Good morning, everyone. Thanks for joining us on the last day of our conference. I'm Andrea Tan, biotech analyst at Goldman Sachs, and I'm pleased to have with us the team from Madrigal, Paul Friedman, CEO; Rebecca Taub, CMO and President of R&D; Carole Huntsman, CCO; and newly appointed CFO, Alex Howarth. With that, maybe Paul, I'll start with you and turn it over for opening remarks.
Sure. Good morning, Andrea Tan. We're pleased to be here. Appreciate your recent positive coverage of Madrigal. For those of you who may not be familiar with Madrigal, before beginning the Q&A, we have a few high-level slides to share as a brief introduction to our company and resmetirom, our liver-directed thyroid receptor beta agonist. Can we see slide two, please? This is our fine print regarding forward-looking statements, and you can peruse it at your leisure. Next slide. To begin, Madrigal has an experienced management team with proven track records in bringing multiple drugs through discovery development and onto the market. Rebecca Taub is widely recognized as a leading expert in liver disease and NASH. I was CEO of Incyte, where there and before that at Merck and at DuPont, led the development of multiple commercially successful novel therapeutics.
Remy, our Chief Scientific Officer, has launched more than a dozen drugs. We're quite confident we have the scientific, clinical, and commercial resources to bring resmetirom to market and emerge as a leader in the treatment of NASH. There certainly is a significant unmet need for a safe and effective treatment for this clinical situation. No drug has made it over the finish line to approval yet. resmetirom, a once-daily oral therapy, is well into phase III studies and has first-to-market potential. Our phase II clinical trial results demonstrated compelling efficacy and an attractive safety profile, and the current extensive phase III program includes two trials, MAESTRO-NAFLD-1 and MAESTRO-NASH, which Rebecca Taub will shortly describe.
We're confident that the Phase III program is well powered and of sufficient duration to determine therapeutic benefit and statistical significance of our primary and key secondary endpoints, as well as to provide an adequate safety database. We're targeting an NDA submission for the second half of next year. Finally, our plan is to commercialize resmetirom on our own in the US and secure a partner or partners for commercializing ex-US. Next slide, please. This is a busy slide, but just bear with me. On the left side are depictions of macro and microscopic degrees of what is non-alcoholic fatty liver disease, which covers the spectrum of simple fatty liver through NASH cirrhosis. What you see is, from simple fatty liver, you can have different degrees of fibrosis and inflammation.
On biopsy, the designations of levels of fibrosis microscopically are F0, where there's minimal to no fibrosis, through F4, which is frank cirrhosis of the liver. In addition to scar tissue being laid down due to the harmful lipotoxic fat that the hepatocytes have to deal with, you see ongoing inflammation, and at the bottom, you see hepatocytes that have what's called a ballooning characteristic on the microscope, which is indicative of pre-hepatic and hepatic hepatocyte situation. On the right side, just to repeat, the NAFLD results from the accumulation of excessive fat unrelated to alcohol use. Some patients with NAFLD have NASH, which is non-alcoholic steatohepatitis. Steatohepatitis is the key word because it is a hepatitis with a final common pathologic pathway on biopsy. Although it has certain individual features, it has a commonality with other hepatitides like alcoholic hepatitis and viral hepatitis.
As you know, if you stop drinking and/or you're treated with antivirals to cure hepatitis C virus, the inflammation goes away, the hepatocytes become healthy, and the liver can regenerate, including a decrease or elimination of fibrosis. That's the same situation here, where lipotoxic fat is the main driver of the hepatitis. A lot of people have NAFLD in the Western world with the high incidence of obesity, metabolic syndrome, and type two diabetes estimated at 25%-30%. Somewhere between three percent and 12% actually have NASH. NASH with significant fibrosis, F2 or F3 on biopsy, is felt to be prevalent at greater than 5 million people in the United States. NAFLD leads to an increased risk of morbidity and mortality, as you might expect with type two diabetes, obesity, and metabolic syndrome.
The actual leading cause of morbidity and mortality in this population is cardiovascular risk and disease. It's interesting because resmetirom, in addition to removing a significant amount of fat from the liver, by itself an individual atherogenic risk, also lowers clinically significantly LDL cholesterol, triglycerides, as well as Lp(a). There are, of course, liver-related events as you move through the spectrum on the left side of the slide, and it should be noted that over 10% of advanced NASH patients will progress to frank cirrhosis over a 15-year period. That's a lot of people when you consider the number of people with NASH in the United States. It also should be noted that it either is or NASH soon will be the most common reason for a requirement for a liver transplant. With that, I'll turn the podium over to Carole Huntsman.
Thank you, Paul. Next slide, please. There is a ton of information out there around NASH, the disease, how the physicians look at it, how to think about it. To set up the context of what I'm going to talk to you about, there's two things to remember. one, we're talking about, for our commercial planning purposes, the patient population that Paul described, which is NASH with significant liver fibrosis. That's F2, F3 patient population, F2, F3 stage patient population. That is the population we have in mind as we are studying it in our clinical trials. Secondly, thinking about NASH from a commercial perspective and dynamics in the market is very, when you think about the overall sort of physician population. We are laser-focused on when it comes to our commercial planning to the physicians who we're calling NASH specialists.
Physicians that are HEPs, GIs, like endos, that even today, without lack of any sort of FDA-approved therapies, are managing at least 20-30 NASH with liver fibrosis patients. These are physicians that are living the NASH disease today with their patients and managing it. Some of our insights, some of our plans may be a bit surprising for you relative to what you've been hearing in the public domain. Our proprietary information is based on different look at the commercial landscape. Some of the highlights here, we do believe that NASH with significant liver fibrosis therapeutic category is highly attractive. Why do we think that? When we think about the patient population, what is this whole size, Paul mentioned the best sort of prevalence estimates are on 5 million people potentially in the U.S.
It's also understood based on published data, around 11% of those patients, potential patients or people living with that disease, are already identified, and they've been identified using non-invasive techniques. We've looked at insurance claims data, and it corroborates this level of patients being available for drugs as they enter the market. A long way of saying that as we think about resmetirom entering the market based on phase III program, there's going to be a few hundred thousand patients that physicians can look at and decide whether they're appropriate for treatment with resmetirom when it's approved, assuming there's an approval. That's very positive when you think about launch planning. There's a solid landing ground. When we talk to these physicians about unmet needs in this patient population, they perceive it to be quite high.
To give you an idea, there are no treatments for this patient population right now, they have about a quarter of those patients on some sort of off-label treatment to just do something for their NASH with liver fibrosis, significant liver fibrosis. They're not satisfied. These patients are not satisfied with these treatments, they're going to do something for these patients. As with any other category, we expect that the diagnosis treatment rates for NASH will increase over time, potentially match type 2 diabetes with hyperlipidemia, 60%-80% level in the coming years. We feel that when it comes to the introduction of resmetirom assuming approval, it's going to have a very solid landing place, which gives us a lot of confidence in the market attractiveness. Next slide, please.
We have a lot of confidence in what we will read out in phase III relative to resmetirom. We've put what we are considering the target profile of resmetirom in front of the NASH specialists. Physicians who treat NASH with significant fibrosis patients today at least 20 or 30 of them per month. We believe that based on phase III data, we have confidence that resmetirom is going to show a depth of liver efficacy. What does that mean? We expect it to resolve the underlying disease of NASH. We expect it to improve fibrosis. We expect that it's going to have a beneficial effect on LDL. The favorable safety profile based on data is very attractive, and of course, it's once a day oral.
When you put it all together and we put that in front of who we expect to be the initial treaters of NASH with FDA-approved drugs, they're finding that profile very attractive. I've had the opportunity of being in our business for about 27 years, been involved in 12 launches in our industry. I've never seen what's on the left side of the screen, which is the clinical utility or the overall utility, a grade of extremely high by 91% of the physicians, the type of physicians we expect to target. These physicians have a very high level of understanding of NASH. They understand the pathophysiology. They understand the role of resolving the underlying disease of NASH to improve fibrosis to get better liver outcomes over time.
As a matter of fact, when asked directly about surrogate endpoints of fibrosis improvement, NASH resolution, they rate them about the same, if anything, favoring NASH resolution. Lastly, I would say, before I turn it over to Rebecca Taub, these physicians, when asked about this profile and what their intent to prescribe may be, assuming resmetirom actual label and phase III data is in line with our profile that we're projecting, nearly half of them said in this research that they will prescribe it right away in the vast majority of their NASH with significant fibrosis patients, F2, F3 stage patients. Significant in their mind when asked is only from 60% - 80% of their patient population that fits the patients they see that are in line with the patients that we're studying.
This research I've been talking to you about, or these insights are based on research with around 1,000 GIs and endos. We think it's a good hook of work to give us confidence in what we are perceiving at this point. Becky?
Thanks. This slide I'm going to go through very quickly. You heard that Madrigal's resmetirom was successful phase II NASH study. The primary endpoint, liver fat reduction on MRI-PDFF, was achieved. What you see in the slide and the figure on the left is that the higher doses, 80-100 milligrams a day, which are the phase III doses, achieves levels of liver fat reduction that was readily seen within a few weeks and predicted the phase III endpoint achievement, resolution of NASH, and fibrosis improvement on biopsy. The other important parameters established in this study and continued in the phase III is the use of non-invasive monitoring of patient benefits. We'll talk about that relative to the phase III. There are a variety of different imaging and biomarker effects of resmetirom that can be used to show patient response. Next slide.
This shows the overall design of the two phase III studies, MAESTRO-NASH and MAESTRO-NAFL. They're both 52-week phase III trials, they provide a comprehensive data set in more than 2,000 NASH patients to support the efficacy and safety of resmetirom. That's consistent with regulatory requirements to support accelerated approval of resmetirom for the treatments of patients with NASH and significant liver fibrosis. Both trials employ non-invasive readouts that provide a framework for monitoring patients' treatment response to resmetirom. You can see here on this diagram that we're demonstrating, in addition to the liver biopsy in MAESTRO-NASH, the serial liver biopsy, we are also showing non-invasive measures of efficacy such as MRI-PDFF, FibroScan, serum biomarkers for fibrosis, and important cardiovascular benefits such as LDL cholesterol lowering. The open label arm of MAESTRO-NAFL provides ongoing data readouts supporting the safety and potential benefits of resmetirom treatment.
Those data will be discussed at the upcoming EASL conference, and we'll talk about our data readouts on the next slide. This shows you the important upcoming data events in MAESTRO-NAFL, which is a real-life NASH study in more than 1,200 patients. As mentioned, we'll be presenting data from non-cirrhotic NASH patients at 52 weeks and from the open label arm, and also some initial open label arm data from NASH cirrhotic patients. We will be reading out by the end of 2021 the top-line data for the double-blind, placebo-controlled arms of the study. In total, as I mentioned, this is about 1,200 patients, including the open label and blinded arms.
MAESTRO-NASH, which is a serial liver biopsy study, has gotten to the end of enrollment for the portion of the study that is supporting the accelerated approval, and that will be reading out 52 weeks, a little over 52 weeks from now. That study will establish the primary endpoint of NASH resolution, the key secondary endpoints of reduction in liver fibrosis and LDL cholesterol lowering. MAESTRO-NAFLD-1, in terms of its endpoints, it is a primary safety study to support the safety database. Also has key secondary endpoints that we believe will result in additional data in the drug label, such as lipid lowering, PDFF lowering or liver fat reduction, and potentially other endpoints of that study. Just the key messages just to finish up here.
MAESTRO-NASH will support safety, tolerability, and inform reductions in fibrosis by elastography methods, MRE and FibroScan, confirm endpoints from phase II, such as PDFF, liver enzymes, and lipid reduction. This data will also provide guidance to treating physicians as how best to identify and monitor patients on resmetirom in real-world practice. We're providing guidance on identification of patients with NASH and following those patients. In addition, the data secondary endpoints from MAESTRO-NASH will also help support the non-invasive patient identification and monitoring at launch. We'll stop there, and Andrea Tan will follow up with some questions.
Perfect. Thanks, everyone. That was a really nice comprehensive overview. one question for the team to start here, just on the overall NASH space. Over the last two years, we have seen a number of setbacks, as recently as three weeks ago. You've been involved in this space now. What sets Madrigal apart? What sets resmetirom apart as you look to bringing this product forward?
I'll start. Sorry, I was saying Rebecca may want to add to what I'm going to say here. Drugs fail for various reasons. I mean, the most obvious are inadequate efficacy and/or they have an unacceptable safety profile. Other types of things that bury a program are inadequate safety database. I suspect that's what has happened to date with Intercept to obtain regulatory approval. I mean, poor study design like underpowering and the like. In the space, I mean, we think there are a number of compounds in earlier development that could be interesting, and they could be effective, but they haven't been put through their paces yet. By contrast, the compounds that have made it, all of them, that have made it to later stages of development all had one or more of the issues that I've mentioned.
With resmetirom, on the other hand, as Rebecca Taub pointed out, we're using the exact primary endpoint we used in phase II and made NASH resolution with at least a two point reduction in NAS. We made that endpoint even though the phase II study was a small study, and in that study, about half the patients were on an active but not adequate dose of 60 milligrams a day. The phase III has only 80 and 100-milligram arms. It's 10 times larger than the phase II, and it runs three months longer. We have great confidence that we'll make this endpoint, as well as the two key secondaries of LDL lowering and fibrosis improvement, where we use very conservative power calculations in designing the study size. Just the other characteristics of resmetirom that I think are important are it has a great safety profile.
It should decrease cardiovascular risk. We hope to have that lipid data in the label. It's a once-a-day oral. With these two large studies, as Rebecca pointed out, using both eighty and 100 milligrams, we should have an adequate safety database.
Great. That's helpful. Maybe digging into that MAESTRO-NASH study and your expectations as you head into the pivotal data next year. Just help us understand how confident you are. You've spoken about the phase II data, how that does lend confidence that, if you could speak maybe more on the fibrosis endpoint, and how important that is.
Yeah. The fibrosis endpoint, which is the one-point reduction in fibrosis, is the key secondary endpoint of our study, NASH resolution being the primary endpoint. The other key secondary endpoint, LDL cholesterol lowering, will be readily achieved by resmetirom. The fibrosis reduction that we saw in phase II, as we stated, we found that patients who were on the adequate dose of resmetirom and had at least a 30% reduction in liver fat had a high rate of NASH resolution and fibrosis reduction. They achieved both endpoints, and we expect to see that same coincidence of the two endpoints achieved in the phase III. In fact, we showed that patients with that PDFF reduction achieve every endpoint, reduce all components of NASH, including steatosis, ballooning inflammation, and fibrosis.
We also have very significant reductions in other measures of liver fibrosis, such as reduction in the FibroScan, which is a measure of fibrosis stage. We show reduction in MRE, which is even a more sophisticated imaging measure of liver fibrosis. We show using a more advanced AI technology review of liver biopsies in phase II that the liver fibrosis endpoint was achieved in phase II. The biopsy itself was not powered to achieve the fibrosis endpoint in phase II. As Paul Friedman said, at those same rates of fibrosis reduction that we observed in phase II, the phase III study is powered to show the fibrosis endpoint. I think that's an important point about the fibrosis reduction. As Carole Huntsman said, the world has changed a lot. It used to be that people were focused on the fibrosis endpoint.
There were a bunch of studies set in NASH that only focused on that. That has changed. There's now a greater recognition that resolution of NASH and treatment of NASH, and treatment of the underlying hepatitis is really critical to improving the patient's health, and ultimately, fibrosis is a response to liver inflammation. If we treat the underlying disease, the fibrosis will either improve over time as the liver regenerates, or even if it doesn't get worse, the patient's not going to get worse. They're not going to progress. I think, either way, we've got it covered. We expect them to make both endpoints, and those are the data that we're relying on.
Perfect. Maybe one follow-up question on the fibrosis there, and the biopsy endpoint. Just how are you thinking about the variability that is inherent to biopsies and what steps are you taking to mitigate that variability?
I talked about this a little bit. It does get fairly technical, but the biopsy is a very small snippet of the liver. The main variability when it comes to fibrosis relates to the variability across the liver. It's not that pathologists disagree about that stage of fibrosis. There are some pretty good landmarks for measuring fibrosis, so there is a decent degree of concordance on fibrosis. We showed this with our two central readers in phase II. What has been shown is that different areas of the liver, one area may be F1, another F2, another F3, another F4, and so that's where the variability is. It's a fairly high number that can change your endpoint, and the powering of the endpoint. In order to overcome variability, you need to study more patients, and that's really what it comes down to.
We've seen some bad luck, I think recently with that level of variability. I would also say that there's less variability as NASH gets more advanced. The F3, you're going to see less variability. There's a lot more fibrosis in F3 than in F1 and F2. We've also enrolled a preponderance of F3 in our MAESTRO-NASH study to help get around that issue.
Great. As you think about NASH resolution, you are doing this two-point reduction. Maybe just talk about that decision and how those discussions with the FDA have gone around that endpoint.
First of all, the FDA always thought the endpoint was fine. There was never any pushback at all, or questions or anything. They thought it was a more robust endpoint. We noted early on, and I'd say if anything, additional data has confirmed this, that the NASH resolution, when you start with a very low NAS, so a low activity score. When the so-called few balloon cells, stage one or grade one ballooning, what happens is that you can get so-called NASH resolution with simply a drop in ballooning from 1 - 0 and no other change on the biopsy. We know that if you just section across the liver, in different slides from the same biopsy, you can have that happen, just within a tiny little fragment.
Ballooning by itself, one grade change in ballooning is a very small change. You're really inviting variability with that endpoint because there are a significant number of NASH patients in every study who have low NAS at baseline. We made the endpoint more robust. That will help us reduce the variability and observe the resmetirom treatment effect more reliably.
Perfect. As you think about the data that you'll have at EASL in the next coming weeks, maybe help us understand what we'll see and provide some context just based off of what you were able to present last year.
Yeah. What we focused on for EASL, and obviously I'm not going to say today what the data are, but what we focused on for EASL is two updates and open label arms of our MAESTRO-NAFL study. We also have a company presentation by three NASH experts. The data that you asked about, it's an update of the non-cirrhotic open label arm, 100 milligrams in MAESTRO-NAFL, focuses on their 52-week data. These are patients enrolled in the open label arm who have completed all 52 weeks. It's not the whole study, it is a substantial number of completers. What this allowed us to do was to look at the imaging that compared to baseline, the MRE, the FibroScan, the MRI-PDFF. These really critical parameters that can assess response as well, of course, other fibrosis markers, liver enzymes, and things like that.
I think it's going to be a convincing data set in terms of the response to resmetirom, both from an efficacy and a safety perspective. In cirrhosis patients, we enrolled what's called Child-Pugh or the patients who have compensated cirrhosis, NASH cirrhosis. This is a safety study, but of course, also allows us to better characterize these patients using some sophisticated technology. We do the same MREs, MRI-PDFF, FibroScans, and biomarkers assessment in these patients. I think that in itself is a really important and interesting data set and some early data on treatment effects of resmetirom in that patient population, as well as safety.
Perfect. Then with the blinded data that is expected by the end of this year, how should we be thinking about that in terms of read-through to the MAESTRO-NASH trial and how much confidence in terms of the non-invasive testing methods?
I think it's going to be quite similar in the sense of to what we're doing with the open label arm of the study. However, we do have both phase III doses, so we'll have 80 and 100 as well as placebo. We'll have all the non-invasive readouts, and we'll get some sense on the doses as well. Now we know the drug is well-tolerated at all the doses, and we'll get a sense about whether there's any difference, for example, between 80 and 100 in terms of the efficacy readouts as well. We have shown from phase II a tight connection between response on some of these imaging parameters, especially the MRI-PDFF in phase II and the NASH endpoints, so reduction in fibrosis as well as NASH resolution.
Perfect. Carole Huntsman, maybe changing over to the commercialization and your thoughts about how to create this NASH therapeutics market. What steps are you working on right now? What's going to be done later when the data are available?
Yeah. Brilliant question. Let's talk about the starting point as well. To have commercial success, you have to have the following three things, no matter what you're trying to do, no matter what category, no matter what product, which is you got to have a sense of unmet need out there with your customer type, the physicians you expect to target for the treatment. We've got that in our situation. We discussed it. You have to have an emerging profile that's highly attractive. We talked about how about half of the physicians we expect to target or those kinds of physicians are already finding reasons to prescribe the drug. If it meets the profile is in line with phase II data and approval, approved label are in line with our profile, they expect to prescribe that day one for the vast majority of their patients.
We haven't talked about this a lot yet, which is the payer feedback. Payer feedback has been that they see a clear unmet need to treat NASH with significant fibrosis, F2, F3 population. They see less need to treat earlier-stage patients with therapeutics. For the patients that we are studying, there's a clear realization among payers. They realize, hey, listen, these patients are being identified with non-invasives, and if at all possible, they should be identified with non-invasive tools when the FDA-approved drugs are available. They've also mentioned that in our research that they're going to find it hard not to cover the first approved NASH drugs considering the unmet need. Again, barring any sort of ridiculous sort of pricing methodologies by manufacturers. We have that going. That is needed to start with.
Your question is, what are you going to do to build upon it, right? There's a whole host of things we have to do to help create this market. We're quite realistic about this. In the interest of time, I'll mention maybe one thing per key stakeholder. When it comes to HCPs, Rebecca mentioned this. Our MAESTRO-NAFLD-1, MAESTRO-NASH trials. They're going to be treasure troves of non-invasive data. We likely, as a company, have more non-invasive data in NASH, hepatic fibrosis, than anybody else out there. That data is going to be instrumental in us working with KOLs to help define how these patients should be identified, treated, monitored with NASH drugs. That's the work we have to do. We feel up to it. I think we can, or we think we can.
Secondly, for patients, these patients are dealing with a lot of things, and they're dealing with a lot of comorbidities. Our job there, as you help create the NASH market, is to help them understand the value of liver health. Lastly, on the payer side, they're all about what's in the label. We talk about pricing and things of that sort. What's also very primary for them is who are the patients in their covered plans, in their patient population, their members, they should identify and have treated with drugs like resmetirom. That's the work we have to do with them.
All right. Maybe a follow-up there. You said that the 50% or almost 50% of responders who said they would immediately put their patients on resmetirom. What do you think the other half of the responders are waiting to see to really be convinced to use this drug?
You find this in pretty much any sort of a product launch, which is you have a portion of physicians that are early adopters. It's usually 10%-15%, 20%, right? We're seeing 50% and we're using the profile that we're using. The ones that are not saying they're going to prescribe day one, the answer is what you would expect. They want to see trial by quote, unquote, "because they're more specialized physicians." That's something that endos are saying. "Listen, I want to treat the liver, but why don't we let some of the HEPs and GIs have the first shot at this and then I will jump in." It's your typical sort of adoption of innovation curve.
It's just that the early adopters, the population is very significant relative to what you'd commonly see, and then also the amount of patients that they're thinking that they want to put on the drug, assuming that the label is in line with the profile that we're expecting.
Perfect. Remind us how you're thinking about potential pricing here and, particularly in the context of how some other competitors have discussed pricing. Just what are some initial thoughts here?
Yeah. Way too early for us to talk about pricing for resmetirom. I will share with you what some of the insights we have as we think about the topic, to do justice to your question here. We talked to 40 medical directors, pharmacy directors, and they together account for maybe 80%-90% of the covered insured population in the U.S. The understanding we have is based on a good comprehensive book of work. They see clear and they need, they see the non-invasive being used. Regarding pricing, they are picturing NASH drugs to be likely priced at specialty drug-like pricing levels. That's the sort of mindset that they have. They're aware of ICER's review of OCA, $15K-$20K.
Regarding how we think about the pricing for the drug, it's one of those things, we have to look at the data. We have to look at the value, the innovation delivered by resmetirom based on phase III data, based on its actual label for our key stakeholders, not just payers, but physicians and patients, as potentially the first drug to truly modify the disease. That's what I can share for now.
Perfect. Well, with that, thank you all for the time. Thanks, everyone for joining us, and have a good day.
Thank you. Thank you. Bye-bye.
Bye-bye.