Madrigal Pharmaceuticals(MDGL) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q3 2025, net sales totaled $287.3 million, representing a 35% increase quarter over quarter [22][24] - R&D expenses increased to $174 million from $68.7 million in Q3 2024, primarily due to a one-time $117 million expense for a global licensing agreement [23][24] - SG&A expenses rose to $209.1 million compared to $107.6 million in Q3 2024, reflecting higher commercial investment for the Rezdiffra launch [24] 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 therapy, up from over 23,000 at the end of Q2 2025 [3][5][25] - The number of prescribers for Rezdiffra exceeded 10,000, indicating strong adoption and penetration in the market [6][25] 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 [8][10] - The company anticipates that the market will expand, driven by increased awareness and diagnosis, particularly with the entry of competitors like Novo [61] Company Strategy and Development Direction - The company is focused on maximizing the value of Rezdiffra and expanding its pipeline, with a strong emphasis on payer contracting for first-line access in 2026 [3][11] - The strategy includes a thoughtful approach to pipeline development, aiming to combine Rezdiffra with other mechanisms like GLP-1s to enhance treatment efficacy [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 a favorable market position [10][68] - The company is optimistic about the upcoming data presentations at AASLD, which are expected to bolster confidence in the Maestro NASH outcomes trial [32][19] Other Important Information - The company ended Q3 2025 with $1.1 billion in cash and equivalents, providing a strong financial position to support ongoing operations and pipeline advancements [25] - The gross-to-net impact is expected to rise to the high 30% range in 2026, consistent with other innovative specialty medicines [23][12] 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 role of Rezdiffra in treatment, expressing excitement for the upcoming AASLD data [29][31] Question: Pros and cons of combining Rezdiffra with MGL-2086 versus other GLP-1s? - The company clarified that MGL-2086 is an orforglipron derivative, emphasizing the rationale for combining it with Rezdiffra to enhance efficacy [35][36] Question: Thoughts on competitive positioning amid recent M&A in the space? - Management views recent M&A as validation of the MASH market, believing it will lead to increased diagnosis and treatment opportunities for Rezdiffra [41][43] Question: Feedback on Rezdiffra's adherence rates and net pricing expectations? - Management confirmed strong adherence rates and indicated that while some gross-to-net decline is expected, they are well-positioned for stable pricing [49][51] Question: Insights on Aetna's formulary coverage decision? - Management stated that Aetna's non-coverage will not significantly impact access, as Rezdiffra will still be available through prior authorization [55][56] Question: Observations on Novo's marketing campaign and its impact on patient numbers? - Management noted that while it is early to quantify, there are signs of increased referrals and diagnosis, which could benefit Rezdiffra [60][62] Question: Path to profitability and future growth strategies? - The focus remains on driving top-line growth and expanding the pipeline, with profitability being a longer-term goal [63][68]