Madrigal Pharmaceuticals, Inc. Aktie

Good morning, and thank you for standing by. Welcome to Madrigal Pharmaceuticals Third 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. Good morning, everyone, and thank you for joining us to discuss Madrigal's Third Quarter 2026 results. 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 are Bill Sibold, Chief Executive Officer; Dave Soergel, Chief Medical Officer; and Mardi Dier, Chief Financial Officer. They will provide prepared remarks followed by Q&A. Please note that 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, and thank you all for joining. The business is performing exceptionally well. Rezdiffra is growing rapidly and the MASH market is accelerating. Rezdiffra is best-in-disease profile and our team's strong execution have established differ as the foundational therapy and MASH.

I'll summarize a few highlights. First, we delivered a $431 million quarter crossed the $1 billion milestone in year-to-date net sales and are now annualizing at more than $1.7 billion based on this quarter's results. We're continuing to steadily add patients and believe we're well on our way to mega blockbuster status. Second, the U.S. F2/F3 MASH market is accelerating on track to grow more than 30% this year. When you combine rapid market growth with Rezdiffra's patent protection expected into 2045, it's hard to find a more attractive growth opportunity in biotech.

And third, we're advanced program with the same objective that has guided us in F2S3 to be first and best.Our ongoing Mitra MASH outcomes trial positions us to deliver the first therapy for FC. Our new Maestro CSH Phase III trial is designed to be a practice shaping trial that we expect to extend our competitive advantage and strengthen our long-term leadership.

Let's move to our Q3 results, where I'll cover Rezdiffra and the expanding MASH market. Dave will discuss our pipeline progress, and Mardi will close with our financials. Turning to Slide 5. Third quarter 2026 net sales were $431 million, up 50% year-over-year. This performance reflects growing demand for Rezdiffra and outstanding execution by our team. We built a broad and durable prescriber base early, and now we are driving depth. The positive experience or got specialists are having with Rezdiffra in the real world is translating into action. They are prescribing it more often. That growing depth combined with excellent access, Rezdiffra's differentiated profile and strong patient adherence is why we continue to steadily add patients.

As shown on Slide 6, we ended the third quarter with more than 55,800 active risk different patients compared to more than 29,500 a year ago. That's nearly twice as many patients on therapy. As a reminder, this is the number of patients actively on therapy at quarter end net of discontinuations. Slide 7 shows why we are so confident in the opportunity ahead. Our latest research shows that the market is accelerating. As we've said, at the end of 2025, the diagnosed U.S. F2/F3 mass population had grown nearly 50% in 2 years to 460,000 patients.

As of June 30 of this year, we estimate the market expanded to more than 530,000 patients and is on track to grow more than 30% by the end of 2026. The growth in this market is primarily being driven by an increase in awareness and diagnosis. Slide 8 makes clear just how much runway remains. The MASH diagnosis rate is still only around 10% and and Rezdiffra has penetrated approximately percent of the market. At 10% of 10%, we are only about 1% into the total opportunity. With more than $1 billion in year-to-date net sales, we are at the very beginning of what we believe will become one of the largest specialty markets in the industry.

As noted on Slide 10, building a successful medicine takes much more a positive top line readout. That's only the beginning of the story. Launch success depends on several important drivers. Labels matter, boxed warnings and burdensome monitoring requirements create barriers. You need efficacy, safety and tolerability to translate into a positive real-world experience and you need a medicine that is easy to prescribe, easy to take and easy to stay on.

Then at execution, the right infrastructure, the field team, medical affairs, reimbursement, market access, fulfillment and patient support all working together to get patients on therapy and keep them on therapy. Building that system takes experience, resources and time. 10 quarters into launch, those questions have been answered for Rezdiffra shown on Slide 11. We have what we believe is the best in disease profile. Rezdiffra is highly effective across each patient subtype. It's well tolerated and simple to use and with nearly 56,000 patients on therapy, its safety profile is exceptionally well defined, which actually may be the most important thing. That's the real-world profile you want for a chronic disease.

We also built the industry-leading infrastructure, and we are continuously improving it. We've done the hard work to wire the system and have set an extremely high bar. This doesn't just happen overnight, and it is difficult to replicate. We already have thousands of prescribers and more than 2 years of real-world experience. Any new entrant will have to build what we are already optimizing and answer the question, what problem are they trying to solve? We have delivered some of the best specialty launches of the last decade and established clear leadership in F2-F3 by being first and best. We will leverage this formidable advantage in S4C as well.

Let's turn to Slide 12. The S4C market is increasingly attractive. It's a rapidly growing multibillion-dollar market opportunity. we now estimate 360,000 addressable F4C patients in the U.S., up more than 45% from the 245,000 we previously shared. That is larger than the F2F3 patient population when we launched Rezdiffra. Expanding into FC could double resides opportunity and bring patients their first approved therapy. We've also seen recently that competitors have modified their programs, increased their study sizes and delayed the time lines with the earliest potential entrant now not expected until 2030.

Our lead in F4C has widened. Mastro MASH outcomes put us in a unique position to be first to market. events continue to accrue in this study, and we're now anticipating a readout in late 2027. We are confident in Rezdiffra's potential in F4 and are exceptionally well positioned to lead. The addition of our new Phase III trial, Maetro CSPH, raises the bar for the field. It builds on maestro MASH outcomes while unlocking new opportunities to shape clinical practice as the treatment landscape continues to evolve. This trial will benefit from what we've learned about F4C over the last 5 years and is another tangible demonstration of our leadership in MASH.

Our objective remains clear, the first and best in F4C. Dave will walk you through our plans. Over to you, Dave.

Thanks, Bill. Patients with F4 Mash face serious risks, including liver decompensation, liver cancer and premature death. The unmet need is urgent. Our 2-year data from the 122 patient open-label F4C cohort in Mastro NAFLD-1 shows that patients treated with Rezdiffra 2 years have improved MASH-related biomarkers and imaging parameters. Among the patients with clinically significant portal hypertension or CSPH, confirmed at baseline, 65% moved to a lower risk category, suggesting a lower risk of Liberty compensation. These data reinforce our confidence in Rezdiffra potential to benefit these patients. Mastro MASH outcomes gives us the opportunity to deliver the first approved treatment for FC -- this is our 845 patient placebo-controlled, event-driven Phase III trial.

The primary endpoint is improvement in liver-related clinical outcomes consistent with FDA guidance. A positive result would support both an F4C indication and full approval across F2 through F4. We continue to accrue events and as Bill referenced, we now anticipate a readout in late 2027. In parallel, we plan to initiate Mastro CSPH in the first half of 2027. This second Phase III outcomes trial withdraw on our open-label F4C data or experience conducting Mastro NASH outcomes and the latest advances in the field to generate highly relevant data to support Rezdiffra benefit in F4C. There are 4 features that distinguish this new trial and our F4C program, as noted on Slide 14.

First is the patient population. We plan to enroll more than 2,000 patients and enrich the trial for CSPH. Development of CSPH is a critical inflection point in the pathophysiology of compensated cirrhosis. So we're focusing this new trial where the unmet need is greatest and we're preventing or delaying a clinical event is especially meaningful. Second is the breadth of evidence we intend to generate. We expect to have the most comprehensive data set in F4C. The size of this new trial combined also with Mastro NASH outcomes should allow us to conduct meaningful analyses across clinically important subgroups.

Third, Maestro CSPH enhances our opportunity to build risk differ specific biomarker evidence. We plan to collect a rich set of biomarkers and noninvasive data in Maestro CSPH, as we've done in Maestro Nash outcomes. Using the data from Maestro NASH outcomes, we can identify measures that are most closely associated with treatment benefit and potentially validate those findings in Maestro CSPH.

And fourth is scale. Across Maestro NASH outcomes and Maestro CSPH, we expect our F4C outcomes-based clinical program to include approximately 3,000 patients, which will give us the greatest insight into this population and further strengthen our competitive advantage. Overall, we believe Maestro-CSPH will be the defining a 4C study in this space. We plan to finalize the study protocol following our discussions with FDA and initiate the study in the first half of next year with the results expected in the early 2030s.

Having 2 complementary outcomes trials gives us a unique advantage and the opportunity to demonstrate consistent clinical benefit across studies, replicate key biomarker findings, advanced designs and get prescribers a more complete understanding of step.

Now let's turn to what we're doing today to further expand the evidence base supporting Rezdiffra in F2-F3. In a heterogeneous disease like MASH, predictable efficacy across patient subgroup is critical for patients and providers. The fourth slot on Slide 15, our Phase III Maestro NASH trial demonstrates Rezdiffra's consistent efficacy across each patient subgroup, including patients with F2 or F3 fibrosis with or without type 2 diabetes across BMI categories and across common genetic variants. Slide 16 builds on that evidence with a more detailed examination of Rezdiffra profile in patients with common genetic variants associated with MASH progression recently published in the DuraHepatology. As shown in the genetic subgroups evaluated Rezdiffra improved fibrosis and reduced liver fat with a consistent treatment effect. These data support Rezdiffra differs utility as a foundational treatment for NASH and form the basis of the combination programs in our pipeline.

We're also expanding Rezdiffra evidence base to include data from everyday clinical practice. This will be a major theme at AASLD later this week. Rezdiffra be featured in more abstracts than any other MASH therapy across the conference. This includes 13 real-world data abstracts, the largest of which includes nearly 12,000 patients. We continue to hear the feedback from prescribers that Rezdiffra is performing even better than they expected. The data highlight the evidence base supporting this positive real-world experience with Rezdiffra.

Slide 18 outlines 3 areas where we're continuing to broaden our understanding of MASH and Rezdiffra. This includes real-world evidence generation, data in special populations and practice-informing studies evaluating Rezdiffra with approved therapies to treat common comorbidities. Examples include combinations with pioglitazone or an SGLT2 inhibitor. These initiatives are intended to answer the practical questions prescribers face when treating complex patients with MASH. We'll use what we learn to inform future development.

Slide 19 showcases our pipeline. In addition to our ongoing Phase III studies, our portfolio now includes more than 10 resmetirom combination programs. Each program follows the same strategy. Start with resmetirom is the foundation and add complementary mechanisms with the potential to deliver better efficacy to some or all MASH patients. we expect to initiate 3 Phase II cation trials in 2027 following regulatory discussions. The first will evaluate our oral DGAT2 inhibitor or vergostat with resmetirom following a Phase I drug-drug interaction study initiated in October.

The second will evaluate MGL-2086, our oral GLP-1 agonist with resmetirom following completion of the ongoing Phase I SAD MAD study. Our goal remains to dial in the right amount of weight loss to enhance resmetirom antifibrotic effect while preserving tolerability. The third will evaluate MGL-0795, our sRNA targeting PNPLA3 with. This is our genetically targeted approach for patients homozygous for a PNPLA3 disease accelerated mutation. Our earlier-stage pipeline is advancing as well with 6 siRNA programs and 3 exploratory assets.

Our approach to our pipeline remains disciplined and focused on combination programs with the potential to deliver the greatest benefit to patients living with NASH. With that, I'll hand it over to Mardi.

Thank you, Dave. Turning to Slide 20 and a summary of our financial results, where comparisons are made to the prior year period. Third quarter 2026 net sales were $431.3 million, up 50% year-over-year with year-to-date net sales of $1.1 billion. This was another outstanding demand quarter. In addition, the team continues to do an excellent job managing gross to net with 9 months of the year behind us, and good visibility into the fourth quarter, we expect gross to net to come in at the low end of our mid- to high 30s range for 2026.

Moving to operating expenses, which included $38.9 million of noncash stock-based compensation in the quarter compared to $26.3 million. Cost of sales for the third quarter was $37.8 million compared to $18.1 million. Cost of sales was primarily driven by an increase in royalty payable for Roche. R&D expenses for the third quarter were $71.8 million compared to $174 million. The decrease was primarily due to onetime upfront business development expense of $117.3 million in the third quarter of last year.

SG&A expenses for the third quarter were $265.7 million compared to $209.1 million. The increase was primarily due to continued investment in commercial activities for Rezdiffra.

Looking ahead, we expect full year 2026 R&D expenses to be nominally lower than 2025, inclusive of the previously announced upfront business development expenses in both periods. We expect full year 2026 SG&A expenses to increase compared to 2025 as we continue to support Rezdiffra growth. As we discussed earlier in the year, we expected some quarter-to-quarter choppiness in SG&A throughout the year due to timing of certain marketing expenses and expect higher Q4 SG&A expenses compared to Q3.

The third quarter marked another important milestone for, our first quarter profitability. We reported net income of $55.4 million compared to a net loss of $114.2 million. As we said, we remain a top line growth story and may dip in and out of profitability in the near term based on the timing of investments, business development as well as typical One key dynamics. We will continue to make investments thoughtfully with a focus on long-term value creation. We also ended the quarter with a cash position of $961.8 million.We've been operating cash flow positive for the last 2 quarters, driven by strong revenue generation and disciplined investment. We remain well resourced to support Rezdiffra, advance our pipeline and pursue continued business development.

So to conclude, on Slide 21, there are 4 important takeaways. First, Rezdiffra tracking toward mega blockbuster status with year-to-date net sales of more than $1 billion. We continue to steadily act patients ending the quarter with nearly twice as many in as a year ago. Second, the addressable market is accelerating, expected to grow more than 30% for the full year. Third, we're strengthening our leadership position in F4C with our new trial, Maestro CSTH. And fourth, we continue to advance our industry-leading NASH pipeline with more than 10 programs, including a leading F4C clinical development program and 3 Phase II combination trials planned for next year.

We're in an incredible position of strength. Less than 3 years post launch, we're already generating positive operating cash flow by continuing to invest in our rapidly growing top line and pipeline. Our operating model is working. We are in a unique position to be able to sell fund strategically important initiatives that we believe will result in sustained value creation. Thank you, and I'll now turn the call back over to Tina to begin the Q&A session.

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

[Operator Instructions]

Our first question comes from Prakar Agarwal with Cantor.

Congrats on a great quarter. So first question, 3Q look great on new patient adds and revenue as well. Maybe if you can talk about the 4Q trends based on what you're seeing in October should we continue to assume steady patient adds or any pushes pulls in 4Q that we should be aware of? And secondly, if you can talk about the new F4C trial in detail, why start this trial now and how will it differ versus the master outcomes trial, both on trial design and event rate assumption and then the addressable market?

It's Bill. Thanks for the question. First of all, just a little context on the quarter. Great quarter, $431 million, greater than $1 billion year-to-date, annualizing at $1.7 billion, we are firing on all cylinders. And in the backdrop, we have the market which is now accelerating, expected to grow over 30% this year in F2F3. So we're up to over 530,000 patients at the middle of the year. So all the dynamics are really great. And that led to steadily adding patients in the third quarter. And that's exactly what we expect to continue doing is to steadily add patients. But maybe, Mardi, I'll pass it over to you to talk about Q4.

Yes. Q4 looks really good as we steadily add patients. We'll just remind you what we said last quarter. For Q3 to Q4, we feel good about the consensus growth rate between the 2 quarters. And we'll just reiterate that today. So again, good growth into Q4, and that led to the robust growth rate for 2026. We're in good shape.

And with the second question, thanks kind of why the FC study now, et cetera. Well, I mean look, we're building a mega blockbuster here. And this is the type of trial that leaders in a space do. We talked and you heard me say in the prepared remarks, first and best. That's what we're trying to do. This is a practice shaping trial that it's a leapfrog study, if you will.

So we are going to raise the bar for the entire industry, drive the science forward. And we're going to win in the category. That's ultimately the objective here. And you do assess so that it can be the most useful for you when you are launching -- and if you look at the timing, we're going to be reading the study out about the same time, there could be some potential other companies there, and we moved the bar even further. So this is a truthfully, a study which, as a leader you do and it's consistent with first invest. But Dave, I don't know if you could comment just a little bit on the study.

Yes, I thanks, Bill. I mean a couple of things for Karl. I mean, we've learned a lot about F4C about the patient population over the last several years both from the open-label study that we've talked quite a bit about from Maestro Naturality One, but also from executing the Maestro outcome study and learning more about the patient population through that. And then the field has evolved as well. So there have been new approaches of ways of being able to identify patients with CSPH and be able to enrich the population more effectively.

So in terms of the scientific understanding in the field, the timing is also really, really great because a lot of things sort of are converging to create the possibility of of delivering that practice shaping study that Bill was just describing.

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

Congrats on the quarter. Dave, maybe I can ask you on the Maestro NASH outcomes trial that's currently guided for late 2027 readout. Just wondering if you could provide any color on what you're observing in terms of the blinded aggregate event rate accrual relative to the baseline assumptions in your statistical analysis plan?

And then secondly, just given increasing real-world uptake of GLP-1 agonist, are you able to share what proportion of patients in the trial are on these background therapies? And how will the stat plan adjust for background or drop in use of these competing agents?

Thanks, Andrea. Dave.

Yes. Thanks,. So yes, great question. So what we're talking about now as we talked about in the past about Master outcomes. We've talked about sort of 2027 time frame in terms of when we expect the trial to deliver. And we've always said as more events accrue over time, we'll be able to be more precise. And so now we're able to be more precise and say, late 2027. And so I think that's the answer to your first question. We're not providing really specifics around the vent accrual because these more modest trials, it tends to be a bit choppy. So the important information is that events are accruing and we expect the late 2027 delivery now.

With respect to the GLP-1, so about 25% to 30% of patients were on stable GLP-1 therapy. At the start of Maestro NASH outcomes. That's we presented those data a couple of years ago at EASL.Now GLP-1s are not -- haven't been shown to be effective and therefore, they're excluded in the trial as patients continue on the study. So it would be a protocol deviation to add a GLP-1 for weight loss, for example, in the study.

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

Congrats an outstanding quarter and also giving guidance, closer fine-tuning narrowing down the Maestro outcome study. I guess first quick question, Ana. Given that's late 2027, can we say you are like based on the visibility of the events tracking that there is no chance that it could get pushed in 2028, just like the confirmation of truly having this in late 2027 rather than falling off? And then also, if there's a translation from this study and its event rates to predicting the probability of success in your nearly CSPH study.

Yes. Thanks for the question. It's an event-driven trial, and we've been saying that all along. Our best estimate now is late Again, as I've said for a long time, if we're at December 31, 2027, and we don't have the right number of events, we're just not going to stop the study. So this is our latest. We're going to keep you up to date along the way if anything changes at that.

Dave, do you want to handle the second case? SP-4 Yes. I mean the -- I understood your question properly. I mean -- so Maestro CSPH is designed to really provide a depth of data to implement Maestro outcomes. So there's a real power in having 2 outcome studies where in the first study in Maestro outcomes, we can identify potential biomarkers or imaging approaches or subpopulations to then confirm or validate in the second trial. So that's the real power behind having the 2 studies together.

And I think it really presents us with a clear advantage because we can provide data at the practitioner practicing community about these relevant subpopulations and biomarkers to to accentuate to sort of make it clear about which patients should be treated and how they should be treated and followed with resmetirom once the drug is approved.

Your next question comes from the line of Nicole Marcus with TD Cohen.

I'm on for Ritu Baral. I'm wondering if you guys can comment on how long do you think the diagnosis can continue growing at the current rate? And if you can comment on any detailed for was differ use within the endocrinology practice?

Thanks for the question, Nicole. Look, what we've talked about is we expect to see double-digit growth for the foreseeable future. I think that this year, let's just take all the step all the way back. At the end of 2023, prior to launch, we communicated there were 315,000 patients. We reran the analysis at the end of '25. We were up to 460. So that was almost 50% growth in 2 years.

And now we wanted to take a peak in the middle of the year to see what was happening. -- and that's where we saw the over 530, which if we project that out is greater than 30% growth that we'd anticipate for this year. Remember where we are -- we're at about a 10% diagnosis rate, and we're at about a 10% penetration rate, which you do the math, is about 1% into this opportunity. We are at the very beginning of the MASH market, the F23 market. So we really see this growing for years, this market. This is going to be one of those specialty areas that I think probably takes decades to fully emerge. If you believe -- if you look at RA, IBD psoriasis, after 20 in almost 30 years, they're still growing, I would expect this is going to be consistent with that.

We're starting to see that diagnosis rates are starting to go up. People are looking for the disease that usually happens when you have an approved therapy. When you have more companies that start to do any of their premarketing work or even if they're approved, it leads to greater diagnosis and so forth. So we really see that this is a very long-term growth market. And that's what gives us really such confidence in the future, 1%, $1.7 billion annualized, find another opportunity in the industry that looks like that.

Regarding Endo, making progress with Endo. We got going with Endo in fourth quarter of last year. And it's really interesting. I mean the big takeaway for us or kind of 2 key takeaways. One is they've got a lot of patients sitting at their practice. And they are tending to follow the pattern similar to gastroenterology. Remember, they're still learning to put their pathways in place, et cetera. And one of the things we've seen actually is when endos convert, they tend to go deeper, faster. And we have some examples of practices that have really been some of the probably best growth practices that we've seen.

So confident in endo. Again, remember, we're not solving this overnight. This is providing us long-term growth as we get deeper into Endo and deeper into diagnosis rates across all the specialties that we're calling on. So thanks for the question.

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

This is Barry Tosh on for Ash. A couple of quick ones. The first one, can you talk about the Medicare channel for us if and how much of that is already contracted -- and then as we head towards 2027, is there appetite to contract more? And what type of volume pull-through could drive that? And what would be the impact on overall gross to net -- and the second quick one is on the FO outcome study. Historically, some of the highest placebo event rates cited by 4 patients come from natural history cohorts instead of controlled interventional studies. -- and the controlled studies have reported placebo rates close to 2% to 3%. So the question for this is what makes you confident that a placebo event rate above 5% is achievable in the ATOM study?

Thanks for the question. Mardi, do you want to start with Medicare?

Yes, I would. And thanks for the question. I'll take this moment and just comment more broadly on gross to net, and then we'll get into the Medicare Part D question specifically as it affects 2027. So let's start with 2026 and looking into the fourth quarter with respect to gross to net. So we had an outstanding demand quarter this quarter again, and we expect that to continue. We focus and we're very disciplined on growth to net in that as we're solving for 2045 for the long term. So we spend a lot of time here managing gross to net.

And so with 9 months behind us in 2026, we have really good visibility into the fourth quarter. And just want to say that we expect to come in at the low end of our stated range for 2026 for the fourth quarter in 2026, which is mid- to high 30s. So the low end of that range for 2026. So now thinking about 2027. So what have we said? We have terrific access, right, both from a commercial standpoint and now on the Medicare side as well. And we said that we're in the middle of negotiating Medicare Part D contracts that will go into effect in Q1 2027. And that's ongoing right now.

So it's a little early to get very specific about 2027 but we can reiterate that we're comfortable that the big step-up in gross to net happened between '25 and '26 as we entered commercial contracting and there will be an impact -- somewhat of an impact in 2027 as those Medicare Part D contracts go into an effect. So while I said it was a little early. We do expect our gross to net next year to be plus or minus the high end of our range that we gave this year, which was mid- to high 30s. So great management by the team, and we remain really happy about our gross-to-net efforts.

Thanks, Mardi. Dave.

Yes. So Parash, on the F4 study, I mean, you're right, you can look at natural history studies, and you'll find a whole range of estimates. So as you're aware, we've talked about a placebo rate in our trial between 5% and 10%. And the basis for that is really that FFC is not a monolithic disease there's a gradation and risk of decompensation as you go from the patients who just converted from F3 to F4 for example, all the way to those who are starting to have already developed portal hypertension. And so the risk profile of that patient -- of that patient population across that spectrum is very different.

And so what Becky and the team did very well 4 or 5 years ago was actually enriched Maestro and NASH outcomes to be able to have a good representation of patients on the sort of more advanced part of the spectrum of cirrhosis. And what we're doing now is having had that by the years of experience is we can do that even better, right? So we can now enrich for CSPH, even more effectively because of that experience we've had in Maestro NASH outcomes because of the experience we've had in the -- with the open-label cohort from Maestro NASH and because of some of the advances in the field, especially to the Avino Consortium and so forth. So there have been a variety of advances that really allow us to now run an even more contemporary and practice shaping study.

Your next question comes from the line of Akash Tewari with Jefferies.

This is Manos on for gas. Just 1 from our end. How do you view the new emerging SARNA data sets from the space specifically, like how does that compare with your internal in-license assets preclinical efficacy. Also Regeneron has started a Phase III with see endpoint as a secondary endpoint, of course. But do you expect this going forward, you can run the registrational trials with the noninvasive measures as the primary endpoint? Just wondering on that time line.

Great. Thanks for the question. Dave, do you want to do the comment?

Yes, yes. I think -- I mean, Manos, the field has been moving more and more towards noninvasive evaluation of of NASH. So there are several consortia now that are working towards eliminating biopsy as a requirement. -- for clinical trials. And we participate in all of those consortia of course. But the latest understanding though at this point is that for a diagnosis of mash for a clinical trial for clinical trial purposes. A biopsy is still required. So -- I mean, you'd have to ask the sponsor of that particular trial, what exactly their approach is. My understanding is that it's a high-risk MAD study, so it's not actually match. So -- but again, you'd have to ask for the details. With respect to the target itself, we haven't I don't think we've seen data from that trial.

I think it's coming out in the next week or so of maybe -- so it'd be premature to comment on it. But I think what you're raising is there are a lot of great approachable genetic targets with sRNA and that's why we're especially excited about our PNPLA3 program and the research collaboration we have with around 6 FRNA targets.

Yes. Remember, just to fill in there, we have 7 total siRNA targets. We haven't named them for competitive reasons, but sure it would be interesting to see how these SIs do in combination with Rezdiffra.

Your next question comes from the line of Eric Joseph with Citi.

Congrats in the quarter -- just on Maestro NASH outcomes, curious to know the extent to which you have visibility into the study's dropout rate, how that's tracked relative to expectations and whether that's a factor here in terms of timing study readout? And just also on Maestro CSPH, just trying to better understand some of the contrasts with the NASH outcome study. Would patients in this trial be closer to potential disease progression. Just wondering whether the event rate might be a little bit faster in this planned additional planned outcome study relative to the one well underway, NASH outcomes.

Thanks for the question, Eric. Dave.

Yes, thanks for the question, Eric. I mean -- so Mister NASH outcomes, as we've said, it's an event-driven trial. And as events accumulate, we can get more precise about how we estimate the the trial delivery date when that would occur. And so we've gotten to a point now where we can estimate that late 2027 is when we would expect the data. We track blinded event rates, we track dropouts. We're heavily involved in managing this trial as 1 always is with an outcomes trial. It's crucial to to have a very sort of compulsive approach to outcomes trials and just making sure that the quality and the retention of the study is is as expected. And we are -- the dropout rates that we're seeing is within our expectations.

So I think I'll leave it there. And with respect to Maestro CSPH, yes, I mean, like I've said a couple of times now, we're better able to enrich the population for CSPH given the experience that we've had with Rezdiffra in the F4 population as well as how the science and medicine is shaped has evolved in in cirrhosis. So we are better able to identify patients at higher risk. But what I'll point out, I made the comment that F4 monolithic disorder. And there could be a point at which patients are too far along in the CSPH journey to where it gets more and more difficult to treat them. So we also have visibility, not just on the the less severe end, but also in the more severe end. So it gives us really the opportunity to identify the sweet spot within CSPHto find patients for the trial.

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

Congrats on the progress. Just wondering, you guys mentioned mega blockbuster a few times. Wondering if you could give us some guidepost on what you consider as like a blockbuster. And then with a lot of investment coming next year in the pipeline. Can you talk about how you think about profitability versus reinvesting the pipeline and the strategic initiatives there?

Yes. Jon, thanks a lot for the question. Mega blockbuster. It's a little bit of a moving target and how it's defined. Certainly, if you look at kind of where consensus is for us for peak, that certainly puts you from our definition in the mega blockbuster category. I think that there's very few products in the industry that could actually make a claim like that. that we believe that there's that much potential in the market.

And again, it's just based on, as we've said from the beginning, high unmet need, increasing number of patients and we have what I continually have said that I believe we really have a holy grail profile with a once-a-day pill that is effective, well tolerated and safe kind of what you need to be successful.

And I'm just talking about F2F3 at this point. One of the things that's happening in F4C, that market opportunity has gotten to be as big as the F2-F3 opportunity was in 2023 with signs of rapid growth and a long future ahead of it. And as we said, FC could double the opportunity for us. So the fundamentals in this market are so positive that we believe that this could really be a mega blockbuster product, and we're well on our way with each of the quarters that we're delivering out here. So maybe I'll turn it over to Mardi with the question on profitability.

Yes. Thanks for the question, Jon. So yes, we're pretty excited that we hit our milestone of our first quarter of profitability. So it's another milestone for magical and Rezdiffra. And again, it just reflects our excellent launch execution strength of the business and the underlying demand. So it was a good question about is profitability and cash flow positivity going to be sustainable -- and it's a good time to remind everybody that we're still a top line growth story, and that's our focus right now. And we continue to invest in that top line as well as building our pipeline, which you mentioned.

So I'm going to reiterate the same message that we said in our prepared remarks that we may dip in and out of profitability in the near term based on those investments and also remind you of the 1Q dynamics, which, for us, is very consistent to what the analogs and specialty medicines. But the good news is the operating model is working, and we're in this great position that we're able to self-fund these import initiatives like Maestro CSTH and that we believe will result in the sustained value creation.

So we're in good shape, lots of momentum. We do believe the growth of the top line will outstrip the spend even with these investments. But right now, we may dip in and out profitability in certain other quarters in the near term.

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

Congrats on the quarter. With respect to the new Phase III X4 study, talk a little bit more about how exactly you plan to enrich for patients with CSCH and how that compares to the population you've already enrolled in the Master NASH outcome study. And then can you just talk about next steps for engagement with FDA, like what's outstanding that you need to get alignment on here with this study? And -- how are you thinking about the potential to achieve differentiated labeling with this study relative to Maestro NASH outcomes and some of the competing F4 programs?

Yes, sure. Tom, thanks for the question. Dave, I'm going to pass it over to you.

Yes. Thanks, Tom. Yes, great question. So the -- Mister CPH is really being designed as a practice shaping study. So again, I've said it a couple of times, we can really leverage our experience in the F4 population to be able to enrich more effectively. At this point, it's a bit of a competitive advantage for us. So we're not going to go into it in a lot of detail. Suffice it to say, we have imaging, we have biomarkers. We have a lot of things from the open-label study and from Maestro NASH outcomes that helps us understand more about how to shift that patient population to the more severe group.

I mean even if you look into the at some of the published literature recently, you look at anticipate NASH scores or you look at the Baveno consensus criteria continued evolution of those consensus statements over time and the refining of the ability to be able to identify these folks with more severe disease. So that's kind of the broad brush strokes. And of course, as we get more information, we'll -- we get closer to foliation with the protocol, we'll share more more information with you.

And part of that, to your second question about FDA engagement, really around the finalization of the protocol will be engaging with FDA to talk about exactly your third question, which is what -- how does this study potentially affect labeling. Our goal is that this study would be designed to fully be represented in the product label. And so obviously, in engagement with the agencies required for that to make sure we're all aligned.

Right. And just one other comment on this. A lot of companies would wait and start a trial after approval and ultimately find themselves in a bit of a data desert. And they're playing continuous catch-up. That's not what you do as the leader in the space. We don't want to have any daylight between our approval -- and ultimately, if any other company is successful to get there, we want to assert ourselves as the leader. And that's why you start this study today so that you have no daylight between anyone potentially launching and you generating new important data for the field.

Your next question comes from the line of Ellie Merle with Barclays.

Congrats on a quite strong quarter. On 2027, how are you thinking about revenue growth there as well as consensus as it currently stands and your latest thinking around whether you would issue revenue guidance.

Kelly, thanks for the question, Mardi.

Yes. Great. Ali, thanks for the question. For 2027, we're a little on the early side to give a specific direction on 202. But listen, the business is doing great. We have a lot of momentum. And I would say the underlying characteristics of 2027 are lining up in a fantastic way. So we're continuing to steadily add patients. We have great access and the market, of course, is accelerating. So as Bill said a couple of times, we're firing on all cylinders, and that will continue into 2027.

So I can't give a little bit of direction. We did look at consensus for 2027, and I think we're in a pretty good spot there. So we can say that about 2027, but I'll also take this opportunity to once again remind everybody about the Q1 dynamics going from Q4 to Q1, just like what you see with the analogs we're not immune to that, and we expect similar Q1 dynamics, and you can just look at the analogs for the specialty products in the sector. But otherwise, if we look forward to continued growth, continued fantastic growth into 2027. And with respect to guidance, yes, no, we're not providing guidance at this point, but we'll continue as we have a pretty good direction both on the quarters and the years as we have.

Your next question comes from the line of Andy Chan with Wolfe Research.

Regarding the time expansion to $530 -- if you can talk about the patient journey and how that has evolved through your launch, especially the prescribers and how they work up with the patient. Are physicians behaving differently today is time to diagnosis. Is that becoming shorter? And do you also anticipate any future changes in a favorable way going into the future?

Andy, thanks for the question. Look, the patient journey -- well, here's -- let me answer a few things for you here. First of all, we are seeing increased diagnosis as evidenced by the numbers. And what's driving that is familiarity with the disease and familiarity as well with the product that's approved in the disease. We also see that there is more of an emphasis in guidelines on testing and looking for MAS. And that certainly helps people start to look for the disease, right? I mean that's what we're seeing in all of the specialties that we're calling on, including endocrinology.

Now what happens after somebody starts diagnosing is there is a moment where they put their own pathway in place. And the sophistication level of that really varies upon the practice and the institution some are all the way an institution where they're using electronic medical records to actually go out and proactively find patients using either beyond the diagnosis code looking at symptoms somebody may have or are they at high risk factors that's kind of on the far end. That's what the future, I think, holds where there'll be much more of a desire to go out and look for these patients. And then in other practices, I have a suspicion someone is obese has type 2 diabetes. That's reason enough that I should be testing.

Access to NITs is something that will continue to grow in time as well. We're seeing a continued increase in the number of scanning that equipment that's available, and that certainly helped as well. So I would say -- like everything else, we're at the very beginning here. There's still variability on the far end of people using technology, et cetera. And at the beginning where people are under-avea suspicion of a patient something that they've previously seen in a file that triggers it. But everyone is formalizing, starting to formalize their approach.

And the one thing that we can't control for -- we can help try to accelerate, but it's really time. It just takes time for people to incorporate something into their day-to-day practice. And all these positive signs greater than 30% growth that was previously greater than 50% growth over 2 years. So this acceleration -- those are all signs that it is becoming more incorporated into the daily practice. And we only expect that to increase and improve over time, which, again, is why we have such confidence in the prospects of this market and of us competing in that market.

Your next question comes from the line of Jay Olson with Oppenheimer.

Congrats on a great quarter. Since Magical has pioneered the diagnosis and treatment of mash with noninvasive methods. Are you planning to drive similar innovations in CSPH, to provide diagnosis and monitoring with safe, easy-to-use noninvasive approaches that could replace the current gold standard invasive testing for CSPH? And then separately, since you have a wealth of combination programs and recognizing that your decisions will be entirely data-driven. How will you prioritize this portfolio of combos? And how much clinical data will you need to generate before identifying the ideal combination or combinations to advance into registrational development.

Jay, thank you very much for the question. Dave?

Yes, great question, Jay. On noninvasive diagnosis of CSPH, I mean the short answer is yes. I mean the idea of combining Maester NASH outcomes with Maestro CSPH, gives us the opportunity to really move the field forward with respect to noninvasive tests and biomarkers and specifically do it for resi. So a lot of these biomarkers are mechanism dependent. And so we will have a large data set that we'll be able to use to validate some of these measures.

So when a practitioner puts a patient on Rezdiffra cirrhotic patient on Rezdiffra after it's approved. They'll be able to have tools to be able to monitor that patient's progress. That's the vision of being able to validate some of these markers. So that's exactly the whole idea.

So the second question you had was with respect to the combination therapy pipeline. Look, our stated strategy has been to be disciplined and efficient in developing the pipeline and really only bring forward combination products that make a -- have a meaningful benefit for patients, either some patients or all patients. So if you think about the PNPLA3 siRNA, for example, there's a clearly defined population of people who live with disease accelerating homozygous mutations on P&P. 3, who are the natural targets for that sRNA treatment in combination with metro.

So that's one very clear example -- similarly if you think about the 2 inhibitor, patients will require additional efficacy to really pull them back from a rapidly accelerated disease process. So the type of data we'll be generating in Phase II will help us make those decisions. And as I said during the remarks, we'll have those 3 programs starting in 2027. So it's very exciting to see this pipeline evolve.

Yes. And remember, we'll be generating data in combo therapy where others will be still attempting to move forward in monotherapy and jumping off a great product that just a great profile. So trying to make it even better.

Your last question comes from the line of Michael DiFiore with Evercore.

Congrats on all the great progress. Two questions from me. When you say that a positive F 4C trial could support full approval in F2 and F3 guess what constitutes a sufficient result? Is it just on the primary composite alone or consistency across components? -- separately. Earlier this year, you said around 25% of differ patients who are also on LPI and you expected that to rise. So now we're a year into go mash launch, has that share moved? And are you seeing more patients come to Rezdiffra after trying a Jill?

Yes. Mike, thanks for the question. First of all, that 25% is moving up some. It stayed fairly consistent. I mean what we're seeing is GLP-1s as a background therapy here. They're kind of ubiquitous. And it's hard to say when have people been on one. A lot of them, if you ask, they've been on one at some point. So it's kind of this background therapy.

Yes, we are seeing some patients that have come over. But again, it hasn't really dented us. Our growth in any way, having the GLP-1 will go be approved on the market. In fact, I think that, that's helped with some of the market growth -- so again, as I said, we're seeing it more as a background therapy. Though we're very interested in trying our combo we have RLP and we think that with just the right amount of weight loss that it can potentiate the impact of risk different. Dave, do you want to take the first question?

Yes, on Maestro outcomes, Mike. So guidance from the agency is that a positive Maestro NASH outcomes trial could support both the new indication of F4C and full approval for F2/F3. So it serves both those purposes. That's -- I guess, I'll leave it at that.

Dave, look, why don't we end there? Maybe just to sum things up a little bit here. Launch is objectively outstanding for us and it's continued to be so for the 10 quarters that we've been on the market and on all metrics. And I think some of the context here is important. This has been while competing against 1 of the largest companies in the industry with one of the largest products in the history of the industry. We've had 5 quarters of competition with Wibobi, and it has not made an impact on our growth and we're going to have at least 15 quarters of a lead on the next potential competitor.

Now in the background, the market is growing at 30% as well. We're at 1% penetration, and that's at 55,850 patients in F2, F3. We -- every day, we're adding patients every day, the real-world experience is increasing. And I can tell you in the conversations I've had with many, many prescribers I have never had any 1 question the efficacy of Rezdiffra. In fact, they've been extremely pleased with what they're seeing in the real world. And next is a we're seeing, we have Maestro NASH outcomes quickly followed by CSPH, our new study in a market which is now bigger than the F2/F3 opportunity when we started 10 quarters ago.

And finally, we have the leading pipeline and all of this is going to be in combination with Rezdiffra. As I said, while others are attempting to bring their first product to market. So we are performing exceptionally, and we are exceptionally well positioned for the future. This remains from, certainly, my perspective, the best opportunity that's out there. So we thank you for joining us today and look forward to updating you with our future progress.

Great. Thanks, Joe. 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.

All right. Welcome, everyone, to day 2 of Cantor's Global Healthcare Conference. My name is Prakhar Agrawal. I'm a biotech analyst at Cantor. And for the next session, we are very excited to host the team of Madrigal. Joining us today, we have the entire management team, Bill, CEO; Mardi, CFO; and David, Chief Medical Officer. Thank you so much for taking the time to join our conference.

Thank you.

Maybe, Bill, we can start off with just level-setting expectations. Coming out of 2Q, what were some of the key highlights for you internally on Rezdiffra's performance and things that maybe Street fully underappreciated?

Yes. Well, first of all, thanks for having us, Prakhar. We're really happy to be here. Q2 was a great quarter for us. If you look at it from any of the metrics that we share, starting with $364 million in sales. That puts us in a very, very elite group when you take out some of the already mega blockbusters that exist. There's very few companies that could put up a quarter like that with some differences, and I'll get to that in a second.

We also announced that we had greater than 49,000 patients. That was the end of Q2, but we also said that we crossed the 50,000 mark in July, which is a big -- it's a significant milestone when you cross 50,000. Now the other piece which is really interesting, and this is getting a little bit more to the what's underappreciated. I think that there's still a lack of appreciation for the market dynamics that exist in MASH. That 50,000 and that $364 million, just to put in context, we are in a disease that's about 10% diagnosed today and 10% penetration. So that's 1% of the opportunity.

We are at the very beginning of what could be a big market. And the market growth dynamics are certainly exceptional. We reported at the end of '23 that there was about 315,000 patients that were sitting in the practices that we were going to be calling on our target prescribers, and that number grew to 460,000 at the end of '25, so almost 50% growth in 2 years. And what we're seeing through the first half of '26 is very robust market growth that's continuing. We said that we expect double-digit market growth for the foreseeable future, and that's certainly the case.

So I think the market is treating us at times like it's a mature market where you're in a zero-sum game for market share, et cetera. Instead of looking and saying, this is a lot like some specialty markets that evolved over 20 to 30 years, RA, psoriasis, IBD, and those have become $20 billion, even $30 billion markets. And we feel that that's what's going to happen with the MASH market. The difference, we're the leaders. We have a first-mover advantage. And because of the success of the product, we've now built a pipeline which really leads to longer-term growth and success as well. So I think that it's sometimes when you look at something you say, is it too good to be true? Well, I mean, this is not too good to be true. This is true.

And -- there was a big debate that GLP-1s are going to impact the volume. But I mean, you've been constantly adding 6,000 to 7,000 net patient adds in the past few quarters. And I feel like since Wegovy's launch, the patient -- have actually accelerated a little bit. So what's driving some of that growth? Is it that -- being in the market, just increasing the diagnosis rate, treatment rate? Just maybe expand on that.

Yes. Well, look, a couple of things. I think any time you add a competitor or another launch to a market, it certainly helps with the growth of that market, and we're seeing that. I mean, as I said, we're seeing a really, really robust growth continuing with MASH with diagnosis, and Wegovy has helped that. Now what it hasn't done is it hasn't had any impact on the growth of Rezdiffra. And I think that really comes down to profiles. The Rezdiffra profile, you often hear me refer to it as kind of a holy grail profile, an effective, well-tolerated, safe, once-a-day pill. That is -- has kind of been the gold standard, at least in my 35 career -- in the 35-year career experience so far. And that's what I think is driving a lot of the uptake of Rezdiffra.

People are seeing that -- it's got a great profile and even more importantly, the real-world evidence looks really good. We look like we are -- I think we look better than we did in clinical trials. That's the report that we got from physicians constantly are saying patients are doing really, really well, even better than I would have expected. So all of that leads to this steadily adding comment that we've been making really for a number of quarters now that we have steadily added and expect to continue to steadily add patients, which is what we're going for here. And you can't fight certain dynamics of a new market.

Rarely, and in fact, I don't think I've ever seen in my career where first product launches and every single patient just gets treated out of the gates. It takes time. I mean each physician, each prescriber has to go through their own checklist. They have to make sure they've got the resource to pull through a prescription. They've got to make sure they know how to identify, how they source, how they create pathways. So it just takes some time. That's why we use benchmarking so frequently in our launch metrics. And on all the key metrics, we are at or near the top of those various metrics against other really, really successful specialty products.

Got it. And you've talked about the increase in diagnosis rate as well since the Rezdiffra launch. I guess, where can it go at peak? Are there any analogs that you look at internally to really understand that? And any further steps you could take to increase that?

Yes. I mean, look, as I said, some of that's just on a -- gradually, you increase that diagnosis rate. And that's why -- let me start with, that's why we were so specific and have been so specific about what the diagnosed population is that's at our target prescribers because that's ultimately what is the opportunity immediately in front of you. And I think -- and I'll get to the diagnosis in a second. But when you look at the 315,000 growing to 460,000 and growing well beyond that, that in itself represents an opportunity which is a big specialty market if you were not to at all increase the diagnosis rate. So it's a way to give surety that we have multiple paths to victory, so to speak.

Now when you think about diagnosis rates, it really depends. You look at the real high end, cystic fibrosis is over 75%. If you look at something like cirrhosis -- psoriasis, sorry, you have the cirrhosis psoriasis. Psoriasis after almost 30 years of products on the market is still in the upper 20s, I believe.

So where do we land? It's somewhere -- it's not going to be up at the 75-plus percent just because it's not as visible the disease and so forth. But all -- if you look at just even the lower end of that, you're talking about a population of diagnosed, which could exceed 1 million-plus people. So that's why us doing the counts and knowing who exactly is diagnosed and already there and building our approach around that to take advantage of that opportunity is the approach that we've taken. But look, where it's going to land, I'm not sure, but is it going to be a lot bigger than the 460,000 today? Absolutely. Is it showing signs of that today? Absolutely. When is it going to get there? It's going to take years, but we are going to make this -- this is a -- it's a big specialty market.

Okay. And I think in terms of the breadth of prescribing and depth of prescribing, you said that you've reached most of the 10,000-plus target physicians, focus is on the depth of prescribing. So maybe just talk about like the steps that you're taking to increase the depth of prescribing. And what are the constraints? Is it just a matter of time as physicians get comfortable with the drug?

Yes. So just to recall, we had originally targeted 14,000 prescribers and about 6,000 were the real high, high target where you had the highest potential. And we announced the 10,000. The 10,000 because 10,000 is a really important milestone that breadth becomes just a little less important because when you've got that many prescribers, if you can start to go deeper, you actually have set yourself up for what you need to do. So we kind of treated that as check the box, we're above 10,000.

Now in reality, we're adding prescribers every day. So the number is north of 10,000. So we have enough prescribers driving depth now. There's a few things that drive it. One is time. People just get more familiar. Like I am picking up lay press now that talks about fatty liver that I had never seen before. So I think that's always just familiarity, having us on the market talking about it, having other companies as well. Then it becomes for each prescriber, the experience they have. Now as I said, the good news is that in the real world, people are reporting back, they're really satisfied, prescribers and patients with what Rezdiffra is offering, exceeding the clinical trial results.

So that own personal experience is helpful, but we also use real-world evidence and other data that's generated. So you get this continuous feedback loop, and that just leads to more and more experience. And you see physicians -- prescribers, I should say, on a curve where they all start with one and then they add and add and add. So again, when we look at depth of prescribing, we're tracking extremely well. I said, at or near the top of the benchmarks that we're using.

So it's time, it's experience, it's generation of data. It's ease of use as we refine our service model to make it easier to write a prescription and to make sure that the patient gets that prescription.

Okay. That's great. And maybe on access, I guess, when the GLP-1, like Wegovy was launching, there was a big debate on whether there will be step edits, more extensive prior authorization. You guys did contracting. We haven't seen much of that. I guess, firstly, how do you kind of convince the payers on getting such a broad access for Rezdiffra? And secondly, as we look forward, any reason to believe that it could change maybe into 2027 or beyond?

Yes, do you want me to take that?

Yes.

Great. Thanks, Prakhar. It's great to be here. Yes, we have excellent access, just as you said, even with the launch of Wegovy, which did put us in a position where we contracted with the commercial payers at the start of 2026. We are able to retain that first-line access, no step edits and improved utilization criteria. So it's something we take very seriously. We have a whole team that works on it. We think they've done an excellent job. We're also solving for 2045, right? So we're here for the long term. So everything we do, we want to protect that gross to net and make sure we maintain the best access that we can for these patients. So we think about it and work on it continually, and I think we've done a very good job.

Now we talked about 2026 with respect to commercial contracting, and then looking ahead for 2027 and beyond. In 2027, we've talked about contracting with the Medicare payers, right? So you usually do your commercial contracting about a year later, it comes in with Medicare. We already have some Medicare that we're contracting with already. So we'll see some of that in 2027 and beyond. But honestly, where we are now with the access that we have, both commercial and the Medicare, we're feeling really good about accessing our gross to net.

And maybe the big hit to gross to net was for 2026. Do you still expect 2027 to increase, but maybe not to the same extent as what happened in 2026?

Yes. Generally, yes, that's correct. Because going from no contracting to stepping up from '25 to '26, yes, that was meaningful, and we talked about that quite a bit. So going forward, you still see some degradation to gross to net, just naturally as you do in the business on the commercial side, but we'll also have some of the Medicare impact as well. But generally, the biggest impact was in 2026.

Maybe just one comment as well about Wegovy and Rezdiffra. I mean first of all, our company view on GLP-1s is that for other indications, assuming the prescriber thinks it makes sense and it's on label that GLP-1s are great. For MASH, Rezdiffra, we believe, is the product that patients should be on. Are there combination therapy? Yes, there's -- look, we got our own oral GLP-1. So we're interested in can we get a little bit of weight loss in association in combination with Rezdiffra, we know we get a better effect. We haven't tried that through a pharmacologic intervention, but we think that's good.

I think what it shows is real world profiles matter because when you look at the -- both products from a clinical trial perspective, there's -- they're quite similar. But when you look in the real world, that's where things change. And that's where our profile matters so much and is driving the uptake. And I think, payers, we've explained that to them that if someone has to stay on a drug for it to work, they know that this is an expensive disease and they want something that people are going to take and work. You can have something which costs much less. But if you can't get to the therapeutic dose or stay on it long enough to have the effect, you're going to end up paying for that later either in the form of somebody progressing or having to then switch to a Rezdiffra. So I think we've really hit the stable point of people understanding kind of where each product is appropriately used.

Okay. And we're in September right now almost getting close to end of the year. So people have already started talking about 2027. And I guess, any initial thoughts on how do you see 2027 panning out versus 2026? I mean, the drug will already be annualizing at $1.75 billion plus exiting based on where consensus sits right now. Any dynamics maybe apart from the contracting on the Medicare side that we should be aware of in 2027?

Well, I can answer that, yes. So we haven't talked a lot about 2027 yet. So we're not talking specifics, and we haven't given specific direction on that front. But I think everything that Bill said before is the setup for 2027, the rest of '26 and into '27, which is market growth, considerable market growth that we think continues to grow at double-digit rates. Market access we just talked about having good first-line access across the board. The depth of prescribing that we're seeing out there with Rezdiffra, and our IP patent life into 2045. So the setup is fantastic. We talked about robust sales growth for the rest of 2026, and we just think where we are on patient adds as well and where we are in the dynamics and the benchmarks and the analogs, it's a great setup for 2027 and beyond.

Okay. Got it. And with any large market, there's always more competition. So we have a few readouts coming in the next 12 to 18 months. Inventiva has a readout in 4Q. We have the FGF21 reading out sometime in 2027. I guess for you, Antony (sic) [ David ], is there any scenario out of these readouts where you think, all right, we need to up our game commercially because I mean, we have seen analogs in markets like we mentioned about psoriasis, any new drug increases the size of the market. So like -- but for any scenario from these readouts where you think, all right, we need to figure out a way to really expand commercially, like make sure that our infrastructure is right there because competitors are coming.

Well, I mean, look, I think you're right. In any time a product -- a new product launches, it helps the overall growth of the market. We've got a great profile. It's really hard for me to look ahead and see anything in the upcoming pipeline that offers something beyond Rezdiffra. Also, what no one has is over 50,000 patients that are on drug and has -- it will be 3-plus, 4 years of real-world experience. We continually up our game. So the way we launched, we continue to iterate on the services that we provide, how we interact with the community, how we partner with the community really. And that's just gotten better and better. So we will continue to do that regardless of whether there's competition or not. And I think if I take a look at 12 months ago, we had the -- that some were thinking the falling off the cliff of the world moment when Wegovy was approved. We're 12 months into their launch, and we haven't seen an impact on Rezdiffra. That's competing against one of the biggest pharmaceutical companies in the world. We feel we can compete against anybody.

Great. That's a good segue to the pipeline. I guess, firstly, there's a big focus on the F4c readout that's coming. What drives your confidence internally that this should be a positive readout for Rezdiffra?

Well, I think first of all, it starts with the data that we have in our hands. So -- we have a very rich experience with 122 patients in an open-label study. So all with F4 cirrhosis who have baseline characteristics that are very similar to the Phase III population in the MAESTRO-OUTCOMES study. So in that open-label study, we see compelling changes in some of the key measures of liver effects. So we see reductions in liver stiffness measurements over 2 years of 6.7 kilopascals. And just to put that into context, in cirrhosis, you usually work on the rule of 5 kilopascals. So if you increase your liver stiffness by 5 kilopascals, you're entering a new level of risk category with respect to portal hypertension.

So a reduction of 6.7 kilopascals suggests that we're able to put a lot of patients into a lower risk category after a couple of years of therapy. And indeed, about 65% of patients who have clinically significant portal -- had clinically significant portal hypertension at baseline shifted to lower risk categories over that 2-year period. So that's the CSPH measures using liver stiffness measurements. But there are also other measures in that trial, including MR elastography, including liver enzymes and other biomarkers that all go in the right direction and give us a lot of confidence.

And then last, again, these are sick patients with cirrhosis. And yet, what we see is a 2% to 3% annualized event rate in that open-label cohort. So a lower event rate than one would expect from natural history, which we would expect to be in the 5% to 10% range. So that kind of sets the sort of expectation that we're seeing a positive effect of the drug and gives us confidence about what we'll see in the Phase III trial.

Right. And so you mentioned about the placebo event rate 5% to 10%, it seems like a pretty wide range. So I guess like how was the trial powered? And like in terms of enrichment as well, like where do you think the placebo -- like the base case expectation of where the placebo lands?

Yes.

I mean what drove that 5% to 10% assumption as well, if you can...

Yes. It's really the natural history data. So there are sort of large meta-analyses of a kind of broad F4c population that gives you an event rate around 5% of decompensation events. Now importantly, if you enrich more and more and more for higher severity of disease, you can get closer to that 10%. And what Becky Taub and the team did very well in this study when they were setting it up years ago was to enrich for higher-risk patients. So -- and you do that by setting criteria around platelet count around MR elastography measures, VCTE, et cetera, to try to really push the patient population into the higher severity range.

And the reason why that's important is because those are the patients who are on the cusp of having decompensation events. So you really do need to enrich these trials to see the events accrue. So that's where the placebo event range comes from. And I agree, it is a broad range just because the natural history data doesn't pinpoint a number for us like in some therapy areas.

So -- and then the powering assumptions for the trial are for a hazard ratio of 0.5, which is based on other analogs in hepatology, like hep B, hep C and PBC, there have been data sets that show that you can achieve that large an effect size in the hepatology indication. And again, this is an indication where there is no standard of care. So it's not like heart failure where you're introducing the fifth therapy on top of a good standard of care, there's no standard of care. So the modifiable disease is -- disease burden is larger in cirrhosis than in some areas where there's already a good standard-of-care. So we would expect a larger modifiable disease burden.

And assuming the F4 readout is positive, I guess, the addressable population is smaller, but should the treatment rate be higher in this population given it's more severe? And is there any halo effect on the F2, F3 population as well?

Yes. Look, so what we've presented previously is that we think there's about 245,000 F4c patients in the United States. And we would expect that you would have a much higher urgency to treat those patients. So fewer patients, higher urgency to treat. Therefore, we see the opportunity is essentially doubling our opportunity.

Your other question was -- sorry?

Does it help you in the...

Yes. I think, look, I think -- I would assume it can't do anything but help just the positive read-through. It just gives more certainty about the -- what the product can do. I think we're going to learn a lot. There's still a lot to be learned from all these populations. And as pioneers, we're really trying to drive the science here, and essentially set a bar for others to try to get over as well.

Okay. And you do have a big pipeline as well now internally apart from Rezdiffra. So maybe just lay it out in terms of any near-term readouts that you expect that we should be starting to pay more attention to.

Yes. I mean -- so the pipeline is one -- or the aspiration to build the pipeline was one of the reasons that really -- I was really interested in joining Madrigal actually. So Bill's vision around not just making Rezdiffra an incredibly successful product, but then using resmetirom as sort of the focal point for building a pipeline was an incredible opportunity.

So we have three assets that we've been talking quite a lot about. So the GLP-1, an oral GLP-1, orforglipron analog, great chemical properties, very good pharmacology preclinically, is now in the first time in-human study. So going through the initial opening IND trial to get into healthy volunteers to establish safety and tolerability initially. We'll run a small resmetirom drug interaction study as well, just to assure that there's no pharmacokinetic issues with the two products together.

And then the real -- so that kind of happens through this year. And then next year, we anticipate starting a Phase II study with a combination product. So as Bill mentioned earlier, the compelling thing about the GLP-1 combination therapy with resmetirom is you just have to tickle in a little bit of weight loss to boost resmetirom's antifibrotic efficacy. So we think with a really well-tolerated combination product, we might be able to get to better efficacy for patients.

Then the second product we licensed from Pfizer, Ervogastat, which had actually been through a Phase IIb study, a well-conducted Phase IIb trial. So we know a lot about the drug. It didn't look to us or apparently to Pfizer like a monotherapy. And so -- but it looked like a really nice combination opportunity for resmetirom. So complementary mechanism of action. It inhibits DGAT-2, which is the terminal step in de novo lipogenesis which is the process that leads to triglyceride droplet formation in hepatocyte.

So by inhibiting that last step and then treating with resmetirom and ramping up mitochondrial fat burning, fatty acid burning, we have two complementary mechanisms that could get us better antifibrotic efficacy as well.

And then the last is the more recent addition to the pipeline, which is an siRNA for PNPLA3 that we licensed from Arrowhead. So PNPLA3 is a genetic determinant of MASH progression and MASH severity. And while resmetirom actually works quite -- works well in patients with PNPLA3 mutations, these are people who had even higher burden of disease. And so combining two treatments might offer a better efficacy for those patients as well. So those last two programs, the Ervogastat program and the PNPLA3 siRNA, similarly, we expect to be in Phase II next year.

Okay. So as you start planning for Phase II trials for these programs in combination with Rezdiffra, like what's -- how do you think about the most capital efficient way to decide which assets to move into like a large Phase III?

So I can talk about the clinical part. I mean I think the question is -- the bar is high. Let's just start with the bar is high. Like resmetirom, Rezdiffra is already a great drug. And so a combination product is going to have to really deliver something that is compelling and clearly differentiated for some patients or all patients with MASH. So the Phase II program will be designed with that in mind. And looking primarily at the usual biomarkers like MRI-PDFF and serum markers like ELF or PRO-C3, so the typical markers we use, and all of those data together with the tolerability data will help us make a decision. The nice thing is all three of those programs are kind of happening around the same time. And so there's some efficiency there because we can sort of screen and enroll in the most appropriate protocol.

Just remember on the pipeline, we built this pipeline only spending about $300 million upfront, right? So we are capital efficient from the start. And so Dave is correct. We'll design those Phase IIs in a capital-efficient manner, so that we can decide what to move forward before we commit to the Phase IIIs.

Okay. Got it. And I know you won't provide peak sales guidance for Rezdiffra, but you call it a mega blockbuster, Bill. What's a mega blockbuster?

Yes.

What do you mean by mega blockbuster?

Well, no, look, I think that the answer is -- Okay. Look, I think that for all the reasons that I described, the market dynamics, the rare space that we're in at $364 million in a single quarter, 9 quarters in. This has the potential to be a very big product. We haven't given guidance, we're not going to. But I think if you start looking at even kind of what your models suggest, I mean, that certainly in my definition, is a mega blockbuster. So it's a big product.

Okay. And maybe in the last minute or so, like what are investors right now missing about Madrigal's business?

Look, I think they're missing -- just what we talked about, they're missing the fact that the market dynamics are incredibly favorable. And you're launching with a product that isn't like a typical first-in launch product where it's pretty hairy. And it's like, well, there's such a high unmet need, we'll approve it. This is a really good product that I'm not so sure there's going to be anything that's better, and the market dynamics are so favorable. And it's showing that performance already 9 quarters in. And the company has made the strategic step to say we're building a pipeline, and we're building this for the long term. And we've made progress on all things like IP, et cetera.

So I think they're just not appreciating all of that. I mean on a personal note, I'm in my 3-year anniversary this week joining Madrigal.

Congrats.

Thank you. The reason why I joined is because I thought that this was the best opportunity in the industry, the best opportunity that I had ever seen, I believe that more today. And we have more proof today that it's going to be possible based on the performance that we've had, the team that we've built, the product and the portfolio. So it's kind of all systems go for a really, really great product, great company.

Well, I know we're out of time, but that's a great way to end the conversation. Thank you to the entire management team for taking time out to come to the conference.

Thank you.

Thanks.

Hi. Good afternoon, everyone. My name is Edward Nash, Senior Biotech Analyst here at Canaccord Genuity. It is my pleasure to have with us today the management team from Madrigal Pharmaceuticals. Joining us from the company, we have Mardi Dier, the Chief Financial Officer; Carole Huntsman, Chief Commercial Officer; and we also have David Soergel, who is the Chief Medical Officer. Thank you all for joining us today.

So from at least in the biotech world, we usually -- I would say Madrigal doesn't need any introductions because they were the company that got the first drug approved for a very large indication out there known as MASH. You've had a really impressive second quarter and with continued strong growth.

Although the company does not provide specific revenue guidance, could you maybe talk to us a little bit about the commercial growth of Rezdiffra since its launch in April of '24? And how Madrigal positions Rezdiffra from a perspective of the long-term expectations?

Yes. Great. Thanks, Ed, and thanks for having us. We really appreciate being here. Yes, we'll take -- I'll take a stab at answering that question. So at Madrigal, we've had excellent commercial growth since our launch in the first quarter of 2024, and we're focused very much on our 2 top priorities, which is building value for Rezdiffra, getting Rezdiffra to as many patients as we can and building our pipeline so we can maintain our leadership position in MASH.

And if we talk about the quarter specifically, we announced in 2Q at the end of July, and we had excellent top line growth. We announced $364 million in revenue, which was 71% increase year-over-year, looking at the same quarter a year ago. And if you look at our trailing 12 months in revenue, we're on a run rate of approximately $1.3 billion. So this is really putting -- that's only after 9 quarters of launch. So this is putting us on a trajectory of a mega blockbuster, which is exactly what we think Rezdiffra is.

And we do give KPIs every quarter and we look at our patient adds and how many patients that we have on Rezdiffra, and 9 quarters in, and we look at this as active patients at the end of each quarter. And at the end of Q2 2026, we had over 49,000 patients on Rezdiffra. And we're very excited about achieving a significant threshold. We crossed the 50,000 patient mark in the early July time point. So any launch, specialty or otherwise, that's a significant milestone.

So we really think that the growth of the company will continue, and we talked a little bit about what we expect for third and fourth quarter. And we acknowledge that we're comfortable with the consensus growth rate from second quarter to third quarter and then third quarter to fourth quarter 2026, and that will result in robust sales growth for 2026. And we see that growth continuing.

So if we look at -- so that's sort of the execution of Q2. But a lot of the growth in the future growth is going to be driven by the market dynamics and then the growth of our pipeline. And the market dynamics are just right for an exceptional launch and continued growth of Rezdiffra. This market is at its infancy. Basically, we are only 10% penetrated into a market that has 10% diagnosis rate. So 10% of 10%, we are just 1% penetrated into what we think can be a significant market. And we're definitely in the leadership position and expect continued growth.

And we really liken our growth prospects to some of the large therapeutic areas in categories such as rheumatoid arthritis or IBD, et cetera, where you see these categories at the $20 billion mark and growing multiple decades after the first product launch. So we think there's significant growth opportunity for Rezdiffra, and we think the MASH market is going to continue to grow in the future. And we're just at the beginning of seeing where that growth is. And with that, we want to continue to build on our leadership position within MASH and build out our pipeline.

So we've talked about and we have announced that we have IP protection of Rezdiffra to 2045. So we're building for the long term. What can we do? We have a once-in-a-lifetime medicine with Rezdiffra. And what can we do possibly in building out F2-F3 and F4c with Rezdiffra? What we can do to transform the efficacy of Rezdiffra through combination therapies? And with that, we've built out our pipeline of potential assets that we can combine with Rezdiffra and continue to grow the market.

So in the last year plus, we've added -- we had a pipeline of one drug, Rezdiffra in 2 indications, and we've added -- now we have a pipeline of 10 assets. And we're very capital efficient. We spent less than $300 million upfront to build out this pipeline. But it's setting us up to really take advantage of our leadership position in MASH, the growing market, our excellent execution, and so we're pretty excited about the long-term prospects for the drug and the company.

Fantastic. So Rezdiffra has been in the market now for a little bit over 2 years. Could you talk a little bit about if there's been any real physician evolution in how their sentiment, overall sentiment on Rezdiffra, especially as we've seen an additional competitor come in the market, and we may likely see another one come next year into the market. What's been the company's kind of interaction with physicians on that?

Great question. Thank you. So we, early on in launch, we built a broad base of prescribers. And actually, that is one of the best predictors of long-term success. We actually, last year, announced a milestone of more than 10,000 prescribers, and we've continued to add on a weekly basis even new prescribers to that number.

So now we're more focused on depth, depth of prescribing. So where we are right now as it relates to our best-in-class specialty launch analogs is we're right aligned with those analogs in terms of depth. And you may ask why we're getting great breadth and depth. It's really how the product is performing and the positive experience that providers are having with the product. We are hearing really on a regular basis that Rezdiffra is overperforming expectations in the clinic with its best-in-class profile, liver-directed efficacy, well-tolerated once-daily pill. It's really -- they're having a great experience with it.

So would I say that physician sentiment has changed? No, not really. But I think there may even be more excitement today about the broad efficacy of Rezdiffra. Dave shared a forest plot during our earnings call that showed how all of the patient subtypes performed on Rezdiffra, and the efficacy was strong regardless of that patient subtype.

And that's actually a really significant competitive advantage for Rezdiffra relative to the product that's approved and on the market today as well as to the products that are coming on the market. So that efficacy in each of those patient subtypes.

And speaking of competition in the marketplace, we are now at 1 year after the approval of Wegovy in MASH, and we continue to steadily add patients. We continue to have very favorable market access positioning for Rezdiffra. So we're not seeing a significant impact. There is utilization of Wegovy. However, not to the detriment of Rezdiffra. We see Wegovy more as a background therapy. And in fact, if you look at Wegovy prescriptions on a weekly basis, less than 1% are prescriptions written by hepatologists or GIs for patients or in patients with MASH.

So we welcome competition. Competition helps grow the market. Competition invests more in education of providers and patients. And in the end, that benefits the leader and the foundational therapy that Rezdiffra is.

And obviously, with Wegovy's approval that we obviously know GLP-1s are very effective in the treatment of MASH. And Mardi, to your comment about expanding your pipeline, GLP-1 was your first -- the first step in that process. Could you talk a little bit about 2086 as the clinical data or the data, I should say, we have to date that would show that a combination of that GLP-1 with resmetirom makes sense?

Yes. It's a great point. So we licensed in MGL-2086 last July, I think, about a year ago. And so 2086 is a orforglipron scaffold GLP-1 small molecule agonist. And what we know -- the reason why we're interested in this mechanism is because we know from the MAESTRO-NASH study that patients who lose just a little bit of body weight, so 5% body weight loss, see a potentiated effect of resmetirom on fibrosis. So you see better antifibrotic efficacy if you can just dial in a little bit of body weight loss.

So with 2086, we're not going for 20% weight loss. We're going for just tweaking enough weight loss to be able to get more efficacy out of resmetirom. And so this is sort of consistent with our entire pipeline strategy where resmetirom, Rezdiffra is in the middle of that strategy. Everything that we've in-licensed is built around Rezdiffra and has scientific rationale for being a combination approach.

So that's the existing data with GLP-1 and resmetirom. And so what we announced just at our last earnings call is that we initiated our first time in human study with 2086. So it's a novel molecular entity, so it requires going first in human. And then next year, we'll anticipate running a combination study with resmetirom in NASH patients to test its efficacy.

So a very exciting time. That was our first in-licensing opportunity. But as Carole mentioned, we've got a whole stable now of agents to combine with resmetirom and build that next generation of medicines.

So in addition to the GLP-1 asset, during the past year, you've also taken in ervogastat, which is a DGAT-2 inhibitor, an siRNA targeting PNPLA3 as well as additional siRNAs for 6 undisclosed targets. Could you maybe highlight briefly the rationale behind this expansion decision? You made these acquisitions very rapidly, probably much quicker than I think of any biotech, not just not just in MASH, but in general, with multiple different mechanisms. And I know the one thing that physicians we've talked to all agree on is that this is going to be a multi-mechanistic approach in MASH. So clearly, you guys are on the right path. But maybe you could just talk us a little bit behind that rationale and expansion for the exact assets that you acquired?

Yes. We moved quickly because the opportunity was there to do a really good deal and get a great asset. So ervogastat, first, as you pointed out, we licensed in from Pfizer last year. They had actually run this medicine up through Phase IIb. So we had already some very good evidence, Pfizer quality evidence, showing that ervogastat has efficacy in patients with MASH, and very effective reducer on its own of liver fat, which, of course, is one of the substrates for the development of MASH.

And so the feeling -- the other thing that we know about resmetirom is that the more you can reduce liver fat, the more you can reduce PDFF, the more antifibrotic efficacy you get with resmetirom. And so the combination of these 2 mechanisms, THR-beta with resmetirom and a de novo lipogenesis inhibitor with the DGAT-2 inhibitor gives us an opportunity to boost resmetirom's efficacy in terms of antifibrosis as well.

So 2 approaches, GLP-1 and DGAT, with the same sort of foundational strategy, right, looking to combine another mechanism, complementary mechanism with resmetirom and deliver a better profile, better efficacy with the great safety and tolerability we've already seen with resmetirom. So that's the approach that we've taken with ervogastat. And that will be entering a Phase I study, drug-drug interaction study later this year and then a Phase II program anticipated next year.

PNPLA3 was licensed in earlier this year. We licensed it in from Arrowhead Pharmaceuticals. And they had been previously partnered with J&J. So there was actually quite a bit of work done in early phase development with this siRNA therapy. As you probably are all well aware, siRNAs are great because they're highly specific to the target and they're very durable. So you can give them quarterly or semiannually, and sometimes even annually for some of these medicines. So the science has really progressed substantially with siRNAs and they are sort of a great modality for chronic diseases like MASH.

And so the rationale for combining these 2 mechanisms with resmetirom plus PNPLA3 is PNPLA3 is known to be one of the major genetic drivers of MASH severity, especially in Hispanic patients, up to 30% of Hispanic patients have PNPLA3 mutations that are amenable to downregulation or silencing with an siRNA.

So again, in these higher risk patients with PNPLA mutation delivering better efficacy might be an important clinical benefit for those individuals. So that combination rationale is to basically deliver PNPLA3, siRNA quarterly or semiannually, and then have as a baseline therapy resmetirom. So developing as a combination of regimen as opposed to a fixed dose combination.

So will the prioritization of these programs will be driven by the clinical data themselves or it will be, as opposed to you guys don't internally think this is really where things are going to move, and this is the one that we're really kind of crossing our fingers and hoping works out. Or is it just a matter of we get them in and whatever shows the most robust, I know that fits hand in hand. But just kind of curious how you guys are thinking about the mechanisms.

Yes. I mean, I would say the priority -- the near-term priority is to generate the data, right? So run the combination trial. So we'll have 3 combination studies in Phase II starting next year, we anticipate, and we have to talk to the agency about that first. But that's the plan. And once we see those data, we'll have a decision to make about which ones we -- which we bring forward into Phase III.

And as we've talked about, resmetirom is already a great drug. I mean, it delivers great broad efficacy across all subgroups. And so the bar for us is actually quite high. So this is not a situation where we have to develop a pipeline of assets because we're running up against a constraint like IP constraint because we have IP out to 2045 with resmetirom. But it really is an opportunity that's been created by the success of resmetirom that allows us to build a pipeline and deliver the next generation of treatments. But the bar is high for us. Like it's got to be a transformative medicine for us to bring it forward.

And just one comment on that. We're very cost effective in building the pipeline, and it's creating the optionality to move the whole sector forward. That's the underlying strategy with our BD.

Understood. Yes. So the cardiometabolic effects of MASH treatment have been clearly received a lot of attention, even well before Rezdiffra was approved. And that's something in our conversation with the KOLs that gets brought up a lot is that they're looking beyond some of the other -- the direct clinical impact more towards cardiometabolic factors as well. This year at major medical conferences, we've been hearing a lot about this. So could you maybe talk to us a little bit about how important you think in MASH therapy it is to show a benefit beyond just MASH resolution and fibrosis improvement.

Well, I guess I would sort of quibble a little bit with just MASH resolution. And the reason is because MASH is known to be a risk factor for cardiovascular morbidity and mortality. So if you can improve MASH, if you can improve the liver disease, the possibility is that you reduce cardiovascular risk as well in these patients.

But we also know that resmetirom is a cardiometabolic drug, right? So it reduces atherogenic lipids. It reduces LDL-C. It reduces Lp(a) actually quite effectively as well as triglycerides. So we know that it has systemic anti-lipid effects that could potentially lead to a cardiovascular benefit in patients with MASH.

So yes, I mean, MASH, at its root, is stimulated by cardiovascular risk factors like diabetes, obesity, hypertension, et cetera. But there's a trigger in MASH that leads some patients to develop liver fibrosis and experience the worst outcomes. And so the disease, it's not just a constellation of metabolic findings. It's a metabolic findings that lead to some worse pathophysiology. And that's science that's really not as well understood yet, what that trigger is. So our thesis is that treating with resmetirom and maybe with other of our pipeline assets, we'll be able to deliver even a better profile for patients and improve their risk.

So in addition to the recent expansion of the pipeline, we're also expecting data from the Phase III MAESTRO-NASH OUTCOMES study, which was anticipated for next year as well as the 54-month long-term data from the MAESTRO-NASH study expected in 2028. So assuming positive results from these trials, how do you anticipate these readouts will impact the potential for expansion and the commercial opportunity for Rezdiffra, especially with regards to the outcome study in F4?

Sure. I'll talk about the Phase III studies and hand it to Carole to talk about commercial. So we have 2 Phase III studies ongoing, as you pointed out. So the 54-month data from MAESTRO-NASH is the continuation of the trial that led to accelerated approval. So MAESTRO-NASH 52-week was what led to MAESTRO-NASH's initial accelerated approval. And then confirmation of benefit will happen at 54 months in 2028, as you pointed out. So that's the F2-F3 population.

And then the MAESTRO OUTCOMES study is the F4 population, and that's an event-driven outcome study, which means that we have to get to a certain target number of events to complete the trial. And at that point, we would unblind and determine whether or not we were successful.

So what we've talked to the agency about is that either of these 2 trials, positive results from either of these 2 trials, could lead to full approval in F2-F3. Of course, a positive study in F4 would lead to an indication expansion into F4. So that would be a label update with a new indication.

And so maybe, I'll hand it to Carole.

Yes. And so I mean, as Dave said, outcomes are very, very important. So whether outcomes come from F2-F3 study, the F4 study, that's going to be very important to us commercially and provides even more opportunity to continue a very, very strong launch.

As it relates specifically to F4c, there are 245,000 F4c patients diagnosed in the United States. And because this is a much more severe condition, we feel that there's going to be a lot more urgency to treat. So penetration of that population will happen a lot more quickly and actually has the opportunity to double our overall opportunity with Rezdiffra in F2 through F4c.

So do you feel based on -- I mean, the F4 has obviously been one of the areas we know, the agency that was really kind of a big focus for them early on because those patients were at the most need of a treatment. But as we saw with all of the FGF21s having been acquired by big pharma companies, all 3 big pharma companies, acquiring the 3 that were out there. How do you see the FGF21s kind of playing in versus the Rezdiffra in the F4?

So I'll talk about it, I guess, from a scientific standpoint, then you could. So FGF21, it's an interesting mechanism. We've seen some data from Phase II in both F2-F3 and in F4, small data set in F4 that shows antifibrotic efficacy with these medicines. Now they also have other effects. So they have GI side effects, and there is an on-target issue with this target, bone mineral density loss. So that's sort of been known for quite a while.

So we'll have to see how the Phase III studies land, what the profile is when they actually complete their Phase III program. But the way we've thought about this mechanism is really as an induction therapy where you treat patients with advanced fibrosis, especially for 6 to 12 months on a background of resmetirom, and then you continue to resmetirom after that. So in that way, you sort of mitigate some of the challenges, especially with the mineral density loss.

And I would just go back to the story about outcomes and the importance of outcomes. Rezdiffra will be the first with outcomes and really all of the products that are coming along will start with an accelerated approval, and they'll have to get to their outcomes. So just as we were first to the market in F2-F3, we'll be first with outcomes, and that gives us a real opportunity to continue to execute a very successful launch.

So could you maybe talk a little bit about the EU strategy and how that's really been contributing to overall Rezdiffra uptake?

Yes. I'll answer that. So we're approved in the EU, which is fantastic, and we launched in Germany last September. And we just got approval in the U.K. as well. So listen, the MASH is a global disease. It's not just a U.S. disease. So the opportunity outside the U.S. is significant. Right now, with respect to Rezdiffra in Europe, in particular, the market setup is great. We have guidelines. In fact, we had guidelines -- we were on the guidelines from EASL before we even had them in the U.S. The patient population is significant. So the epidemiology is ripe for the need for Rezdiffra.

Market access and reimbursement is an issue, it presents challenges, particularly with the Most-Favored-Nation, the MFN strategy that's coming out of the U.S. administration. So until we figure out and have clarity on MFN, you won't see a big uptake, most likely in Europe for Rezdiffra. But we're kind of at the ready, and we're working on it. It's a big focus of ours. But in 2026, we've said that sales will likely be negligible until we work our way through the MFN strategy.

Thank you very much. Obviously, it's still very early days for Rezdiffra, and you've been off to a fantastic start with it. So look forward to continued strong growth there and obviously, the evolution of the pipeline as well. Thank you very much for joining us.

Good morning, and thank you for standing by. Welcome to Madrigal Pharmaceuticals Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

Good morning, everyone, and thank you for joining us to discuss Madrigal's second quarter 2026 results. 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 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, and thank you all for joining. Before we review our second quarter results, let me remind you why we're so excited about MASH and why we believe Madrigal is uniquely positioned to lead this market. The market fundamentals are exceptional. MASH is a high unmet need disease with the potential for decades of growth given today's low diagnosis and treatment rates and a rapidly expanding patient population. We are at the forefront of one of the most attractive growth opportunities in the industry.

We also have what we believe is the foundational therapy. Rezdiffra is the first approved medicine for MASH, a liver-directed once-daily oral medication with demonstrated efficacy across each MASH subgroup and an outstanding real-world profile. Add to that our commercial execution, our experienced team and our industry-leading pipeline. We believe Madrigal is exceptionally well positioned to lead in MASH today and define where this market goes over the long term.

Slide 4 summarizes how we're executing on our two strategic growth priorities, maximizing the value of Rezdiffra and advancing our pipeline. Rezdiffra continues to exceed expectations as we steadily add patients quarter-over-quarter. Over the last 12 months, Rezdiffra has generated nearly $1.3 billion in net sales, reinforcing its mega blockbuster potential. We're also strengthening the long-term value of the franchise. A key pillar of that strategy has been to build a robust patent estate. Last year, we secured our pivotal 2045 F2-F3 patent. This month, we build on that foundation with three additional patents, two that reinforce our protection in F2-F3 and one supporting our potential F4c indication.

As we've done successfully to date, we'll continue pursuing IP that protects the future of Rezdiffra. And because we believe Rezdiffra is the foundational therapy in what will become a large specialty market, we're investing behind it. In less than a year, we've built what we believe is the industry-leading MASH pipeline, adding more than 10 programs. We now have 4 clinical stage assets following the initiation of the Phase I study of our oral GLP-1 last month. Each of our programs is designed to build on Rezdiffra's foundation and extend our leadership in MASH for years to come.

We've accomplished a tremendous amount in a short period of time, but we're just getting started. Our team continues to execute on these priorities to strengthen the leadership position we've established. Let's move to our Q2 results, where I'll provide an update on Rezdiffra. Dave will discuss our pipeline, and Mardi will close with a review of our financials. Turning to Slide 6 and net sales. We are continuing to see strong demand for Rezdiffra. Second quarter 2026 net sales were $364 million, representing year-over-year growth of 71%.

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. Our strong performance is a result of successful launch execution. It's driving our near-term results and building the foundation for the long-term growth. We have effectively wired the system to build a broad and durable prescriber base.

And importantly, prescribers continue to tell us that Rezdiffra is performing even better in the real world, and that experience is translating into action. Today, our target specialists are prescribing Rezdiffra more often, which is driving greater depth across our prescriber base. That growing depth, combined with broad first-line commercial access, Rezdiffra's differentiated profile and strong patient adherence continues to drive patient growth.

That's why we've steadily added patients ending the second quarter with more than 49,000 active patients on Rezdiffra, more than double a year ago. Importantly, momentum remains strong as we progress through the third quarter where we surpassed the 50,000 patient milestone earlier this month, a significant accomplishment in any launch. One of the things we're most excited about is how quickly this market is developing, as shown on Slide 8. From year-end 2023 to year-end 2025, the U.S. addressable market has grown nearly 50% from 315,000 diagnosed F2-F3 patients at our target specialists to 460,000.

That's remarkable growth in just 2 years, and it's being driven by exactly what you'd expect in a new therapeutic category, greater disease awareness, increasing diagnosis, more patients being referred to specialists, a growing urgency to treat and increased investment by multiple companies. We have continued to see strong market growth again this year and expect the MASH market to expand at a double-digit pace for the foreseeable future.

In fact, we see parallels between MASH and other large chronic disease markets like rheumatoid arthritis, IBD and psoriasis as shown on Slide 9. Each started with 1 or 2 therapies and evolved into markets supporting more than a dozen products and more than $20 billion in annual sales. We believe that MASH will follow the same path and that Rezdiffra has a stronger profile than the first products that launched in any of those categories.

And today, we're only about 10% penetrated in a market with a roughly 10% diagnosis rate. Think about that, 10% of 10%, that's 1% of the total potential market. Yet even from that starting point, as shown on Slide 11, Rezdiffra is already generating north of $1 billion in trailing 12-month net sales. That's why we're so excited about the future. We are still at the beginning of what we believe will become one of the largest specialty markets in the industry where we have a first-to-market medicine with a best-in-disease profile.

Everything I've discussed so far speaks to the strength and opportunity of Rezdiffra in F2-F3 MASH, but there is another significant unmet need ahead of us in well-compensated MASH cirrhosis or F4c, as noted on Slide 12. It's an untapped market with no approved therapies and a much higher urgency to treat. With approximately 245,000 patients under specialist care in the U.S., we believe F4c could double Rezdiffra's opportunity.

We have an event-driven outcome trial underway in F4c that if positive, is expected to support expansion into this indication and support full approval across F2 to F4c. And we see the market evolving beyond these initial stages as noted on Slide 13. Like other complex chronic diseases, treatment will evolve to include multiple mechanisms, combination regimens and increasingly personalized approaches.

That's why we've strategically invested in building the industry-leading MASH pipeline. Rezdiffra gives us a foundation no one else has, allowing us to thoughtfully add complementary mechanisms that can provide even more efficacy, broaden patient reach and define the next generation of MASH therapies. And one of the reasons we believe Rezdiffra is foundational is what we've heard consistently from prescribers over the last 2 years of launch.

They not only value its liver-directed efficacy, well-tolerated profile and once-daily dosing, but appreciate that Rezdiffra works across each patient subgroup in clinical practice. That breadth and consistency across patient subgroups is exactly what you want in a foundational medicine, and it's unique to Rezdiffra. Dave will talk more about this in his section and share key data demonstrating Rezdiffra's broad efficacy.

So with that, I'll turn it over to Dave.

Thanks, Bill. As Bill just mentioned, for a therapy to be truly foundational, it should work effectively across patient subgroups. This is especially true in a heterogeneous disease like MASH. The forest plot on Slide 14 with data from our Phase III MAESTRO-NASH clinical trial demonstrates exactly that. Patients on Rezdiffra consistently demonstrated improvements across key subgroups, including fibrosis stage, diabetes status, BMI and genetic background, risk factors that may expedite disease progression.

This is another way in which we are differentiating ourselves from the competition and why health care providers overwhelmingly prescribe Rezdiffra when the patient is diagnosed with F2 or F3 MASH. But we're not standing still. Leadership means continuing to advance the science and generating evidence that supports Rezdiffra’s clinical benefit well beyond approval. It's an ongoing effort to better understand Rezdiffra, answer important clinical questions and continue to raise the bar for what's possible in NASH.

At EASL this year, we presented more MASH abstracts than any other company. I'll highlight 3 presentations that reinforce our belief that Rezdiffra is the foundational therapy in NASH. First is our F4c analysis on Slide 15 using the ANTICIPATE-NASH risk model. ANTICIPATE-NASH is a validated model developed specifically for patients with MASH cirrhosis. It estimates the patient's likelihood of developing clinically significant portal hypertension or CSPH, and future liver-related events.

The NASH field is rapidly evolving, and this model has become an increasingly accepted tool for assessing risk in patients with compensated MASH cirrhosis. This is an emerging area of science, and we are an early adopter of this new tool. That's an important part of how we approach leadership at Madrigal. We're not simply following the evolution of the field, but we're helping pioneer new ways to understand treatment response and disease progression. We applied the ANTICIPATE-NASH model to the 122-patient 2-year open-label cohort from our Phase III MAESTRO-NAFLD-1 trial.

The proportion of patients classified as higher risk for CSPH declined from 75% at baseline to 55% at 2 years of resmetirom treatment. Why is this important? The development of portal hypertension is the key pathophysiological inflection point in compensated cirrhosis. Once patients progress to CSPH, their risk of decompensation and other serious liver-related events increases by approximately fivefold. These findings further strengthen our confidence that resmetirom has the potential to delay disease progression and improve long-term outcomes in patients with F4c MASH.

The second data set extends our understanding of Rezdiffra beyond the liver. Patients with F2-F3 MASH don't just have liver disease. They also carry substantial cardiometabolic risk. In fact, cardiovascular disease remains the leading cause of death in this population and MASH itself is an independent driver of cardiovascular risk. Our secondary analysis from MAESTRO-NASH MAESTRO-NAFLD-1 showed significant reductions in Apo-B, including Lp(a) and LDL regardless of baseline statin use.

Taken together, these data suggest Rezdiffra may positively impact both liver disease and cardiovascular risk. Slide 17 highlights Rezdiffra's performance in the real world. Clinical trials establish efficacy, real-world experience builds prescriber confidence. After treating tens of thousands of patients, prescribers continue to tell us Rezdiffra is performing even better than they expected. The data at EASL support those observations.

In one large gastroenterology practice over a mean follow-up period of approximately 9 months, nearly half the patients achieved at least a 25% reduction in liver stiffness, a key measure of treatment response. Real-world evidence like this complements what we've already seen in our clinical trials and reinforces Rezdiffra's best-in-disease profile. To deepen our understanding of Rezdiffra's full clinical potential, we're broadening our evidence generation efforts across real-world studies, investigator-initiated research and company-sponsored trials.

We will continue to pursue the questions that matter most to physicians and patients and work to generate new data that can further inform how MASH is diagnosed, treated and managed. Putting it all together on Slide 19, we've translated our leadership into action. In just 1 year, we built the industry's leading MASH pipeline with more than 10 programs, including 4 clinical-stage assets, all anchored by Rezdiffra. This momentum will continue into 2027 when we expect to initiate 3 Phase II trials. The first will evaluate MGL-2086, our oral GLP-1 in combination with resmetirom.

Our goal is to potentiate resmetirom's antifibrotic effect. We began dosing MGL-2086 in a Phase I single ascending dose study in June. Results from this first-in-human study will inform the Phase II trial. We also plan to initiate a Phase II study of our DGAT-2 inhibitor, ervogastat in combination with resmetirom, and we'll engage with regulatory authorities on the design of a Phase II trial combining resmetirom with MGL-0795, our siRNA targeting PNPLA3 in-licensed from Arrowhead in May.

We're also progressing 1 of the 6 preclinical siRNA assets that we in-licensed from Ribocure.

We recently nominated the first candidate to move into IND-enabling studies. All of this is advancing alongside our 2 ongoing Phase III Rezdiffra trials. First, our F4c MAESTRO-OUTCOMES study, which is an event-driven trial that we expect to read out in 2027; and second, the F2-F3 MAESTRO-NASH study, which is primarily histology-driven with data expected in 2028. We've made significant progress in a very short period of time. With Rezdiffra as a foundation and long-term patent protection providing the runway to invest and innovate, we have an opportunity to define the future of NASH care and meaningfully improve the lives of patients.

With that, I'll hand it over to Mardi.

Thank you, Dave. Turning to Slide 20 and the summary of our financial results. We delivered another strong quarter with second quarter 2026 net sales of $364.3 million, representing 71% growth year-over-year. Demand for Rezdiffra remains strong. We once again steadily added patients, more than doubling patients on Rezdiffra compared to a year ago. We also continue to effectively manage gross to net and continue to expect our gross to net discount to be in the mid- to high 30s for this year. Taken together, these fundamentals support our expectation for continued steady patient adds and robust net sales growth.

Moving to operating expenses, which included a total of $35.4 million of noncash stock-based compensation expense in the quarter compared to $25.2 million in the prior year period. Cost of sales for the second quarter of 2026 was $40 million compared to $9.1 million for the prior year period. Cost of sales was primarily driven by an increase in royalties payable to Roche and a write-down of certain work-in-process inventory. R&D expenses for the second quarter of 2026 were $91.2 million compared to $54.1 million for the prior year period.

The increase was primarily due to a onetime upfront business development expense of $25 million related to the in-licensing of MGL-0795, a clinical stage siRNA program from Arrowhead. SG&A expenses for the second quarter of 2026 were $289.4 million compared to $196.9 million for the prior year period. The increase was primarily due to continued investment in commercial activities for Rezdiffra, including headcount 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 the 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 long-term growth. Net loss for the second quarter of 2026 was $57.9 million compared to $42.3 million for the prior year period. Net loss for the second quarter was inclusive of a onetime upfront business development expense of $25 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 second quarter of 2026 with $838.9 million in cash, cash equivalents, restricted cash and marketable securities compared to $988.6 million at year-end 2025. With this strong cash position, we continue to be well resourced to support the ongoing launch of Rezdiffra, the advancement of multiple pipeline programs and continued business development.

So to conclude on Slide 21, we believe Madrigal is exceptionally well positioned for continued value creation. With nearly $1.3 billion in trailing 12-month net sales, Rezdiffra is on its way to mega blockbuster status. And as Bill said, the third quarter is off to a great start. We've more than doubled the number of patients on therapy over the past year, while the addressable MASH market itself has expanded by nearly 50% in just 2 years, and we believe it's still in the early stages of what will be decades of growth.

We're building on Rezdiffra's foundation with the industry-leading pipeline of more than 10 programs. We look forward to multiple future data readouts, including our Phase III F4c trial. We're investing from a position of strength with an R&D strategy designed to extend our leadership and create long-term value. Taken together, we believe Madrigal is exceptionally well positioned, not only for continued growth in 2026, but for sustained value creation for many years to come.

I'll now turn the call back over to Tina to begin the Q&A session.

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

[Operator Instructions] Our first question comes from the line of Prakhar Agrawal of Cantor Fitzgerald.

Congrats on the quarter. I had 2. Firstly, I wanted to ask about the 3Q trends. What are you seeing and expectations for net patient adds for the remainder of the year? Just wanted to get a little bit of better color on what segments are going to drive further growth here? And how do you feel about where the consensus is sitting for 3Q and full year 2026?

And second question, you got started targeting endocrinologists last year. Any initial thoughts on what you are seeing on the uptake among endocrinologists? Could that be a meaningful growth segment? Or is it more niche right now?

Thanks for the question, Prakhar. It's Bill. Maybe just a comment on where we are year-to-date here. We had really, I think, an exceptional quarter in Q2. That was driven by exceptional execution, exceptional market dynamics. And I think that is really the best indicator of where we're headed for the future. The fundamentals of the business are terrific. We have great access. 2026 is going to be another great year. As you know, we exceeded Q2 expectations.

Q3 is off to a great start. We have said and we continue to steadily add patients with -- over 49,000 patients at the end of Q2, more than doubling year-over-year patient numbers. And we did announce this 50,000 milestone, which -- that is a really remarkable number in any launch. I don't care whether you're in a specialty launch, nonspecialty launch, 50,000 represents great progress. And that's something that we crossed in July.

So we continue now looking forward to Q3 and beyond to steadily add patients. We've been steadily adding. We're going to continue to steadily add patients through third quarter and through the rest of the year. So I think we're set up really well for '26. But Mardi, do you want to talk maybe a little bit about some of the specifics?

Yes, absolutely. And hi, Prakhar, and good morning, everyone. As Bill said, we're off to a great start in third quarter, and we're going to expect to steadily add patients as he just discussed. And with respect to third quarter and fourth quarter, what we'd like to say is that, yes, we're comfortable with the consensus quarterly growth rate for the rest of the year. So that means from going -- the growth rate -- the consensus growth rate from second quarter to third quarter and then again, the consensus growth rate from third quarter to fourth quarter. So taken together, just as we said, robust sales growth for 2026.

And Prakhar, just to talk about kind of the segments where it's coming from. This continues to be driven by Heps and GI for the most part. That's just where the prescriptions happen, where we would expect that they're going to continue. You also asked about endocrinology. Endocrinology was a fourth quarter 2025 focus of ours. So we're still really early into that. And you have to remember, endocrinologists, just I'll make 2 real quick points about them.

Number one, they've been using GLP-1s for over a decade, and they still are seeing lots of MASH and want to talk about Rezdiffra. Check that box. Number two, they just got started really in the fourth quarter of last year. So they're in kind of that first year of launch and Heps and GI, they have to take their own time to wire the system, know how they're going to access their NITs, what's the pathway they have for their practice. So lots of potential in endocrinology in time, but you have to just know where they are. They're kind of 9 months into the launch really at this point, but certainly very promising.

Our next question comes from the line of Ellie Merle of Barclays.

Congrats on the strong performance. Just in terms of patient growth, it seemed to accelerate versus the first quarter. I guess what are the drivers of this and your expectations for patient growth from here? And then just in terms of F4c, I guess, how is the event rate tracking in that study? And any clarity on when in 2027, you might expect to release the data? I recognize you might not comment, but figured I would try.

Thanks, Ellie. Thanks for the question. On the patient growth, now I just want to make sure just to level set, the way we report patient numbers is the number of patients that are on Rezdiffra on the last day of the quarter. And that is the net of patients that are coming in the top of the funnel and patients that are going out at the bottom of the funnel, right? I mean as you get a bigger and bigger denominator, you have more and more patients exposed to potentially dropping off. Now the great news this year is that we continue to steadily add patients, as I've said, and we don't see that slowing down at all.

But remember, you really have to do work a lot harder on the top of the funnel as you have a bigger denominator that patients can fall out. We're seeing persistency like a well-tolerated oral. A well-tolerated oral at the 1-year mark is in that 60% to 70% range. No changes there. Product has been performing exceptionally well. When we talk to the community, we hear stories of persistence, which are even higher than that.

So we have focus our efforts with our internal teams on how do you address persistency to have more patients stay on longer and then how do we work with specialty pharmacies, et cetera, to get that same result. So a real focus of ours to drive the top of the funnel, adding new patients and to keep patients on and then we get to that net number. And we think that we have a really good approach, and that's why we continue to say we expect to steadily add. Maybe, Dave, I'll turn to you on, F4c.

Yes, a quick update. So I mean, clearly, MAESTRO-OUTCOMES is an important trial for the field given the unmet medical need and the fact that this is going to be the first outcomes trial in F4c to read out with outcomes, which is a big thing for the field. So the good news is we're seeing events accrue in the trial.

However, as we've said in the past, this isn't like, for example, a cardiovascular outcome study where you have a large number of target events. So in this case, precision is very difficult. And when we can be more precise, where we'll provide you an update at that point. But right now, we're tracking to 2027, as we said.

Our next question comes from the line of Thomas Smith.

Congrats on the nice quarter here. I was wondering if you could clarify and maybe expand on the comments regarding gross to net and inventory dynamics in the quarter and how you see those evolving through the balance of '26. And then could you also clarify the contribution of Europe to the worldwide revenues and patient numbers?

We saw there was an early access program that launched in France during the quarter. Anecdotally, from some KOLs, it sounded like there's been some nice early uptake there. But can you just comment on that program and how you think about Europe contribution for the year?

Great. Mardi, do you want to talk about gross to net?

Yes, absolutely. So gross to net, as we said last quarter, our gross to net projected for 2026 is in the mid- to high 30s. And we are right in that zone for 2Q, and that's what we expect for the rest of the year. And that's really balanced with -- mostly with a high demand quarter with respect to inventory, just as we have with every quarter, no big changes there. So overall, everything is going well for the rest of the year in 2026, as we've discussed, what we believe the growth rate is for the rest of the year. In Europe, do you want me to...

Thanks for the question, Tom. Look, contribution of Europe is negligible in the quarter, and we would expect that to be for the year. Now let me just talk a little bit just about ex U.S. in general. We've launched in Germany. And as you say, we have the early access program in France, and we received approval in the U.K. couple of observations. This is not a U.S. disease. It's a global disease. There's a high unmet need. Interest is really high from prescribers and from patients.

Reimbursement is a big challenge. You have to remember, we're in an MFN context here where there is still uncertainty about where that all lands. And I think we're going to be in a period in the next 12, 18 months where things are still settling down. So systems have not -- when I say systems, other countries have not yet adopted what the ask is of the administration in MFN, which is paying U.S. prices. So that's something that we're at the table. We're talking with all of the governments there about this. I'm really hopeful for a long-term solution.

But as I said, in this time where it's just kind of really dynamic and a lot of uncertainty as to where policy lands and so forth, that's why we say it's going to be negligible. But remember, we've only launched in Germany. That's where we've done our build. We've been extremely disciplined about the building spend there. So more to come in the following quarters. But as I said, it certainly is -- there certainly is a high unmet need. It's just we've got to solve the reimbursement piece. And this isn't a Madrigal specific issue. This is an industry issue overall.

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

I wanted to drill down a little further on outcomes, F4c timing and sort of the drivers there for the data. Can you guys confirm that per your design publication that you're still aiming for that 92 event threshold? Or is there a possibility that you might want to boost powering based on what you're seeing? And based on -- further, just based on our conversations with KOLs, they indicate to us that like events in F4, tend to be almost more asymptotic in the sense that they accumulate much, much more rapidly and barely at all in the first part of the trial versus more sort of linear cardiac outcome study event accumulation.

Can you comment on what the natural history tells you on that event accumulation curve and how that contributes to how you're approaching giving us additional clarity and narrowing of data timing guidance?

Thanks, Ritu. I'll pass that over to Dave.

Yes. Thanks, Ritu. I think the first thing to comment on is we haven't actually confirmed the target number of events. So what we've said generally is there's a publication by Harrison that's a few years old that was sort of evaluating an earlier version of the protocol. And we've heard other numbers out there. What we said in general is that most of these numbers are in the ballpark, but we haven't confirmed the actual number. I think to your point about accumulation of events, look, I mean, we're pioneering in this space.

This -- as we've said many times before, this is really the first well-controlled F4c outcomes trial with a therapeutic agent. So what -- we've heard the same thing from KOLs that the possibility is that events accelerate over time as patients sort of age through the F4c pathophysiology and the development of [Technical Difficulty] for example. I think the good news is, like I said, we're seeing events accrue.

They're in line with our projected completion date in 2027. So when we can be more precise, we'll provide more precision. But I think what you're highlighting is one of the questions that's out there, right? So it's what -- how does the placebo sort of evolve over time within a controlled trial.

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

So we noticed that you provided a time line guidance on the oral GLP-1 and the DGAT-2. Just curious if -- can you maybe tell us a bit more about the Arrowhead asset? When is Phase II going to begin? And then with the oral GLP-1, the SAD has initiated. Is it reasonable to maybe predict that maybe we're going to get data next year?

Great. Thanks, Andy. Dave?

Yes. So well, first of all, thanks for the question, Andy, on the pipeline. I love it. It's one of the main reasons why I came to Madrigal sort of the opportunity to build a pipeline in the space where there's so much potential and so much need. And what I love about our pipeline is that we have a diversity of mechanisms and yet all the mechanisms we know a lot about already, right? So there's a lot of data on GLP-1. There's a lot of data on DGAT. There's a lot of data on PNPLA3. So specifically with respect to the programs, all of these programs have been chosen because there's a strong scientific rationale for complementarity with thyroid hormone receptor beta agonism with resmetirom.

So specifically for the oral GLP-1, as you recall, we're developing the oral GLP-1 ultimately in combination with resmetirom to dial in a little bit of weight loss to potentiate resmetirom's efficacy. So as you pointed out, we started our SAD last month, and we'll be running the SAD and the MAD sort of through this year is our plan. And then the data from that trial will then inform the Phase II study, which after we talk to health authorities would start in 2027.

So timing -- with respect to timing, we haven't given a specific date to expect Phase I, but that study will sort of proceed through this year. Similar story with DGAT, we've talked about running a pretty straightforward drug-drug interaction study later this year with resmetirom and ervogastat. Again, we know a lot about ervogastat because Pfizer took the compound through Phase II. So now we know it provides a lot of PDFF reduction in patients with NASH. And that PDFF reduction could also potentiate resmetirom's efficacy. So once we finish that drug-drug interaction study, again, go to health authorities, talk about our Phase II plan and estimate to start that in 2027.

Same story with PNPLA3. So that siRNA program that we licensed from Arrowhead, we start with some very good Phase I data where we have a good understanding of dose range with the molecule as a monotherapy, again, we'd have to go to health authorities talk about the combination program and again, estimating a start in 2027. We'll provide more of an update on the specific plans in Phase II as we get closer to the initiation. But right now, just based on where the programs are in their life cycle, we'd expect them to start Phase II in '27.

Yes. And just maybe just a point on the pipeline, right? We brought in these assets to be used in combination with Rezdiffra. As Dave pointed out in the presentation, as I said, Rezdiffra is a foundational therapy. You see it working across various groups within MASH consistently. So our objective is to find even more efficacy either in a subgroup or in the total MASH population.

And if you think about that in comparison to the rest of the industry for those who are participating in MASH, -- they have single assets that they're hoping still to read out maybe positive data and maybe get approved and then be able to launch. They're going to be doing that, and we're going to be already moving forward with our combo strategy, which is going to raise the bar for the entire field. But there's only going to be one company that has Rezdiffra. I think that's a point that sometimes just doesn't get quite picked up or understood. We are starting from kind of that foundational therapy, which is the building block for MASH. Thanks for the question.

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

Congrats on a great quarter and all the color. Maybe -- would love to get color as you guys have been -- and I'm sure you're tracking sort of event rates in the real world and F2-F3 population, which is the indication. But maybe to the extent that you're seeing if there is any off-label use in F4s, any observations that being made there, whether it's consistent with the MAESTRO-OLE data, which you reminded us of earlier today.

Just would love to get sort of real-world experience, and I know it's limited and it's probably occurring at a less extent, but I appreciate any color around that. And it seems like probably if you could quantify like your confidence that the data is in 2027 and the likelihood that it could get pushed out into 2028, that could also be really helpful. Sorry for the very long-winded question.

Yes. Thanks for the question. I mean maybe just a comment on kind of the real world, what we're seeing in F2-F3. It's -- you never know what's going to happen in the real world, right? You have your clinical studies, they read out, they're well controlled. Everything is controlled for patients stay on drug and you do your readout and you create a bar chart and everyone starts comparing against the bar chart. Then you get to the real world, and that's really what counts. How does the product perform.

And what we're hearing overwhelmingly from patients and prescribers is that Rezdiffra is performing exceptionally well. I don't hear stories of Rezdiffra not working. Just -- and that's -- and I speak, as you know, to hundreds of physicians, hundreds of prescribers. And I have not heard anyone say, Bill, it isn't working. What I hear is that this is working better than I even thought it would. It is effective, well tolerated, safe, easy to use, supported by a great patient support program that we have here. So we really take care of patients, take care of prescribers.

So early feedback, and we're seeing it also in real-world evidence that's being reported, is the product is performing really, really well. And that's exciting. You never know that. So as you think about -- as I said, you can compare products on a bar chart, but what really counts is when you move into the real world. And you didn't ask a question about sema, but sema, I think, is on kind of the opposite side of that.

Well-controlled clinical trial looks good in the clinical trial. In the real world, though, you have to stay on a drug, get to a high enough dose and be on it long enough for it to actually work. And I think that's a really, really great example. And I think as we look into the future, profiles really matter, and we've got a great profile. I like to call it a holy grail profile. Having been in the industry 35 years, this is what the industry has always wanted to have a once-a-day pill that works, right?

So maybe that's the place just to give you some context on what we're hearing in the real world. Now regarding off-label use, look, we've been crystal clear from day 1. Do not use Rezdiffra in F4c patients until we have the trial complete and we know that it works. And I think that is just the responsible thing to do. And also, look, it makes sense. What you don't want to do is have a product used in an area where there could be any kind of adverse event that then carries back to your already indicated population.

So I think there is some use. We can't quantify it, and there isn't a lot of data to suggest what the experience has been with people. So maybe, Dave, can I turn it over to you?

Yes. Just a quick add. I mean, you made a comment about the open-label experience. And so we didn't talk about it this time around, but we have in the past where the event rate in that 122-patient cohort over a 2-year period is quite low. It's a 2% to 3% annualized rate. So that's -- even though it's an open-label population, it's a well-controlled and well-characterized population with F4c that looks very much like the MAESTRO-OUTCOMES Phase III population.

So that low event rate is some of the basis for our confidence that resmetirom is -- could be effective in F4 as well. I think with respect to timing, as we said, when we have more precision on the estimate, we'll provide you with an update. At this point, we're still projecting into 2027.

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

This is Manoj on for Akash. Just one on the F4c outcomes trial. So given the mean baseline platelet count in open label was around 125,000, somewhat higher than the baseline of 150,000 in the F4c trial. Do you view the event rates observed in the OLE as the realistic guide for what we should expect in the F4c? And also, are the blinded event rates in the outcomes trial is tracking in line with what we would expect from the OLE data? Just a rough estimate on that point?

Dave, do you want to?

Yes, sure. Yes, I think with reference to the platelet count, I mean, there's going to be some variability, as you know, in the measure of platelets. So in general, we enriched both populations by having a very low exclusion criterion for platelet count, so greater than 70,000 in the study. And the distribution, as we've talked about, of patients with CSPH, is pretty similar when you look at the open-label population compared to the MAESTRO-OUTCOMES Phase III study.

So if you recall, ANTICIPATE-NASH scoring and Baveno criteria are the combination of liver stiffness measurements by VCTE and platelet count. So when you combine the 2, you get a risk of CSPH. So I think the fact that we were -- we've sort of pushed the population towards the CSPH, the higher CSPH risk is one of the reasons why we're seeing events and maybe in other programs at other sponsor companies are maybe not seeing as robust accrual of events.

We think we've enriched this trial in a particularly effective way, both in terms of CSPH and using other markers like MRE. So I think that's the key point. What your second question was?

Whether the tracking in line with the expectations?

Yes. So as we said, I mean, the events are tracking in a way that would estimate a delivery of the data in 2027. And when we're able to provide more precision on that estimate, we'll give you an update. But right now, 2027.

Our next question comes from the line of Ash Verma of UBS.

Yes, I got 2 on F4 also. So just maybe can you talk about like what type of relative risk reduction on the composite would position Rezdiffra as a drug that can have broad adoption based on the feedback that you're getting from physicians? Is it realistic 50% type outcome? Or can we get even a broad adoption with a lower risk reduction?

That's first. And then secondly, a lot of discussion on just the event rates here. Maybe just like if you can help us understand on the placebo events in this study, like why would this be any different in this study versus the prior 5% to 10% annualized event rate that you've seen? And I believe your stat plans assumes an annualized 10%, but if it's more like a 5%, is it still a 2027 readout?

Dave?

Yes. Well, I mean, I think -- look, first of all, what's a clinically relevant reduction in hazard in F4c. The reality is, I think anything that's statistically significant and yields an approval would be clinically relevant. I mean this is a disease where there is no treatment and these patients are really on the cusp of end-stage liver disease and either death or a transplant. So I think one of the really important things is getting a medicine to these patients and any risk reduction is going to be a big change in the field for patients.

With respect to the placebo rate, I mean, we've sort of guided to the 5% to 10% range based on the natural history. As you pointed out, we -- in the earlier Harrison paper, which was, again, was done sort of drafted using an earlier version of the protocol, the estimate of the placebo rate was about 10%. The 10% placebo rate, as you know, determines sort of the duration of the trial. It doesn't really affect trial powering.

So the hazard reduction is the key thing that determines trial powering. And those 2 things together, the placebo rate and the drug effect determine the blinded event rate. So as we said, the blinded event rate is tracking in line with delivery in '27. And when we have more data, we'll provide you more precision on that.

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

Two for me. The first regarding Rezdiffra patient growth and underlying demand. Can you separate 2Q patient growth into new starts versus reactivations following first quarter insurance disruptions versus discontinuations? And my second question is, you've already reached over 10,000 prescribers that have indicated that -- and have indicated that the commercial focus is increasingly shifting towards prescription depth. My question is, what percent of 2Q new prescriptions came from existing prescribers versus first-time writers? And how is that mix changing?

Thanks, Mike, for the question. Maybe let me start a little with that. You mentioned the 10,000 prescribers. That is another really, really significant milestone to cross in the launch. I mean my experience, you exceed 10,000 and you've really got your base of prescribers that can drive your future into, in this case, a mega blockbuster. And that's something which hasn't stood. So we haven't reported on that number in a while, but it continues to grow. We have new prescribers all the time.

When you think about that mix, you're always going to have more of your scripts on a monthly basis coming from the existing pool of prescribers. So think about it, if you add 10 prescribers on the 10,000, disproportionately, there's so many -- that's not the right number, adding 10. We're adding more than that, I can assure you. So it's always going to be weighted towards the current prescribers. And that's why depth becomes much more important than breadth once you cross that 10,000 threshold. And we're continuing to see across all of the prescribers just increased depth of prescriptions.

And why is that? Well, because they're having good results. Why is that? Because they're diagnosing more patients, and they're learning the product. They're setting up -- they're wiring their system. They're setting up their pathways. They're making sure they have access to or have their own NITs. So that is what takes time in a launch. And that's why products typically don't go from 0 to 100. It takes kind of years to get to full penetration because people just get more comfortable and work down through their deck of patients, if you will. And we're seeing exactly that. And we're tracking exactly like we had hoped and like what we had thought we would.

Now so how does that translate now back to your question about monthly adds? You said the mix. We haven't reported out on the mix of prescribers and so forth. If you think about heps and GIs are the predominant writers, GIs outnumber heps just in the market -- in the country by about 10:1. So that's where the volume is going to be because they just have more patients and more prescribers, okay? Now what about patient adds? That net number that we show, we don't break it out into what's coming in the top of the funnel, what's going at the bottom of the funnel and net.

And as you can see, that steadily adding, when you look back over the quarters, that's kind of our definition of steadily adding. And most importantly, we expect to continue to do so going forward. Now we're going to do everything we can to accelerate adding to the top and decelerate leaving from the bottom. That's what we do. That's what that continues to make it a great launch. So that's what I'll leave it now, Mike, and we'll update in the future.

But we are in really, really great shape on kind of all key metrics. And really the one at the end of the day, what counts, is patients, and that's the one that I think that is -- this 50,000 milestone, that is a big number. I just -- that's why we kind of pulled that one ahead. We didn't want to wait another quarter and say, and we know everyone will be doing- well what day of the month was that it happened. Let me assure you the 50,000 is consistent with the steadily adding patients. It's a big number that the world should know about.

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

Congrats on all the progress, and thank you for providing this update. Since you have a number of new patents and multiple levers available to drive Rezdiffra sales growth, including potential combinations, how are you thinking about the peak sales magnitude and time line to achieve peak sales?

And what's your vision of how the MASH market dynamics may evolve in the next 10 years in terms of patient segmentation and which genotypes or phenotypes do you suspect might be appropriate to target for a more personalized approach to treating MASH with precision medicine?

Okay. Thanks for the question. Let me start with kind of the market dynamics because I think these are -- this is something which is really so remarkable about MASH. I'll go back, first of all, to when we communicated what the approachable patient number in F2-F3 was at the end of '23. That was the 315,000. And we did that same analysis at the end of '25, and that was 460,000. So almost 50% growth in patients. Now you would say, well, gee, how sustainable is that?

Well, here's why it's really sustainable because it's about 10% diagnosed today, the disease. And we have about 10% penetration. So we're about 1% into the journey. Now that is a setup where all the demographics, everything that we're looking at is driving towards MASH continuing to be a challenge, not just for the next 3, 5, 10 years, but decades. So that's the backdrop that we're against. We've got -- we had almost 50% growth in 2 years.

We expect a double-digit growth for the foreseeable future. And you heard me say that Q3 is off to a strong start, but that we are expecting and seeing patient growth in the market in 2026, consistent with what we've communicated before. So that growth of the market is where the real opportunity lies. And as great as Rezdiffra is, as I said, in my opinion, holy grail profile, we're looking for even more efficacy in either the whole population or segments of the population. And a real specific, you said how do you kind of personalized medicine. This is where the PNPLA3 deal that we did with Arrowhead, we are so excited about. That is a very specific identifiable patient population that could benefit from having a not only a foundational therapy like Rezdiffra, where we work really well in that, if you look at our presentation.

But if you add to that this targeted siRNA, could we get even more efficacy. So we look at -- there's going to be these segments that open up in time, partially driven by the data, partially driven by just natural market evolution. So that's why we're not only optimistic about Rezdiffra, but a whole franchise and having a solution for patients that cover really the gamut of NASH.

We haven't commented on peak and we're not, but you have heard us say that we think that Rezdiffra has mega blockbuster potential, and that's even before we start to add these next-generation products that we're working on, which, again, I'll remind you, as we have combo products, others will be still fighting for their first product in a pathway that we probably already got a combo.

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

Congratulations on the quarter. I wanted to ask about the competitive landscape. As we get closer to a competitor Phase III data in 4Q of this year, I was wondering if you can comment on how you view any potential impact on Rezdiffra if the trial were to be successful and MASH patients get another oral option.

I think it also takes back to the prior question regarding fragmentation because some of our KOL checks have suggested that this drug could target specific subsegments or drugs in general could target different subsegments. So would love to hear your comments on that. And also, I wanted to just ask about also the recent patents issued for resmetirom. You already had a previously issued patent extending resmetirom until 2045. Can you just talk about the impact of the recently issued ones and how that strengthens the profile of the drug?

Look, thank you very much for the question. There's a lot there. Maybe just starting with IP. Last year, we secured our -- last July, actually, we secured our pivotal F2-F3 patent, which is the weight threshold dosing, which gives us out to 2045. And the reason that patent was so important, it allows us to think about our pipeline and portfolio a little differently. We have a lot of time with Rezdiffra, so we can place a bet on earlier-stage programs or later-stage programs. We're not -- we don't have a short-term problem.

So that's really good. The patents that we announced just, I guess, this month, was it -- we secured 2 new F2-F3 patents. And those cover important safety information in our label. So generics have to include that type of language in their label. So them trying to do a skinny label really makes it challenging for them. And these are both Orange Book listed patents. So that's just further reinforcing the 2045 patent that we have.

We now have a new F4c patent, and I'm really excited about this because this -- remember, 45 came out of the approved label. And we don't have a label yet in F4c, but we've already secured a use patent, which gets us into the 40s as well. And that's before a label where there's potentially other opportunities to generate IP. So I feel like we've said all along that we -- that IP is really important, and we've made it a focus, and I think we've made really, really significant progress with our IP strategy.

Now I think you're probably referring to lanifibranor. That's what it was, right? And look, what we've always said, and you've heard me say before, this is going to be a big market. It can support multiple products. And the new entrants, we think, help us if there are new entrants. You still have to have a successful product, you have to get it approved and all those minor details build a big commercial organization launch. But if you get to market day eventually, it is -- can really help to drive growth.

And I think we've seen that with Wegovy. I think their being here has really helped us. You heard me say a little bit earlier, though, this isn't about comparing bar graphs anymore. It's really about the real world. We're over 2 years on the market, over 50,000 patients. We have high satisfaction by prescribers and patients, and it's just continuing to press. So against that backdrop, it's kind of hard to see where lanifibranor will fit.

It comes down to profiles, if you heard me say it many times, and we've got a great profile. Lanifibranor, 1,200-milligram pill, it's a PPAR associated with weight gain and edema. Now this is at a time when the world is obsessed with weight loss. So we don't see weight gain as a real benefit, particularly in MASH.

And we did some market research with prescribers and 80% of prescribers said they wouldn't use lanifibranor because of the weight gain. So if they get here, look, MASH is a big market. We've got lots of room for more products. That's why we're building our pipeline. We think it overall helps. But they've got a long way to go, and we wish them luck. I think that's where I'll leave it.

Great. Thanks. And actually, we're past the top of the hour, Corey. So I think we'll conclude today's call. And so thank you all for your time and interest. This now concludes our call. A replay of the webcast will be available on our website in approximately 2 hours. Thanks for joining us.

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

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.