Ahead and get started. Thank you, everyone, for joining us for the Madrigal Pharmaceuticals fireside chat. I'm Ritu Baral, covering analyst. And with us from Madrigal, we have Bill Sibold, CEO; Mardi Dier, CFO; and Michael Charlton, head of clinical development. Thank you guys for joining us today to talk about the Rezdiffra launch, market dynamics, and the evolving landscape of NASH treatment. Maybe we'll start with the launch dynamics, launch metrics. A year ago, you mentioned that it would take just about a year for the channels to be fully open, the pump to be primed, for lack of a better word, with aspects like insurance and distribution. How is that going? What's left to do?
Well, thanks for having us, Ritu. Great to be here. Look, first of all, I think we refer to it as wiring the system. You know, I get a lot of comments on wiring the system. And that's what we've been doing over the last 12 months. When you think about it, 12 months ago, there wasn't an approved NASH therapy. So when you think about where we are 12 months later, it's kind of remarkable. You know, in our fourth quarter, we delivered $103 million in sales for $180 million for the year. If you compare that against any metric that is in top tier launches, we've been following a group of about 10 products in specialty care over the last 10 years, which have some of the, you know, I'd say best launches that I've ever seen in the industry.
We are tracking extremely well on all the indicators there. It's a lot of hard work a launch. It's especially hard work when there was nothing in place before as the first product to launch. I would sum the launch up as being great so far. What have we been doing? Teams have been out there. You have to educate each physician on how to about the disease, the product, then how to use it, et cetera. A lot of the practices, remember, they weren't treating NASH before.
Yeah.
So they have to find the time now to think about, well, how do I process this patient?
You're talking about the community gastro.
I'm talking about everyone, because even the hepatologist didn't have a therapy to go to.
Right.
Right? They had clinical trials, but it was more of a stage and wait. And if they're for a clinical trial, they can go into clinical trial, but there was really nothing to offer them. So we have to, for each practice, kind of help them build that pathway, if you will, so that they can access the therapy. On the other side, and just to give you the sense there, 14,000 prescriber universe, 6,000 targets. And we announced at the end of the fourth quarter that 60% of the 6,000 had written a script and 40% of the 14,000. Great progress, tracks well with all the metrics we're using, with that group of 10. The next piece is payer access. You have to be able to have that open. We set a very ambitious goal of 80% commercial coverage by the end of the year.
We achieved that a full quarter early. So access has been strong, and that's allowed patients to get through the system pretty, pretty efficiently. So that's what it's been hard work building for each of the specialties. And we've seen, you know, positive results on access being open, prescribers prescribing, and over 11,800 patients on drug by the end of the year, which is a very, very significant milestone to get that many to cross a 10,000 patient mark in nine months on the market.
So now that we are close to one year, are doctors encountering the first wave of reauthorizations? And how are those going? When your coverage policies first started getting posted, I think I even wrote up at one point that the reauthorization requirements looked extremely generous. Are those still the original reauth requirements still standing, or is that something that gets renegotiated?
Yeah, look, like any other specialty product, you have a reauthorization. Usually it's at 12 months. There's a few that are at six months. So since we're not even at the year yet, we haven't really gone through that. But as you say, the way they are written is they tend to be, I would say, quite fair in that it's looking for response, either physician attestation or proof by the outcome of an NIT, et cetera. Now, the reason...
That's mostly encompassing serum NITs, as I've noticed. So really just a blood test to...
It's a bit of a mixture. I would say that that's what we're seeing across the, across the board. What's really reassuring is the feedback that we're getting from the community, kind of the real world impression is extremely positive, and I think that if when you ask physicians, if you ask me, you know, what's the unknown going into launch, you never know how something's going to perform in the real world, right? You have your clinical trial results, and then you know until it's in patients and you're getting that feedback from physicians and from patients is, I would say exceeding initial thoughts that I had, and that also bodes well for when we go through reauthorization that they will have shown progress, whether it be on liver fat, liver stiffness, LFTs, cholesterol, et cetera.
Got it. Latest figures and trends, more qualitative in this case on prescribers. How are prescriptions breaking out and trending, you know, as far as the balance of like community gastros, hepatologists versus centers of excellence?
Yeah. Well, maybe just to set the stage a little bit. So there's 14,000 physicians in the universe that we identified going into the launch. And there's less than a thousand hepatologists in the country. The overwhelming majority then is gastroenterologists.
10,000 plus. Yep.
Yeah. And there's some, you know, endocrinologists, but, you know, it's, it's really heps and GIs, but GIs, predominantly. And we said that, as I already said in this, 40% of the 14,000, 60% of the 6,000 targets. Hepatologists got off a little bit faster start just because that's the organ that they treat, they know it, and they were a little bit better prepared. But what we've seen is the gastroenterologists. I mean, it's actually kind of remarkable when I look back over the past year, the difference in their preparation. They've started to put the resource in place that they needed. You know, the gastroenterologists are typically busy, scoping.
Yes.
They rely a lot on...
That's how they make their money.
On their APPs. That's correct.
Yeah.
And so they've had to, in some cases, hire, train, bring the appropriate equipment in, such as a FibroScan, et cetera. And they're moving very rapidly to do that. And, you know, just we focus on some of the super groups as well, which are these, you know, large groups of physicians, hundreds of gastroenterologists in one in particular in 15 states. And what we've seen in just nine months, they went from not having a NASH pathway, ready access to NITs or any kind of real approach through their practice to now hundreds of patients on therapy, a pathway that's established and a continuing expansion of that capability. So, you know, this is just one of the things, the wiring of the system that takes some time.
It's not complete because you're always, as you're adding a new prescriber, a new practice, they've got to go through that same process. And that's what we help them with.
Got it. And APPs are the allied professionals that...
Yeah. Nurse practitioners, physician assistants.
So are they the ones, the APPs are the ones seeing NASH patients and writing the prescription or, 'cause I don't know if they have prescribing rights?
They do. Yeah. And it's in conjunction with the gastroenterologists. And each practice is a little bit different how they've set it up, but you know, that's a big educational lift. And we've put a lot of effort towards it. And I think the progress has been really strong.
So among the prescribers, are there any PCPs and those, and how much of a focus should we be giving that potential prescriber population?
Yeah, this is a specialty drug. So PCPs, we don't see as a part of it, at least not in the foreseeable future. As I said, there's some endocrinologists. It really tends to be more in that hep and gastroenterology space that you see the real bulk of the prescriptions coming. And we would expect that it's going to stay specialist.
So this is a question we still get very frequently from general list investors looking at Madrigal stock and the NASH field in general, but, you know, impact on prescribing trends as we get closer to Novo's likely filing and likely approval for Sema for NASH. How do you see that impacting the market? And I suspect, tell me if I'm wrong, you'll see differences in willingness to prescribe both drugs by specialty. Hence, I wanted to set up the specialty conversation.
Yeah. So, I mean, again, just with a little bit of background here, you know, 12 months ago, there had never been a NASH prescription. Now we are, you know, nine months in as of the last report, and we're less than 4% penetrated into the 315,000 patients that we've talked about that are diagnosed sitting in those 14,000 prescribers' offices. So, you know, this is, we are at the beginning of something that's going to take probably 15 years to complete to mature, like other specialty markets. So there is just so much unmet need and demand that, first of all, the path for us looks very promising ahead for, you know, years of growth. So, what's where are we at now? We're carrying the full weight of bringing better awareness of this disease now, and that hasn't even been our focus.
Our focus has really been on these 315,000 that have a definitive diagnosis. So the coming GLP-1s, first of all, you know, they've been on the market for, I think it's like 14 years. 25% of our patients currently are on a GLP-1 as well, and 50% have been exposed to a GLP-1. So it's not like there's this moment where they're here or they're not here. They've already been here.
Yeah.
And they're already being used in some cases in combination. So it's not like a cataclysmic moment where all of a sudden you have the next entry 'cause it, 'cause it's already here. You know, this is where kind of the views of the world differ a little bit or the focus of the companies differ. You know, we talk about 1.5 million diagnosed people in the U.S., 525,000 F2, F3, and within that 14,000, 315,000 patients. That's where we're focusing overwhelmingly. Novo, on the other hand, as they've thought about MASH, they've talked about 22 million F2- F4 patients in the U.S., EU5 , and Japan by 2030. Magnitude's different than our 315,000.
Right.
Now, for them to have MASH be an interesting market, it's got to be, it's got to be a lot more than 315,000. So we think they're going to spend time focusing on diagnosis and awareness.
Which they have.
Which they have. Yeah. They've started, but you know, they aren't approved yet. So it's a little bit difficult to do too much pre-promotions. So the way we see it, they're going to need access to a lot more patients. Even if they had the full 315, it's just not a big number versus 115 million obese Americans. So we look at it as a number of pathways for us to be successful, whether it's the 315 or the world ends up having greater diagnosis, more patients that get exposed to a GLP-1. And we know right now the profile is no different that you still are going to have high discontinuation rates, you know, and we know that it's a 72-week trial. So almost 18 months to show an effect.
So by the time you put those facts together, that sets up really well that if there is this bigger market, that even if they were to start with the GLP-1, we think they're going to end up the overwhelming majority with us.
Do you have any market research on the number of NASH patients that are on underlying GLP-1s because of their diabetes? And we would know, I think 45%-50% of patients are diabetic to begin with. Some percentage of like somewhere between 20%-30% walk into NASH clinics on a background GLP-1 to begin with. Do you have that number for Rezdiffra patient ?
It's 50% of patients that are on Rezdiffra have been exposed to a GLP-1. 25% are on at the same time.
Oh, okay.
At the same time. Now we're looking at the data. It's still evolving in the sense that, you know, it gets to, well, what dose are you on? Are you on for diabetes? I mean, for instance, in our MAESTRO-NASH trial, 14% of patients were on a background GLP-1 dose. Net result is same treatment effect, whether you were on or you weren't. So now we've got to get better data to say how many are on actually a weight loss dose, which is the dose anticipated for MASH. And, you know, so it becomes a little bit more of a subtlety because from our perspective, and the data would suggest if you're not on the highest dose, then you're not really being treated for your MASH.
Yeah.
I think that's going to be a real practicality, you know, as I said, physicians don't have time. That's the one thing that they wish they had more of, but they don't have time. So now they've got a choice or will have a choice assuming approval. You've got a once-a-day pill that you don't titrate. It's well tolerated. Studies show that real world shows that. Or you've now got a GLP-1, which you've got to find a path from starting dose to 2.4 in order to have the effective dose. And, you know, that could result in time spent helping with titration, helping through any tolerability issues, et cetera. So that's why we feel like just on profile alone, we just set up really well. And again, because we don't think this is a winner-take-all market either.
You know, if you take a look at big specialty markets, they can support 10, 15 products, right? And, you know, we think competition's going to be really helpful to drive awareness and treatment and so forth. And the winning profile we think is ours. You know, we always refer to it as kind of the holy grail, the once-a-day pill that's well tolerated, effective. And, you know, so we feel really good about our ability to compete too.
How should we be thinking about growth going forward? You gave us a very directed idea of what Q4 could be over Q3. You know, that left us asking how much insight do you have in forward growth?
Can I talk a little?
Sure.
Sure. I think what we said on the call last week is that, you know, we do expect quarter over quarter growth going from Q4 to Q1. We also said that we expect year over year robust growth for 2025. So we're really pleased with what we've seen, thus far as we go into 2025. But remember, this is the first time we've gone through a Q1. So we're not immune to the Q1 dynamics. Like we're there with everybody else.
Q1 dynamics are changing with the GLP-1s and the smoothing and the, yeah.
Yeah, the Medicare Part D redesign for sure, and we can talk about gross-to-net in a minute, but anyway, you know, and typically your Q1 could be flat. It could be down once you're at steady state because of this Q1 dynamic, but I think we've been really pleased at what we've seen with steadily adding patients from Q4 into Q1 thus far, so we anticipate, you know, some growth into 2025, so what are those dynamics? Well, you know, you have the re-auths, et cetera, that the patients have to go through, so maybe you know you don't have patients on for a little bit. Patients come on later in the quarter perhaps, but you also have this gross-to-net impact that, you know, we're not immune to either.
And we talked a lot about the Medicare Part D redesign, which was going to, is having an impact on gross-to-net for us. You know, fortunately we also had Medicare rebates in Q4, Q3, and Q4. So the redesign impact for us right now is, is incremental. It's there, but it's incremental. It's not a huge step up. But other components of gross-to-net like our copay assist 'cause we want our, our patients to get on commercial drugs. So we want to help where we can. That'll have an impact on gross-to-net as well. So we do see gross-to-net increasing as expected into Q1 and that'll continue through the rest of the year. But we still stay very disciplined on our gross-to-net.
And we, you know, we expect that range where we fall to be just like other specialty medicines at this point in the launch. And I should go back on the Medicare issue as well. About a third of our business is Medicare patients as well. So you have to take that into effect. But all said, even with this Q1 dynamic, we're very pleased with what we're seeing so far for growth in Q1 and then rest of 2025.
Great. Bill, are discussions with insurance companies done or they're continuing talks with plans?
Yeah, look, I would characterize it as you're always in a continuing discussion with plans. You know, we've had some.
So I'm just curious why, why is that? It seems like you can strike an agreement and then the agreement is the agreement. Is it because the agreement gets renewed or will the plan come back and say, hey, you know, what is, 'cause I think most investors are unfamiliar with talking to payers. So.
Right. So you can have just a time dependent, so annual or a reason why you would.
An annual agreement.
Book the next year's contract. A market event, if a competitor or another product, when I say a competitor, if another product launches that can lead to additional discussions. That's what I'm saying, you know.
Is that when the payer calls you up or vice versa? Who's, who's got the initiative there?
Yeah, I would say that's typically a payer-led dynamic, right? They see, hey, this is a, it's their opinion. Is this a competitive or this is, is this a market event? Therefore, you know, let's, let's talk again.
Got it.
But we've had really, I'd say great discussions with payers. This was leading up to even launch a year before. I think there's no debate about the seriousness of the disease. And I think that's why we did so well from an access perspective early on. I mean, in Medicare as well. I mean, that was something that patients moved through really well through medical exception. So you know, now we'll continue those discussions from a perspective, you know, if there's a new product that launches, et cetera. But again, we feel like we're in a really good position. They're expensive patients, from a healthcare perspective with the complications they have in leading to ultimately transplant. And you know, our data's very strong. So you know, we'll continue to work with them and partner with them.
Got it. Have you started hitting the edges of what you can do with your current sales force? Are there thoughts of expansion or maybe DTC, or is that really a more down the line thing?
Look, we've starting with DTC, we started DTC last year and,
Like television or?
Yeah. Yeah. For the most part though, it's been very, very targeted. So, you know, we've been trying to focus on this 315,000 already diagnosed patients. Fortunately, the technology is available that you can target it so that you might see the comment and the content and somebody else wouldn't. We're also doing a little bit of what's called linear, which is, where it's more of a, on, general cable TV. And there we would prioritize for shows that we know that there tends to be MASH patients that they watch.
How do you find that out?
Market research. Yeah. So, you know, I mean, one of the things we know is that these that these patients tend to watch a fair bit of TV. That's maybe one of them. Yeah, that's maybe one. So yeah, that's one of the levers that we have. Also from a sales force perspective, you know, we launched, I think with a, you know, really, really, well-sized sales force to take advantage of the opportunity and the 14,000 targets that we have between now and the future. You know, there'll be, you know, plus minus that you add. If you see an opportunity, you may say, well, let's resource a little bit more over here. So we have that. We have that ability. For the most part though, we have really, I think, built to the scale of the opportunity.
Now, the one thing I would also say is that the sales force is one component of it. There's other pieces as well that are necessary in order to launch. You know, I have people that are helpful with kind of key accounts, reimbursement specialists, et cetera. Then of course you have the whole medical side, which was deployed earlier and offshoots of that. So it's not just the sales force. You have to think about your full commercial effort, and on that, we feel really, really comfortable knowing that there'll be plus minuses. Now the next moment in the evolution in time of a launch is if you have other products launch, how do they deploy? You know, you have to consider that in how you continue to deploy.
Is there a need to add additional people in other areas or not? You know, that's something which is true for every product, every launch, and that's down the road a little bit.
Got it. Let's talk about F4 for a little bit. There's been a lot of discussion on F4, patients, the ability to treat them, what sort of market they represent. Can you remind us where your F4 study stands, when it will read out, and what that top line readout will include?
Yeah. Maybe Michael, do you want to talk about that?
Yeah, sure. So we have 845 patients in MAESTRO-NASH OUTCOMES, which is an F4C population or compensated fib, cirrhosis population. And it's a time to event study. So we wait for the number of events that we planned or projected that we would see when that number's reached, that's the end of the study. We're projecting 2027 for that. You know, it, we also have an F4C population in MAESTRO-NAFLD, which was a safety and tolerability study. There are about 180 patients in a dedicated arm. Everyone got drugged. At two years, in that study, we looked at liver stiffness. Now for accelerated approval, histology was the endpoint. For full approval, outcomes are the endpoint. And the same is true, the FDA guidance for F4C, its outcomes as well. So we're looking for something to predict outcomes.
The best predictor, better than histology, is liver stiffness measured by FibroScan BCTE.
Which was, I think, the dataset that you featured as part of your Q4 earnings. Yeah.
Yeah. And we saw a 6.7 kilopascal reduction in liver stiffness compared to baseline in the F4C arm. That would project to a 30%-40% lower likelihood of liver-related outcomes.
As you think about, you know, F4C, you know, obviously our approval is F2, F3, looking ahead if everything turns out and we get into F4C. You know, we really believe that from F2- F4C will be the leading product. You know, we just, we believe our profile is the profile that wins. Michael talked about the promising data that we announced last week, really significant result. Now, you know, again, with all the limitations, it's an open label study, et cetera, et cetera. But remember, we did that study with an eye on the MAESTRO-NASH outcomes that helped us think about how we were going to design that study. So, you know, I think what people had in the last months maybe discounted a little bit was us in F4C.
I think what last week shows is that not only are we a player, but we could have the winning profile, assuming we're approved. We have F2- F4C then first in this decade with any outcomes data. And more importantly, a familiarity with the product and a profile that's really nice. Remember, by the time F4C is approved, we will have had thousands of prescribers. We already do tens of thousands of patients. The system's wired, so it would be just a matter of changing a prescription to that new population versus somebody else coming in, having to rebuild from scratch and certainly won't have the years and patient numbers of exposure that we'll have at that point. So, you know, we think it sets up really nice for us. And again, our profile is, we think the winning profile.
Let's talk about Europe in our last five to seven minutes. Your application is under review right now. How's the review going? I mean, it's almost Europe is less about CHMP and more about the health technology assessments, but on a CHMP level, how is that review going?
Yeah, look, I mean, we're on track, as we said, for kind of middle of the year, with a launch this year, starting in Germany. And remember, so not gonna say much more about the approval other than, you know, we're on track and the approval is going as expected. When we talk about Europe, it's really not Europe, it's countries. So we're not launching everywhere out of the gates. We are very systematic in thinking about where does it make sense to launch.
So you're not investing everywhere out of the gates either?
No, we won't do that.
Right now. So you're saying right now you're only investing in Germany or are you starting to look at other geographies?
We have to have a regional presence.
Yep.
Then Germany, and then we'll look at kind of next to come countries and think about kind of a very dedicated targeted effort in those. It's, you know, we're. I'll let Mardi talk about kind of how we're thinking about it from an investment perspective, but we're just like everything else we're doing, extremely disciplined. Mardi, do you wanna?
Yeah. And with that discipline, we look at it from a financial standpoint. If we're gonna invest in any country, we have to make sure that we have a positive contribution or payback period between two to three years. I mean, that's how we'll evaluate two to three years.
'Cause Europe can get expensive.
It can, but that's why you have to be disciplined 'cause you can also drag earnings if you let it, right?
How should we be thinking about the top five in Europe, right? So you have Germany, we talked about Germany, you've got U.K., France, Spain, and.
Italy.
Italy, and oftentimes even like these larger indications tend to be very KOL driven. We know we have great KOLs in France. Is that the obvious next step? KOLs in the U.K., do they get it? I mean, it's almost like a philosophical approach to NASH as a disease, like 'cause like nobody's expecting you to go after like the Benelux countries and, or Scandinavia, but how should we be thinking of that top five at least?
Well, again, from a KOL perspective, feel very confident. I mean, having been at EASL last year, I mean, I have to say the Europeans were leading the way with guidelines, you know, a full, almost a full year in advance of approval. They put Rezdiffra in their guidelines, assuming it gets approved. I don't think I've ever seen that by any society in any therapeutic area ever. So that's a huge, that's a huge step forward. Conversations with the European physicians that they're I would say advanced in their preparation and thinking compared to the US docs. And it does make some sense because, you know, usually the US docs had been disappointed almost two dozen times by products that never made it to market. So there was always this trepidation, will it get approved or won't it?
You know, I'm not gonna do anything until it gets approved.
Right. Because the KOLs themselves have been very critical of how FDA has handled it rather than something inherent.
Exactly. Europe now, knowing that the U.S. got approved, I think has a, you know, optimistic view that it will be available. And, the doctors have been, you know, very supportive, very pragmatic. So that's not going to be an issue from my perspective, the interest. As you say, it's going to be on a country-by-country basis, as we talk to, the HTAs, et cetera. And that's where, as Mardi laid out, we'll be extremely disciplined and, go where it makes sense.
Got it, and in our last few minutes, how are you thinking about timing and strategy behind potential pipeline expansion?
I mean, look, this is, you know.
You have all of three minutes.
Okay. So NASH, MASH, Madrigal, it's a very unique setup. You just don't see opportunities like this in the industry is my perspective. And that's why I'm here. That's why everyone on my leadership team came, because the dynamics are really, really amazing. Most companies that are here this week, are pipeline looking for a significant product. We have a significant product. Now we have the opportunity to build a pipeline on our terms. We don't have to, right? We could be a single product company. We do the lifecycle management, the two studies ongoing, look at additional populations through lifecycle management, and that would be great. But the opportunity here is to say, how do we build sustained long-term leadership? And that's what we're trying to do. And we think Rezdiffra is a fantastic product. It is the winner period F2- F4C.
However, products support, markets support multiple products. We believe Rezdiffra is the foundation. We believe we can add to that either standalone unique mechanisms of action, combination therapy, et cetera.
For Mash.
For Mash.
You don't have to go adjunct.
Leadership in MASH is the objective today.
So it's kind of.
We have it now. We have it now. Yep. There might be adjacencies that you can ultimately move into, but you know, the opportunity is so great in front of us that we wanna be the ones that drive that future.
When you say that, do you also mean MetALD or do you consider that a different indication?
I think that, you know, the jury's still out a little bit on how MetALD is gonna be classified and how, you know, what's gonna be required for, for that work there. Actually, been a ton of, discussion about it lately, starting at AASLD. I mean, that has been really, really pretty interesting. You know, I think.
And at a panel as well.
I think, you know, still our data that we presented at ESO last year is, I think, the largest cohort of MetALD patients that's been reported on. We saw very, you know, strong, strong results there. Timing-wise, look, like anything else, you put guardrails in place. Like we're not gonna do a bet the company strategy on any BD that we do.
Okay.
But it's a matter of finding the right product and, you know, getting to the right terms in order to be able to execute something. Now, you know, we have, as I said, the advantage of we're first, we're the leader, and now we get to add, and we'll do so in a thoughtful way that we think is gonna make a difference for patients and for our long-term leadership position in the space. But we're really excited about it, and it's one of the pillars of our strategy for the future.
Great. Well, thank you, Bill, Mardi, Michael. This was very helpful.
Thanks for having us.
Thank you.
Thank you.