Good morning, everyone. Welcome to Day Three of our Piper Sandler Healthcare Conference. My name is Yaz Rahimi. I'm a Senior Biotech Analyst here at Piper. Really thrilled to have Bill from Madrigal here. What an amazing 2025. Madrigal, as many of you know, was my first stock that I covered as a covering analyst. And it's been an incredible journey to see Rezdiffra approved. I truly cried when I saw that on March. And not only got it approved, you guys have crushed the launch. So I cannot be more proud and excited for you. So after all the nice things, now I'm going to grill you with tough questions. But I want to say congratulations, and you have done a tremendous job. You and all the team at Madrigal.
Thank you. Very nice of you.
I think investors were also continuing to see, I think, in Q2 we reported $62.2 million in revenue, and so now the question becomes, where do you go from here, so if you could maybe share with us how you're thinking about the trajectory of the launch in the upcoming quarters, that would be great.
Yeah, look, so first of all, thanks for letting us be here. And also, thanks for the compliment. I mean, '24 has just been a remarkable year. It's been a remarkable year for patients. I mean, when you think about it, there's never been anything for MASH. And it's not from lack of trying. Over 20 products failed getting there, and we finally made it over the finish line. And we're off to a great start. $62.2 for Q3. Some of the other metrics that we presented were number of patients, over 6,800, which is greater than 2,000 that we saw at the end of Q2. We have 40% of our target prescribers versus 20% at Q2. And we, a full quarter early, achieved the 80% commercial lives covered that we had hoped for the end of the year, a full quarter in advance.
So I think all the metrics are great. And we're also comparing against benchmarks as well to not trust our own internal view, but also to get an external view of things. So we're off to a really strong start. And kind of where to from here? I think that we've been steadily adding patients, steadily adding prescribers. And we've continued to see that. We saw that in the numbers through the quarter. And that's what we continue to expect. As I said, we are looking at benchmarks. And in that benchmarks, one of the things that we're looking at is kind of the quarter-to-quarter growth. And in the group that we were looking at from that second quarter of launch to third quarter, it's kind of in that 50% zone. So that's a metric that we'll continue to look at.
That seems to be pretty consistent with how the Street is thinking about things as well.
OK. So given that 50%-50% quarter-over-quarter growth, and you feel pretty confident, I think, in terms of I think the Street is modeling about $87 million. So it's a very achievable.
No, I mean, look, we are doing what we said that we would do. We're continuing to wire the system. We're having, I think, really incredible results on each of the quarters, and just referencing back to that benchmark, it's something that one of the benchmarks we're certainly looking at. It's in that 50% zone that those other products are at, so as I said, the Street seems to be interpreting kind of what that looks like.
OK. And do you expect when we go into the fourth quarter update to give color on any new metrics that we didn't have? Or should we be expecting a very similar update just with new numbers?
Yeah, look, you know I think that we've done a really great job in saying what we thought was going to happen with the market and saying what are the key drivers of market success, such as penetration of prescribers, et cetera. So we'll continue to read out from a patient perspective, from a prescriber perspective, and from a payer perspective, though that is essentially done for now, at least from the commercial side. And then we'll have Medicare, which is going to be coming online in January. So we'll give metrics that are the details there. And we'll continue to look to see if there's anything else which is helpful for you and the community to be able to interpret launch results. But we think that right now what we're giving is actually very informative and also the color around what's happening.
OK, perfect. Maybe the second bucket of questions is around the recent ESSENCE data that became available at AASLD. Maybe just what are Madrigal's overall impressions of the data?
Yeah, I'd say it's pretty much as expected, consistent with what we had been thinking about going in and certainly consistent with the November press release. And I think as we look at it, we don't have access to all their data. So it's hard to really know all the details. It's really a reminder to us how good Rezdiffra looks from a fibrosis perspective. Ours is a 52-week study. I think we've demonstrated really strong, consistent results. And so more than anything, to me, it's an affirmation of how good we look. And at the end of the day, real-world profile matters. And we think we've got a great. Well, we do have a great real-world profile. Some would call it the holy grail, a once-a-day pill that is effective, well tolerated, et cetera. So that's something that we think is ultimately going to drive us in the market.
I think one of the questions that has come up, and we'll continue, is just thinking about what payers' views are going to be in terms of differential pricing between Rezdiffra versus the current product. So how do you think about do you think there is going to be a requirement for a step added before you can get just because of the differential pricing? How do you think pricing will impact Rezdiffra?
Yeah, look, I mean, we spent a lot of time with payers before launch and after launch. And what has been compelling for them is the profile of the product. Well, first of all, start with the seriousness of the disease. This is a really serious disease. It's a costly disease for payers, not just at the F2, F3, but when they convert into cirrhosis, it's a problem as well, a more significant problem. If you end up having a transplant, that even pushes you further. So those discussions with our compelling data, and you saw from a really thorough third-party review as well with ICER, we're a very cost-effective product. Now, I would say in every category, there are products with very different prices in them. And that's something which is, I think, kind of well identified and supported in the industry.
We feel that the merits of our product are going to put us in a position. Now, any time you have a change to a category, any time you just have a calendar change, there's discussions that you continue to have with payers. It's a little too early to know. But what we do know is that all the discussions we've had to date have been extremely productive with the payers. They are really, really understanding the unmet need and the benefit that we're bringing. So I think it will evolve as more parties launch and so forth. But for now, we believe that we've taken the right approach. I think we've priced the product extremely well for this disease. And we'll see what happens. You say, could there be a step through? There aren't any step throughs at the moment.
I think that's something that we'll look towards the future to see what happens, and we can talk a little bit about how I think the market dynamics are going to evolve in the future, about the GLP-1s being here in general.
Yeah, I think that's going to be critically important because I think what investors are trying to figure out is Novo is communicating 22 million Americans with F2 to F4. And you guys have been very transparent to communicate that under the GI Hepatology, there are about 315,000 patients in need. So the question that investors have is, who's going to be on Rezdiffra versus on semaglutide? So if you could kind of share the good part is we have abundance of patients. But how will physicians make that decision? And what will the distribution of updates be?
I think there's two things there. You say, who's going to be on one or the other? And what we're seeing already is that about 25% of Rezdiffra patients are on a GLP-1 as well. So it's not necessarily one or the other. And in markets like this, many products can be supported. I mean, there is not a winner-take-all market that I know of. When you look at large specialty markets or good-sized specialty markets, they typically support 10, 15, or more products. And within those, you've got blockbusters and mega blockbusters. So I think this notion of there's somebody who is just the undisputed winner, 100% share, it just doesn't happen that way. Now, there is a little bit of a difference in how we look at the patient population versus others. What we were always clear about is if you're diagnosed and actionable, that's our target.
So there were 1.5 million diagnosed NASH patients in the U.S., 525,000 F2, F3. And then remember, we're targeting 14,000 prescribers. That's our universe. And that's where the 315,000 fit. So as a company coming in, launching for the first time, rather than spending the resource and the time trying to improve diagnosis, we know it's not a very well-diagnosed disease at this moment. The plan was always focus on the patients that are in those practices that we're targeting. And an overwhelming majority of them sit in the 6,000 that we're really hyper-focusing on. And that's been our approach. And that will continue to be our approach. Now, we've looked at it as a specialty market because these are the patients that are most in need, F2, F3s, one to two steps away from cirrhosis, and really costly to the system.
As you said, Novo's view is a little bit different. It's on what's the prevalent population and how do you drive awareness, diagnosis, et cetera, et cetera, and grow that number significantly. So from our perspective, we're going to stay focused on the 315. Now, if they drive those multi-millions that you're talking about, and I think the 22 million was U.S., EU, 5 in Japan, with the profile difference, that is a potential huge source of growth for us. For instance, we know that Novo has reported out that with Wegovy in weight loss, after about one year, 70% of patients drop off the product.
So if we have somebody who is helping us develop the market and building the top of the funnel, which is millions of patients, of which millions of patients are going to discontinue, which then still have not dealt with their MASH, we're sitting there as well. Now, we think also from a newly diagnosed patient, we'll be highly competitive based upon our profile. So how are physicians going to choose? Our heps and GIs that we're focused on, they're busy. They have to make room in their practice now for a new disease because they haven't had anything to treat with before. And do they want to spend the time dose titrating, et cetera, a patient?
Or do they want to, because their organ that they're thinking about is the liver, have a liver-directed therapy with the profile that we have and have a patient that's going to stay on drug actually to the 52 weeks that our readout was and beyond, rather than having a higher discontinuation rate, perhaps a hassle to dose titrate, et cetera, and be waiting longer and getting no additional benefit really. So I mean, I think that people will look at it one by each patient in front of them, decide what's going to be best, how do they think they'll do. But we feel really, really comfortable that regardless of how the market unfolds, we're in a great position because of the profile that we have and the leadership position that we're building now.
I think I completely agree with you on this perspective. Sometimes speaking with investors, their view would be, look, if you look at the ESSENCE data, the discontinuation rates were quite low. So even though they agree that there's a lot of literature and real-world data establishing that more than half of the patients don't stay on the drug, they will say, well, ESSENCE in the real world could have a low discontinuation rate, which then would mean that the funnel of patients progressing to F2, F3 and being referred to the specialties could become less, that it could shrink your target population. What do you say to those individuals? Because I do get it at times that there is a group of investors out there thinking that Semaglutide could shrink the market for you instead of expanding the market for you.
Yeah, I would say that that is probably maybe not such a great understanding of how the markets work and what the practical realities are. I mean, even in the most severe health conditions, there's still a compliance issue. The very fact that people are going to have tolerability problems, this is usually not their primary diagnosis. Usually, they have a bunch of other things. And now they have MASH. We don't expect that it would be any different. And even if you say, fine, so it's not 70% at 12 months. Let's say it's 50%. Let's say it's 40%. Still, 40% of millions, 70% of millions, 50% of millions is a big number. And that's a bigger number than the 315. So I think that there's this look back at clinical trials is great.
But that is the most controlled setting and the best a product is going to look. The real world is what matters. And we know what happens in the real world. People have a much different view. They're not trial participants any longer. So we look to the real world a little bit more. And what I'm happy to see is that although it's early, the feedback that we're getting are patients are tolerating Rezdiffra really well. Physicians are reporting really good results. And persistency seems to be strong. We anticipate it's going to be strong. It's too early to be able to make a call on it. We really need 12 months of a big cohort of patients to go through to really start to say, what do the numbers look like? But we anticipate persistency is going to be strong with us.
Our real-world evidence is already pointing towards something which is completely opposite to what some other products are experiencing and other indications.
Great. Could you also talk about all the activities that are ongoing at Madrigal and especially into 2025 in terms of physician outreach and continuing to grow the number of prescribing physicians?
Yeah, I mean, look, it's a breadth and depth story here, ultimately. You need to continue to add new prescribers. And then those prescribers have to continue to write more. Really encouraging the 40% of our targets. And that's of the 6,000 had written a prescription. And we're continuing to steadily add prescribers every day, every week, every month. And with that comes, if you're a new prescriber, definitionally, you have another prescription. And we see the depth increasing in each of the prescribers. And as I said, versus benchmarks, we're performing extremely well for very high-performing launches. So it's really still that blocking and tackling. It's calling on physicians or calling on prescribers because we have a lot of APPs that we're calling on as well, especially in the GI practices.
But it's the more people get familiar with the story, with the product, understanding how to identify their patients and process them through their practice. And that's why a meeting like AASLD was so important to us. It was absolutely clear that there was one single leader there. And that was us. We want it on the science. We want it on our presence. We want it on our visibility there. And I think that, again, is confidence building for not only our team, but also for the community to see, look, there's a company here that is really making a difference. And that starts to get new prescribers, et cetera, et cetera, et cetera. So we're right on track to continued strong growth of addition in a steady way of prescribers and then depth within.
And I think one of the questions that will be upcoming in 2025 will be some patients who have been on drug for a year, right? And for them to keep them on the drug. Could you talk to us what Madrigal is doing in terms of working with payers, working with the physicians on what will be the requirement be to keep them on? Is it as simple as, hey, how are you doing? How are you feeling? Running a FibroScan or an NIT? Is there certain cutoffs? So just kind of help us understand what is the criteria from a payer perspective to then allow the patients to continue being on Rezdiffra.
Yeah, it's pretty broad. There are some that may have a specific NIT. But for the most part, it's how can you show that there's some response that's taking place? What was encouraging in the AASLD guidance as well was that it was really trying to put it back in the physician's hands because this is a complicated disease, and if you recall an approval in the FDA press release, they said it was surprising to see an effect on fibrosis at 52 weeks, right, but fibrosis isn't the only thing that's going on. We're having an effect on lipids. We're having an effect on liver enzymes. There's effect on the NASH itself, so you have a number of variables that can be looked at by prescribing physicians.
I think where most people are landing is to say, if there's not a clear worsening, that would be grounds for still keeping a patient on the drug. We'll see when we get to that 52 weeks. We're not anticipating that the criteria that there leads to any significant change in whether someone's on the drug or not.
OK, perfect. Maybe another place to talk about is when it comes to expansion of the market is your strategy in Europe. So if you could just talk about sort of the European MASH market and as you're expecting the European decision to come in in 2025. So how are your discussions going with the agency? What do you hope to gain? And how do you think what is the market opportunity there?
Yeah, really excited about the market opportunity. There are similar amounts of MASH patients in Europe. There was a belief that some countries don't have it. But lo and behold, whenever studies are done, they appear to be quite consistent with what you're seeing in the U.S. There's a lot of anticipation in Europe. One of the advantages that Europe has versus the U.S. is they can look back to see that there's been a product approved in the U.S. And so that increases their expectation that it's going to get launched in Europe. So there was good familiarity there. 125 of our trial sites, about a third of our patients are in Europe. So high awareness. There's been very action-oriented steps by the community. You saw at EASL, there's the EASL guidelines that a year plus in advance anticipated the approval of Rezdiffra.
So I think things are coming along really well there from a community expectation and interest perspective. And we've started to build our infrastructure there. Now, when we say Europe, that's probably not the right way to think of it because we're not launching everywhere in Europe unless we're going country by country to make sure that it has what we see as the opportunity and the requirements to be worthwhile for us. So we want to have a positive return within two to three years. And we're setting really high criteria for ourselves so that we'll be very diligent in thinking about on a country-by-country basis how we launch.
You did a great job before launch to kind of target sort of the addressable market with the 315,000 patients under GI and hepatologists. Will you be able, at the time of the approval, also build a similar market sizing map for us, how we should be thinking?
Yeah, we'll do that as we get closer. I mean, our head of international just started. Great guy, great experience in Europe. As we get closer to launch, we'll come back and we'll provide a little bit more detail about the market dynamics in each of the countries.
Given that Europe is quite heterogeneous, a lot of investors just have difficulty thinking about the size of a sales force that's needed to really how do you build a very efficient team? How do you think about in terms of expansion of the sales team in Europe and as well as the capital needed to be successful there?
Yeah, well, I mean, look, it's as we would do in the U.S. You know the number of prescribers, you know the geography. And there's very, very specific analysis that you can do to figure out how many reps that you're going to need and what your footprint looks like overall. And then it's a matter of we decide how to sequence. And as I said, we're going about this in a very responsible way. And we'll sequence it in that way. So that's really not so different. And myself, all the products I've launched, they've been in Europe as well. So we know exactly what to do. And we're hiring the team that knows all the details on a per-country basis.
OK. And in the U.S., it was very clear that the focus was under GI hepatologists. We are making the assumption that in Europe, the target focus will also be that specialty. Is there something different in Europe in terms of who sees MASH patients more versus others? Or should we be expecting a similar specialty focus?
Way more similar than different. So GIs and heps, there may be and even in the U.S., we have some endocrinologists as well that prescribe. And we constantly are surveilling. We're the first. So we're learning along the way as well. And if there ends up being a prescriber that's really interested that maybe doesn't fit the criteria that we thought about initially, that's something that we reassess. And we can add them to the list as well. So the one thing that just to know and launch, it is an evolving. You're constantly iterating as you learn more in the market. So you don't change strategy, but you evolve your deployment and how you think about it. And we'll learn in each of the markets. There's subtle differences in Europe.
Maybe like in the next minute and a half, I think if you could talk about the patent estate and what work is being done in terms of applying the patent extension.
Yeah. So two key patents that we started with, composition of matter, which is 26, and Form I polymorph, which is 33. And with the five-year extension, that becomes 31 or 38. The goal always has been to aggressively pursue new IP so that we would feel abundantly confident putting the five-year patent term extension on the Form I polymorph, which gets you to 38. As I said, we subsequently have a new Orange Book listed patent, a dosing patent that goes to 33, but with a pediatric extension takes you to 34. So with that patent, it further increases our comfort assigning the PTE to the Form I polymorph. Now, we're also generating new IP that we hope to take beyond 38. So it's been an area of focus for us. I think we've got a great team. And we've done a great job.
I feel really, really comfortable with where we are.
Great. Of course, my investors would be mad if I don't ask about your partnership and how you're thinking about BD activities, maybe in the 20 seconds if.
We're the leaders in NASH today. We want to be leaders for a long time, and we believe that leadership includes building a pipeline. Pipeline's initially going to focus on how do we extend within MASH, so that's a key part of our future strategy.
Wonderful. Bill, wonderful to have you. Congrats on an incredible 2024. And we can't wait for 2025. Let's applaud that.
Thank you, Robin.
Great discussion.