Summary of Madrigal Pharmaceuticals Conference Call Company Overview - **Company**: Madrigal Pharmaceuticals (NasdaqGS:MDGL) - **Product**: Rezdiffra, a treatment for MASH (Metabolic Dysfunction-Associated Steatotic Liver Disease) Key Industry Insights - **Market Opportunity**: There is a significant unmet need in the MASH market, with over 20 failed attempts by the industry to find a solution before Madrigal's success with Rezdiffra [2][3] - **Patient Population**: The diagnosed patient population in the U.S. is approximately 1.5 million, with the F2 and F3 indications accounting for about 525,000 patients. The target prescriber base is narrowed down to 14,000, leading to an actionable patient population of 315,000 [6][7] - **Current Treatment Penetration**: Currently, only about 10% of the identified patient population is being treated, indicating substantial growth potential [6][7] Product and Pipeline Development - **Rezdiffra's Profile**: The product is positioned as a foundational therapy for MASH, with a once-a-day oral dosage that is effective and well-tolerated, which is considered a "holy grail" in the industry [11] - **Sales Forecast**: Initial sales in 2024 are projected to be under $200 million, but the potential market size for Rezdiffra could reach $5 billion to $10 billion as penetration increases [3][12][15] - **Intellectual Property**: Madrigal has secured intellectual property for Rezdiffra until 2045, allowing ample time for market development [3] Competitive Landscape - **Comparison with Competitors**: Madrigal's focused approach contrasts with competitors like Novo, which have multiple indications and broader product lines. Madrigal's strategy is to engage directly with specialists, enhancing their market presence [18][19] - **Market Dynamics**: The company is observing the market entry of competitors and is prepared to adapt its strategy accordingly. The focus remains on building a strong presence in the specialty market [19][20] Sales and Marketing Strategy - **Adoption Rates**: Initial adoption rates in specialty clinics are reported to be as high as 80%, attributed to effective white-glove service and support for prescribers [21][24] - **Patient Adherence**: The persistence rate for patients on Rezdiffra is reported to be around 90% at the 12-month mark, significantly higher than the industry benchmark of 60-70% for well-tolerated oral medications [24][25] - **Sales Force Strategy**: The company has built a dedicated sales force to educate and support prescribers, which is crucial for navigating the complexities of specialty drug prescriptions [22][23] Financial Projections - **Gross Unit Projections**: For 2026, Madrigal anticipates gross unit sales to be in the high 30s percentage range, with a disciplined approach to contracting with commercial payers [29][30] - **Market Mix**: The revenue mix is expected to be 50-55% from commercial payers, 30-35% from Medicare, and the remainder from Medicaid and government sources [34] Research and Development - **Ongoing Studies**: The Maestro Outcomes study is ongoing, focusing on F4 cirrhosis patients, with confidence in positive outcomes based on previous open-label trial results [45][46] - **Patient Enrollment Criteria**: The study is designed to enroll patients with specific platelet counts, differentiating it from other ongoing studies that may include less severe populations [48][49] Conclusion - **Long-term Vision**: Madrigal aims to maintain its leadership in the MASH market for decades, supported by a robust pipeline and a strong foundational product in Rezdiffra [15][16]

Core Insights - Artisan Partners' "Artisan Small Cap Fund" reported strong performance in Q3 2025, with major US indices reaching record highs and the fund's Investor Class returning 8.69% [1] - Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) showed significant stock performance, with a one-month return of 28.70% and a 76.15% increase over the past 52 weeks, closing at $553.42 per share with a market cap of $12.569 billion [2] - The fund increased its position in Madrigal Pharmaceuticals due to the successful launch of its FDA-approved drug Rezdiffra™ for treating MASH, indicating confidence in the company's market potential [3] Fund Performance - The Artisan Small Cap Fund's Investor Class fund ARTSX returned 8.69%, Advisor Class fund APDSX returned 8.75%, and Institutional Class fund APHSX returned 8.73% in Q3 2025, compared to a 12.19% return for the Russell 2000 Growth Index [1] Company Focus - Madrigal Pharmaceuticals is focused on treating metabolic dysfunction-associated steatohepatitis (MASH) with its lead drug, Rezdiffra™, which is the first FDA-approved treatment for MASH with moderate to advanced fibrosis [3] - The company reported net sales of $287 million in Q3 2025, reflecting a 35% increase quarter-over-quarter [4]

Core Insights - Madrigal Pharmaceuticals, Inc. will participate in three upcoming investor conferences, showcasing its commitment to engaging with investors and stakeholders in the healthcare sector [1][2][3] Conference Participation - The company will present at the Jefferies Global Healthcare Conference in London on November 20, 2025, at 8:30 A.M. GMT [1] - Madrigal will also participate in the 8th Annual Evercore Healthcare Conference on December 2, 2025, at 4:15 P.M. ET [2] - Additionally, the company is scheduled to present at the Piper Sandler 37th Annual Healthcare Conference on December 3, 2025, at 1:30 P.M. ET [3] Company Overview - Madrigal Pharmaceuticals focuses on developing novel therapeutics for metabolic dysfunction-associated steatohepatitis (MASH), a liver disease with significant unmet medical needs [4] - The company's lead medication, Rezdiffra (resmetirom), is a once-daily, oral, liver-directed THR-β agonist, and is the first and only medication approved by both the FDA and European Commission for treating MASH with moderate to advanced fibrosis (F2 to F3) [4] - An ongoing Phase 3 outcomes trial is assessing Rezdiffra for the treatment of compensated MASH cirrhosis (F4c) [4]

Core Insights - Madrigal Pharmaceuticals announced positive two-year data from the Phase 3 MAESTRO-NAFLD-1 trial for Rezdiffra, targeting compensated MASH cirrhosis patients, a population with no approved therapies [1][3][4] - The data presented at the AASLD meeting highlighted significant improvements in liver stiffness, liver enzymes, and biomarkers in patients with advanced compensated MASH cirrhosis [2][6][8] Company Overview - Madrigal Pharmaceuticals focuses on developing novel therapeutics for metabolic dysfunction-associated steatohepatitis (MASH) [23] - Rezdiffra (resmetirom) is the first approved medication for treating MASH with moderate to advanced fibrosis in the U.S. and Europe [12][23] Clinical Trial Results - In the MAESTRO-NAFLD-1 trial, Rezdiffra showed statistically significant improvements in multiple imaging and biomarker parameters over two years in patients with compensated MASH cirrhosis [4][6] - Patients with platelet counts <100,000/µL demonstrated notable improvements, with a mean reduction in liver stiffness of -7.9 kPa [5][7] - Following two years of treatment, 39% of patients shifted to no/low CSPH risk scores, indicating a positive trend in disease management [7] Health-Related Quality of Life - Rezdiffra treatment resulted in significant and sustained improvements in health-related quality of life measures across various domains for both cirrhotic and non-cirrhotic patients [9][10] - Improvements were observed in fatigue, worry, emotional function, and abdominal symptoms, enhancing overall patient well-being [10][12] Safety and Tolerability - Rezdiffra was well-tolerated in the high-risk patient population, with a low rate of discontinuation due to adverse events [8][12] - No significant changes in bone mineral density or fracture risk were noted over the two-year treatment period [8] Future Directions - Madrigal is executing a fully enrolled Phase 3 outcomes study for Rezdiffra in compensated MASH cirrhosis patients, reinforcing its commitment to addressing this unmet medical need [3][12] - Continuous treatment with Rezdiffra is emphasized as necessary to maintain benefits and prevent disease progression, similar to management strategies for chronic diseases [12]

Core Insights - Ten large-cap stocks showed significant performance gains last week, driven by better-than-expected financial results and raised guidance for fiscal year 2025 [1] Company Performance Summary - **Globus Medical, Inc. (NYSE:GMED)**: Gained 39.79% after reporting better-than-expected Q3 results and raising FY2025 guidance [1] - **Sandisk Corporation (NASDAQ:SNDK)**: Gained 13.77% following better-than-expected Q1 results and issuing Q2 guidance above estimates [1] - **Lumentum Holdings Inc. (NASDAQ:LITE)**: Gained 15.30% after reporting better-than-expected Q1 results and issuing Q2 guidance above estimates [1] - **Datadog, Inc. (NASDAQ:DDOG)**: Gained 16.91% after better-than-expected Q3 results and raising FY2025 guidance above estimates [1] - **Expedia Group, Inc. (NASDAQ:EXPE)**: Gained 18.14% after beating Q3 earnings estimates and raising FY2025 guidance [1] - **Coherent Corp. (NYSE:COHR)**: Gained 15.82% after better-than-expected Q1 results and issuing Q2 sales guidance above estimates [1] - **Penumbra, Inc. (NYSE:PEN)**: Gained 19.58% after better-than-expected Q3 results and raising FY25 sales guidance above estimates [1] - **Teva Pharmaceutical Industries Limited (NYSE:TEVA)**: Gained 15.13% after beating Q3 earnings and revenue estimates and raising full-year EPS guidance [1] - **Madrigal Pharmaceuticals, Inc. (MDGL)**: Gained 19.90% after reporting better-than-expected Q3 sales results [1] - **DuPont de Nemours, Inc. (NYSE:DD)**: Gained 15.80% after beating Q3 earnings and revenue estimates [1]

Core Insights - Madrigal Pharmaceuticals (MDGL) reported a third-quarter 2025 loss of $5.08 per share, which is wider than the Zacks Consensus Estimate of a loss of $1.98, and compared to a loss of $4.92 per share in the same quarter last year [1][6] - The company generated total revenues of $287.3 million from product sales of its MASH drug Rezdiffra, surpassing the Zacks Consensus Estimate of $249 million, indicating strong year-over-year growth driven by increased demand [2][6] - MDGL shares increased by 7.8% following the announcement of strong sales growth [3] Financial Performance - Research and development expenses more than doubled to $174 million in Q3 2025, primarily due to upfront expenses for CSPC Pharma, partially offset by reduced clinical study expenses [5] - Selling, general and administrative expenses nearly doubled to $209.1 million, attributed to increased commercial launch activities for Rezdiffra [8] - Madrigal's cash, cash equivalents, and marketable securities amounted to $1.1 billion as of September 30, 2025, up from $802 million as of June 30, 2025, reflecting a new $350 million senior secured term loan with Blue Owl Capital [9] Product and Market Updates - Rezdiffra received accelerated approval from the FDA in March 2024, becoming the first and only approved therapy for MASH, with over 29,500 patients currently receiving treatment and more than 10,000 healthcare providers prescribing it as of September 30, 2025 [4][10] - The European Commission granted conditional marketing authorization to Rezdiffra in August 2025, making it the first approved therapy for MASH in the EU, with a launch in Germany in September [10] - Madrigal finalized a global licensing deal with CSPC Pharma for MGL-2086, an oral GLP-1 agonist, to combine with Rezdiffra in MASH treatment, with clinical entry expected in the first half of 2026 [11] Ongoing Studies and Future Prospects - The FDA's continued approval of Rezdiffra will depend on long-term safety and efficacy data from the ongoing pivotal phase III MAESTRO-NASH biopsy study [12] - A second phase III outcomes study (MAESTRO-NASH OUTCOMES) is underway, with top-line data expected in 2027, which could support full approval for Rezdiffra and expand its eligible patient population [13] - Positive two-year data from the open-label extension of the MAESTRO-NAFLD-1 study reinforces Rezdiffra's potential benefits for patients with compensated MASH cirrhosis [14]

Core Insights - Madrigal Pharmaceuticals, Inc. is focused on developing therapies for cardiovascular and metabolic diseases, with its product Rezdiffra gaining market traction despite competition [1] Financial Performance - The company reported a quarterly EPS of -$5.08, missing the estimated EPS of -$2.04, and this loss increased slightly from -$4.92 per share in the same quarter last year [2][6] - Madrigal's revenue for the quarter was $287.3 million, exceeding the estimated $244.96 million, and showing significant growth from $62.17 million reported a year ago [3][6] Market Position and Strategy - Over 29,500 patients are currently using Rezdiffra, indicating strong market acceptance [3] - The company entered a global licensing agreement with CSPC Pharma to incorporate an oral GLP-1 into its offerings, and a new patent for Rezdiffra extends its protection until 2045 [4] - The launch of Rezdiffra in Germany following European Commission approval further expands its market reach [4] Financial Health - Madrigal has a negative P/E ratio of -35.13, indicating a lack of profitability, but maintains a strong current ratio of 5.11, demonstrating good short-term liability coverage [5] - The company has cash reserves totaling $1.1 billion, providing a solid financial foundation for ongoing operations and strategic initiatives [5][6]

Product Launch and Approval - Rezdiffra, the first FDA-approved therapy for MASH, was launched in the U.S. in April 2024 and in Germany in September 2025[118][126]. - The European Commission granted conditional marketing authorization for Rezdiffra, valid in all 27 EU member states[124]. - The company received a Notice of Allowance for a new U.S. patent covering Rezdiffra, providing protection until February 2045[130]. - The company received FDA approval for Rezdiffra in March 2024 and EC approval in August 2025, with a tiered single-digit royalty payable to Roche on net sales[180]. Clinical Trials and Outcomes - Approximately 1.5 million patients in the U.S. are diagnosed with MASH, with 525,000 having moderate to advanced fibrosis[121]. - The MAESTRO-NASH trial showed statistically significant improvement in MASH resolution and fibrosis improvement at 52 weeks[119]. - The company expects to report outcomes data from the MAESTRO-NASH OUTCOMES trial in 2027, which could support full FDA approval for Rezdiffra[119]. - MASH patients with moderate to advanced fibrosis have a 10-to-17 times higher risk of liver-related mortality[120]. Financial Performance - Product revenue for Q3 2025 reached $287.3 million, a 362% increase from $62.2 million in Q3 2024, driven by higher demand for Rezdiffra[143][144]. - For the nine months ended September 30, 2025, product revenue was $637.3 million, a 730% increase from $76.8 million in the same period in 2024[150][151]. - Total operating expenses for Q3 2025 were $401.2 million, up 125% from $178.5 million in Q3 2024, with significant increases in research and development and selling, general and administrative expenses[143][150]. - Net loss for Q3 2025 was $114.2 million, compared to a net loss of $107.0 million in Q3 2024, reflecting a 7% increase in losses[143]. Expenses and Investments - Research and development expenses for Q3 2025 totaled $174.0 million, a 153% increase from $68.7 million in Q3 2024, primarily due to a $120.0 million upfront expense under the CSPC License Agreement[146][147]. - Selling, general and administrative expenses for Q3 2025 were $209.1 million, a 94% increase from $107.6 million in Q3 2024, mainly due to increased commercial activities for Rezdiffra[147][155]. - Interest expense for Q3 2025 was $7.5 million, an increase of 103% from $3.7 million in Q3 2024, due to a higher average outstanding principal balance[149]. Financing and Liquidity - The company secured a Financing Agreement for up to $500 million, including a $350 million initial term loan[129]. - The company entered into a senior secured credit facility in July 2025, providing up to $500.0 million to support operations[159]. - The company anticipates continued significant losses until sufficient revenue is generated from Rezdiffra and other products, with future liquidity needs potentially requiring additional capital[160]. - The company is required to maintain a minimum unrestricted cash balance of $100.0 million at all times under the Financing Agreement[168]. Licensing and Agreements - A global license agreement for MGL-2086 was signed with CSPC, involving an upfront payment of $120 million and potential milestone payments of up to $2 billion[128]. - The company entered into a CSPC License Agreement for MGL-2086, paying an upfront fee of $120.0 million and potentially up to $2.0 billion in milestone payments[181]. - As of September 30, 2025, the company had approximately $187.6 million of obligations under agreements related to active pharmaceutical ingredients, expected to be paid through December 2027[182]. Cash Flow and Market Position - As of September 30, 2025, the company had cash and marketable securities totaling $1,114.7 million, up from $931.3 million as of December 31, 2024[159]. - For the nine months ended September 30, 2025, net cash used in operating activities was $56.1 million, a significant improvement from $351.1 million in the same period of 2024[174]. - Net cash provided by investing activities was $4.7 million for the nine months ended September 30, 2025, compared to a net cash outflow of $226.4 million in the corresponding period of 2024[175]. - The company reported net cash provided by financing activities of $247.0 million for the nine months ended September 30, 2025, down from $715.3 million in the same period of 2024[176]. Risk Factors - The company has not entered into any hedging arrangements for foreign currency risk as it expands operations into Europe, exposing it to fluctuations in exchange rates[185]. - The interest rate on the Term Loans is based on a variable rate, with a current effective rate of 9.1% for the $350.0 million borrowed under the Financing Agreement[184].

Financial Data and Key Metrics Changes - Third quarter 2025 net sales totaled $287.3 million, up 35% from the second quarter of 2025 [23][24] - R&D expenses for the third quarter of 2025 were $174 million, compared to $68.7 million in the third quarter of 2024, primarily due to a one-time $117 million expense associated with the global licensing agreement for MGL-2086 [24][25] - SG&A expenses for the third quarter of 2025 were $209.1 million, compared to $107.6 million in the third quarter of 2024, reflecting higher commercial investment to support the Rezdiffra launch [25] Business Line Data and Key Metrics Changes - Rezdiffra's sales are annualizing at greater than $1 billion in only its sixth quarter of launch, with over 29,500 patients currently on therapy, up from more than 23,000 at the end of the second quarter [4][6][7] - The number of prescribers for Rezdiffra exceeded 10,000, indicating strong adoption and penetration in the market [8][27] Market Data and Key Metrics Changes - The MASH market is still in its early stages, with Rezdiffra positioned as a first-line therapy, benefiting from a unique profile that surpasses other first-to-market products [9][10] - The company anticipates that the market will expand, driven by increased awareness and diagnosis, particularly with the entry of competitors like Wegovy [10][11] Company Strategy and Development Direction - The company is focused on maximizing the value of Rezdiffra and building its pipeline, with a strong emphasis on payer contracting strategies for first-line access [4][12] - The strategy includes expanding globally, with a recent launch in Germany following European approval, and enhancing targeting efforts towards endocrinologists [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Rezdiffra's growth potential, citing a strong adherence rate and the drug's well-tolerated profile as key factors for long-term chronic use [11][72] - The company is optimistic about the outcomes of ongoing trials, particularly the Maestro NASH outcomes trial, which is expected to read out in 2027 [16][47] Other Important Information - The company ended the third quarter of 2025 with $1.1 billion in cash and equivalents, providing strong resources to support the ongoing launch of Rezdiffra and advance multiple pipeline programs [25][26] - The gross-to-net impact is expected to be in the high 30% range starting January 1, 2026, consistent with other innovative specialty medicines [24][14] Q&A Session Summary Question: How could AASLD data further de-risk Maestro NASH outcomes? - Management highlighted the positive feedback from gastroenterologists and the foundational therapy status of Rezdiffra, expressing excitement about the upcoming AASLD meeting [31][32] Question: Pros and cons of combining Rezdiffra with MGL-2086 versus other GLP-1s? - Management clarified that MGL-2086 is an orforglipron derivative, emphasizing the rationale for combining it with Rezdiffra to enhance efficacy [37][38] Question: Thoughts on competitive positioning amid recent M&A in the space? - Management views recent M&A as validation of the MASH market and believes it will lead to greater diagnosis and treatment opportunities, favoring Rezdiffra's profile [45][46] Question: Feedback on Rezdiffra's adherence rate and net pricing expectations? - Management confirmed strong adherence rates and indicated that gross-to-net dynamics would likely lead to some future decline in pricing, but they remain optimistic about market access [51][53] Question: Comments on Aetna's formulary coverage decision? - Management stated that Rezdiffra will be available through prior authorization or medical exception, with no expected meaningful impact on patient access [59] Question: Observations on Novo's marketing campaign and its impact on the addressable patient pool? - Management noted that while it is early to quantify the impact, there are signs of increased referrals and diagnosis, which could benefit Rezdiffra [63][64] Question: Path to profitability and focus areas moving forward? - Management emphasized the focus on driving top-line growth and building out the pipeline, indicating that profitability will be considered in the future [68]

Financial Data and Key Metrics Changes - For Q3 2025, net sales totaled $287.3 million, representing a 35% increase quarter over quarter [23][24]. - The company ended Q3 2025 with $1.1 billion in cash and marketable securities, reflecting a strong cash position to support ongoing operations [25][26]. Business Line Data and Key Metrics Changes - Rezdiffra's sales are annualizing at over $1 billion within six quarters of launch, with over 29,500 patients currently on the therapy, up from more than 23,000 at the end of Q2 2025 [4][6][7]. - The number of prescribers for Rezdiffra exceeded 10,000, indicating strong physician penetration [8]. Market Data and Key Metrics Changes - The target population for Rezdiffra is 315,000 diagnosed patients, with a significant portion remaining untreated, providing substantial growth potential [7][10]. - The company is expanding its market presence in Europe, having launched in Germany following European approval [4][15]. Company Strategy and Development Direction - The company aims to maximize the value of Rezdiffra while building its pipeline, focusing on first-line access and payer contracting strategies for 2026 [4][12]. - The strategy includes expanding the pipeline with new assets, such as an oral GLP-1, to enhance treatment options for MASH [17][18]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Rezdiffra's growth potential, citing its best-in-class profile and the expected impact of payer agreements starting January 1, 2026 [11][24]. - The management team highlighted the importance of sustained efficacy and tolerability for long-term chronic use of Rezdiffra [72][75]. Other Important Information - R&D expenses for Q3 2025 were $174 million, primarily due to a one-time expense related to the licensing agreement for MGL-2086 [24][25]. - SG&A expenses increased to $209.1 million, reflecting higher commercial investments to support the Rezdiffra launch [25]. Q&A Session Summary Question: How could AASLD data further de-risk Maestro NASH outcomes? - Management expressed excitement about AASLD and noted positive feedback from gastroenterologists regarding Rezdiffra's efficacy, which gives confidence in the Maestro outcomes trial [30][31][34]. Question: Pros and cons of combining Rezdiffra with MGL-2086 versus other GLP-1s? - Management clarified that MGL-2086 is an orforglipron derivative, emphasizing the rationale for combining it with Rezdiffra to enhance efficacy [37][38]. Question: Thoughts on competitive positioning amid recent M&A in the space? - Management viewed recent M&A as validation of the MASH market and expressed confidence in their long-term strategy and market access [45][46]. Question: Feedback on Rezdiffra's adherence rates and net pricing? - Management confirmed strong adherence rates and indicated that gross-to-net dynamics would likely lead to some future decline in pricing, but they remain optimistic about market access [51][53]. Question: Comments on Aetna's formulary coverage decision? - Management stated that Aetna's decision would not significantly impact access, as Rezdiffra would still be available through prior authorization [59]. Question: Observations on Novo's marketing campaign and path to profitability? - Management noted that while it is early to quantify the impact of Novo's campaign, they are optimistic about the potential for increased diagnoses and emphasized a focus on top-line growth [62][68].