Summary of Madrigal Pharmaceuticals (MDGL) FY Conference Call - August 12, 2025 Company Overview - **Company**: Madrigal Pharmaceuticals (MDGL) - **Product**: ResDiffera, a treatment for NASH (Non-Alcoholic Steatohepatitis) Key Industry Insights - **NASH Market**: The NASH market is expected to grow significantly, with Madrigal positioned as a leader due to its first approved drug in this space. - **Patient Population**: Approximately 245,000 patients with F4C (compensated cirrhosis) and 315,000 patients with F2F3 NASH are targeted, with a focus on deeper penetration in the F4C group due to their higher medical needs. Core Points and Arguments 1. **Patent Protection**: A new US patent extends protection until February 2045, providing a significant competitive advantage and allowing for strategic planning of future pipelines [3][17][18]. 2. **Sales Performance**: The company reported $213 million in sales for the last quarter, annualizing to over $800 million, with 80% of top targets prescribing ResDiffera [5][6]. 3. **Patient Adoption**: Over 23,000 patients are currently on therapy, indicating strong adoption and positive feedback from healthcare providers [5][6]. 4. **Clinical Efficacy**: Positive feedback from hepatologists indicates that ResDiffera is exceeding expectations in improving liver stiffness and other health metrics [9][10][11]. 5. **Commercial Strategy**: The company is focused on long-term education for providers and patients, ensuring understanding of NASH and the benefits of ResDiffera [13][14][15]. 6. **Combination Therapy**: The recent acquisition of an oral GLP-1 to combine with ResDiffera is expected to enhance efficacy by reducing liver fat and improving patient outcomes [35][36][37]. 7. **Market Positioning**: ResDiffera is positioned as a first-line therapy in EASL guidelines, with a strategic approach to launch in Germany and other European countries [49][50]. Additional Important Insights - **Real-World Data**: The company is leveraging real-world data from the US launch to inform its European strategy, aiming for a smooth rollout [51]. - **Off-Label Use**: There is some off-label use of ResDiffera in F4 patients, but the company is cautious about this until further study results are available [31][32]. - **Future Studies**: The Maestro Outcomes study is expected to provide further validation of ResDiffera's efficacy in 2027, which will be crucial for market confidence [26][30]. This summary encapsulates the key points discussed during the conference call, highlighting Madrigal Pharmaceuticals' strategic initiatives, market positioning, and the promising outlook for ResDiffera in the NASH treatment landscape.

Financial Data and Key Metrics Changes - Madrigal Pharmaceuticals reported net sales of $213 million for Q2 2025, representing a 55% increase quarter-over-quarter [12][33] - The annualized net sales for ResDiffera are now exceeding $800 million, indicating strong demand and execution [12][37] - R&D expenses decreased to $54.1 million from $71.1 million year-over-year, primarily due to lower clinical trial costs [34] - SG&A expenses increased to $196.9 million from $105.4 million year-over-year, driven by higher commercial launch activities [35] Business Line Data and Key Metrics Changes - ResDiffera's quarterly run rate has surpassed $200 million, positioning it among the best specialty launches in the last decade [5] - The number of patients on ResDiffera increased to over 23,000, up from more than 17,000 at the end of Q1 2025 [12] - Physician penetration has reached 80% among the top 6,000 target prescribers, with 60% of a broader 14,000 target prescriber base having written prescriptions by the end of Q2 [14][15] Market Data and Key Metrics Changes - The U.S. market for ResDiffera is expected to expand significantly, with only about 7% of the 315,000 diagnosed F2F3 NASH patients currently being treated [13] - The company is preparing for international expansion, starting with Germany, where it estimates a target population of approximately 370,000 patients [25][26] Company Strategy and Development Direction - Madrigal is focused on maximizing ResDiffera's value and expanding its leadership in the NASH market through geographic expansion and new indications [4][6] - The company has secured a new U.S. patent extending protection for ResDiffera to February 2045, enhancing its long-term growth potential [9][11] - Plans to develop a combination therapy with a newly licensed oral GLP-1 are underway, aiming to optimize treatment for NASH patients [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for ResDiffera and its ability to maintain growth despite potential competition from GLP-1 therapies [51][52] - The company anticipates that the upcoming GLP-1 launch will raise awareness and drive broader screening, ultimately benefiting ResDiffera [20][21] - Management highlighted the importance of maintaining a disciplined approach to gross-to-net dynamics as the company navigates its launch phase [44][46] Other Important Information - Madrigal has entered into a $500 million senior secured credit facility to support its ongoing launch and business development activities [36] - The company is preparing for a potential launch in Europe, with a focus on Germany, where it has already established a strong foundation [24][26] Q&A Session Summary Question: Can you expand on gross to net and inventory dynamics in the quarter? - Management indicated that gross to net will be choppy early in the launch, with expectations for more impact in the second half of the year [41][44] Question: How do you foresee maintaining growth with the entrance of GLP-1 therapies? - Management expects to continue adding patients and believes that the strong demand will persist through the GLP-1 launch [52][55] Question: Can you provide details on the selection process for the new oral GLP-1? - The selection was systematic, focusing on favorable stability and pharmacokinetic profiles, leading to the choice of SYH-2086 [61][62] Question: What is the expected launch curve in Europe compared to the U.S.? - Management believes that the European launch will benefit from prior preparation and existing guidelines, with revenue recognition expected more in 2026 [79] Question: Can you provide numbers around the gross to net range for specialty drugs? - Management confirmed that the gross to net range is expected to fall within 20% to 30%, based on extensive experience and current contracting negotiations [82][84]

Financial Data and Key Metrics Changes - Madrigal Pharmaceuticals reported net sales of $213 million for Q2 2025, representing a 55% increase quarter-over-quarter [13][37] - The annualized net sales for ResDiffera are now exceeding $800 million [13][37] - R&D expenses decreased to $54.1 million from $71.1 million year-over-year, primarily due to lower clinical trial costs [38] - SG&A expenses increased to $196.9 million from $105.4 million year-over-year, driven by higher commercial launch activities [38] Business Line Data and Key Metrics Changes - ResDiffera's quarterly run rate has surpassed $200 million, positioning it among the best specialty launches in the last decade [6][13] - The number of patients on ResDiffera increased to over 23,000, up from more than 17,000 at the end of Q1 2025 [13][14] - Physician penetration reached 80% among the top 6,000 target prescribers, with 60% of a broader 14,000 target prescriber base having written prescriptions by the end of Q2 [15][16] Market Data and Key Metrics Changes - The U.S. market for ResDiffera is expected to expand with the upcoming international launch in Germany, targeting approximately 370,000 diagnosed patients across Europe [26][28] - The company is preparing to expand into compensated NASH cirrhosis (F4C), which could potentially double ResDiffera's market opportunity in the U.S. [31] Company Strategy and Development Direction - Madrigal is focused on maximizing ResDiffera's value and expanding its leadership in the NASH market through geographic expansion and new indications [5][8] - The company has secured a new U.S. patent extending protection for ResDiffera until February 2045, enhancing its long-term growth potential [7][10] - A promising oral GLP-1 asset has been licensed to complement ResDiffera, with plans to enter clinical trials in the first half of next year [25][120] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for ResDiffera and the potential for continued patient growth despite upcoming competition from GLP-1 therapies [56][57] - The company anticipates that the launch of semaglutide will raise awareness and drive broader screening, ultimately benefiting ResDiffera [22][23] - Management emphasized the importance of maintaining a disciplined approach to gross-to-net dynamics, expecting it to remain within the typical range for specialty medicines [48][49] Other Important Information - Madrigal has entered into a $500 million senior secured credit facility to support its ongoing launch and business development activities [40][41] - The company is preparing for a potential launch in Europe, with a focus on Germany as the first market [26][28] Q&A Session Summary Question: Can you expand on gross-to-net and inventory dynamics? - Management noted that gross-to-net will be choppy early in the launch, with expectations for more impact from contracting in the second half of the year [45][48] Question: How do you foresee maintaining growth with GLP-1 market entry? - Management expects strong demand to continue and is actively engaging with payers to establish partnerships, while also preparing for various scenarios regarding GLP-1 pricing and access [54][58] Question: Can you provide details on the new oral GLP-1 selection process? - The selection process was systematic, focusing on favorable chemical properties and pharmacokinetics, leading to the choice of SYH-2086 as a promising candidate for combination therapy [66][68] Question: What is the competitive landscape regarding GLP-1s? - Management believes that the familiarity with GLP-1s in the market will facilitate combination use, and they are focused on leveraging ResDiffera's unique profile to maintain a competitive edge [128][130]

Financial Data and Key Metrics Changes - The launch of ResDiffera has been described as outstanding, with over 17,000 patients on the product by March 2025, compared to almost zero a year prior [6][7] - The company reported that over 80% of commercial lives were covered by payers at the six-month mark post-launch [6] - The company anticipates robust growth for 2025, with expectations for gross to net discounts typical for specialty medicines [44][45] Business Line Data and Key Metrics Changes - The company is focusing on expanding its prescriber base, with over 70% of targeted prescribers having written prescriptions for ResDiffera [9] - The company is currently at 5% penetration of the identified 315,000 diagnosed patients, indicating significant room for growth [8][9] - The management noted that the product is becoming standard of care, which is expected to facilitate further adoption [11] Market Data and Key Metrics Changes - The company sees favorable market dynamics in the NASH space, with a potential patient population that is many multiples of the diagnosed patients [8] - The anticipated approval of semaglutide is viewed as a market growth opportunity rather than a direct threat [31][32] Company Strategy and Development Direction - The company is optimistic about extending its intellectual property (IP) into the 2040s and is actively pursuing new IP to enhance its position [23][24] - The focus on lifecycle management includes ongoing trials and exploring distinct populations for potential new indications [24][26] - The company is strategically positioned to leverage its existing product while selectively pursuing business development opportunities [65][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the product's performance and its acceptance in the market, noting positive feedback from prescribers and patients [36][37] - The company is well-prepared for the European launch, with a strong team in place and high anticipation from the treating community [78][79] - Management believes that the competitive landscape will not hinder their growth, as they maintain a strong product profile [30][31] Other Important Information - The company has a strong balance sheet with $848 million in cash and only $115 million in debt, providing ample capacity for future initiatives [69] - The management emphasized the importance of time in building familiarity with the product among prescribers and patients [11] Q&A Session Summary Question: What are the expectations for reauthorization? - Management believes reauthorization will not be a challenge, as criteria are fair and based on physician assessments of patient stabilization or improvement [21][22] Question: How does the company plan to manage competition? - The company is focused on gross to net strategies and has begun contracting for access, anticipating competition while maintaining a long-term view [42][44] Question: What is the company's approach to business development? - The company is selectively looking for opportunities to enhance its pipeline without risking its current strong position [66][70] Question: How does the company view the upcoming European launch? - Management is optimistic about the European launch, noting that the market is better prepared than the U.S. was at launch [75][78] Question: What is the anticipated impact of MFN on pricing in Europe? - The company is optimistic that Europe will recognize innovation and is prepared to approach pricing based on unfolding information [84]

Financial Data and Key Metrics Changes - For Q1 2025, net sales totaled $137.3 million, representing a 33% increase from Q4 2024 [30] - Over the last twelve months, the company generated $317 million in net sales, indicating strong demand and momentum [28][30] - R&D expenses decreased to $44.2 million in Q1 2025 from $71.2 million in Q1 2024, primarily due to changes in accounting for inventory costs and lower clinical trial costs [31] - SG&A expenses increased to $167.9 million in Q1 2025 from $80.8 million in Q1 2024, driven by increased commercial launch activities [32] Business Line Data and Key Metrics Changes - The company has treated over 17,000 patients with ResDiffera, up from 11,800 patients at the end of Q4 2024, indicating strong patient adoption [12] - Approximately 70% of the top 6,000 target prescribers have prescribed ResDiffera, reflecting a strong base of prescribers [15] - The company is focused on a target market of 315,000 diagnosed F2 and F3 MAH patients, with only about 5% currently being treated with ResDiffera [13] Market Data and Key Metrics Changes - The company is preparing for a mid-year regulatory decision in Europe, with plans to launch in Germany in the second half of the year if approved [26] - The company is evaluating additional high-priority global markets beyond Europe [26] Company Strategy and Development Direction - The expansion to treat F4C patients is a key pillar of the company's long-term NASH leadership strategy, with ongoing trials expected to yield data ahead of competitors [25] - The company aims to build a portfolio of differentiated assets to extend its leadership position in the market [27][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning within the current macroeconomic environment, highlighting the strong cash position to support ongoing launches [29] - The company expects robust year-over-year net sales growth in 2025, despite anticipated increases in gross-to-net discounts as payer contracts are established [30][31] Other Important Information - The company has recently appointed a new Chief Medical Officer, Dave Sorgel, to lead pipeline development efforts [9][27] - The company is actively evaluating opportunities across multiple mechanisms and stages of development to enhance its product offerings [27] Q&A Session Summary Question: Expectations for growth trajectory for ResDiffera with expanded label - Management expects continued growth in patient numbers and market expansion, with significant potential for new patient additions as the market evolves [39][40] Question: Payer reauthorization requirements and patient persistency - Management is not concerned about reauthorizations, citing strong results and patient feedback, which should support persistency [45][47] Question: Status of European approval and implications for pricing - Management is optimistic about the ongoing review process in Europe and expects to launch later this year, with pricing strategies being evaluated [53][56] Question: Confidence in outcomes benefit on hepatic events - Management expressed confidence in the liver stiffness data translating to clinical outcomes, supported by the mechanism of action of ResDiffera [62] Question: Compliance rates and patient feedback on therapy - Early signs of adherence are promising, with anecdotal evidence suggesting patients feel better on the therapy [66][69] Question: Insights on gross-to-net pricing evolution - Management anticipates a disciplined approach to gross-to-net pricing, with ongoing discussions with payers [106][108]