.

With respect to our data, the other piece of information we had as we were looking at potential opportunities, is from MAESTRO-NASH, we know that resmetirom works better if you get a little bit of weight loss. So if you get for example, greater than or equal to 5% weight loss, there's an improvement in the histologic outcome of patients treated with resmetirom. And we -- so we saw that in the MAESTRO-NASH study. We presented that at scientific conferences. The important thing to realize is that weight loss was actually not from the GLP-1 administration that it just happened during the trial and actually probably because resmetirom has a little bit of a weight loss effect itself, so we saw a bit of a shift in weight loss in the study.

So the way we look at the GLP-1 component of the combination therapy is a way to enhance resmetirom's efficacy. And we don't need to achieve annual weight loss of 20% to be successful. We just need to get patients above that 5% threshold to show better efficacy with resmetirom. So it's a different hurdle. The differentiation of the oral GLP-1 in our hands is a combination with resmetirom.

And we've been scouring the earth for business development opportunities for quite a while. And this particular opportunity was the 1 that sort of rose to the top the quickest, and we were able to execute. The molecule was licensed from CSPC Pharmaceuticals, which is a major producer of pharmaceuticals in China. Just an impressive organization. I had the opportunity to go visit there a couple of weeks ago. And this molecule is based on the orforglipron structure. So it's derisked from a chemical standpoint. And the preclinical pharmacology looks very similar to what you see with orforglipron in preclinical species, both rodents and [ mice].

So we still have some work to do to get the IND work completed. But once that's complete, we expect to enter the clinic in a prototypical first time in-human study SAD and MAD in the first half of 2026.

Does this have the potential to be co-formulated? Is that something you're going to be looking at?

Yes, that's something that we're looking at. Based on our evaluation of the molecule, it's a crystalline structure, it looks like it should be combinable in a fixed dose combination, but it doesn't have to be. It could be a loose combination as well. We would consider that. We haven't done any studies yet combining the 2 products either in vitro, in preclinical species or in humans. So we'll have to test that during the development process.

Right. So is there -- would this product with it, if approved, would this replace Rezdiffra or would there still be a place for Rezdiffra as a stand-alone?

I mean I think that's a great question, and we'll have to see how the studies turn out. But I think if we see an improvement in the efficacy as we think we'll see, then I think it will probably be used in place of Rezdiffra.

Yes. I mean I think it depends on the profile. I mean we'll see. I mean, it's a little early to make that definition right now.

So the prevailing thought is that GLP-1s, if approved for MASH, would be required as a step edit before using the therapies. As an advantage of the GLP-1s is that they are approved for multiple indications beyond MASH, so the comorbidity such as type 2 diabetes and obesity. Would the approval of Rezdiffra's GLP-1 combo potentially circumvent this potential step edit for your peers in your minds?

Well, you know, I think, as Dave said, it's -- we're probably years out from actually having the combination product of Rezdiffra and the oral GLP-1. So -- but we have certainly been asked about step edits in advance of the launch of semaglutide. So I think what's important to remember is that GLPs are not new, they've actually been on the market for more than 10 years. And while we're hearing, as we've discussed, very positive feedback about the profile of Rezdiffra, we also know that there are 10 million patients on GLPs in the U.S. and yet the incidence of MASH is increasing. So today, about 25% of the patients who are on Rezdiffra are also on a concomitant GLP and about 50% of the patients are already exposed to a GLP. And when you think about step edits, it's really a bit too early to tell, because we don't have an improved product yet, and we haven't seen the FDA-approved label. And we really need those 2 pieces to continue our dialogue with payers. I mean we're in discussion with payers now and partnering with them, but those 2 pieces are needed to really see where we land.

I think what's important for us is that we have planned for all scenarios. And no matter what scenario there is, it doesn't change our position on the opportunity for Rezdiffra. When you think about what the GLPs are looking for, they are looking to drive millions of patients into the top of the funnel. And because of the challenges that they have with persistence, ultimately, those patients will all end up on Rezdiffra.

And also, if you think about the 315,000 patients that we're targeting right now, we're only 7% penetrated into those patients that are already diagnosed and sitting in our providers' offices right now. And when you look at the math, you do the math with the patients that NOVA will drive into the top of the funnel and the discontinuation rates that is multiples of our 315,000 that we're targeting today.

So we're planning for all scenarios where we see huge success for us in all scenarios because, again, we're really at the beginning of the market development in MASH, and there'll be room for multiple MOAs there. So we're quite confident going forward.

So with the little time we have remaining, you guys are expecting EU approval this month for Rezdiffra. And I just want to see how the launch prep is going over in Europe.

Thank you for that. So as we discussed, CHMP opinion in June, we're expecting EC decision by the end of this month and plan to launch in Germany. We will take a country-by-country approach as it relates to launch in Europe, but we have committed to the launch in Germany. Now we've made a lot of progress in the launch in Germany. We've hired the leadership. The field teams are in place. We're continuing to do the disease education. We've identified who the prescribers are for MASH and we're continuing -- we're starting to wire the system there. And also, Rezdiffra is already noted as a first-line therapy in the EASL guidelines. So we're very well positioned for progress moving forward there.

Like the U.S., we took the approach of identifying patients who are already diagnosed with F2, F3 MASH and under the care of a liver specialist in Europe. And we estimate that number to be 370,000 patients across Europe who are diagnosed with F2, F3. And we will take the learnings from our U.S. launch, obviously, first in disease, it will take some time, but we have this real world experience from the U.S. that will transfer to our outstanding teams in Europe as they continue to move forward with the launch. So we will share more details as we decide where we go from Germany.

Fantastic. Well, it's definitely been a very strong launch in the U.S. So look forward to bringing the EU on board there and then further expansion into the F4 indications. So I really appreciate you taking the time to be here with us.

Excellent. Thank you so much.

Thank you.

Good morning, and thank you for standing by. Welcome to Madrigal Pharmaceuticals Second Quarter 2025 Earnings Conference Call.

[Operator Instructions]

As a reminder, today's conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

Thank you, Demi. Good morning, everyone, and thank you for joining us to discuss Madrigal's Second Quarter 2025 Earnings. We issued a press release this morning and posted a slide deck that accompanies this webcast on the Investor Relations section of our website. On the call with me today is Bill Sibold, Chief Executive Officer; Dave Soergel, Chief Medical Officer; and Mardi Dier, Chief Financial Officer. They'll provide prepared remarks, and then we'll take your questions. Please note on Slide 2, we will be making certain forward-looking statements today. We refer you to our SEC filings for a discussion of the risks that may cause actual results to differ from the forward-looking statements. And with that, I will now turn the call over to Bill.

Thanks, Tina. Good morning, and thanks for joining us. We have a lot to cover today. Before we move into this quarter's performance, as you can see on Slide 3, it's been an incredibly exciting and productive last few months at Madrigal both driving the launch and building our future. We've accomplished a lot, and each of these milestones reflect the deliberate execution of our long-term strategy to maximize RedSiffer's value and expand our leadership in match.

In a short time, we've transformed Madrigal into a company with a longer runway, a stronger foundation and greater flexibility to build for the future. Fundamental to our success is our business in the U.S., which continues to outperform. Red Differ's quarterly run rate now exceeds $200 million, well on its way to blockbuster status. We can objectively say it stands among the best specialty launches of the last decade. Second, we strengthened the long-term value of Rezdiffra with our new U.S. patent providing protection to February 2045. This changes how we think about Rezdiffra's growth potential and our investment in the business. It's not about years of opportunity but decades.

Third, we're preparing to expand internationally, beginning with Germany later this year. Geographic expansion adds another potential future growth opportunity for Rezdiffra. Fourth, we're working to expand Rezdiffra with an indication in compensated mass cirrhosis or F4C, where our outcomes trial continues to progress, if positive, it could double risk differs market opportunity. And finally, we're building a pipeline for the next phase of leadership in match. With the addition of a promising oral GLP-1 to combine with Rezdiffra. And we have the capital in place that will allow us to support and scale all of this. Each of these pieces add value to the foundation we are building for long-term leadership in mass.

So let's move into the call with our agenda on Slide 4. A lot has happened since our last call. I wanted to take the opportunity first to talk about the new U.S. patent that was issued today. We believe it's a significant contributor to our long-term outlook. As we summarize on Slide 5, the patent covers claims directed to [indiscernible] commercial weight threshold dosing regimen as prescribed in its FDA-approved label and will be listed in the FDA Orange book. And we recently learned some favorable news. The patent reflects an updated expiration date of February 4, 2045, which is extended from the previously noted date of September 30, 2024. What gives us such high confidence in the strength of this patent is that it's based on the clear and compelling finding that [indiscernible] doses given to 2 different cohorts of patients each with different body weights optimizes the efficacy and safety of rider. This finding is based directly on our clinical team's independent analysis from our Phase III MAESTRO NASH trial, which was adopted by the FDA for our label. The bottom line, any potential generic competitor will need to adopt the Rezdiffra label and would infringe on our patents.

Our confidence in this pattern is also supported by precedent U.S. case law. This patent changes the game for us in 2 ways. First, strategically, it gives us the privilege of time. This extension creates a lot of flexibility for us to pursue our long-term strategy. We can be very thoughtful and deliberate about how we build our future and shape our pipeline. Second, it adds another potential decade of protected revenue and materially increases our value proposition, creates additional opportunity in match and extends our ability to keep innovating to address unmet patient needs.

Now let's turn to Slide 6, and Rezdiffra's second quarter performance, where we delivered net sales of $213 million, up 55% quarter-over-quarter. U.S. Rezdiffra net sales are now annualizing at well over $800 million. The significant demand we're generating is driven by strong and consistent execution on 2 key launch metrics patients on drug and prescriber penetration. First on patients as shown on Slide 7. We ended the second quarter of 2025 with more than 23,000 patients on Rezdiffra up from more than 17,000 patients at the end of the first quarter. As we've noted before, this figure represents patients actively on therapy accounting for any discontinuations. We are encouraged by Rezdiffra's robust growth and yet we're still in the early stages of this launch. Only about 7% of the 315,000 diagnosed F2-F3 mass patients under the care of a liver specialists are being treated with Rezdiffra. There is significant opportunity ahead.

Moving to Slide 8 and our progress on physician penetration. As I said before, building a strong base of prescribers early in the launch is one of the best indicators of long-term success. That's why the pace of adoption has been so encouraging. In fact, in just over a year since approval, we've achieved another key launch goal. 80% of our 6,000 top targets have prescribed Rezdiffra. This level of penetration exceeds the benchmarks we track and is the direct result of the significant amount of work we've done to wire the system for a first-in-disease launch like Rezdiffra. We're also seeing strong progress as we expand into our broader 14,000 target prescriber base. By the end of the second quarter, 60% or roughly 8,500 health care providers had written a prescription for Rezdiffra, up from 50% in the first quarter.

Looking ahead, more of our focus will be on Rezdiffra which is also tracking in line with best-in-class launches. We believe this is largely due to the positive experience that providers are having with Rezdiffra, and we anticipate that it will continue to drive depth going forward. And this positive experience is being driven by Rezdiffra's compelling profile shown on Slide 9. Rezdiffra is the liver-directed medicine with a mechanism of action that improves the critical processes in the liver that drive match. It has consistently strong efficacy regardless of patient subtype, including those with type 2 diabetes, who have a higher risk of progression and comprise approximately 60% of the MASH population. Additionally, Rezdiffra works effectively regardless of fibrosis stage, BMI or genetic makeup. So it's very consistent when it comes to treatment effect. It's also easy to prescribe and to take a once-daily, well-tolerated pill with no titration requirements. That simplicity matters to physicians, to patients and ultimately, to adherence.

We continue to see strong early signs of adherence, consistent with what we see from other well-tolerated oral therapies. So as we look ahead to future competition, we believe Rezdiffra attractive real-world profile gives us a durable advantage. The next potential entrant in MASH is likely to come from the injectable GLP-1 class. And you can see on Slide 10, Rezdiffra compares very favorably across key attributes. For example, while semaglutide demonstrated an improvement in fibrosis, it was less pronounced in patients with type 2 diabetes, whereas Rezdiffra works consistently across patient subtypes.

Another key difference is adherence in the real world. It's low for semaglutide. Most patients struggle to get to and maintain the 2.4 milligram dose. In addition, only approximately 30% of patients with obesity remain on the medicine after 1 year. This is especially relevant in math, where we're talking about a 72-week efficacy endpoint. For a progressive chronic disease like MASH, providers want a medicine that patients will stay on and one that they can administer easily without a titration schedule, and that's where Rezdiffra stands out. Certainly, a key attribute of a GLP-1 is its impact on weight loss. And we also know patients with MASH may benefit from a combination approach.

Today, about 25% of patients on Rezdiffra are taking it alongside in an injectable GLP-1 to manage their comorbidities and that figure increases to roughly 50% when you include prior GLP-1 users. So combination use is happening in the market today, and we expect it to grow over time. As we look ahead on Slide 11 and consider the upcoming GLP 1 launch in MASH, we believe it has the potential to accelerate the growth opportunity for risk different. Our focus remains squarely on the 315,000 diagnosed patients with moderate to advanced fibrosis. This is our core specialty market. Novo is targeting a much larger population, many multiples of our 315,000. Their efforts will raise awareness and drive broader screening, diagnosis and treatment. This will ultimately benefit patients. and we expect it will also benefit risk differ, both as the foundational therapy and match for first-line patients and from the high real-world discontinuation rate of semaglutide. And there is clearly a need in this large and underpenetrated market for multiple mechanisms and better combinations to treat this challenging disease. That's why we're excited to study Rezdiffra in combination with our newly in-licensed oral GLP-1 as noted on Slide 12.

We're taking a differentiated approach focused on MASH. We are looking to develop a chronic therapy for a chronic disease with Rezdiffra as the foundation. We want to optimize the efficacy and tolerability and MASH by balancing the right amount of weight loss from a GLP-1 with the fibrosis and lipid reduction of Rezdiffra in a once-daily, well-tolerated pill. And our data has shown that just 5% waive loss can increase Rezdiffra's antifibrotic effect. And as we assess the oral GLP-1 landscape, we had specific criteria that we were looking for. We wanted an [indiscernible] derivative with a favorable stability and pharmacokinetic profile that was amenable to develop as a combination therapy and a port an asset that was actionable. We believe that SYH2086 from CSPC Pharma is the right oral GLP-1 asset for our program. It gives us the opportunity to develop what we believe to become a best-in-disease well-tolerated oral combination for MASH. Importantly, we secured this asset with favorable terms.

We have exclusive global rights for $120 million upfront payment and potential future payments based on achievement of development, regulatory and commercial milestones. We expect the transaction to close in the fourth quarter and expect to enter the clinic in the first half of next year. We will provide additional updates on our clinical development plans on future calls. Let's briefly move on to 2 additional growth opportunities, starting with the international expansion of Rezdiffra on Slide 13. In June, we received a positive CHMP opinion, a key regulatory milestone that sets the stage for approval across the European Union. We expect the final decision from the European Commission later this month and are preparing to launch in Germany in the second half of this year. As we've discussed, we've made an incredible amount of progress in Germany over the last year. Leadership in our field teams are in place, we understand which providers treat MASH. -- we're continuing to engage in disease education. We've begun our efforts to wire the system. And importantly, European guidelines already include ReddiFRA as a first-line treatment for MASH, which positions us well.

Like the U.S., we've defined our initial target population as patients already diagnosed with F2-F3 match and under the care of a liver specialist. Based on our research, we estimate that the population is approximately 370,000 patients across Europe. We believe Rezdiffra can be the first medicine approved for MASH in Europe and the foundational therapy for this population just as we've established in the U.S. Let's move to Slide 14 and the opportunity we see in compensated mass cirrhosis or F4 C, an important next step in our growth strategy. First, there is a high unmet need with no approved treatments and serious risk of progression. Second, resi liver-directed mechanism targeting fibrosis is well suited for cirrhosis. Third, our 2-year open-label data presented at EASL showed sustained efficacy and supports our confidence in the ongoing MAESTRO-NASH outcomes trial. No other product or mechanism in development has shown this level of reduction in liver stiffness with such an attractive product profile. And finally, we have real-world momentum, a clear first-mover advantage with outcomes data expected in 2027 and what we believe will be a best-in-disease profile in F4C.

We've learned what it takes to launch in NASH, and we're ready to extend that leadership from F2 to F4C period. Slide 15 outlines the opportunity we see in F4C. We've taken a thoughtful approach to understanding the F4C population. Our research shows there are approximately 245,000 patients in the U.S. with compensated NASH cirrhosis who are already diagnosed and under the care of our target liver specialists. These patients are sicker and further along in disease progression, which typically translates to greater and faster adoption. That's why we believe F4C has the potential to effectively double Rezdiffra's market opportunity in the U.S. With that, I'll hand it over to Dave to walk through the data on Slide 16.

Thanks, Bill. I'll walk through the takeaways now from our 2-year open-label extension data in F 4C, which we presented at EASL. First, let's look at the liver stiffness data as measured by vibration controlled transient lostography or VCT Patients experienced a mean reduction of 6.7 kilopascals in liver stiffness at 2 years, statistically significant versus baseline. But we have achieved at least 25% reduction in liver stiffness.

As published in JAMA, that level of improvement is tied to a lower risk of progression to end-stage liver disease. And 35% of patients met the criteria for regression from F4 to F3, suggesting potential reversal of cirrhosis. Turning to Slide 17. Another critical point is Rezdiffra’s potential ability to reduce the risk of clinically significant portal hypertension or CSPH. CSPH is a key driver of the most severe outcomes of cirrhosis, like ascites, variceal bleeding and hepatic encophalopathy. It marks the tipping point into decompensated disease. In our open-label study, 65% of patients with CSPH at baseline improved to a lower risk category by year 2. That movement away from high-risk CSPH suggests Rezdiffra’ could help the layer prevent life-threatening complications.

Taken together, these data support our confidence in the ongoing Phase III MastraNASH outcomes trial because the baseline characteristics of the patients in the open-label study align closely with those in our F4 outcomes trial. For us, this means Rezdiffra’ has the potential to become the first approved treatment for compensated NASH cirrhosis, a very sick segment of the NASH market that currently has no therapeutic options. I'll now turn the call over to Mardi.

Yes. Thank you, Dave. Second quarter 2025 net sales totaled $212.8 million, up 55% from the first quarter of 2025. This was another strong demand quarter. As we've said, we expected gross to net to be somewhat choppy early in launch, and the team has done an outstanding job managing it to date. As we shared last quarter, we've begun contracting with payers. We saw minimal additional impact from contracting in the second quarter with an expectation for that to increase our gross to net discount in the back half of the year. that's fully expected and consistent with what we typically see with specialty medicines at this point in their launches.

We have good visibility into the growth-to-net dynamic this year and are confident that gross to net will remain within our expected range through 2025. R&D expenses for the second quarter of 2025 were $54.1 million compared to $71.1 million in the second quarter of 2024. The decrease was primarily due to lower clinical trial costs. SG&A expenses for the second quarter of 2025 were $196.9 million compared to $105.4 million in the second quarter of 2024. The increase was primarily due to increases in commercial launch activities for was different. Looking ahead, we expect operating expenses in the third and fourth quarters to be modestly higher than the second quarter.

Turning to our balance sheet. We ended the second quarter of 2025 with $802 million in cash, cash equivalents, restricted cash and marketable securities. As Bill mentioned earlier in July, we also entered into an agreement with Blue Owl Capital for up to $500 million in a senior secured credit facility on favorable terms. This nondilutive financing consists of a $350 million initial term loan funded at closing, a portion of which was used to repay all outstanding obligations under the Hercules loan facility and $150 million delayed draw term available in multiple draws through 2027. We plan to use these funds to pay the upfront payment for the global license of our oral GLP-1.

The Blue Owl agreement also provides a mutual -- provides a mutual option for an additional uncommitted tranche of up to $250 million to support potential additional strategic business development activities. With this strong cash position, we continue to be well resourced to support the ongoing launch of Rezdiffra’ in both the U.S. and our planned launch in Europe in the second half of this year. as well as for business development opportunities to build our pipeline going forward. So with that, let me briefly recap our second quarter progress on Slide 19. We continue to drive strong momentum in the fifth quarter of our launch with a medicine that's now annualizing at well over $800 million. We have more than 23,000 patients on therapy and expect to continue to steadily add patients going forward. Physician adoption continues to build.

We hit a key launch goal with 80% of our 6,000 top targets now prescribing Rezdiffra’ and we're expanding our leadership in F2 to 4C NASH with our new patent confirming Rezdiffra’ protection to February 2045, our progress in 4 our expected expansion into Europe and our exciting new oral GLP-1 global licensing agreement. And now I'll turn the call back to Tina to open up the Q&A session.

Thanks, Mardi. Let's move into the Q&A portion of the call. Demi, please go ahead and provide instructions for the Q&A session.

[Operator Instructions]

Our first question comes from Thomas Smith with Leerink Partners.

I was wondering if you could just expand on the comments regarding gross to net and the inventory dynamics in the quarter. I know you guided to there being a little bit of choppiness, but it looks like you may have benefited perhaps from better net pricing in the quarter versus Q1. If you could just help us kind of frame where you see this going for the rest of the year? And then if you could just comment on inventory stocking in the quarter, that

would be really helpful.

Tom, thanks very much. Mardi, I'm going to turn it over to you to talk about gross to net.

Yes. Great. Tom, thank you for the question. Let's just start with saying that this is a really strong demand quarter. and the team executed so well once again. Now with respect to gross to net that we addressed in the call that we've been very disciplined and we'll remain disciplined when it comes to gross to net. And we've been very consistent with our messages quarter-to-quarter. We said from the start of launch that gross to net will be choppy early in the launch, and we're still just 5 quarters in. So that's the case what we've seen here in this quarter.

We did say last quarter that we began contracting in April and we also anticipated that we would have minimal additional impact from contracting this quarter and expect to see more of that impact in the second half of the year. So we've explained that we are very focused on gross to net. We have very good visibility and that we plan to stay within the range that we've discussed previously, that's very typical for specialty pharma launches at this point in their launch.

Yes. Thanks, Mardi. Look, and Tom, as you've heard me say, we've been extremely diligent about gross to net from the beginning, and we don't think about it in terms of quarter-to-quarter. We've taken a very long-term view looking over multiple years. We know that Rezdiffra is going to be a big product. and gross to net is really important. So you want to watch it and work very carefully on it and make sure that you preserve it. So our team has done just an outstanding job on it. And so we feel really good about where we're at. And as Mardi said, we've got a real strong sense of how it will evolve and where we're going.

Next question comes from Yasmeen Rahimi with Piper Sadler.

Good morning Congrats, an outstanding quarter. I guess the team One of the questions that I think seems to be investors asking as with the entrance of GLP-1 to the market. Let's say you maintain your pricing strategy and don't aggressively rebate to the level of matching semaglutide, how do you foresee sort of maintaining the strong growth curve that you have shown so far -- and I think it's very clear that hepatologists are going to prefer liver-directed therapies. But if there is a sort of a prior authorization of debt adits needed due to pricing differences. How do you foresee how soon that could play sort of flat out and not become as important. So if you could just talk about that dynamic, we get that question quite a bit, and I'm sure so do you?

There's a lot of questions in nuance in there. So let me just kind of roll through a little bit -- provide a little bit of context here. I mean, as we said, we're coming off an outstanding second quarter which was driven by strong demand. So number -- and we've been steadily adding patients since launch, and that doesn't change. things through the SEMA launch in the second half of the year. RECONNECT Now in addition to the strong demand with our -- from the Q1 effect.

So we would expect our quarter-over-quarter growth rates to continue to track right in line with other successful specialty launches with similar dynamics. And you heard Marty talk about gross to net that is being choppy quarter-to-quarter. We have good visibility and expect for that gross to net discount to step up in 2025, but stay within the specialty product range that we've discussed. So everything I've said there is in the context of expecting a CEMA approval and launch. Now you asked a very specific question about step edits and so forth. Now look, right now, it's just a little too early to tell. Product hasn't approved yet. We don't know what the label looks like. And those are going to be taken into consideration in the discussions that we have with payers.

We've been actively talking with payers. We think that we've established a good partnership and planning with players payers, but we're waiting to see ultimately what happens with the label and approval of semaglutide. Either way, we plan for all scenarios. And a step at it here in this space though is somewhat complicated. And I think that, that's going to be one of the things to take into consideration because these patients have other comorbid conditions such as type 2 diabetes or cardiovascular disease. So think about it. If a patient is well controlled on a different GLP-1 would a payer disrupt their current therapy to put them on sema for NASH so there's a lot of nuance and complications here. We don't have all the data yet, but we have planned for all eventualities, and it doesn't change our excitement for the opportunity that exists.

Yes. Bill. And yes, I would just add one more thing is, remember, GLPs have been on the market for a long time. And our data has been pretty consistent what we've seen to date that of the patients that we've treated about 50% are either on or have exposure to GLP-1s already and probably 25% are on at any given time. So there's a lot of familiarity in the market already. And clearly, combination use is already established.

Yes. It's a really great point, Mardi because this isn't as though it's a new product that's entering the market that's never been used I mean this has been used everywhere. There's nobody who hasn't heard of it or has the ability to get it for some indication now. This is just an extension. So that's a very different setup than if you have a brand-new mechanism of action entering a market, which has more potential to disrupt.

Next question comes from Jon Wolleben with Citizens.

This is Catherine on for John. I just had a quick question about your new GLP, oral -- and just how many did you look at kind of -- and how did you go about I know you kind of said that though Orfoglopron backbone was kind of in factor. But just could you provide a little bit of color on that.

Yes. Look, thanks for the question. as we've said for a long time, BD is a part of our strategy. and we're looking to add the right assets to our pipeline to extend our leadership in NASH. Oral GLP-1s are something that we've been interested for a long time like with any BD process, you look at a lot of different things before you find the 1 that's just right. And that's what we did. We laid out what we were looking for.

We were looking for a Northair derivative. We wanted favorable stability in the PK profile that's amenable to combo, and we found that in this asset. So it was a very systematic approach. We looked at a lot of things before deciding and coming upon the one that we think is just right to create that product which we think is going to be a next advancement in NASH. Now just the one thing I'll say, there are a lot of oral GLP-1s out there.

There are a lot of GLP-1s, BGs, et cetera, but there's only 1 that's going to be combined with risk differ in this form. And that's how we differentiate in this market. That's something which is special to magical, and that's something that we see a huge opportunity for us.

Next question comes from Eliana Merle with UBS.

Congrats on the quarter. In terms of next year, how are you thinking about sequential quarterly growth once [indiscernible] is available? And specifically on gross to net, can you give us a little bit more color on how you're thinking about how that could trend next year? And lastly, I feel free to not answer this question, but what's your latest thinking around when you might be in a position to issue revenue guidance?

Do you want to take the revenue guidance or anything or any part of it?

Yes. Thanks, Ellie. Thanks for the question. So revenue guidance is easy. We haven't discussed that publicly and we have no plans in the near term to give guidance. In terms of growth, you're asking about 2026 already, that we're in Q2 of 2025. So we're focused on the rest of the year of 2025. And we've discussed on the call and we'll say it again now that we believe that we'll be steadily adding patients through the rest of the year and continue our growth trend.

And as you know, we follow a basket of analogs of specialty medicines that have launched successfully over the last 10 years, and we are tracking right along that growth rate of those top analogs in this basket. So we feel very good about the growth in the rest of the year. And then gross to net, I think we made those comments in 2025, and we feel good and have good predictability. And as the year goes on, then we'll start focusing on 2026 and discussing that more.

Next question comes from Andrea Newkirk with Goldman Sachs.

Congratulations on the quarter. Bill, just as you think to a potential EU approval -- just curious how you're thinking about the shape of a potential launch curve there versus what you've seen in the U.S.? And when might you expect to recognize first revenue?

Thanks, Andrea. Look, I think we've got a very good view on what curves can look like having just gone through the U.S. launch. It all starts with how you wire the system, how do you prepare? How do you educate, how do you create pathways for patients there. Now the benefit in Europe is they've had more time to prepare for this launch than the U.S. did. Because remember, in the U.S., since we were the first product ever approved in NASH, the community had been met with disappointment over 20x.

There's the guidelines in Europe that exist already and with the U.S. getting approved, Europe had a little bit longer to prepare -- but like any other launch and especially when it's a first in disease, it takes time, and we have some really good first-hand experience with that in the U.S. and we're taking essentially all the learnings from the U.S. and transferring them to the really outstanding team that we've hired in Europe and specifically Germany and I just want to put a fine point on that. It's Germany that we're launching in first. We're not going everywhere all at once. We put extremely rigid guidelines in place for what we need to see in a market for it to launch.

So more to come when will we start recognizing revenue, look, I would say it's really not much of a -- there's not much happening in we're going to be starting in the second half of the year in order to get the teams deployed, et cetera, it takes a little time. So really, it's more of a '26 and on story.

Next question comes from Andy Chen with Wolfe Research.

Mardi, you talked about this basket of specialty drugs. Can you give some numbers around what this gross to net range is in that basket that you're analyzing? And then this 20% to 30% at the gross to net that you're guiding to, is that an educated guess and prediction? Or is that already a largely known fact given your existing contracting negotiations and you know that it's going to end up in the 20%, 30% range?

Andy, thanks for that. I'll turn it over to Mardi in a second. Just to be clear on that. We are very, very clear on the 20% to 30% that is based on decades of experience and knowledge and how our conversations have gone with the payer community. So like everything else that we talked about in this launch, we've been very accurate in our comments that we make to all of you. So maybe I'll turn it over to Mardi for any other comment that you have. But look, we don't say things just to say things. We save things because we're confident in them.

Right. Yes, just to reiterate that, Andy, we have good visibility for the rest of the year. We've talked about this range since I think our first launch quarter, and we feel very strong that we're tracking along with typical specialty medicines and that the gross to net for 2025 falls within that range. And there's a lot of components to gross to net, many components, of which contracting is just one and we did say we started contracting in April, and then you'd see more of that in the second half.

That's just sort of the natural dynamics in this marketplace and launching in the U.S., all very predictable for 2025 as we move forward. So we feel good about that. And just to reiterate a point that is to, we haven't commented on 2026, but we see this drug as continued growth and robust growth as we move forward and as we steadily add patients.

Next question comes from Ritu Baral with TD Cowen.

I wanted to ask about some of your underlying plans, Bill, as far as continuing this growth momentum into the potential adobe label expansion. You hit your target of 80% prescribers in that top tier. What's the next target? And how does that overlap with your understanding of Novo's potential detailing target for that label expansion.

And as part of that answer, could you address the sort of growing awareness of mass in the diabetic population and amongst endocrinologists? Are they part of that next year?

Thanks, Ritu. Look, we don't have a next target that we're going to talk about. Really what happens now is it's a focus on depth. I mean we have -- the breadth of prescribing that we're seeing is as we said, it's leading the other products that we're looking at, the analogs. So we have done just an outstanding job there. So it really becomes a depth story now, and we're seeing all the signs that we're tracking right with those analogs as well. So that's the next -- the first leading indicator is really the breadth now you go to depth, and we're seeing more of that. And why do people use more because they see the results, the real-world experience that we're seeing is actually very impressive.

We have physicians every physician I speak with talks about just how -- what they're seeing in the real world is impressive and exceeding expectations. So you talked about kind of where do we go from here from an endocrinology perspective? Yes, endocrinology, there is some. It's not all of endocrinology, but some endocrinologists are very excited about Rezdiffra. And we started spending a little bit more time with those physicians, and we'll continue to do so.

As I said, the key focus is hepatologists and gastroenterologists. And we also talked about endocrinologists, but we'll continue to pursue additional endocrinologists that have an interest. Interesting, endocrinologists are super interested in mechanism of action. And this being a THR beta, their eyes light up saying, look, this is in our alley to be talking about something with a cool mechanism like this, albeit very specific to the liver in our case. And so yes, we have some -- we have those targets that will increase as well. Anything else read to with that? Or is that -- does that answer it for you?

And that covers it.

Next question comes from Akash Tewari with Jeffries.

This is Kathy on for Akash. To follow on the gross to net question from before. I know you said you'll see more of the contracting happen in the second half of the year. But based on our math, it looks like the gross-to-net for this quarter roughly returned to Q4 levels. And then we also anticipated a potentially higher Part D impact from this quarter versus last quarter. So what are the biggest drivers behind this price improvement for the quarter and can you give us some color on the Part D redesign impact this quarter as well as the stocking contribution and the driving factors behind that increase?

Thanks for the question. There was a lot -- a couple of thrown in there. I'm not sure we can get to. But Mardi, any comments?

So let's start on the easy one on stocking, which was not part of gross to net, as you know, but let's reiterate what we said in the script as well. It was a strong demand quarter. And so inventory is not we don't need to discuss that anymore -- strong demand quarter. With respect to gross to net, a lot of focus here. let's reiterate. So again, the range that has been brought up on this call already for typical specialty medicines at this point in the launch for this year is 20% to 30%. And -- what we've said is that contracting, which is one component of many components in gross to net, we'll see a bigger -- started in April, normal part of our business, and we'll continue to widen that through the end of the year.

So that's all predictable in that 20% to 30% range and expected. In Part B, I thought we kind of put this to bed, but the Part D impact was wins we discussed this on the fourth quarter, and I believe the first quarter call, which is incremental to what we saw in the fourth quarter. And that's because we had rebates in the fourth quarter, given the timing of our launch -- so the new IRA Part D impact was pretty minimal going into 2025, given the base from which we started in the fourth quarter of -- all in all, so gross to net, again, falls within the range, and we'll continue to do so through the rest of 2025.

Yes. And look, I mean, we were clear on our first approval call that we would have a choppy gross to net to net for a period of time. But just what happens in the launch. And just to reiterate again, there are a number of components of gross net, including co-pay assistance. I mean we have a 0 co-pay assistance program as well which is getting greater and greater utilization. It's really important. We want patients on co-pay assistance because that just makes it more affordable, which leads to better persistency leads to better outcomes for patients.

Next question comes from Mayank Mamtani with B.Riley Securities.

Congrats on a very strong quarter. Could you give us a little bit more detail on the claims of this newly issued patent with 2045 expiry. I guess it's related to the method of treating NASH where those finding work in humans was a nonobvious finding. And also was curious if there's plans to further build on this with the outcomes data emerging? And then I have a quick follow-up.

Sorry, what was the F4C question? I missed that.

Yes, there's additional patent work you may do as the F4C and the outcomes data still kind of emerging there?

Yes. Great. That's something we, we don't have the trial outcome yet. We don't have approval yet. Certainly, there will be -- we'll look for opportunities with the F4C indication, we hope, in the future. But look, I think the pattern you saw this morning or you are -- it's available now. And as we said, it's based on clear and compelling evidence that different -- different doses given 2 different cohorts of patients, each comprising different body waste optimizes the efficacy of safety of efficacy and safety over recipe. So that's the headline for it.

We think this is a very strong patent. This is something that has become our base case now. as we think about all of our planning in the company and how we're thinking about our plans for everything from BB to just investment, et cetera, 2045 is our base case. So look, I think I'm going to let you all spend a little bit more time reading it and so forth. But we think all the facts are very clear. We think that there's good precedent as well in case law, and we're really excited about this. This is a really, really, really important development for us as a company.

Next question comes from Jay Olson with Oppenheimer.

Congrats on the quarter and all the impressive progress, especially with life cycle planning. In your due diligence process, can you talk about any preclinical or clinical work done to support a fixed-dose combination of SYH-2086 with Rezdiffra. And now that you have an oral GLP-1 what other mechanisms are you considering? And how are you thinking about future business development deals in terms of timing and priority?

Great. Thanks, Jay. Maybe I'll start with just the last bit and then I'll turn it over to Dave. Look, BDs are still very much part of our strategy. We think this is a great first step, but we will continue to look at next best mechanisms of action that are going to add potential value to NASH patients. either as a stand-alone or in combination with Rezdiffra. Now we really believe that the market is going to move towards combination therapy and that Rezdiffra is going to be the foundational therapy. It already is. It's the standard of care today. And what you see in a lot of different diseases is that you add to that standard of care, whether it be for a different effect you're looking for, a subpopulation, et cetera.

Remember, we are at the absolute very beginning, 7% penetrated into this 315,000 population with decades, I would say, of growth in this marketplace ahead of us, it's going to support multiple mechanisms of action, multiple products. And as the leader with the foundational product looking for those next white spaces or areas of opportunity is something that we are going to be a part of and more than that we are going to drive. So Dave, maybe you want to talk a little bit about this asset?

Yes, sure. I think first of all, let's touch on 2 things. First of all, the scientific rationale for combining a GLP-1 with first Metron. And then second, we can talk about this molecule in particular. So we already know based on our experience in Maestro NASH that as little as 5% weight loss will enhance the efficacy of resmetirom in NASH. So we see better biopsy results in patients who achieve as little as 5% weight loss.

So as we talked about, we can achieve that more effectively and in more patients, that level of weight loss with -- by adding a GLP-1 mechanism drug to Rezdiffra. So the sign of rationale, I think is very, very strong for combining the mechanisms. Second, with respect to this molecule, in particular, Bill touched on some of the properties that we were looking for. We were looking for chemical properties like the structure. We wanted to make sure that came with a derisked structure like in [indiscernible] backbone. And we wanted to make sure that the pharmacokinetics and sort of initial pharmacology were consistent with what we were seeing with other molecules in this class.

So that gave us that assessment, I think it's important to sort of mention that this is still a preclinical asset, and there's still work to be done before we get into the clinic. But from what we've seen, we're very excited about combining 2086 with Rezdiffra.

And maybe just one final point on that, Jay. Fixed dose combo would be great, but it's not completely necessary. And again, I think that you have to go back to when you've got the runway that we've got to 2045, right? We had the time to do things in a very thoughtful, precise way. Ideally, it's a fixed-dose combo, but it doesn't have to be just be more convenient for patients. But we like the properties that would make that a good probability.

Thanks so much, Jay. And Deb, it looks like we have time for one more question, please.

Next question comes from Kaveri Polman with Clear Street.

Congrats on the progress. I just want to kind of understand a little bit about the competitive landscape and your rationale for choosing GLP-1s over there are a lot of dual and triple agonist going on? And how you are thinking about whether with increase in weight loss, if you can see more benefit to mesh patients?

And you expect any kind of off-label use there as this space grows as well as with the combination specifically for the oral drug you have -- any concerns related to kind of overlapping toxicities. And based on that, how you are thinking about developing it whether you plan to -- when you like test different doses and scheduling of both drugs or GLP-1 will be adjusted according to the approved regimen for Rezdiffra?

Great. Well, thank you. I appreciate the question. There's a lot there. Let me just take a couple of things really quickly. First of all, we like oral GLP-1 for the reasons Dave mentioned and that we mentioned in the call, with as little as a 5% weight loss in combination with Rezdiffra, we see a better effect on fibrosis from Rezdiffra. So that makes it better. Now you're talking about a whole group of products, BCGs, et cetera, where their fundamental approach is the battle of who can show the greatest weight loss -- and there's comparisons of 1%, 2% in the teens and beyond, and that becomes a competitive set. That's not the game we're playing.

We need an oral GLP-1 that gets us past that 5%, but it's well tolerated. It's something that people can stay on so that the overall profile of the new product with Rezdiffra remains what it is which is really as good as it gets in the profile of the drug. It's a holy grail profile. Once a they pill, something we've been looking for in my whole career, our products like this. So we have a very different approach on how we're thinking about this. The primary objective isn't for massive weight loss. The primary objective is to get to this threshold weight loss that makes Rezdiffra perhaps an even better drug. So that's a different frame.

And I think people got to get their head around that because that's how we very thoughtfully approach this. As it relates to what's the impact on the product profile, as I said, we're trying to make it a well-tolerated profile and not give up anything on it. And that's how we hope to satisfy that with dosing, et cetera. But it's premature to talk about our development plan. We're going to come back at a later time. And as I said as well, BD remains part of our strategy, and it's something that will be -- continue to be very thoughtful about how we might extend our leadership in NASH. And Dave...

I would just add one thing with respect to the diligence on the molecule. So of course, one of the things that we were looking at was the preclinical profile and ensuring that this molecule would be, at least from a preclinical standpoint, compatible with risk metro. And so we were reassured by our diligence process. And so we're very excited to have this and tested in clinic.

Thanks, Dave. And thanks, everyone. Thanks, Demi and thank you all for your time and interest today. This now concludes our call. A replay of this webcast will be available on our website in about 2 hours. Thank you for joining us.

Ladies and gentlemen, thank you for your participation in today's conference. You may now disconnect. Have a wonderful day.

Thanks, everyone, for joining us. I'm really pleased to be joined this morning by Bill Sibold, CEO, Mardi Dier, CFO, and David Soergel, MD, CMO of Madrigal. Thank you, guys, all for joining us.

Thanks for having us.

Bill, maybe I'll start with you here. We're sitting here now over 1 year into the launch of Rezdiffra. It's been an incredible launch to see to date. What have you been most encouraged by as it relates to patients, physicians, payer coverage? And what have been the biggest learning?

Well, objectively, it's been an outstanding launch. And thank you for recognizing that. I mean we are -- if you look back a year, as you say, there was nothing, right? There wasn't an approved product. There weren't pathways. Nobody had ever written a prescription. There was no clear path to reimbursement, et cetera. And on each of those measures based on, I would say, our team's experience, planning and execution, we've removed these hurdles, and we're off to a really great start. We're comparing ourselves against some of the best launches in the last 10 years in the specialty space. And looking at all the metrics we are tracking at -- near the top or at the top on each of those metrics. That's why I say it's subjectively a great launch.

So I look back over the year, I'd say some of the learnings are that, experience matters. We had a team that knew what to do. We are starting obviously from having a great product. But I think we took all the steps to wire the system, if you will, and to make sure that there was going to be a product that was available that people were educated that there were pathways within each practice that they understood how to use NITs, which NITs to use. The pathway with payers was cleared early. In fact, over 80% of commercial lives covered at the 6-month mark. The 9-month marker was considered to be a stretch to do it in 6 months. So that combination of planning, execution and now what we've seen is we have a product that has -- there were over 17,000 patients on it at the end of March, going from almost zero, a year ago when you're looking at a launch in April.

And I think that not only it gives us confidence about what lies ahead with F2, F3, but the whole way has been paved now for us for F4c. So we're really encouraged by the data there. We'll talk maybe a little bit more about that later. But assuming to have a positive outcome and we get approved, it's just snap the finger, and we are already wired ready to go. And that's going to be something which anyone else that is starting is going to have to build from scratch, and it's going to take a long time.

You referenced 17,000 patients. And when you think about that in the context of the 315,000 targeted patients that you identified and you know are diagnosed to launch. It's only 5%. How do you get the remaining 95%?

Yes, it is. We are at the very beginning here. I mean this is -- again, I don't think everyone always appreciates the -- just incredibly favorable market dynamics that there are in MASH. We talked about 315,000 diagnosed patients. Others talk about prevalent populations, which are many, many multiples of that. But that 315,000, we're only 5% of the way through, and a lot of it is continuing to do what we're doing. We've built a nice breadth of prescribers. We talked about over 70% of our 6,000 key targets having written the product and over 50% of the top 14,000 that have written a prescription already. So we continue to increase the number of prescribers and go deeper into each prescriber. It's really a team executing day-to-day, making sure market that market is available, making sure that physicians are educated. We've done more DTC now where there's more patients that are being educated and coming to prescribers and inquiring about Rezdiffra.

So all those things continue to build and the one element that we don't always talk about is time. It just takes time to become familiar with the disease, familiar with the product, familiar with how to use it. And then it is now becoming really standard of care. So it's just much easier. So we just continue to see that 5% growth. Also, when we have new competitors come in, those -- that always accelerates market growth. So we actually welcome other products coming in because it will ultimately help us as the market leader, you benefit the most in that situation.

When you think about -- you just mentioned it takes time. How should we think about the shape of the curve and the shape of the adoption curve essentially here?

Yes. Look, we've been talking about steadily adding prescribers and steadily adding patients and that continues to be the case. We see a lot of years of continued growth ahead of us. We are at the infancy of this market. I think that you're going to look like other specialty markets, you can look out 10, 15, 20 years. And I still think this is going to be an emerging growing evolving market. And there is a benefit to being first, and there is even a bigger benefit to being first with the product profile that we have.

Great. You were speaking about the prescribing -- the breadth of prescribing that you're seeing. Maybe speak a little bit more about the depth then. And your top physicians, how deeply penetrated are they within their patient population?

I would say there's not a prescriber in the country that is anywhere close to fully penetrated. Right? There are some -- there's a wide scale of those that adopted early have very systematically looked to put patients on. And then there's others that are still writing their first prescription. Everyone has room to grow. And I think, again, as familiarity increases as they establish their pathways that it allows them to put more and more patients on drug.

Now I think one of the key drivers of that is the experience that they have. Feedback from the community has been exceptionally strong about their interactions with the company. and what we've been able to provide from a service perspective. But as importantly, even more importantly, is the experience with Rezdiffra. And the early feedback though it's only 1 year in is very favorable from an outcomes perspective.

Great. Maybe as a follow-up there, what are you hearing on compliance persistency? Maybe speak to the value of proposition of Rezdiffra really driving that compliance?

Yes. I mean, look, this is behaving like a well-tolerated oral. Now it's a little early to know exactly what persistency looks like because we -- product was available in April of last year. So there's very few patients that have made that 1-year mark. But so far, what we've seen is that it's performing like a well-tolerated oral. And that makes a big difference. You have to be on a drug for it to work.

And the feedback that we're getting is that patients are tolerating the product that first 4 weeks, 5 weeks is when we're hearing physicians say, that's the time to follow up, watch the patient, help them through any kind of tolerability challenges they may experience. But overall, feedback has been really strong about that. And that's the benefit of this of a once-a-day pill.

And as you are coming up on patients being on this drug coming up on 1 year. Some have reached it, many more, will reach it in the coming months. Remind us where things stand with reauthorization. What are your expectations there? And how you view that process?

Yes. Look, reauthorization is a reality for certainly all the products that I've worked on. We don't see it as being a challenge. First of all, I think that the reauthorization criteria are very fair. Generally, it is physicians either a testing that there's been a stabilization or improvement or some objective measures. And so we think that, that seems to be fair. Also coupled with what we're hearing in the real world, we don't see it as a challenge. So, so far, so good.

Great. Maybe we can touch on IP here really quickly. We sit here in 2025. Many have looked at loss of exclusivity potentially in 2033. But what are your plans here as it relates to life cycle management and being able to extend that IP runway?

Yes. So look, we're increasingly optimistic about having IP extend into the 2040s. And that is a monotherapy Rezdiffra into 2040s. Now this is part of a larger strategy, which we've been saying now since launch, which is we're aggressively pursuing new IP to extend our IP position. The first success of that was with our last year, we had an Orange Book-listed patent, a new one for dosing, and that was extending to '33 with a pediatric extension to '34, and that might be what you're referencing. So that was the first. More to come.

Now as it relates to life cycle management, the two key areas of focus on life cycle management are our MAESTRO-NASH trial and MAESTRO-NASH OUTCOMES. However, we're getting a lot of interest in the community to study distinct populations and look for where might Rezdiffra be able to work or populations where there have been something like a post transplant, et cetera. So that's happening. And what we're seeing is people are really grasping on to this or are starting with this Rezdiffra as a foundational therapy and what can you do beyond that. So we have a lot of exciting plans in the future for life cycle management, the key being reading out the 2 trials that are ongoing. And as I said, we feel we have long runway with the product.

It reminds me, you had data last year at EASL in unmet ALD population. Is that a potential indication you'd be interested in exploring?

Yes. I mean as far as I know, that's the most complete data that exists right now. I mean it was a 75-patient cohort within our MAESTRO-NASH trials that look to qualify for that definition. That's certainly a population to consider. I think that the regulatory pathway for that is still a little bit murky. There's a lot of interest in it. But that could be one of the things that we would consider.

And we were actually very encouraged by the data. It showed that there was an effect that was as good as and consistent as with the rest of the population.

Maybe one of the debates that continues to persist here is what the impact will be in the NASH field as semaglutide receives an expanded label. Do you think the debate over the need for a liver-directed therapy has been put to bed? Or do we still need to wait to see?

Look, again, we're -- I'll go back to -- we're at the very beginning of this journey in MASH, 5% penetration. It's not going to be a winner take all market, but we have the best profile. And as I look in the pipeline ahead, I don't see anyone with a profile that's better than us in F2, F3 or F4c right? So we're starting from a very, very strong position. We welcome having more products in the space. I mean, I think the thing with GLP-1s is they're not new. They've been in the market for over 10 years now. We still have this increasing prevalence of MASH.

So clearly, just the way they've been used that hasn't solved the problem. Now with the new -- looking at higher doses, et cetera, we'll see what the label ultimately looks like, but we're anticipating approval of sema later this year. And we see it as a market growth opportunity. We talked about the 315,000 that you've referenced. Others have spoken about there being millions of patients. 22 million U.S., EU5 in Japan is a number that's been used by Novo. That translates down into multiples of the 315,000 in the U.S. that are F2, F3. So we look at that as an opportunity. right? We see a path to success with the 315,000, and we certainly see another path to success with if you put a zero behind that.

So at the end of the day, profiles matter. We've got, as we talked about, a once-a-day pill, well tolerated, showing really positive signs in the real world from an efficacy perspective. sema data, I mean the trial looked good. But we also know that compliance is a challenge in that you have to be on a drug for it to work. So we see it as a market expansion opportunity, and we're actually really excited about that.

Remind us here, I mean, what you're seeing in the real world. There's definitely a proportion of your patients who are on background therapy right now?

Yes, essential -- so I mean, to finish that, yes, about 25% of patients are currently on a GLP-1 in combination with Rezdiffra, and it's 50% of patients have been previously exposed to a GLP-1. So it's not as though it's introducing something that isn't already being used. The real-world experience has been really positive. Oftentimes, you don't know what's going to happen between clinical trials, well-controlled setting, to the real world. And we have received very positive feedback from the community from prescribers and from patients about the effect. They're seeing the broad effects of whether it be liver stiffness, fat, LFTs, lipids. Across the board, people are seeing effect of the drug, which makes sense, right?

A regulatory endpoint, a composite regulatory endpoint is not way people treat patients in the real world. They're looking to see, is it having an impact on these base measures? And that's what we're hearing. We're hearing that it's working fast and it's working well. And that is across the board, the feedback that we're getting. So that's a great position to be in that people see us, not only they had expectations, but it's meeting or exceeding expectations. So we're excited about it.

And that underpins your confidence that this is truly going to be a chronic therapy then?

Yes.

Okay. Maybe as we think about competition, Mardi, I'll turn this one to you. You've talked about beginning to contract for access with an eye towards what the competitive landscape could look like. Maybe give us an update on those efforts.

Sorry, I just want to make sure I understand that -- on the contracting?

On the contract.

You're talking about [indiscernible]. Do you want to start off with the answer?

Maybe the context is that when we launched the product, we weren't thinking about just a quarter or a year, we were looking into the future to say we're going to have this product for a long time, what's the implications of our strategy in 1, 3, 5 years, knowing that there's going to be competition, knowing that we're going to have expanded indication and so forth. And we have been extremely, extremely conscious and focused on gross to net. It Is something which is precious. You have to guard it. You have to be careful with it.

We started off not contracting. However, we've always anticipated that we would contract. That's part of being a good partner with the payers as well. And so that's what we started in April, not everywhere, not all at once, but it's something that we'll continue. And maybe, Mardi, do you want to provide the content?

Yes, I can give a little more context. As Bill said, all of this is anticipated and what we've discussed previously with respect to gross to net and particularly in 2025 with the initiation of our contracting here in the second quarter. We see gross to net discount step up through the year, but really be within this band. We've discussed that is very typical for specialty medicines that are launching at this period. So we feel very good about where we are in gross to net, it's already taken into our expectations, and we've already talked about the robust growth that we expect for 2025.

Great. Dave, maybe I'll bring you in here. Welcome to the Madrigal team. It's nice to meet you. Maybe introduce -- maybe spend a few minutes introducing yourself, and then if you may, talk about the recent data that was presented at EASL and what the key takeaways were?

Sure. Happy to. Yes. Great to be here. So my name is David Soergel. I'm the Chief Medical Officer, recently joined Madrigal. I joined from Novartis, where I was Head of Cardiovascular Renal Metabolism Development. And my job there was basically to get drugs approved, build evidence basis to support launch drugs and to build the pipeline. And after 7 great years there, I saw a fantastic opportunity at Madrigal to really enter a space where there's a huge amount of unmet medical need and a need to bring new therapies to patients. So I thought this would be the right place to come. And of course, working with these folks makes it even more exciting for me.

So turning to the EASL presentation, I guess the best way to talk about this is to talk about, first, the 122 patient open-label experience that we presented at EASL. And then second, to talk about how that experience makes us even more confident in the MAESTRO-OUTCOME study in the F4c population, which is our ongoing Phase III study.

So first, the 122 patient experience in the F4c group, I mean, this is a patient population who's kind of right on the doorstep of a catastrophic life event, i.e., decompensation of cirrhotic liver disease, which ultimately leads either to high degrees of morbidity or liver transplant or death. So this is a patient population that's very sick and has progressive disease. And what we saw in this open-label experience is that we could reverse what was previously thought to be very difficult to reverse disease processes, i.e., continued fibrosis and kind of end-stage liver pathophysiology. And the way we measured that was by looking at liver stiffness measurements by VCTE where we saw clinically significant and statistically significant reduction in liver stiffness measures in this population. And also when we looked at MRE and even more rigorous measure of liver stiffness, we saw an important reduction in stiffness and that -- with that measure as well.

So the second important piece of information we got from that trial was in patients who had -- were on even the further spectrum of the compensated liver disease population and had evidence of portal hypertension. We showed that in the 35% of the patients who had that phenotype, we could reverse that phenotype in 65% of those individuals. So again, a population that you didn't think you could reverse these physiology in and you could actually do it with Rezdiffra.

So, and the last piece of important information from this open-label experience was that we saw a very low hepatic decompensation rate. So the rate that we saw over that 2-year time period of dosing was between 2% and 3%. And in this patient population, you expect something like 7% to 10% annual decompensation rate. So very low events, with the caveats, it's an open-label experience and so forth. So now if we translate that experience to what we expect from MAESTRO OUTCOMES, the patient population that we enrolled in that open-label experience looks very much like the MAESTRO OUTCOMES patient population in terms of baseline characteristics and so forth. So that gives us a lot more confidence that we're going to be able to see a significant treatment effect of Rezdiffra in that group.

It's exciting data, and I would say the feedback from the community across the world have been extremely complementary, supportive and excited about it.

Maybe to that point, based off of the feedback that you've been hearing from the community at EASL when you presented the data. How do they see Rezdiffra stacking up against other agents that are being developed also in the F4c space?

Yes. So I mean, the first comment of the presentation was Laurent Costera from France, who stood up and said, data looks like a [ carol. ] And we believe that we've got the best profile and we're going to have the best product in that space. I think we haven't been given the credit for F4c. We haven't talked about it that much, but I think now that we have this 122 patients, again, with all the caveats open-label study, et cetera, you expect a low placebo response rate in this population. And so we think looking at it with active drug, it looks very positive. So we consider ourselves not just an F2, F3 product. We're F4c, and we consider ourselves the leader from F2 to F4c period. So we think our profile is the best profile.

And the one thing just for consideration, people don't think about this. By the time in '27 when we get our results of MAESTRO-NASH OUTCOMES and assuming approval follows. We will have had tens of thousands of patients on the drug. We have a system which is 4 years wired. We have great familiarity with the people in the company, with the product, how to use it, it's just a matter of changing a prescription. That is a very difficult environment for somebody to come in and start from scratch. When you've got a profile starting with our profile, once-a-day pill that works really well, not only in F2, F3, but is promising in F4c. So as I said, we think that we win F2 to F4c.

The first to market, clearly having an advantage here.

And this profile. Profiles matter.

Dave, maybe I can ask you here. You touched on VCTE. Just remind us of the literature that really underpins the ability of VCTE to then predict clinical outcomes? Particularly as we start to think about MAESTRO-NASH OUTCOMES?

Yes, it's a great question. So there's a large prospective experience that was published in JAMA that shows that a reduction in VCTE by 25% can improve -- shows an improvement in liver outcomes. So that's a very large sort of data set. But maybe just thinking about the fundamental kind of connections to start with. So what we know for sure is that increasing fibrosis predicts worse morbidity mortality, worse liver outcomes.

So as you go from F0 to F1 to F4 your increase in risk goes up by about 12-fold to having an adverse liver outcome. And so the question then is, is VCTE liver stiffness measurement, a good surrogate for figuring out whether or not you have F2, F3 or F4 fibrosis. And the answer is yes.

Increasingly, it's become the standard clinical tool to measure fibrosis. And in the patient population. As I said, MRE is even better, but of course, it's less accessible because it's MRI-based.

So you see good read-through from the data you've had to this outcome?

Yes.

Okay. Maybe I can ask you here. You've spoken more recently and openly about an interest in BD, augmenting your pipeline. What can you share in terms of what you're interested in? What makes sense for Madrigal to bring on right now?

Yes. Well, you've also heard me say that. We're in this very, I would say, fortunate and rare position where most companies have a pipeline looking for a great product. We have a great product. Now we can thoughtfully build a pipeline. We are interested in extending our leadership in MASH, and we are looking at every mechanism of action that can potentially be the next best mechanism of action in the space or something that could be used in combination with Rezdiffra.

So our efforts have been, I would say, very broad looking across everything from very early stage to late stage. And when we identify the thing that we think is the next to add or things to add, we will perceive with that. But we are in no rush because we don't have to be so we can be highly selective. We're not going to do a bet the company strategy. Like we don't -- that would just be irresponsible to do. Because we have such a great profile. I mean we have a growth story for within F2, F3, but then we have a whole other indication to move into an F4c with a single product, which we see as the best profile that there is now and in the future. So we'll be selective, thoughtful, something that's going to make it a difference to extend our leadership and we'll report out when we have something to report out on.

Great. Well, maybe a follow-up here. As you think about the type of deal you might want to do, naturally, the next question is, what is the magnitude, what is the size of the deal that Madrigal would be able to really transact on? Mardi, please speak to us on that front.

Yes, sure. So in terms of our capacity, just to reiterate what Bill said, we're not going to bet the company on any BD that we're pursuing. But BD is definitely a piece of our key strategy. So we are very focused on it. But our capacity, we're in great shape. So not only do we have a growing top line. But from a balance sheet perspective, we continue to be very strong.

So we had last quarter, $848 million in cash, and we only have $115 million in debt outstanding. So we're very clean in terms of the balance sheet. And then so we have plenty of capacity to do what we want to do going forward.

Is there the appetite just to restart this whole clinical development pathway in NASH. If you were to bring in an early stage asset, you would essentially be taking on all of those expenses. What is the appetite to do that?

Yes. I mean if it's the right bet to place, of course. I mean, look, one of the things that we have, which most of the other companies don't, is a top line to support it. We also have expertise. We're the only one that's been successful to get something over the finish line. I remind people, this is not for the faint of heart. There are 23 failures before us. And we think that we are experts in the space. And we are going to use that expertise to not only identify what we think is the best bet to place, but also how are we going to develop it to get as early a read as possible to know is it something worth carrying into late-stage development where you have your big expenses.

So we feel like we are exceptionally well positioned with the capabilities that we have, the experience that we have to be able to make calls quickly on whatever we bring in assuming it's not already late stage.

Got it. And as you think the remainder of this year, you do have an upcoming approval hopefully, in Europe. Where do things stand just in terms of the interactions there and your expectations for receiving an announcement?

Yes. So look, we said midyear CHMP opinion, and with the launch in the second half of the year in Germany. European approval that we anticipate, but it's a country-by-country decision on how we launch and where we launch. Germany is the first country. We've substantially built out our resources there or our team there. And I have to say, very encouraged by the team we've put together. We brought really top-notch people in just like we did with the U.S., there's tremendous interest in magical, tremendous interest in Rezdiffra and joining that team. So we think we have a great team that we've put in place.

And we take a little bit of the blueprint from the U.S. and apply it to each country, taking into consideration the particularities of each country. So we are on schedule for everything that we've talked about.

And when you think about the treating community in Europe, how does that compare to the physicians in the U.S. in terms of their receptivity?

Yes. I mean it's interesting. I would say that Europe is far better prepared than the U.S. was. In the U.S when we got approval, I would say that clinicians weren't sure whether a NASH product was ever getting approved. And so they didn't take any steps to plan for how they were going to treat patients. So we were really starting other than with a handful of practices on what your pathway going to be. And that's been this since last March 14. That's been the journey that we've been on helping to build that.

Europe on other hand saw the U.S. approval, so started to speculate, there's going to be a product available. They went as far as -- and I've never seen this in any other disease with any other product, adding Rezdiffra to the treatment guidelines a year before it was even going to get approved. So they've had time to think about it. Anticipation seems very high. We've heard people say that always asking, when is it coming? When is it coming? I'm going to use it, looking forward to it.

But you have to remember, it's just like with any other launch, day 1, not everyone puts every patient on. It takes time. And so that's what we expect to see in Europe as well. But anticipation is high. I think their preparedness is probably better than the U.S. So we're really excited.

You've taken a strategic approach in the U.S. to go out of 315,000 [indiscernible] that were identified, diagnosed, how does that number compare in Europe?

Remarkably, the numbers are fairly consistent between Europe and the [ U.S. ]. There's plenty of patients that are going to be in Europe and available to us.

And then similarly, as you think about the number of prescribers that could potentially be out there how concentrated are these physicians? And how well equipped is your sales force to essentially be able to target the appropriate physicians here?

Yes, we feel very confident that we can target the appropriate physicians -- if you think about Germany, it's much more of a GI with some hepatology. But we've mapped that out, and it's reasonably standard to be able to figure out what type of sales force effort you're going to need against the target physicians that you have. So it's exactly the same type of process that we went through in the U.S. So we know who it is that we're going to be calling on and then we build the team accordingly to be able to make those calls.

And what is your current expectation right now around the requirement for a biopsy?

Look, that was a huge speculation in the U.S. Remember when I first got here, people said, "Oh, the label is going to have a biopsy requirement. And if they -- even if that doesn't, payers are going to require it." Well, I think we've proven that, that's not the case. We have the same expectations in Europe. Certainly, standard of care is not a biopsy. But you're always going to have institutions or physicians that have their own standard of care. And so we expect it to be the exception rather than the rule.

And maybe one last question here. As we do think about launching in Europe, there's such uncertainty right now around MFN, potential impacts that could have, how are you thinking about pricing in Europe?

Yes. So look, we're still optimistic that Europe will recognize innovation. Now clearly, MFN is something which we haven't heard the last of -- we haven't heard the first of in many ways, and we're waiting to see a what more information exists. The great news is we have nothing to wind. We don't have a price, we don't have products that are already generating revenue that we're going to have to react to MFN. We've got a chance to prospectively look at it. And we're going to hear what it -- how it unfolds, and we will approach each country in Europe based on the information that we have. So we're in a really good position because we haven't been approved yet, we haven't launched yet.

But good things to look forward to.

Very much so.

Well, thank you both. Thank you for joining us this morning. Thanks, everyone.

Thanks for having us.