Hello, and welcome again to the eighth annual H.C. Wainwright NASH, the NASH Investor Conference. My name is Ed Arce. I'm one of the senior biotech analysts here at HCW, and I'm very pleased to have our next presenting company. Needs no introduction in the space, Madrigal Pharmaceuticals, obviously with the first approved drug in the space. Representing the company is the CEO, Bill Sibold. Bill, so glad to have you with us.
Ed, it's a real pleasure to be here. Thanks for having us.
So let's kick it off. I know you've been at the company for about a year now. How has it tracked compared to your expectations, and where do you see Madrigal in three to five years?
Well, look, it's just over a year now, and it's been quite a year of everything that has been accomplished and everything that's been going on, and you know, really what attracted me here was been in the industry a long time. I think it's the greatest industry in the world. You get to transform and potentially save lives, and rare do you get an opportunity where there's such a high unmet need and such a great product to fit that unmet need, and not only that, but to build a company. It's rare that you have that opportunity, so you know, I really believe it's the best opportunity there is in the industry today.
We've hit pretty much on everything, so when you talk about what were expectations, you know, we have high expectations for the product, high expectations for the company, high expectations of ourselves. So far, you know, since I started, you know, there was a question, would the file get accepted? Would we receive priority review? Would you require an AdC om? And, you know, we satisfied all any of the questions on that. We built an expert team really quickly, not only at the commercial level, but also at the leadership level. You know, unlike a lot of companies, we built sufficient supply. That hasn't been a question for us, and we were ready to launch within, actually, immediately post-approval with drug shipment the following month.
So we've been going really, really strong, and I think that we are tracking where I would hope we would be tracking. Certainly, from our expectations perspective, we're right on track. You know, we, we've talked a lot about wiring the system. That's what this first year is about, making sure that there's pathways for patients, that reimbursement's secure, and so forth. And if we do all that right, it really puts us in a position three to five years from now where I see us as not only our current leadership position, but extending that leadership position. You know, we'll be well on our way on our blockbuster launch of Rezdiffra. We'll have the outcomes data in both the well-compensated, but also the F2, F3 patients.
That puts us that much further ahead, again, extending our leadership. We'll have launched in Europe, and so be a global brand, and I think we're, at that point, we'll have a pipeline as well. So we're off to a strong start now, and we're laying that foundation, I should say, for future leadership and strength.
Excellent. All right, so, roughly, since you shipped the product, about maybe just under six months now. Let's talk about that launch. What were some of the key metrics that you provided the first couple quarters that you would continue to provide over the next few quarters, and give investors a sense of some of the progress that you've seen so far?
Well, you know, this is a little bit different launch than many other products that are launching, for the simple reason that this is the first product ever to launch in NASH.
Mm-hmm.
As I had said a little bit earlier, previous question was, you know, this whole wiring the system, it's real, right? You know, until Rezdiffra was approved, physicians were diagnosing NASH either to stage it and watch, or if they were trialists, they would see if they met inclusion/exclusion criteria. So it was very formulaic in that sense. Now, though, they have patients that they can treat. Their offices have to be prepared. That includes just a lot of training. In some cases, they have to re-resource their office and add people to process patients through the practice.
So we're spending a lot of time, we've spent a lot of time, and we'll continue to make sure that there's this whole pathway that is established, that starts at the practice, it's with the staff, it's with the physician, obviously, working with the payers, and also working with the patients. A lot of patients haven't been really told the disease that they have or how serious it is because there's been nothing to offer them. Now, at the second quarter, and you know, as you know, we just finished the third quarter, so I'm gonna restrict all my conversation to second quarter results.
But you know, there we had $14.6 million in sales, greater than 2,000 patients on drug, greater than 50% of commercial lives covered, and less than 5% requiring a biopsy. And at a conference in New York last month, we mentioned that another PBM came on board, a large one, so that number is that 50% has increased, and we feel like we're well on track towards our 80% goal by end of the year. And from a breadth and depth perspective, at least from a breadth perspective, you know, about 20% of our top targets have prescribed, and I'll remind you, that's about 6,000 physicians. So all these things are, I think, really strong metrics for a first-in-disease launch, and we also have guidelines that have come along as well.
You've seen the EASL guidelines, there's a U.S. expert panel, et cetera. So kind of on all fronts that I think we've made really strong progress through the second quarter.
Okay, so let's dive a little bit deeper into some of these metrics. In particular, second quarter performance, as you mentioned. What's first of all, what's the mix of paid versus free patients as of June thirtieth?
Yeah, it's predominantly, almost exclusively, paid patients. There are some free patients, but it is really a paid patient story.
And, you know, as I mentioned, it's been a few months now. Some of these patients are the first of those to receive the drug are approaching six months of treatment. How have the physicians provided any feedback in terms of how those early patients are doing?
Yeah, you know, look, it is really early. Some of the feedback that we're receiving is pretty consistent with what was seen in clinical trials. You know, manageable GI side effects, tolerability overall is very good. It's a little early to get a sense for persistency and discontinuation rates. It's just too early. It's too early. However, you know, with the profile of the product, a once-a-day pill that is well-tolerated, you know, we're quite optimistic about persistency and so forth. Now, you know, look, all products, you would think it's always the case that if you even have the more severe disease, that you have everyone who always stays on and never misses a dose.
That's just not the case, even in the most severe diseases. So we expect, no matter how severe this disease is, that you'll still have some patients that will come off. And the number that we reported, greater than 2,000 on drug, that included some patients that for whatever reason hadn't continued on the product. And, you know, just to remind you again, 'cause I think sometimes we forget about what this launch, what we're focusing on, what we're trying to do. We're focused on diagnosed patients, and there's 1.5 million diagnosed in the U.S. Of that, about 525,000 are F2, F3.
And in the 14,000 physicians we're calling on are healthcare professionals that prescribe. That's about 315,000 patients there. So, you know, it is clearly a very specialty-focused launch. And we know that above that diagnosed, there are those waiting to be diagnosed that haven't, but that certainly hasn't been the focus of our efforts since we don't wanna overwhelm the practices either with new patients coming in. Let them establish the pathway, clear the patients in their practice.
Right. Yeah, and to your point, this is, you know, early on. It's very much a ground game, in terms of, you know, tactically getting the pieces together and really building a business from the ground up, as there wasn't anything before. So that's an important reminder, especially the first year. And yet, really, quite impressive that those 2,000 patients really came in one quarter. If you think about the approval came in mid-March, and you didn't have drug available until early April. So really, that's a one-quarter number, really.
Right. And one of the things I would just comment on to that is, you know, the community hadn't taken a lot of steps to prepare for approval and launch. You know, we had gotten this question quite a bit, was there a bolus? Well, the answer is no. Other than, I would say, a handful of centers, there wasn't the identification of patients and lining up and scheduling patients. It's been much more as patients come in for their regularly scheduled visit, then Rezdiffra is discussed. And again, this all goes back to our creating, helping create a pathway in each practice on how best to process patients, and then how to procure the prescription once it's written, and that's working with the payers.
So very much an organic growth story versus some sort of a preset bolus of patients that-
That's right
Just got dropped in. Right. And so, you mentioned that out of the 6,000 targeted physicians, you've already got 20% roughly are prescribing. Can you talk about the mix between GI and heps? And, what's the differential between those two in terms of uptake?
Yeah. So, look, as I had said, a moment ago, there's 14,000 physicians or prescribers in our list, and about 6,000 of them are our top targets. We would expect the overwhelming majority of the prescriptions to come from that group of physicians. Now, within that group, you have less than 1,000 hepatologists, and that's just simply because there's less than 1,000 hepatologists in the U.S. So we're, you know, we are targeting those physicians. The majority of the prescribers are gastroenterologists and we think they're gonna be fundamental in the launch. Now, the gastroenterologists are certainly not quite as familiar with NASH as the hepatologists. So the hepatologists have either been studying or following these patients for years.
Clearly, GI docs are aware of it and have come across those patients and have a lot of those patients. But for a lot of them, they are working on creating that pathway in their practice or institution. This is where they're using much of their support staff, the APPs, that are very fundamental to diagnosing and treating the disease in these practices. So I would say that just by virtue of their specialty and years of training, hepatologists are a little bit quicker. And they you know they know their way very well around the liver. And the gastroenterologists are fast coming on, and as I said, they're establishing their pathways.
But just based on the sheer number of them, we would expect that a lot of the business will come from gastroenterologists. They may have fewer patients than a hepatologist, but there's a lot more gastroenterologists, and we feel like we're right on track with building that experience and training, and helping them, as I said, create their pathway in their practice.
Okay. So, switching to the payers, you were above 50% in the second quarter in terms of some form of coverage. How has that coverage continued since then? And, what is the characteristic of these coverage in terms of, you know, access barriers, common access barriers, like step edits and prior auths? What does that look like?
Yeah, look, I think, you know, we set ourselves a very ambitious goal of 80% of covered commercial lives by the end of the year. And, you know, we're very- we were very happy at the end of Q2 to be over the 50% point, and then last month bring on another PBM that increased that number. So we feel very good about the 80% by year-end. Feel perhaps even better that, you know, over 95% of those accept NITs and are not requiring a biopsy. So there's still the occasional outlier, but certainly, that's not at all representative of the criteria that are being used to make a definitive diagnosis.
On top of that, we had Medicaid starting in July, and Medicare will come on in full strength in the new year. However, Medicaid - Medicare, pardon me, patients through medical exception and so forth, have been getting on drug. I think overall, when you talk to physicians, the experience with access has been reasonably favorable. I think they're starting to see that. Now, specifically about the criteria, you know, every patient's gonna require a prior auth on this. It's a specialty product, and it's no different in that sense, prior auths are gonna be required.
Typically, they have a list of NITs to pick from to confirm F2, F3, then metabolic risk factors such as obesity or high cholesterol, diabetes, and usually prescribed in consultation with a specialist, like a hepatologist or a GI. And you know, the label's quite clear, used in combination with diet and exercise, and we're very supportive of that as an organization, and you know, clearly point that out to the physicians. There's also a one-year reauthorization requirement, typically. We've seen it at six months as well, but for the most part it has been around one year. Yeah, I would say when I say standard, these are things that we would have expected, really, and these will continue to evolve in time.
Hard to speculate where they go, but we think that there are enough tools for physicians to be able to use to convince the payers of both the diagnosis and the progress of the patient. By progress, I mean response of the patient. And there's certainly a willingness to accept these tools.
Okay. You mentioned the expert panel recommendations that were published in July detailing how to treat and monitor Rezdiffra. But I was wondering if you could share with us your expectations on, you know, updates?
Sorry, Ed, I'm not sure if I lost you or you lost me. I, I missed the end of that question. You said-
Oh, sorry.
updates-
It froze for a second.
I may have frozen. I'm not quite sure.
I think the internet connection on my end is a bit unstable.
All right.
Apologies, so I just wanted to get a sense if you had any for the timeline.
Okay. Ed, was it the timeline of any other guidelines, like AASLD and AGA?
Correct.
Okay. Look, I think that we were really quite excited that EASL came out of the gate so fast, realizing that the product isn't approved there yet. But they contemplated it, and their recommendations were around, if approved, and, you know, boy, that is really forward-looking. They could have waited a year and done it, but they got a year ahead and said, "There's this anticipation that this product's going to be approved." So, A, it's I think it's a good prognosticator to say they believe it's gonna get approved. But, B, they're already thinking about it, because, C, there's enough NASH that it it's a problem that they want to address, and there's a lot of hope around Rezdiffra.
So I thought that was very encouraging, and we've seen, obviously, expert opinions, in the U.S. as well by really, a group of some of the top hepatologists, in the country and in the world. So we think that there is, kind of a- There's guidance out there which any physician can access and make use of to help them with their treatment decisions. Now, as far as AASLD goes, probably a better question for them. Not sure when they're gonna have their guidance in place. I'm assuming that it will be by the meeting next month in San Diego, and with ACG, not quite sure, but I think that what we had heard is that it would be perhaps this year. So I think they're coming now.
Look, I think at one point, there was anticipation for additional guidance and guidelines. Now, with so many of the payers who are either through or in their final stages of evaluating, they've made use of the materials and the guidance and guidelines that are already out there. So what we're not anticipating is that people are waiting to make a decision on things before any further guidelines are published.
Sure. But, like, you know, clearly, the question was asked in terms of, you know, so some subset of physicians who may want to wait for formal practice guidelines-
Mm.
In the U.S. is my point.
Yeah.
But having EASL certainly was a strong validation.
Yeah, I think, though, and I think that- Look, I think it's right. Every physician, you know, they end up being segmented into early adopters and those that are waiting, and I think this launch is no different. I think here, though, there is so much anticipation because there's been so many years of failure in the space, and it's such a serious disease that people are paying attention to it. Now, it's still gonna take time. That's why, you know, 20% had written at the end of Q2, and that's just something we're gonna see continue to build every day, every month.
Okay. How do you think about the impact of the GLP-1s on the market, and if Sema hits in phase III and gets approval in NASH, you know, what are your expectations there in terms of the market impact?
Yeah, look, I mean, we're looking forward to hearing what the data has to say as well. You know, the way we've thought about it is if Sema misses on fibrosis, it's probably a good thing for us. If they hit, it's probably a better thing for us, and that may sound a little counterintuitive, but you know, let me kind of provide some of the frame of that. You know, what we're talking about here, these are, first of all, patients that are F2, F3. They're one to two steps away from cirrhosis. You don't know how fast they're gonna progress. You know, there's data which suggests that you can progress pretty quickly, but you can't pick who that's going to be.
You've got a product like Sema, which it's an eighteen-month trial. It's a year and a half. That's a long time to wait, and it's got the downside of, first of all, having no data that suggests that it works in reversal of fibrosis, or at least statistically significant. So that's a high hurdle in itself, and you've got the persistency challenges that we all know about with the GLP-1s. In fact, whether you look at, you know, Blue Cross Blue Shield, or others, or even what Novo's presented, it's pretty precipitous, the drop-off. So how many patients are even gonna be around after eighteen months when it shows a benefit to receive that benefit? Versus a product that has hit on both endpoints, no question about the efficacy in Rezdiffra. It's approved, it's available, it's a once-a-day pill that's well-tolerated.
Kind of when you think about the a once-a-day pill, it's a little bit of the holy grail of drug development, at least it has been in my career, to you know, "Just give me a pill once a day that's gonna help me." So you know, we just think from a profile perspective. But let's say they hit. Fine. So they hit, and we're focused on 315,000 patients. When you think about what that market opportunity is for a GLP-1, not so attractive, right? Just do the simple math of what their net copay price is versus times 315,000. That's not such a big opportunity. The GLP-1 interest is in the 115 million obese people in America.
Mm.
So we're not spending time on top-of-the-funnel diagnosis. They are gonna have to spend time building that market and making diagnosis much higher multiples, perhaps even of what we've been focused on in order to make it a worthwhile market opportunity and allow that penetration into the obese population. Now, you know, we've had the question, well, gee, are payers gonna have you step through a GLP-1? Well, we haven't seen that, but I think the payers have to think about the implications of that strategy. Their biggest challenge right now is GLP-1s, and if you create a pathway to millions and millions of patients through increased diagnosis, et cetera, you're not really helping your situation.
That's why we've been very specific in only wanting the most in-need patients, those that are one to two steps away from cirrhosis, those that could benefit from a liver-directed therapy that has efficacy shown on both endpoints, and that's where we plan to stay focused. If GLP-1s expand that market, that's great for us. Ultimately, again, this isn't a winner-take-all market, and so we think, as especially the first product approved in advance of everyone else, definitionally, that we've got lots of years of leadership ahead of us.
So, Bill, I just wanted to clarify here. Obviously, step edits, you know, across the board, various NITs, but what you just said was that not a single plan so far that's offered access has a step edit through a GLP-1 first?
Nothing of significance, no.
All right. So, couple quick questions further. You've decided to go to Europe, or go commercialize Europe on your own. Can you talk why that decision was made?
Well, look, we're making all decisions with a three to five-year view in mind, and first of all, you're gonna go where there's patients and where there's an opportunity. Clearly, NASH has a significant patient population in Europe. You've seen the interest based on the whole EASL meeting, but the EASL guidelines asking for a product that works there. We had a hundred and twenty-five trial sites in Europe, and it was about a third of patients, so it's real. It's there.
Yeah.
So then the question is, who's best to launch and execute? Well, again, if I look three years out, as Rezdiffra is growing, as the company's growing, we're gonna be in a perfect position, I think, to have that answer be a slam dunk that Madrigal should be the one who's doing it. Because remember, every product that I've launched in the last 12 years has been a global brand. It hasn't been restricted to just the U.S. or anywhere else. So we have experience and believe that we can take that experience and turn it into an opportunity. All major blockbusters, mega blockbusters, still, a significant portion of the sales comes from outside of the U.S., and we're starting off as a completely unencumbered asset.
We have a single-digit royalty to Roche, but beyond that, we have 100% of the product, 100% of the geographies. So we're gonna be very thoughtful. Now, that doesn't mean we're just gonna launch everywhere. The first decision point was Europe, and we will launch in a very, very strategic way on a country-by-country basis in Europe, where it makes sense, and we're gonna build according to the opportunity. We're not just going to open up every country. We'll start with the countries that are going to support reimbursement, and countries where there's the best opportunity, and we'll make decisions from there. So we're gonna do this in a measured way, and we're building towards, as I said, in three and five years, when we have all of our capabilities in place.
We have a product that's well on its way to being the product that we think it can be. We'll be able to additionally support, not only Europe, but we can start to consider where else in the world might we wanna go.
I want to squeeze in one last question before time runs out. That is, last week you hired Dr. Michael Charlton, a well-known KOL in this space, as Senior VP of Clinical Development. Just on the heels of that, I wanted to ask you, how do you think about business development strategically, more broadly, and how does that fit in with you know clinical development and sort of you know next follow-on you know lifestyle or you know follow-on assets to those different?
Yeah. Well, look, you know, we're the leader in NASH/MASH now, and our intent is to be leaders for the long term, and we think that that requires more than a single product. We think we've got a great product. We think, you know, still may be the best product that there is in NASH for years and years to come.
Mm-hmm.
However, we think that it's gonna need more than a single solution, and we wanna be at the front end of that and have a portfolio of products to address the issue. Now, Michael joining is, I think it's great for us as a company. If you're gonna be a leader in a space, you wanna have experts within your own company, and Michael certainly is a global expert that can help us tremendously. He's treated patients. He has a real understanding of the disease. He'll be able to help us obviously with drug development, not only the lifecycle management of Rezdiffra, but also as we look to add to the portfolio.
I think in order to be an expert in a space, you need experts in your organization, and Michael represents that expert. You know, of all the NASH companies that Michael could have chosen, he chose us, which I think is another endorsement of what it is we're doing here and what we potentially will be doing in the future.
Great! Bill, thank you so much for your time and perspectives. I really appreciate it.
Thank you, Ed. Really appreciate it.