Madrigal Pharmaceuticals Q2 2025 Earnings Report

Madrigal Pharmaceuticals EPS Results

• Actual EPS: -$1.90
• Consensus EPS: -$3.48
• Beat/Miss: Beat by +$1.58
• One Year Ago EPS: -$7.10

Madrigal Pharmaceuticals Revenue Results

• Actual Revenue: $212.80 million
• Expected Revenue: $158.94 million
• Beat/Miss: Beat by +$53.86 million
• YoY Revenue Growth: +1,357.50%

Madrigal Pharmaceuticals Announcement Details

• Quarter: Q2 2025
• Date: 8/5/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 5, 2025
• Conference Call Time: 8:00AM ET

Madrigal Pharmaceuticals (NASDAQ:MDGL), a clinical-stage biopharmaceutical company, focuses on the development of therapeutics for the treatment of non-alcoholic steatohepatitis (NASH) in the United States. Its lead product candidate is resmetirom, a liver-directed thyroid hormone receptor beta agonist, which is in Phase 3 clinical trials for treating NASH. The company is headquartered in West Conshohocken, Pennsylvania.

Madrigal Pharmaceuticals Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: They reported Q2 net sales of $213 million, up 55% quarter-over-quarter and annualizing at over $800 million, reflecting strong U.S. launch momentum.
• Positive Sentiment: A newly issued U.S. patent extends protection for ResDiffera’s weight-based dosing regimen to February 2045, adding over a decade of exclusivity and strategic flexibility.
• Positive Sentiment: The European Medicines Agency granted a positive CHMP opinion and Madrigal is preparing for a Germany launch in H2 2025, initiating its international market entry.
• Positive Sentiment: Madrigal in-licensed an oral GLP-1 candidate (SYH-2086) with favorable terms—$120 million upfront—and plans to start clinical testing in H1 2026 as part of a combo strategy.
• Positive Sentiment: Two-year open-label data in compensated cirrhosis (F4C) showed a mean 6.7 kPa reduction in liver stiffness and 35% fibrosis regression, supporting the ongoing MAESTRO NASH outcomes trial.

Presentation

[Operator]

Good morning, and thank you for standing by. Welcome to Medrigal Pharmaceuticals Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. As a reminder, today's conference call is being recorded.

[Operator]

I would now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Thank you, Demi. Good morning, everyone, and thank you for joining us to discuss Madrigal's second quarter twenty twenty five 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 Sorgel, Chief Medical Officer and Marty Deer, Chief Financial Officer. They'll provide prepared remarks and then we'll take your questions. Please note on slide two, 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. And with that, I will now turn the call over to Bill.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Thanks, Tina. Good morning and thanks for joining us. We have a lot to cover today. Before we move into this quarter's performance, as you can see on slide three, it's been an incredibly exciting and productive last few months at Madrigal, both driving the launch and building our future. We've accomplished a lot and each of these milestones reflect the deliberate execution of our long term strategy to maximize ResDiffer's value and expand our leadership in Match. In a short time, we've transformed Madrigal into a company with a longer runway, a stronger foundation and greater flexibility to build for the future. Fundamental to our success is our business in The U.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

S, which continues to outperform. Reddiffer's quarterly run rate now exceeds $200,000,000 well on its way to blockbuster status. We can objectively say it stands among the best specialty launches of the last decade. Second, we've strengthened the long term value of Resdiffera with our new U. S.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Patent providing protection to February 2045. This changes how we think about Residifera's growth potential and our investment in the business. It's not about years of opportunity, but decades. Third, we're preparing to expand internationally beginning with Germany later this year. Geographic expansion adds another potential future growth opportunity for Resdiffera.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Fourth, we're working to expand Resdiffera with an indication in compensated mass cirrhosis or F4C, where our outcomes trial continues to progress. If positive, it could double Resdiffera's market opportunity. And finally, we're building a pipeline for the next phase of leadership in MATCH with the addition of a promising oral GLP-one to combine with resdiffer. And we have the capital in place that will allow us to support and scale all of this. Each of these pieces adds value to the foundation we are building for long term leadership in MASH.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

So let's move into the call with our agenda on slide four. A lot has happened since our last call. I wanted to take the opportunity first to talk about the new U. S. Patent that was issued today.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

We believe it's a significant contributor to our long term outlook. As we summarize on slide five, the patent covers claims directed to ResDiffer's commercial weight threshold dosing regimen as prescribed in its FDA approved label and will be listed in the FDA orange book. And we recently learned some favorable news. The patent reflects an updated expiration date of 02/04/2045, which is extended from the previously noted date of 09/30/2044. What gives us such high confidence in the strength of this patent is that it's based on the clear and compelling findings that different Risdipla doses given to two different cohorts of patients, each with different body weights, optimizes the efficacy and safety of Risdifa.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

This finding is based directly on our clinical teams independent analysis from our Phase three MAESTRO NASH trial, which was adopted by the FDA for our label. The bottom line, any potential generic competitor will need to adopt the resdiffer label and would infringe on our patent. Our confidence in this patent is also supported by precedent U. S. Case law.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

This patent changes the game for us in two ways. First, strategically, it gives us the privilege of time. This extension creates a lot of flexibility for us to pursue our long term strategy. We can be very thoughtful and deliberate about how we build our future and shape our pipeline. Second, it adds another potential decade of protected revenue and materially increases our value proposition, creates additional opportunity in NASH and extends our ability to keep innovating to address unmet patient needs.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Now let's turn to Slide six, NRES Differ's second quarter performance where we delivered net sales of $213,000,000 up 55% quarter over quarter. U. S. ResDiffer net sales are now annualizing at well over $800,000,000 The significant demand we're generating is driven by strong and consistent execution on two key launch metrics, patients on drug and prescriber penetration. First on patients as shown on Slide seven, we ended the 2025 with more than 23,000 patients on ResDiffera, up from more than 17,000 patients at the end of the first quarter.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

As we've noted before, this figure represents patients actively on therapy accounting for any discontinuations. We are encouraged by ResDiffer's robust growth and yet we're still in the early stages of this launch. Only about seven percent of the three hundred and fifteen thousand diagnosed F2F3 MASP patients under the care of a liver specialist are being treated with Risdipla. There is significant opportunity ahead. Moving to slide eight and our progress on physician penetration.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

As I've said before, building a strong base of prescribers early in a launch is one of the best indicators of long term success. That's why the pace of adoption has been so encouraging. In fact, in just over a year since approval, we've achieved another key launch goal. Eighty percent of our 6,000 top targets have prescribed Risdifa. This level of penetration exceeds the benchmarks we track and is the direct result of the significant amount of work we've done to wire the system for a first in disease launch like Resdiffera.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

We're also seeing strong progress as we expand into our broader 14,000 target prescriber base. By the end of the second quarter, 60% or roughly 8,500 healthcare providers had written a prescription for ResDiffera, up from fifty percent in the first quarter. Looking ahead, more of our focus will be on depth, which is also tracking in line with best in class launches. We believe this is largely due to the positive experience that providers are having with Risdifa and we anticipate that it will continue to drive depth going forward. And this positive experience is being driven by Risdiphora's compelling profile shown on slide nine.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Risdiphora is the liver directed medicine with a mechanism of action that improves the critical processes in the liver that drive NASH. It has consistently strong efficacy regardless of patient subtype, including those with type two diabetes, who have a higher risk of progression and comprise approximately sixty percent of the NASH population. Additionally, ResDipra works effectively regardless of fibrosis stage, BMI or genetic makeup. So it's very consistent when it comes to treatment effect. It's also easy to prescribe and to take a once daily well tolerated pill with no titration requirements.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

That simplicity matters to physicians, to patients and ultimately to adherence. We continue to see strong early signs of adherence consistent with what we see from other well tolerated oral therapies. So as we look ahead to future competition, we believe Resdiffer's attractive real world profile gives us a durable advantage. The next potential entrant in NASH is likely to come from the injectable GLP-one class. And you can see on slide 10, resdiffer compares very favorably across key attributes.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

For example, while semaglutide demonstrated an improvement in fibrosis, it was less pronounced in patients with type two diabetes, whereas resdiffer works consistently across patient subtypes. Another key difference is adherence in the real world. It's low for semaglutide. Most patients struggle to get to and maintain the two point four milligram dose. In addition, only approximately thirty percent of patients with obesity remain on the medicine after one year.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

This is especially relevant in NASH, where we're talking about a seventy two week efficacy endpoint. For a progressive chronic disease like NASH, providers want a medicine that patients will stay on and one that they can administer easily without a titration schedule and that's where risdipper stands out. Certainly, a key attribute of a GLP-one is its impact on weight loss. And we also know patients with NASH may benefit from a combination approach. Today, about twenty five percent of patients on ResDiffer are taking it alongside an injectable GLP-one to manage their comorbidities, and that figure increases to roughly fifty percent when you include prior GLP-one users.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

So combination use is happening in the market today, and we expect it to grow over time. As we look ahead on slide 11 and consider the upcoming GLP-one launch in NASH, we believe it has the potential to accelerate the growth opportunity for Risdifa. Our focus remains squarely on the three hundred and fifteen thousand diagnosed patients with moderate to advanced fibrosis. This is our core specialty market. Novo is targeting a much larger population, many multiples of our three hundred and fifteen thousand.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Their efforts will raise awareness and drive broader screening, diagnosis and treatment. This will ultimately benefit patients and we expect it will also benefit ResDiffera, both as the foundational therapy in NASH for first line patients and from the high real world discontinuation rate of semaglutide. And there's clearly a need in this large and underpenetrated market for multiple mechanisms and better combinations to treat this challenging disease. That's why we're excited to study Resifera in combination with our newly in licensed oral GLP-one as noted on slide 12. We're taking a differentiated approach focused on MATCH.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

We are looking to develop a chronic therapy for a chronic disease with Risdiffera as the foundation. We want to optimize the efficacy and tolerability in NASH by balancing the right amount of weight loss from a GLP-one with the fibrosis and lipid reduction of Risdifera in a once daily well tolerated pill. And our data has shown that just five percent weight loss can increase Risdifera's anti fibrotic effect. And as we assess the oral GLP-one landscape, we had specific criteria that we were looking for. We wanted an orfagliptron derivative with a favorable stability and pharmacokinetic profile that was amenable to develop as a combination therapy, and of course an asset that was actionable.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

We believe SYH-two thousand and eighty six from CSPC Pharma is the right oral GLP-one asset for our program. It gives us the opportunity to develop what we believe could become a best in disease, well tolerated oral combination for NASH. Importantly, we secured this asset with favorable terms. We exclusive global rights for $120,000,000 upfront payment and potential future payments based on achievement of development, regulatory and commercial milestones. We expect the transaction to close in the fourth quarter and expect to enter the clinic in the first half of next year.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

We will provide additional updates on our clinical development plans on future calls. Let's briefly move on to two additional growth opportunities, starting with the international expansion of Risdipla on Slide 13. In June, we received a positive CHMP opinion, a key regulatory milestone that sets the stage for approval across the European Union. We expect a final decision from the European Commission later this month and are preparing to launch in Germany in the second half of this year. As we've discussed, we've made an incredible amount of progress in Germany over the last year.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Leadership and our field teams are in place. We understand which providers treat NASH. We're continuing to engage in disease education. We've begun our efforts to wire the system and importantly, European guidelines already include Resdiphora as a first line treatment for NASH, which positions us well. Like The U.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

S, we've defined our initial target population as patients already diagnosed with F2F3 NASH and under the care of a liver specialist. Based on our research, we estimate that the population is approximately three hundred and seventy thousand patients across Europe. We believe Rasdiffera can be the first medicine approved for NASH in Europe and the foundational therapy for this population just as we've established in The US. Let's move to slide 14 and the opportunity we see in compensated NASH cirrhosis or F4C, an important next step in our growth strategy. First, there is a high unmet need with no approved treatments and serious risk of progression.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Second, Resdiffera's liver directed mechanism targeting fibrosis is well suited for cirrhosis. Third, our two year open label data presented at EASL showed sustained efficacy and supports our confidence in the ongoing MAESTRO NASH outcomes trial. No other product or mechanism in development has shown this level of reduction in liver stiffness with such an attractive product profile. And finally, we have real world momentum, a clear first mover advantage with outcomes data expected in 2027, and what we believe will be a best in disease profile in F4C. We've learned what it takes to launch in NASH and we're ready to extend that leadership from F2 to F4C period.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Slide 15 outlines the opportunity we see in F4C. We've taken a thoughtful approach to understanding the F4C population. Our research shows there are approximately two hundred and forty five thousand patients in The US with compensated mass cirrhosis, who are already diagnosed and under the care of our target liver specialists. These patients are sicker and further along in disease progression, which typically translates to greater and faster adoption. That's why we believe F4C has the potential to effectively double resdiffer's market opportunity in The U.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

S. With that, I'll hand it over to Dave to walk through the data on Slide 16.

[David Soergel, EVP & Chief Medical Officer at Madrigal Pharmaceuticals]

Thanks, Bill. I'll walk through the takeaways now from our two year open label extension data in F4C, which we presented at EASL. First, let's look at the liver stiffness data as measured by vibration controlled transient elastography or VCTE. Patients experienced a mean reduction of 6.7 kilopascals in liver stiffness at two years, statistically significant versus baseline. Over half achieved at least 25% reduction in liver stiffness.

[David Soergel, EVP & Chief Medical Officer at Madrigal Pharmaceuticals]

As published in JAMA, that level of improvement is tied to a lower risk of progression to end stage liver disease. And thirty five percent of patients met the criteria for regression from F4 to F3, suggesting potential reversal of cirrhosis. Turning to Slide 17. Another critical point is Risdifa's potential ability to reduce the risk of clinically significant portal hypertension, or CSPH. CSPH is a key driver of the most severe outcomes of cirrhosis like ascites, variceal bleeding, and hepatic encephalopathy.

[David Soergel, EVP & Chief Medical Officer at Madrigal Pharmaceuticals]

It marks the tipping point into decompensated disease. In our open label study, sixty five percent of patients with CSPH at baseline improved to a lower risk category by year two. That movement away from high risk CSPH suggests RECIDIRA could help delay or prevent life threatening complications. Taken together, these data support our confidence in the ongoing Phase three MAESTRO NASH outcomes trial, because the baseline characteristics of the patients in the open label study aligned closely with those in our F4C outcomes trial. For us, this means Risdifa has the potential to become the first approved treatment for compensated NASH cirrhosis, a very sick segment of the NASH market that currently has no therapeutic options. I'll now turn the call over to Marty.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

Yes. Thank you, Dave. Second quarter twenty twenty five net sales totaled $212,800,000 up 55% from the 2025. This was another strong demand quarter. As we've said, we expected gross to net to be somewhat choppy early in launch and the team has done an outstanding job managing it to date.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

As we shared last quarter, we've begun contracting with payers. We saw minimal additional impact from contracting in the second quarter with an expectation for that to increase our gross to net discount in the back half of the year. That's fully expected and consistent with what we typically see with specialty medicines at this point in their launches. We have good visibility into the gross to net dynamic this year and are confident that gross to net will remain within our expected range through 2025. R and D expenses for the 2025 were $54,100,000 compared to $71,100,000 in the 2024.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

The decrease was primarily due to lower clinical trial cost. SG and A expenses for the 2025 were $196,900,000 compared to $105,400,000 in the 2024. The increase was primarily due to increases in commercial launch activities expenses in the third and fourth quarters to be modestly higher than the second quarter. Turning to our balance sheet. We ended the 2025 with $8.00 $2,000,000 in cash, cash equivalents, restricted cash and marketable securities.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

As Bill mentioned earlier, in July, we also entered into an agreement with Blue Owl Capital for up to $500,000,000 in a senior secured credit facility on favorable terms. This non dilutive financing consists of a $350,000,000 initial term loan funded at closing, a portion of which was used to repay all outstanding obligations under the Hercules loan facility and $150,000,000 delayed draw term available in multiple draws through 2027. We plan to use these funds to pay the upfront payment for the global license of our oral GLP-one. The Blue Owl agreement also provides mutual option for an additional uncommitted tranche of up to $250,000,000 to support potential additional strategic business development activity. With this strong cash position, we continue to be well resourced to support the ongoing launch of Risdifa in both The U.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

S. And our planned launch in Europe in the second half of this year as well as for business development opportunities to build our pipeline going forward. So with that, let me briefly recap our second quarter progress on Slide 19. We continue to drive strong momentum in the fifth quarter of our launch with a medicine that's now annualizing at well over $800,000,000 We have more than 23,000 patients on therapy and expect to continue to steadily add patients going forward. Physician adoption continues to build.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

We hit a key launch goal with 80% of our 6,000 top targets now prescribing Risdifa. And we're expanding our leadership in F2 to F4C NASH with our new patent confirming Risdipla protection to February 2045, our progress in F4C, our expected expansion into Europe and our exciting new oral GLP-one global licensing agreement. And now, I'll turn the call back to Tina to open up the Q and A session.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

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

[Operator]

We will now open the lines for questions. Our first question comes from Thomas Smith with Leerink Partners.

[Thomas J. Smith, Senior MD - Immunology & Metabolism at Leerink Partners]

Hey guys, good morning. Thanks for taking the questions and congrats on the really strong quarter here. I was wondering if you could just expand on the comments regarding gross to net and the inventory dynamics in the quarter. I know you guided there being a little bit of choppiness, but it looks like you may have benefited perhaps from a better net pricing in the quarter versus Q1. If you could just help us kind of frame where you see this going for the rest of the year?

[Thomas J. Smith, Senior MD - Immunology & Metabolism at Leerink Partners]

And then if you could just comment on inventory stocking in the quarter, that would be really helpful. Thanks so much.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Hey, Tom. Thanks very much. Marty, I'm going to turn it over to you to talk about gross to net.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

Yes. Great. Hi, Tom, and thank you for the question. Let's just start with saying that this was a really strong demand quarter and the team executed so well once again. Now with respect to gross to net that we addressed in the call that we've been very disciplined and will remain disciplined when it comes to gross to net.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

And we've been very consistent with our messages quarter to quarter. We said from the start of launch that gross to net will be choppy early in the launch and we're still just five quarters in. So that's the case what we've seen here in this quarter. We did say last quarter that we began contracting in April and we also anticipated that we would have minimal additional impact from contracting this quarter and expect to see more of that impact in the second half of the year. So we've explained, that we are very focused on gross to net.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

We have very good visibility and that we plan to stay within the range that we've discussed previously that's very typical for specialty pharma launches at this point in their launch.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Yes. Thanks, Marty. Look and Tom, as you heard me say, we've been extremely diligent about gross to net from the beginning. And we don't think about it in terms of a quarter to quarter. We've taken a very long term view looking over multiple years.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

We know that risdipper is going to be a big product and gross to net is really important. So you want to watch it and work very carefully on it and make sure that you preserve it. So our team has done just an outstanding job on it. And so we feel really good about where we're at. And as Marty said, we've got a real strong sense of how it will evolve and where we're going.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Great. Thanks, Tom. Next question please.

[Operator]

Next question comes from Yasmeen Rahimi with Piper Sandler.

[Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies]

Good morning, team. Congrats on an outstanding quarter. I guess, team, one of the questions that I think seems to be investors asking us with the entrance of GLP-one to the market, let's say you maintain your pricing strategy and don't aggressively rebate to the level of matching semaglutide, how do you foresee sort of maintaining the strong growth curve that you have shown so far? And I think it's very clear that hepatologists are gonna prefer liver directed therapies. But if there is a sort of a prior authorization of GLP-one step edits needed due to pricing differences, how do you foresee how soon that could play sort of flatten out and not become as important?

[Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies]

So if you could just talk about that dynamic, we get that question quite a bit, and I'm sure so do you.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Okay. Yeah. There's of there's a lot of questions and nuance in there. So let me just kind of roll through a little bit of provide a little bit of context here. I mean, as we said, we're coming off an outstanding second quarter, which was driven by strong demand.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

So number one. And we've been steadily adding patients since launch, and that doesn't change. We expect this trend will continue through the Semma launch in the second half of the year. Now in addition to the strong demand, with our in Q2, we also benefited a bit from the Q1 effect. So we would expect our quarter over quarter growth rates to continue to track right in line with other successful specialty launches with similar dynamics.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

And you heard Marty talk about gross to net that it being choppy quarter to quarter. We have good visibility and expect for that gross to net discount to step up in 2025, but stay within the specialty product range that we've discussed. So everything I've said there is in the context of expecting a SEMA approval and launch. Now, you asked a very specific question about step edits and so forth. Look, right now it's just a little too early to tell.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Product hasn't approved yet, we don't know what the label looks like, and those are going to be taken into consideration in the discussions that we have with payers. We've been actively talking with payers. We think that we've established a good partnership and planning with payers, but we're waiting to see ultimately what happens with the label and approval of semaglutide. Either way, we plan for all scenarios. And a step edit here in this space though is somewhat complicated, And I think that that's going to be one of the things to take into consideration because these patients have other comorbid conditions such as type two diabetes or cardiovascular disease.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

So think about it, if a patient's well controlled on a different GLP-one, would a payer disrupt their current therapy to put them on SEMA for NASH? So there's a lot of nuance and complications here. We don't have all the data yet, but we have planned for all eventualities, and it doesn't change our excitement for the opportunity that exists.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

Yes, Bill. And yes, I would just add one more thing. Remember GLP-1s have been on the market for a long time and our data has been pretty consistent what we've seen to date that of the patients that we've treated about fifty percent are either on or have exposure to GLP-1s already and probably twenty five percent are on at any given time. So there's a lot of familiarity in the market already, and clearly combination use is already established.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Yes, it's a really great point, Marty, because this isn't as though it's a new product that's entering the market that's never been used. I mean, this has been used everywhere. There's nobody who hasn't heard of it or has the ability to get it for some indication now. This is just an extension. So that's a very different setup than if you have a brand new mechanism of action entering a market which has more potential to disrupt.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Great. Thanks, Yan.

[Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies]

You,

[Thomas J. Smith, Senior MD - Immunology & Metabolism at Leerink Partners]

Maggie. Next question?

[Operator]

Question comes from John Walleban with Citizens.

[Analyst]

Hi. This is Catherine on for John. I just have a quick question about your new GLP oral GLP-one. And just how many did you look at kind of and how did you go about picking? I know you kind of said that the orfaglipron backbone was kind of side effect, but just if you could provide a little bit of color on that.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Yes, look, thanks for the question. As we've said for a long time, BD is a part of our strategy. And we're looking to add the right assets to our pipeline to extend our leadership in NASH. Oral GLP-1s are something that we've been interested for a long time. Like with any BD process, you look at a lot of different things before you find the one that's just right.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

And that's what we did. We laid out what we were looking for. We were looking for an orfagliptron derivative. We wanted favorable stability and a PK profile that's amenable to combo. And we found that in this asset.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

So it was a very systematic approach. We looked at a lot of things before deciding and coming upon the one that we think is just right to create that product, which we think is going to be a next advancement in managed. Now just the one thing I'll say, there are a lot of oral GLP-1s out there. There are a lot of GLP-1s, GGGs, etcetera. But there's only one that's going to be combined with risdipper in this form.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

And that's how we differentiate in this market. That's something which is special to Madrigal, and that's something that we see a huge opportunity for.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Great. All right.

[Analyst]

Thank you.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Thanks. Next question please.

[Operator]

Next question comes from Eliana Moo with UBS.

[Ellie Merle, ED - Biotech Equity Research at UBS Group]

Hey guys, congrats on the quarter and thanks for taking the question. In terms of next year, how are you thinking about sequential quarterly growth once SEM is available? And specifically on gross to net, can you give us a little bit more color on how you're thinking about how that could trend next year? And lastly, and feel free to just not answer this question, but what's your latest thinking around when you might be in a position to issue revenue guidance? Thanks.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Do you want take the revenue guidance or Any part

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

of it? Yes. Thanks, Ellie. Thanks for the question. Revenue guidance is easy.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

We haven't discussed that publicly and we have no plans in the near term to give guidance. In terms of growth, you're asking about 2026 already, but we're in 2025. So we're focused on the rest of the year of 2025. And we discussed on the call and we'll say it again now that we believe that we'll be steadily adding patients through the rest of the year, and continue our growth trend. And as you know, we follow a basket of analogs of specialty medicines that have launched successfully over the last ten years and we are tracking right along that growth rate of those top analogs, in this basket.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

So we feel very good about the growth in the rest of the year. And then gross to net, I think we made those comments in 2025 and we feel good and have good predictability. And as the year goes on, then we'll start focusing on 2026 and discussing that more.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Great. Thanks, Ellie. Next question please.

[Operator]

Next question comes from Andrea Newberg with Goldman Sachs.

[Andrea Newkirk, Biotechnolgy Equity Research at Goldman Sachs]

Good morning. Thanks for taking the question and congratulations the quarter. Bill, just as you think to a potential EU approval next month, just curious how you're thinking about the shape of a potential launch curve there, versus what you've seen in The U. S. And when might you expect to recognize first revenue?

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Thanks, Andrea. Look, I think we've got a very good view on what curves can look like having just gone through The U. S. Launch. It all starts with how do you wire the system?

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

How do you prepare? How do you educate? How do you create pathways for patients there? Now the benefit in Europe is they've had more time to prepare for this launch than The US did. Because remember in The US since we were the first product ever approved in NASH, the community had been met with disappointment over 20 times.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

There's the guidelines in Europe that exist already. And with The US getting approved, Europe's had a little bit longer to prepare. But like any other launch, and especially when it's a first in disease, it takes time, and we have some really good firsthand experience with that in The U. S. And we're taking essentially all the learnings from The U.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

S. And transferring them to the really outstanding team that we've hired in Europe and specifically Germany. And I just want to put a fine point on that. It's Germany that we're launching in first. We're not going everywhere all at once.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

We put extremely rigid guidelines in place for what we need to see in a market for it to launch. So more to come. When will we start recognizing revenue? Look, I would say it's really not much of a there's not much happening in 2025. We're going to be starting in the second half of the year in order to get the teams deployed, etcetera.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

It takes a little time. So really it's more of a 2026 and on story.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Great. Thanks, Andrea. Next question please.

[Operator]

Next question comes from Andy Chen with Wolfe Research.

[Andy Chen, Director, Senior Equity Research Analyst at Wolfe Research]

Hey, thank you for taking the question. Marty, you talked about this basket of specialty drugs. Can you give some numbers around what this gross to net range is in that basket that you're analyzing? Then this 20% to 30% that the gross to net that you're guiding to, is that an educated guess and prediction? Or is that already a largely known fact given your existing contracting negotiations and you know that it's going to end up in the 20, 30% range? Thank you.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Hey, Andy, thanks for that. I'll turn it over to Marty in a second. Just to be clear on that, we are very, very clear on the 20% to 30%. That is based on decades of experience and knowledge, and how our conversations have gone with the payer community. So like everything else that we talked about in this launch, we've been very accurate in our comments that we make to all of you.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

So maybe I'll turn it over to Marty for any other comment that you have Marty. But look, we don't say things just to say things. We say things because we're confident in them.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

Right. Yes, just to reiterate that, Andy, we have good visibility for the rest of the year. We've talked about this range since I think our first launch quarter and we feel very strong that we're tracking along with typical specialty medicines and that the gross to net for 2025 falls within that range. And there's a lot of components to gross to net, many components of which contracting is just one. And we did say we started contracting in April and that you'd see more of that in the second half.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

That's just sort of the natural dynamics in this marketplace in launching in The U. S. All very predictable for 2025 as we move forward. So we feel good about that. And just to reiterate a point that Ellie asked too, we haven't commented on 2026, but we see this drug as continued growth and robust growth as we move forward and as we steadily add patients.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Thanks Andy. Next question please.

[Operator]

Next question comes from Ritu Baral with TD Cowen.

[Ritu Baral, MD & Senior Biotechnology Analyst at TD Cowen]

Hi guys, thanks for taking the question. I wanted to ask about some of your underlying plans, Bill, as far as continuing this growth momentum into the potential WIGOVY label expansion. You hit your target of 80% prescribers in that top tier. What's the next target and how does that overlap with your understanding of Novo's potential detailing target for that label expansion? And as part of that answer, could you address the sort of growing awareness of mass in the diabetic population and amongst endocrinologists? Are they part of that next tier? Thanks.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Thanks, Ritu. Look, we don't have a next target that we're going to talk about. Really what happens now is it's a focus on depth. I mean, we have the breadth of prescribing that we're seeing is, as we said, it's leading the other products that we're looking at the analogs. So we have done just an outstanding job there.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

So it really becomes a depth story now. And we're seeing all the signs that we're tracking right with those analogs as well. So that's the next the first leading indicator is really the breadth. Now you go to depth, and we're seeing more of that. And why do people use more?

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Because they see the results. The real world experience that we're seeing is actually very impressive. We have physicians, every physician I speak with talks about just how what they're seeing in the real world is impressive and exceeding expectations. So you talked about kind of where do we go from here from an endocrinology perspective. Yep, endocrinology there's some, it's not all of endocrinology, but some endocrinologists are very excited about ResDiffera.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

And we've started spending a little bit more time with those physicians and we'll continue to do so. As I said, the key focus is hepatologists and gastroenterologists. And we also talked about endocrinologists, but we'll continue to pursue additional endocrinologists that have an interest. Interesting, endocrinologists are super interested in mechanism of action. And this being a THR beta, their eyes light up saying, look, this is in our alley to be talking about something with a cool mechanism like this, albeit very specific to the liver in our case.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

And so yes, we have some we have those targets that will increase as well. Anything else Ritu with that or does that answer it for you?

[Ritu Baral, MD & Senior Biotechnology Analyst at TD Cowen]

That covers it. Thank you so much.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Great. Okay, thanks.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Thanks Ritu. Next question please.

[Operator]

Next question comes from Akash Tewari with Jefferies.

[Analyst]

Hi. This is Kathy on for Akash. To follow on the gross to net question from before, I know you said you'll see more of the contracting happen in the second half of the year, but based on our math, it looks like the gross to net for this quarter roughly returned to q four levels. And then we also anticipated a potentially higher Part D impact from this quarter versus last quarter. So what are the biggest drivers behind this price improvement for the quarter? And can you give us some color on the Part D redesign impact this quarter as well as the stocking contribution and the driving factors behind that increase? Thank you.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Thanks for the question. There was a lot a couple thrown in at the end there. I'm not sure we can get to, but Marty, why

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

don't you Yes.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

Well, let's start on the easy one on stocking, which was not part of gross to net as you know. But let's reiterate what we said in the script as well. It was a strong demand quarter. And so inventory is not we don't need to discuss that anymore, strong demand quarter. With respect to gross to net, a lot of focus here.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

Let's reiterate. So again, the range that has been brought up on this call already for typical specialty medicines at this point in the launch for this year is 20% to 30%. What we said is that contracting, which is one component of many components in gross to net will see a bigger started in April, normal part of our business and will continue to widen that through the end of the year. So that's all predictable in that 20% to 30% range and expected. In Part D, I thought we kind of put this to bed, but the Part D impact was we discussed this on the fourth quarter and I believe the first quarter call, which is incremental to what we saw in the fourth quarter.

[Mardi Dier, EVP & CFO at Madrigal Pharmaceuticals]

And that's because we had rebates in the fourth quarter given the timing of our launch. So the new IRA Part D impact was pretty minimal going into 2025, given the base from which we started in the 2024. All in all, so gross to net, again, falls within the range and we'll continue to do so through the rest of 2025.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Yes. And look, mean, were clear on our first approval call that we would have choppy gross to net for a period of time. That's just what happens in a launch. And just to reiterate again, there are a number of components of gross to net including co pay assistance. I mean, we have a $0 co pay assistance program as well, which is getting greater and greater utilization.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

It's really important. We want patients on co pay assistance because that just makes it more affordable, which leads to better persistency, leads to better outcomes for patients. Next question. Good. Thanks. Next question, please.

[Operator]

Next question comes from Mayank Mamtani with B. Riley Securities.

[Mayank Mamtani, Senior MD & Group Head - Healthcare at B. Riley Securities]

Yes, good morning team. Thanks for taking our questions and congrats on a very strong quarter. Could you give us a little bit more detail on the claims of this newly issued patent with 2,045 Xperi, I guess it's related to the method of treating NASH where dose finding work in humans was a non obvious finding. And also was curious if there's plan to further build on this with the FOC outcomes data emerging? And then I have a quick follow-up.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Sorry, what was the F4C question? I missed that.

[Mayank Mamtani, Senior MD & Group Head - Healthcare at B. Riley Securities]

Yeah, if there's additional patent work you may do as the F4C and the outcomes data still kind of emerging there?

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Yes, great. That's something look, we don't have the trial outcome yet. We don't have approval yet. Certainly, there will be we'll look for opportunities with the F4C indication we hope in the future. But look, I think the patent you saw this morning or you are it's available now.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

And as we said, it's based on clear and compelling evidence that res different doses given to two different cohorts of patients each comprising different body weights optimizes the efficacy and safety of resifers. So that's the headline for it. We think this is a very strong patent. This is something that it's become our base case now. As we think about all of our planning in the company and how we're thinking about our plans for everything from BD to just investment etcetera, 2045 is our base case.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

So look, I think I'm going to let you all spend a little bit more time reading it and so forth. But we think all the facts are very clear. We think that there's good precedent as well in case law. And we're really excited about this. This is a really, really, really important development for us as a company.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Great. Thanks, Mayank. Next question please, Demi.

[Operator]

Next question comes from Jay Olson with Oppenheimer.

[Jay Olson, MD & Senior Analyst - Biotechnology at Oppenheimer & Co. Inc.]

Oh, hey. Congrats on the quarter and all the impressive progress, especially with life cycle planning. In your due diligence process, can you talk about any preclinical or clinical work done to support a fixed dose combination of SYH two thousand and eighty six with ResDiffera? And now that you have an oral GLP-one, what other mechanisms are you considering and how are you thinking about future business development deals in terms of timing and priority? Thank you.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Great. Thanks, Jay. Maybe I'll start with just the last bit and then I'll turn it over to Dave. Look, BD is still very much part of our strategy. Now, we think this is a great first step, but we will continue to look at next best mechanisms of action that are going to add potential value to MAASH patients, either as a standalone or in combination with ResDiffer.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Now, we really believe that the market is going to move towards combination therapy and that ResDiffer is going to be the foundational therapy. It already is. It's the standard of care today. And what you see in a lot of different diseases is that you add to that standard of care, whether it be for a different effect you're looking for, a subpopulation, etc. Remember, we are at the absolute very beginning, seven percent penetrated into this 315,000 population.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

With decades I would say of growth in this marketplace ahead of us, It's going to support multiple mechanisms of action, multiple products. And as the leader with the foundational product looking for those next white spaces or areas of opportunity is something that we are going to be a part of and more than that we are going to drive. So Dave, maybe do you want to talk a little bit about this asset?

[David Soergel, EVP & Chief Medical Officer at Madrigal Pharmaceuticals]

Yes, sure. So I think first of all, let's touch on two things. First of all, the scientific rationale for combining a GLP-one with rismetron. And then second, we can talk about this molecule in particular. We already know, based on our experience in Maestro NASH that as little as 5% weight loss will enhance the efficacy of ResMederam in NASH.

[David Soergel, EVP & Chief Medical Officer at Madrigal Pharmaceuticals]

So we see better biopsy results in patients who achieve, as little as 5% weight loss. So, as we talked about, we can achieve, that more effectively and in more patients that level of weight loss with, by adding a GLP-one mechanism drug to Risdifa. So the scientific rationale I think is very strong for combining the mechanisms. Second, with respect to this molecule in particular, Bill touched on some of the properties that we were looking for. We were looking for chemical properties like the structure, we wanted to make sure that it came with a de risked structure, like an Orfagliptin backbone, and we wanted to make sure that the pharmacokinetics and sort of initial pharmacology were consistent with what we were seeing with other molecules in this class.

[David Soergel, EVP & Chief Medical Officer at Madrigal Pharmaceuticals]

So that gave us that assessment. I think it's important to sort of mention that this is still a preclinical asset and there's still work to be done before we get into the clinic. But from what we've seen, we're very excited about combining two thousand eighty six with Risdipla.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

And maybe just one final point on that, Jay. Six dose combo would be great, but it's not completely necessary, right? And again, I think this you have to go back to when you've got the runway that we've got to 02/1945, right? We have the time to do things in a very thoughtful, precise way. Ideally it's a fixed dose combo, but doesn't have to be, it would just be more convenient for patients.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

But we like the properties that would make that a good probability.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Great, thanks so much Jay. And Demi, it looks like we have time for one more question please.

[Operator]

Next question comes from Kaveri Palmer with Clear Street.

[Kaveri Pohlman, Managing Director, Senior Equity Research Analyst at Clear Street]

Hi, good morning. Congrats on the progress and thanks for taking my question. I just want to kind of understand a little bit about the competitive landscape and your rationale for choosing GLP-one over there are a lot of dual and triple agonists going on. And how you are thinking about whether with increase in weight loss, if you can see more benefit to NASH patients and you expect any kind of off label use there as this pace grows? As well as, you know, with the combination specifically for the oral drug you have, any concerns related to kind of overlapping toxicities?

[Kaveri Pohlman, Managing Director, Senior Equity Research Analyst at Clear Street]

And based on that, how you are thinking about developing it? Whether you plan to when you test different doses and scheduling of both drugs or GLP-one will be adjusted according to the approved regimen for Risdipla?

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

Great, well thank you. Appreciate the questions. There's a lot there. Let me just take a couple of things really quickly. First of all, we like oral GLP-one for the reasons Dave mentioned, and that we mentioned in the call.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

With as little as a 5% weight loss in combination with ResDiffera, we see a better effect on fibrosis from ResDiffera. So that makes it better. Now, you're talking about a whole group of products, triple Gs, etc, where their fundamental approach is the battle of who can show the greatest weight loss. And there's comparisons of 1%, 2% in the teens and beyond, and that becomes a competitive set. That's not the game we're playing.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

We need an oral GLP-one that gets us past that five percent, but it's well tolerated. It's something that people can stay on so that the overall profile of the new product with Resdiffera remains what it is, which is really as good as it gets in a profile of a drug. It's a holy grail profile. Once a day pill, it's something we've been looking for my whole career, are products like this. So we have a very different approach on how we're thinking about this.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

The primary objective isn't for massive weight loss. The primary objective is to get to this threshold weight loss that makes REDS Differa perhaps an even better drug. So that's a different frame and I think people got to get their head around that because that's how we very thoughtfully approach this. As it relates to what's the impact on product profile, as I said, we're trying to make it a well tolerated profile and not give up anything on it. And that's how we hope to satisfy that with dosing etcetera.

[Bill Sibold, CEO & Director at Madrigal Pharmaceuticals]

But it's premature to talk about our development plan. We're going to come back at later time. And as I said as well, BD remains part of our strategy and it's something that will be continued to be very thoughtful about how we might extend our leadership in NASH. And Dave? Yes, would just

[David Soergel, EVP & Chief Medical Officer at Madrigal Pharmaceuticals]

add one thing with respect to the diligence on the molecule. So of course, one of the things that we were looking at was a preclinical profile and ensuring that this molecule would be, at least from a preclinical standpoint, compatible with rismetron. And so we were reassured by our diligence process. And so we're very excited to have this and to test it in the clinic.

[Tina Ventura, Chief Investor Relations Officer at Madrigal Pharmaceuticals]

Thanks, Dave. And thanks, everyone. Thanks, Demi. 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 two hours. Thank you for joining us.

[Operator]

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

Participants

Executives

• Tina Ventura, Chief Investor Relations Officer
• Bill Sibold, CEO & Director
• David Soergel, EVP & Chief Medical Officer
• Mardi Dier, EVP & CFO

Analysts

• Thomas J. Smith, Senior MD - Immunology & Metabolism at Leerink Partners
• Yasmeen Rahimi, Sr. Research Analyst at Piper Sandler Companies
• Analyst
• Ellie Merle, ED - Biotech Equity Research at UBS Group
• Andrea Newkirk, Biotechnolgy Equity Research at Goldman Sachs
• Andy Chen, Director, Senior Equity Research Analyst at Wolfe Research
• Ritu Baral, MD & Senior Biotechnology Analyst at TD Cowen
• Mayank Mamtani, Senior MD & Group Head - Healthcare at B. Riley Securities
• Jay Olson, MD & Senior Analyst - Biotechnology at Oppenheimer & Co. Inc.
• Kaveri Pohlman, Managing Director, Senior Equity Research Analyst at Clear Street