Let's get started.
Let's get started.
But welcome, everybody. Those of you who don't know me, I'm Mike DiFiore. I'm one of the biotech analysts covering Madrigal and Evercore. But pleasure to have the management team from Madrigal here. Bill, Mardi, welcome. Thanks so much for making it down to Miami to be with us. But before we delve into Q&A, we'd love to get an overview of the business and what we could look forward to in the next six to 12 months.
Yeah, well, Mike, first of all, thanks for having us here. It's always great to come to Miami, especially when the weather's so nice compared to the Northeast. Look, Madrigal, we're just finished our sixth quarter of launch. And that's early, but it's been a long road. There's been over 20 products that failed in MASH before we were finally approved. So to have just hit that milestone is so significant, not only for MASH, but I think for the industry as well. And it shows that if the industry puts its mind to something, ultimately, it can get there. After that sixth quarter, we're now annualizing at over a $1 billion run rate, which is a huge milestone. We have over 10,000 prescribers of the product, which is in itself another huge milestone.
We're really at the beginning because we're less than 10% penetrated into this 315,000 population that we've talked about that are diagnosed in the prescribers' offices that we're calling on. We've made progress in securing the long-term future of the product with an issuance of a 2045 patent. We completed our deal for an oral GLP-1 that we see as a fixed-dose combination with Rezdiffra, and that goes into the clinic next year. For 2026, we've made really great progress from a payer access perspective. Our intent was first line and no step-through and improve utilization management criteria where we could. We are in a really great position for 2026 and beyond. This was a big moment for us to go from no contracting to contracting with the commercial payers. I think we've taken some really great steps. We're executing at a very high level.
We are comparing ourselves to other very successful launches, some of the best launches in the last 10 years, and on each of the metrics, we're at or near the top of all of those. We've started to build the pipeline in earnest and so forth, so the short and the long term, I think, look very promising for us.
Excellent. Yeah, definitely has been a very successful year in terms of the launch. Rezdiffra is now annualizing at over $1 billion as of Q3. So if we think about the penetration into that 315,000 target population, you're less than 10%. With your announcement that you're going to expand the sales force, maybe calling endocrinologists, if we look at the pace of penetration into that 315K, it's been about 2% per quarter. Could we expect that, at least for the short term, or with the adoption of the sale, with the expansion of the sales force, could that accelerate over time?
Yeah, I mean, look, so first of all, when you think about the effort with endocrinology that we announced, we were calling on some endocrinologists from the start. So predominantly, it's hepatologists and gastroenterologists with some endocrinologists. We actually had a lot of inbound interest from endocrinologists saying, "We have these MASH patients. We would like to hear about Rezdiffra." So we did a lot of work and looked and saw that there's about 2,000 endocrinologists that we thought we would target. And we put together an increased sales force to increase the number of reps to call on those. And that is a group which is really starting from standing still in many ways. It was March 2024 that we launched, and we talked about wiring the system. And we had to do that with each of the prescribers, whether it be hepatologists or gastroenterologists. And that takes time.
And so the endocrinologists are starting, I'd say, maybe even a step further back because they don't have access or know necessarily which non-invasive tests to use, et cetera. So that's something that's going to come on in time. But we just got started in Q4. In 2026, it starts to have an impact. They start to contribute, but it's going to take a while. We think that's really kind of a future state. From a penetration perspective, this is where I mentioned we're comparing to some of the best specialty launches in the last 10 years. And penetration is one of the metrics we're using, and we are kind of at or near the top of that. It takes time to build a market in penetration.
So as we look ahead to 2026, we've talked about steadily adding patients, and we have been steadily adding, and we would expect to steadily add. And I think the steadily add is so important in the context of this period of time is because we now have Wegovy that is approved in the space. And so despite having a competitor, we still expect steadily adding.
Got it. One of the key data points that hit me from AASLD recently was the persistence rate. You guys had a nice poster of a claims analysis showing that persistence is kind of really high, up to 90%. So I think all the folks I spoke with here when they're building out their models, they conservatively model maybe 60%-70% persistence. So just in light of this new data, should folks kind of change their modeling in that sense and kind of like increase the persistence rate?
Well, a couple of things here.
Go ahead.
No, don't change the model at this point. So let me start with that. A couple of things. First of all, we have visibility across all the patients. And that's where we say it's behaving like a well-tolerated oral. And when people ask, "What's a well-tolerated oral persistency look like at a year?" It's about 60%-70%. If you look at subsets or institutions or various practices or prescribers, you can get to that 90%. Now, this provides us an opportunity to really understand what are they doing that gets to that.
That was my next question.
So how can we then take that back to the broader population and help? And also, it's still pretty early. Six quarters into launch, the way uptake curves progress, there's very few patients that have crossed that year mark, right? It gets to be more and more. So we get better insight into persistency as time goes on. But we're really encouraged by it. I think that it will behave like a well-tolerated oral. We're going to use our best efforts, obviously, to see if we can find rooms to improve in that even.
Got it. Okay, so I want to pivot now to gross to net, very common topic that comes up. Now, contracting started in April. It's just starting to really kind of gain traction, so much so that you'll end the year, I think, you said in the low 20%, which kind of implies 4Q is around 25% gross to net. Come January 1st, you're going to be up to high 30s gross to net. So some folks may ask, "Wow, Madrigal's kind of giving this drug away." But what would you say to that in terms of the huge increase in gross to net that's expected from the year?
Mardi, do you want to take it?
Yeah, well, and hi, Mike and thanks for the question. No, we're not giving the drug away. Absolutely not. So to answer a question this way, we're in our sixth quarter of launch. We're going into almost our third year of launch. And even coming into that third year at the high 30s gross to net discount, well within the range for specialty pharmacy products, very well within the range. But what you're seeing, this step-up that you're seeing is something that Bill had referred to, which we had six quarters of launch with no contracting. Basically no contracting had started last April, just a little bit. That's highly unusual. So now we're going from sort of highly unusual where we had very good access. Our patients had very good access to the medicines through the payers through those six quarters through medical exception, et cetera.
And now with Wegovy coming on the market, it is time for us to enter the contracting world, the commercial contracting world, which we have, and that'll bring that gross to net discount into the high 30s%. So it's just that we went from zero to the high 30s%. That makes it look like a big step-up. But really, we were just sort of exceptional those first six quarters. And now we're right where we should be for a specialty product in the third year of launch.
Yeah.
Got it.
And just to clarify, we went from where we're exiting mid-20s to the high 30s. The zero was in the commercial contracting, right? So we hadn't had any.
So is it fair to say that going forward, starting in January, that there'll be no huge step-ups in gross-to-net? It'll always increase, but it'll never increase drastically from here on out?
Yeah, I think, look, this is the big step, as Mardi said, because we didn't have any. And then going into the third year of launch, you really got to do it, right? I mean, we want to be a good partner with payers. And we have to say the conversations with payers have been exceptionally collaborative. They've identified that this is a product of high value. ICER actually confirms that when last month they announced their list of assessment of product launches over the past couple of years. And we received the high value designation, which meant that it was fairly priced and of value to both patients and the system overall. So that's a really strong place to be. So we feel as though we are in a really good place right now with this, as you have this step-up because we're going zero to contracting.
The only other area where there's some step-up, Mike, we haven't contracted all the way with Medicare yet. That's really we're bidding on 2027 now. So as you get to there's some contracting. As you get to 2027, you'll have more. But that's on a smaller base of business, right? That's about 30%-35%. So gross-to-net really starts to settle down more or less after we get the Medicare in place in 2027. But that's not the step that you're seeing as we will in 2026.
Got it.
Then, when I say you're in a steady state, gross-to-net typically only goes one direction, but it doesn't fall off a cliff.
Part of the reason why I'm asking this question, Bill, is that now that Semaglutide is approved for MASH, there's huge pricing pressure among the GLP-1. So when Sem becomes available for IRA price negotiation in 2027, and then once it goes generic, I think in 2031, 2032, even though it's a different class, will Sem's pricing pressure have knock-on effects to Rezdiffra's pricing where we may see even stronger discounts?
Every category, you can have big differences in pricing. A lot will have generic orals, and they'll still have complicated biologics, and there'll be quite a difference. Right now, as we get into 2026, and as we say, we're going to have first line parity access. When you look at the net prices of the two products today or in 2026, there's a big difference, significant difference. It's already at a threshold where if it becomes even bigger, I don't think that really has a material effect on how we think about gross to net. I mean, our view, gross to net is absolutely critical. We're taking a 20-45 look back, knowing that we're going to have F4C. There's going to be other competitors coming to the market. You really have to take a long-term view.
And I have to say, we've positioned ourselves better than I've ever been positioned in a launch. And I think that what we've managed to this point and what we have going forward is really exceptional.
Got it. Got it. I just want to pivot now to the ex-U.S. launch. You recently got approved in Germany. Maybe discuss how you're approaching the ex-U.S. launch of Rezdiffra. And when you consider MFN pricing, pricing parity equal to the U.S., do you think that Rezdiffra could reach its full potential because of that?
Yeah, you know, look, there's a bit of a total industry question here as well, in that I think in this new context with MFN, I think every company has to understand it and make their decisions. Now, I think if you have a portfolio that's exposed, you're in a far different place than where we are, where everything is looking forward rather than having to correct something from the past. I think that in time, you're going to see things settle down and ex-U.S. opportunity remain attractive. I think that there's some steps between now and then, though. We've launched only in Germany at the moment, and Germany is one of those markets that can be very attractive because you have six months of free pricing, and then you go through the various AMNOG process and then enter into additional negotiations.
We've launched at parity to U.S. government pricing, a blended U.S. government pricing rate. That is different than most launches that have taken place. So the systems have to adjust to this. I think, fortunately, it's not a surprise to any country because the administration has been very vocal. You saw what happened in the U.K. a couple of days ago. So I think it's going to take some time for the dust to settle. But I think the ex-U.S. opportunity remains robust. Our approach, though, is to do this in a very disciplined way. We're going country by country. So when we say we have European approval, that's Germany at the moment that we're launching. And then we'll put very strict criteria that the country has to be a positive contributor within two to three years in order for it to meet the business case.
So we'll be disciplined about it, but we think that there's certainly an opportunity. And I think it's going to just take a little bit of time during this moment of uncertainty.
Got it. Maybe a minute or two. I really want to focus on IP because we had a lot of questions on that. Obviously, you guys just got the dosing patent that extends the franchise out to 2045. But are there any updates as to when you'll decide whether to extend the composition of matter patent or the Form I Polymorph patent? When we could expect news on that?
Yeah, so we're expecting that's likely in 2026. That's not something that's in our control. It's at the patent office, and they have a stack of the patents. And as they work their way through, they will come to us and say, "Would you like to assign the five-year PTE to the Form I Polymorph or to the composition of matter patent?" So we would expect likely in 2026 that that's a decision that we would be asked to make.
Got it. Common question I get all the time too is, why wouldn't it have been obvious to test 80 mg and 100 mg at those weight thresholds in phase III? Because you think about PK population analysis and routine dose optimization, of which PK is a big factor. Why wasn't it obvious in this case to yeah, I'll just leave it there.
No, no, no, that's fair. Look, there was nothing in phase II that taught towards weight being a relevant factor. And there was no prior art that suggested it either. And actually, it's very rare. We're talking about a weight threshold. So it's this kind of, if you will, magical 100 kilograms on one side, 100 mg did better. On the other side of the 100 kilograms, 80 mg did better. And it was based on a post-hoc analysis that our team did. We were surprised by it. We sent it to the FDA. FDA said, "Huh, this is really surprising." And in fact, that became the basis for how they constructed the label saying, "This is what the dosing regimen is." And that provided the opportunity for additional IP.
What makes it so strong is now if you're generic and you have to adopt our label because this weight threshold is part of the label, you would essentially have to have the decision by the FDA for this label to be changed.
So even if a generic managed to come up with their own polymorph and carve around yours, they would still need to adopt your label dosing.
Which is the threshold-based dosing, which would be a violation of our patent.
I see. I see. One question on the F4C indication. You had another great poster at AASLD showing. It was kind of an alternative analysis of your NAFLD trial in the F4 patients. It kind of split out the patients according to baseline platelet counts, showing that patients with lower baseline platelets tended to do a lot worse. And so my question is, in terms of the national MASH outcome study that's going to read out in 2027, had you taken a baseline look and have these patients at baseline, are they similar in terms of their platelet counts less than or equal to 100 as they were in the NAFLD trial?
Yeah, so just a little perspective there as well. So these patients that are considered at higher risk did extremely well on Rezdiffra in that poster with a reduction in kPa. So we're really excited about that because that was at EASL. We had read out that there was a 6.7 kPa reduction in the overall population, and it was over 7 in the less than 100,000 platelet count. Baseline characteristics of the MAESTRO-NAFLD-1 cohort that we've read out and the MAESTRO-NASH outcomes trial are very similar. So that's what gives us further optimism that that's going to be a trial that will be successful.
I see. Maybe the last question for Mardi and just time, just the path of profitability. The consensus right now, at least as a modeling that you guys are going to break even will become profitable next year. But recent comments made, I think on the 3 Q calls, suggest that this may not happen next year. Maybe just providing a color on that.
Yeah, we'll comment on profitability. It is not our focus right now. Our focus is really in three buckets. So we want to drive the sales of Rezdiffra and get it to as many patients as we can. We want to focus on our F4C indication, and then we want to build our pipeline. And that's really what we're focused on moving things forward. So top line, label expansion, and then our pipeline. So in terms of profitability, there could be just with the way spend goes and trial expenses go, et cetera, we could dip our toe into it a quarter or two and come back out. But that's certainly in the near term, next year, 2026. That is not what we're driving to.
I see. I see.
Inevitably, there's enough top line here that we will be profitable.
Got it. Real quick, in the last 10 seconds. Any future thoughts on BD beyond the GLP-1, or is it still too very early?
Yep, we're building a franchise. We're leading today, but we want to extend our leadership for decades. We believe that we are in the right position to do it. We have the foundational therapy with Rezdiffra. We'll look for next best mechanisms of action and products that would work as a combination. So we think that we are in the leading position to do that.
Excellent. Unfortunately, we're out of time, but this has been excellent. Very, very helpful. Thank you, Bill and Mardi, for spending time with us.
Thanks, Mike. I really appreciate it.
Thank, Mike.
Take care.
I tried to jam that in.