Madrigal Pharmaceuticals(MDGL) - 2023 Q4 - Annual Results

Corporate Overview and Recent Developments Madrigal Pharmaceuticals is a clinical-stage biopharmaceutical company focused on developing novel therapeutics for nonalcoholic steatohepatitis (NASH) Introduction and CEO Statement Madrigal Pharmaceuticals, a clinical-stage biopharmaceutical company, is advancing resmetirom for a potential U.S. launch as the first approved NASH medicine - Madrigal Pharmaceuticals is a clinical-stage biopharmaceutical company pursuing novel therapeutics for nonalcoholic steatohepatitis (NASH)[1] - The company is focused on advancing regulatory, operational, and commercial activities for resmetirom in preparation for a potential U.S. launch[2] - The goal is to establish resmetirom as the foundational therapy for NASH with significant fibrosis, addressing a serious disease with significant unmet need[2] Recent Corporate Updates Madrigal announced key leadership appointments and highlighted significant progress in clinical and regulatory efforts for resmetirom, including positive Phase 3 trial results - Mardi C. Dier was appointed as Chief Financial Officer, bringing over 20 years of executive financial leadership experience in biotechnology[4][5] - Additional leadership appointments include Carole Huntsman (CCO), Ronald Fillipo (CIO), Clint Wallace (CHRO), Mark Barrett (CBO), and Tina Ventura (CIRO)[5] - Resmetirom is anticipated to become the first medicine approved for NASH, with a PDUFA date of March 14, 2024[4] - Positive results from the 52-week pivotal Phase 3 MAESTRO-NASH trial were published in the New England Journal of Medicine on February 8, 2024, reinforcing resmetirom's safety and efficacy profile[5] - New data from the MAESTRO-NASH trial, demonstrating broad treatment effects on noninvasive measures of liver health, were presented at the AASLD Liver Meeting in November 2023[6] Financial Results for the Three and Twelve Months Ended December 31, 2023 This section details Madrigal's financial performance, including cash position, operating expenses, and other income/expenses for the specified periods Financial Highlights (Cash Position) Madrigal's cash, cash equivalents, and marketable securities significantly increased to $634.1 million by December 31, 2023, primarily driven by proceeds from a public offering Cash, Cash Equivalents and Marketable Securities | Metric | December 31, 2023 (in millions) | December 31, 2022 (in millions) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Cash, cash equivalents and marketable securities | $634.1 | $358.8 | - The increase in cash and marketable securities was primarily from proceeds from the October 2023 public offering, partially offset by funding of operations[7] Operating Expenses Analysis Total operating expenses increased significantly for both the three and twelve months ended December 31, 2023, driven by R&D and G&A activities for resmetirom's launch Total Operating Expenses | Period | 2023 (in millions) | 2022 (in millions) | YoY Change | | :-------------------- | :----------------- | :----------------- | :--------- | | Three Months Ended Dec 31 | $117.2 | $85.3 | +37.4% | | Twelve Months Ended Dec 31 | $380.5 | $293.6 | +29.6% | Research and Development (R&D) Expenses R&D expenses increased for the twelve months, driven by manufacturing scale-up and personnel for resmetirom's launch Research and Development Expenses | Period | 2023 (in millions) | 2022 (in millions) | YoY Change | | :-------------------- | :----------------- | :----------------- | :--------- | | Three Months Ended Dec 31 | $70.6 | $70.7 | -0.1% | | Twelve Months Ended Dec 31 | $272.4 | $245.4 | +11.0% | - The increases in R&D expenses are primarily attributable to a scale-up of manufacturing activities to prepare for the launch of resmetirom, as well as an increase in R&D personnel[9] General and Administrative (G&A) Expenses G&A expenses significantly increased due to commercialization activities in preparation for resmetirom's expected approval and launch General and Administrative Expenses | Period | 2023 (in millions) | 2022 (in millions) | YoY Change | | :-------------------- | :----------------- | :----------------- | :--------- | | Three Months Ended Dec 31 | $46.5 | $14.6 | +218.5% | | Twelve Months Ended Dec 31 | $108.1 | $48.1 | +124.7% | - The increases in G&A expenses are primarily attributable to commercial activities in preparation for the expected approval and launch of resmetirom[10] - G&A expenses are expected to further increase as operating activities associated with the commercialization of resmetirom expand[10] Other Income and Expenses Madrigal experienced significant increases in both interest income and interest expense for the three and twelve months ended December 31, 2023, driven by higher balances and rates Interest Income Interest income substantially increased due to higher average investment balances and interest rates in 2023 Interest Income | Period | 2023 (in millions) | 2022 (in millions) | YoY Change | | :-------------------- | :----------------- | :----------------- | :--------- | | Three Months Ended Dec 31 | $9.0 | $1.1 | +718.2% | | Twelve Months Ended Dec 31 | $19.6 | $2.2 | +790.9% | - The increases in interest income were due primarily to a higher average principal balance in the investment account as well as higher average interest rates in 2023[11] Interest Expense Interest expense rose due to higher outstanding loan balances and increased average interest rates in 2023 Interest Expense | Period | 2023 (in millions) | 2022 (in millions) | YoY Change | | :-------------------- | :----------------- | :----------------- | :--------- | | Three Months Ended Dec 31 | $4.0 | $1.7 | +135.3% | | Twelve Months Ended Dec 31 | $12.7 | $4.0 | +217.5% | - The increase in interest expense was a result of higher outstanding principal balances under the company's loan facility and higher average interest rates in 2023[12] Disease and Company Background This section provides an overview of Nonalcoholic Steatohepatitis (NASH) and Madrigal Pharmaceuticals' role in developing therapeutics for this disease About NASH NASH is a severe form of fatty liver disease, a leading cause of liver-related mortality with no FDA-approved therapies, recently re-named MASH - NASH is a more advanced form of nonalcoholic fatty liver disease (NAFLD) and a leading cause of liver-related mortality, posing an increasing burden on healthcare systems globally[13] - Patients with NASH and significant fibrosis (stages 2 and 3) face dramatically increased risks of adverse liver outcomes, with NASH rapidly becoming the leading cause of liver transplantation in the U.S[14] - Madrigal estimates approximately 1.5 million diagnosed NASH patients in the U.S., with about 525,000 having significant fibrosis, and plans to focus on approximately 315,000 of these patients under liver specialists during resmetirom's launch[15] - There are currently no FDA-approved therapies for NASH, which is also known as 'metabolic dysfunction-associated steatohepatitis (MASH)' following a 2023 nomenclature change[16] About Madrigal Pharmaceuticals Madrigal Pharmaceuticals is a clinical-stage biopharmaceutical company dedicated to developing novel therapeutics for NASH, with resmetirom as its lead liver-directed oral therapy - Madrigal Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company pursuing novel therapeutics for nonalcoholic steatohepatitis (NASH)[17] - Madrigal's lead candidate, resmetirom, is a liver-directed oral therapy designed to target key underlying causes of NASH[17] Consolidated Financial Statements This section presents Madrigal's condensed consolidated statements of operations and balance sheets, reflecting the company's financial position and performance Condensed Consolidated Statements of Operations Madrigal incurred a net loss of $112.2 million for Q4 2023 and $373.6 million for FY 2023, primarily due to increased R&D and G&A operating expenses Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | Twelve Months Ended Dec 31, 2023 | Twelve Months Ended Dec 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------- | :------------------------------- | | Total revenues | $ — | $ — | $ — | $ — | | Research and development | $70,640 | $70,742 | $272,350 | $245,441 | | General and administrative | $46,536 | $14,557 | $108,146 | $48,130 | | Total operating expenses | $117,176 | $85,299 | $380,496 | $293,571 | | Loss from operations | $(117,176) | $(85,299) | $(380,496) | $(293,571) | | Interest income, net | $8,953 | $1,076 | $19,578 | $2,185 | | Interest expense | $(3,971) | $(1,682) | $(12,712) | $(3,964) | | Net loss | $(112,194) | $(85,905) | $(373,630) | $(295,350) | | Basic and diluted net loss per common share | $(5.68) | $(4.98) | $(19.99) | $(17.23) | | Basic and diluted weighted average number of common shares outstanding | 19,760,842 | 17,237,517 | 18,687,774 | 17,137,201 | Condensed Consolidated Balance Sheets As of December 31, 2023, Madrigal's total assets increased to $640.5 million, primarily driven by a significant rise in cash, cash equivalents, and marketable securities Condensed Consolidated Balance Sheets (in thousands) | Metric | December 31, 2023 | December 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Assets | | | | Cash, cash equivalents and marketable securities | $634,131 | $358,774 | | Other current assets | $3,150 | $2,595 | | Other non-current assets | $3,266 | $1,203 | | Total assets | $640,547 | $362,572 | | Liabilities and Equity | | | | Current liabilities | $118,548 | $115,894 | | Long-term liabilities | $116,666 | $49,289 | | Stockholders' equity | $405,333 | $197,389 | | Total liabilities and stockholders' equity | $640,547 | $362,572 | Additional Information This section provides important disclaimers regarding forward-looking statements and contact information for investor and media inquiries Forward-Looking Statements This section provides a comprehensive disclaimer regarding forward-looking statements, outlining inherent risks and uncertainties associated with Madrigal's future performance and commercialization plans - The communication includes 'forward-looking statements' based on Madrigal's beliefs and assumptions, subject to factors beyond its control[18] - These statements are subject to numerous risks and uncertainties, including those related to obtaining and maintaining regulatory approvals, meeting clinical study objectives, market demand, capital raising, and competitive studies[21] - Undue reliance should not be placed on forward-looking statements, and Madrigal undertakes no obligation to update them; more detailed risk information is available in SEC filings, particularly the Annual Report on Form 10-K[21][22] Investor and Media Contacts This section provides the contact information for investor relations and media inquiries for Madrigal Pharmaceuticals - Investor Contact: Tina Ventura, Madrigal Pharmaceuticals, Inc., IR@madrigalpharma.com[23] - Media Contact: Christopher Frates, Madrigal Pharmaceuticals, Inc., media@madrigalpharma.com[23]