All right, let's get started. Oh, nice full room here. Welcome everyone to the Madrigal Fireside Chat at the 46th Annual TD Cowen Healthcare Conference. I'm covering analyst Ritu Baral. With us here from Madrigal, in order, is Bill Sibold, CEO, David Soergel, CMO, and Mardi Dier, CFO. Welcome everyone. Thank you for being here. Maybe let's start with revenue growth, and company goals. We came off another great earnings report. The launch is going exceptionally well, and at the same time you did 3 BD deals in about six months, like within, I don't know, 14 months of Dave joining, to build the pipeline. Before we get into the questions, maybe Bill, can you just give a brief, like three-minute update on the strategy and performance so far this year?
Yeah. Ritu, first of all, thanks for having us. It's always a great moment of the year to be here. As you said, things are going just great. Taking a look at Rezdiffra, off to a strong start in its Q7 of launch, annualizing at $1.3 billion. Market growing at about 50% over two years. Because of the current performance and what we anticipate for the future with the market growth and just with continued penetration-
50% is diagnosed patients?
50% diagnosed patients at the treating physicians that we are calling on.
Oh, okay.
Because of those favorable dynamics, we've gone to start building a pipeline. When you look specifically at 2025, hard to imagine really a better year. As I said, we end up annualizing at over $1 billion-
Mm-hmm.
Close to $1 billion in sales for 2025. Over 36,250 patients on therapy. As we finish the year, we exit, as we talk about this 50% growth in the market.
Mm-hmm.
We've started to build a pipeline I'll get to in a minute.
Yep
We've also secured 2045 IP for Rezdiffra. We've really put ourselves in a position for long-term growth. The way we thought about the pipeline really is Rezdiffra is a great product. It's a foundational product. It's become quickly the standard of care. How do you make a better product even?
Mm-hmm.
How do we get a better response in the overall population, or how do we identify a subgroup of patients that may respond better? It's such a foundational therapy when you look across all subgroups, subpopulations, the effect is pretty much the same. As we add new mechanisms of action, as you said, in the last six months, we've gone from a company that has a single product in the pipeline to a company that now has over 10 products in the pipeline.
Yeah.
The idea is we will look at combination therapy with Rezdiffra to see if we can get a better response for the whole population or a subgroup and take that forward fast, otherwise kill it fast.
Mm-hmm.
We started with an oral GLP-1. We think that mechanistically makes a lot of sense because we know from our trials that just with over 5% weight loss, we can get a better effect with Rezdiffra. We did the DGAT2 with Pfizer. We think mechanistically makes a lot of sense. Maybe we'll talk about that a little bit later.
Yep.
siRNA, we did six programs that we have brought in that we are directing towards MASH as well. We like it. It's liver-directed therapy as well, and think that there's good rationale for combination with Rezdiffra. In a very short period of time, I think about where we were last year in this meeting, you know, we've really changed profile to being, instead of a company with a promising asset, a company that has a great asset, that has mega blockbuster potential, that now is building its next chapter with a pipeline. Not to even mention the trials that we have ongoing that are gonna read out in both 2027, the F4C trial.
Mm-hmm
... and then in 2028, our outcomes trial.
How should we think about the main sources of upside or downside to current, full year 2026 Rezdiffra expectation? You mentioned the $1.3 billion run rate. Consensus now starts at about $1.48 billion. That's about 50% up from full year 2025, but that also corresponds to the 50% increase in diagnosed patients that you guys mentioned. As you see this $1.5 billion consensus, do you feel like that's easily achievable with the trends that you're seeing right now, or could you grow share while the market, while the TAM sort of grows at the doctor's office as well?
Yeah. Well, look, I think this is all based on coming off a really strong Q4 and momentum that we're carrying-
Mm-hmm
... from 2025 into 2026. As we look at the full year, yeah, we're comfortable with consensus where it is. I mean, I wouldn't say anything is ever easy. You said, is it easily achievable? Nothing's easily achievable. You've got to work hard. You've got to be executing-.
You make it look so easy.
on the plans. You know, thank you for saying that. It isn't easy. I mean, like, we have had to... I think people forget that we've had to build a market from scratch.
Mm-hmm.
There wasn't a blueprint. There were other markets we could look to to see how they evolved. I mean, we look at, you know, RA, psoriasis, IBD, which are over $20 billion markets with, you know.
Mm-hmm
... 10 to 15 products, and they're still growing after, you know, 25, 30 years. There are blueprints like that, but when you actually have to build from scratch, it's really hard work. I think we started with great product, we added great people, we had a great strategy, and we have been executing one thing after another. 2026, we see this continued momentum. We talk about Q1 is we're subject to the Q-
All the challenges. Yep.
All the Q1 effects. I mean, we've had a lot of questions actually on what is this Q1 effect that you're talking about?
Right.
What does it mean? You know, patients have to, if they're changing insurance or get verified, et cetera, with insurance, it leads to missed prescriptions. They may miss a prescription or they may miss 2 prescriptions, that means the patient's worth less, so to speak.
Mm-hmm
... from a revenue perspective. That sorts itself out through the quarter, and by the time you get to the end of the quarter, they're back on. In Q2, you have more of a full quarter effect. We also have, though, in Q1 of this year, this 0 to contracting effect in commercial lives.
Mm-hmm. Right.
That's just one other thing that we have to get through.
This is the step up in the gross-.
The step up in
We'll ask about that. Mm-hmm.
... in the gross to net. Look, we're in a really strong position for not only 2026, but as we look towards the future.
As you think about the risks to consensus, how is Madrigal mitigating these risks, either taking care of the unexpected ones or getting out ahead, especially as continuing conversation from investors about headwinds from GLP-1s, oral or injected, that you're observing?
Well, look, we see way more opportunities than risks. I mean, we're at the very beginning of a market. You know, we talked about, maybe we'll talk about Epi a little bit later, we are less than 12% penetrated into the original 315,000. That is the absolute beginning of a market. We feel good about that. GLP-1s, look, we know GLP-1s are being used, certainly not to the detriment of Rezdiffra. You know, in fact, as we were running into the last earnings call, the prior week had our best NBRx week ever since launch, that's in the presence of Wegovy that was approved, I think, in August, also, oral Wegovy, which, you know, had received a lot of attention. We're not seeing an impact.
What we are seeing, though, is having another company out there talking about MASH helping to drive awareness. We think we win in that equation because we've got the best profile product, we believe.
Are all intended insurance plans at this point negotiated and sorted, for lack of a better word? I think one of the... Are there any new payer agreements to be renegotiated over the course of the year? There seems to be significant investor concern that gross to net is gonna go up even further. Even though you guys have clearly said, like, high 30s stable, it keeps coming up.
Look, gross to net, let's just first of all talk about the commercial contracting. Virtually all of the commercial contracting is in place for, 2026. You have some downstream accounts that, will come in throughout the year. For the most part-
What do you mean by downstream accounts?
If you have the payer and they have a group of accounts that fall under whatever decision they make, you've got a few accounts that don't have to follow the policy.
Oh, they have to decide.
They have to decide.
Okay
they want to accept that or not. The overwhelming majority of the business is locked in.
Mm-hmm.
There's, you know, there's no news there. That's on the commercial side. You know, we're in a very strong place. Remember, what we contracted for was first line access-
Mm-hmm
... no step through Wegovy, and then if we had any utilization management criteria that we wanted to improve...
Yeah
... we would put that in the agreement as well. you know, we're in a really great spot.
Including prescribers?
Pardon me?
I mean, that was something we talked about, like, before there was a restriction around who could prescribe, the GIs, et cetera. That's opened up a little bit.
no. I mean, that's still, typically it's specialists, so HEPS, GIs.
Still
... endocrinology. Yep.
Okay.
Otherwise it's either them or in consultation with one of them.
Mm-hmm. Okay.
Yeah, and that's something that we're not trying to remove. We believe that this is a specialty disease that specialists should write the prescription for, and that's how we have organized ourself to call on the 14,000 specialists that we're talking about and that we targeted, with 6,000 being the real super high targets that we focus on.
On the left to-do list, that's really not gonna drive the gross to net any further.
I just wanted to say one thing, if that's okay.
Mm-hmm.
Yeah.
On the gross to net, you said something about stabilizing at the high thirties.
Mm-hmm.
That's for 2026.
Mm-hmm. Yeah.
that's right quarter.
Right.
I think the next part of your question is, we have to think about Medicare reimbursement as well.
Mm-hmm.
we did say that you'll see some. We're negotiating now for 2027.
Seven, right.
You'll see somewhat of a step up, not to the extent what we saw with.
Mm-hmm
The commercial, the impact of the commercial contracting. You will see a step up in 2027 before it stabilizes.
Mm-hmm
you know, more broadly.
Further.
Yeah.
On the Q1 call, Marty, you gave commentary that revenue could be down mid to high single digits. Can you give any meaningful color or narrowing of those expectations now that we're more than halfway Well, we're through Q1. How should we think about A, 2Q growth and B, profitability as it comes?
I'll take that.
Yeah, go ahead.
Okay. No, no more narrowing. We thought we did a really good job in looking at the analogs.
Mm-hmm.
Companies, you know, big brand, in looking at the effect, the Q1 effect, that they're down mid-to-high single-digits, you know, every Q1. For us it's basically the same. We went into great detail about not only do we have the Q1 effect of patients getting reverified, but also the impact of our commercial contracting, yet we're still in with the analogs at the mid-to-high single-digit decline for Q1. We think we're doing very well coming into Q1. What does that mean for Q2?
The important piece of the puzzle that Bill talked about on the call was that, at quarter end, we give a net patient add every quarter, thus far, and we anticipate that to steadily add from Q4 to Q1 and beyond as we grow into 2026 and, you know, achieve that, you know, considerable growth for 2026 that we talked about earlier with the consensus number, et cetera. In order to do that, you're gonna have acceleration of net sales from Q1 into Q2, Q3, et cetera.
Mm-hmm.
Although the patient adds at the end of the quarter, the net patient adds will remain the same, steadily adding through the year.
It's just the revenue driven by.
Correct.
For when it's filled and stuff like that.
It's the Q1 effect of when it's filled.
Yeah.
Correct.
profitability.
Oh, yes. Profitability. Profitability is inevitable, and it's on the horizon. What we said for 2026 is that we're doing everything we can to support the top-line growth of this business, and we're continuing to invest, particularly in SG&A, to make sure that top line continues to grow. We're not gonna get behind that. At some point, the strength of the growth of the top line is gonna outstrip the rate of growth in a spend. We'll see profitability. Like I said, it's on the horizon. If you look at our past two quarters, even with our, on a cash flow basis, if you strip out the effect of one-time BD charges, we're already in cash flow positive situation last two quarters. We have a lot of strength to our P&L.
You know, we'll see that more after 2026.
You're not gonna let them bring back the caviar and smoked salmon to the liver meetings like during the Hep C days?
We still can't outspend our projected top line growth. Yeah.
Are there continued signals from endos, wanting to prescribe Rezdiffra? This was one of the commercial efforts that you guys started. How are your efforts in detailing them progressing?
Yeah. We started that, we put our team in place in Q4. It adds about 2,000 additional targets-
Mm-hmm
...to our list. You know, they're coming along just as anticipated. First of all, the reason we went there is because we had endocrinologists that were asking us to come because they had MASH patients.
Mm-hmm.
Which is kind of ironic when you think about it, since they are the biggest users of GLP-1s. If GLP-1s in themselves were sufficient, they wouldn't need Rezdiffra.
Right.
The reality is they do. We're walking them through kind of the wiring of the system, just like.
Well, they're the ones.
gastroenterologist and hepatologist had to go through.
Yeah. They're the ones who know how to use them the best too.
Yeah
the GLP-1s.
That's correct.
their tolerability, so they should have maximum success rate with the GLP-1s.
Yeah. One would think.
Yeah.
Again, gives us additional enthusiasm about the future. Right now, though, it's still pretty early. The awareness is there.
Mm-hmm.
They have to think through how they're going to utilize NITs, et cetera.
Mm-hmm
...just like the Heps and GIs did, and make sure that they have access to an NIT, how they're going to bring somebody through the office, et cetera. That just takes some time, like everyone else.
Mm-hmm
We're seeing really, positive early signs and continue to see that. We'll see that grow in 26 and beyond.
Is that an upside lever to your internal expectations for 2026 and 2027, Lee, endos?
it's built into.
It's built in.
It's built into our...
Okay
all of our forecasting.
What did they tell you about a GLP-1 versus resmetirom? For some patients, I mean, there may be some patients who have never seen a GLP-1 before and end up on their doorstep, and they can't get a GI appointment, et cetera. Like, you know, how does an endo see a first-time patient versus a gastro?
Well, they tend to be saying that. They don't talk so much about GLP-1s.
Mm-hmm.
They tend to be saying, "I need something for MASH because what I have isn't sufficient.
Mm-hmm.
That's why they wanna understand how to use it. Mechanistically, they're really interested in it and believe that it's something that can help their patients. I think that they've already made the call that either they can't dose titrate up to 2.4, which is the effective dose.
Yeah
...or stay there long enough that they want another therapy.
Let's briefly address ex-U.S. before moving on to F4. What is your expected contribution, especially Europe, to peak revenue growth? What should we think about in terms of potential for 2027 beyond? Because you've clearly stated that 2026 will still continue to be minimal. How does MFN and ongoing HTA discussions factor into your minimal guidance for 2026 and what you believe for 2027 and beyond?
Yeah. Look, 26 is a U.S. year, right? Just to be clear with that. You know, we're at the really tip of the spear when it comes to products launching in an MFN era. You know, Europe is not going to immediately just accept U.S. pricing.
Mm-hmm.
You know, it's something that they have to think about. It's something that they weren't planning for. It's something that they have to, spend some time, give some thought, and it'll evolve. It won't happen overnight. I think in the long term.
Mm-hmm
...year-
You mean, like, three plus years?
Yeah, I think when you look out in the, you know, three-five year range.
Okay
everything will settle out, and you'll have, ex US, being a meaningful part of.
Mm-hmm
...a launch.
Okay.
There's still a lot of detail that's gotta get worked out between, now and then.
Mm-hmm.
We don't have an answer yet because we're just going through these processes now. As we get more information, we'll be able to read out. I mean, we made the decision to launch, full launch in.
Mm-hmm
...uh, Germany-
Yep
...which started last year. We haven't built out in any other country yet.
Right.
It'll be dependent upon the HTA discussions. The good news is, as you know, we're starting from a cost-effective place. When you look at ICER's assessment of Rezdiffra in the U.S., we were considered cost-effective.
Mm-hmm.
Two years later, they did another assessment, and they put us in the high-value category, which meant that it was fairly priced and of significant value to patients and society. That's a great platform to start from when we go to Europe. With Europe, you know, the price that we are offering, the European countries is a blended U.S. government.
Mm-hmm
...price, and that's something which is just not what they're used to seeing.
Mm-hmm.
We're in those discussions. We're hopeful that we will be successful through them.
something more along, around the lines of that 23% discount versus the 30%.
It's-
plus that my models usually reflect.
The price is about, $39,500.
Okay.
Okay.
Got it. Let's. Japan. Just a minute on Japan.
Yeah.
Is Japan different, or is it part of this whole discussion?
Japan's on the list as well.
Okay.
of countries that, we'd like to pursue-
Yeah.
approval in.
Okay. F4. This is probably gonna be the first phase III F4 MASH trial to read out. What magnitude of effect would you consider clinically meaningful for regulators in commercial success? Not just, like, a statistically significant reduction in events, but, like, when does that start to make sense for clinicians? When does it start to make sense for payers?
I mean, I think you've sort of answered your own question, right? It will be the first trial to read out in F4C. This is an incredibly high unmet need population. I think the answer is it's really something that achieves statistical significance and is approvable.
Anything. Yeah.
Can get to patients. Absolutely.
What's the powering on that then? The powering-
We haven't talked a lot about the details of the powering of the trial. I can give you some of the...
Mm-hmm.
-sort of parameters that we've talked about.
Yeah.
In general, when you look at the F4C population, you know, it's a pretty heterogeneous group. You have people who've just recently transitioned from F3 into cirrhosis.
Mm-hmm.
You've got people who are right on the cusp of decompensation, and they're the ones who have clinically significant portal hypertension.
Mm-hmm.
Haven't yet had an event, right?
Mm-hmm.
One of the important things is making sure you have an enriched population for that latter group to make sure you've got enough people in the study who are gonna be on the cusp of having those events.
Mm-hmm.
You can measure an effect size. Based on that enrichment, we expect a placebo event rate somewhere in the 5%-10% range. There's some publications out there where, you know, there are some high-level assessments of powering and study design, which are in the general range.
Mm-hmm.
-of, an effect size of 50% to 35%.
How sure are you, based on prior data, that these patients aren't too relentlessly on their march towards decompensation that you can't pull them back?
I'm so glad you asked that question. This is where the 122 patient open label.
Yeah.
really tells us some really important information. Okay. so we had a cohort of F4C patients, in one of the earlier studies.
Mm-hmm. Yep.
exposed to resmetirom now for two years, and we showed these data last year. Again, very similar baseline characteristics as the people enrolled in the MAESTRO outcomes randomized trial.
Mm-hmm.
A lot of those patients with clinically significant portal hypertension.
Right. The CSPC.
Yeah. The ones right on the cusp of decompensation. What we see in that population is a shift towards lower portal hypertension risk scores called.
Mm-hmm.
Baveno classification. Even in the sickest patients and the people already with clinically significant portal hypertension, we can shift those people into lower classifications of clinically significant portal hypertension.
You feel that between the Baveno and the portal hypertension, that's the best proxy for events?
Yeah. The Baveno criteria and clinically significant portal hypertension are very good predictors of liver-related events.
Mm-hmm.
Right?
If you can hold them back on that, they're savable.
Correct. Exactly.
Got it. Oh, I lost my space.
Well, I'll just add that.
Mm-hmm.
there are other data. We looked at clinically significant portal hypertension, and that sort of classification shift, but we also saw important changes in other biomarkers like.
Mm-hmm.
MRE, MR elastography, and liver function tests that also sort of, you know, trended in the right direction.
Can you review what the main operational risks are to the timeline for 2027 data? I think that's been... A big fear is that...
For the outcome study.
For the outcome study. Yeah.
Yeah.
You're gonna have 2027 data, and they're gonna open up the envelope you're gonna be underpowered.
Well, yeah. I mean, look, it's an event-driven trial, right?
if you need.
When we have enough events, I mean, look, we're not gonna. December 31st isn't gonna come, and if we haven't had enough events, we're gonna say it, the study's over. We're gonna make sure that we have enough events.
Mm-hmm.
It is tracking towards-
You're tracking towards enough events.
27, we're gonna be pragmatic and see what happens.
Understood.
Is that-
Yeah.
Is that a fair-
Exactly.
Okay.
I think with respect to, you know, like any outcomes trial, the key is retaining patients in the study, and we've done, I think, a great job at keeping patients in this study. As Bill said, it's really about getting to that target number of events.
How do you see positive or negative outcome study from this trial impacting whether it's Rezdiffra's label expansion, potentially destabilizing the accelerator approval or market opportunity revenue trajectory? Yep.
Well, look, we've talked about this being a potential doubling of the opportunity. Fewer patients. There's about 235 ,000 F4C patients. This was when we read it out in 2013. Fewer patients, but higher unmet needs, we would expect-
Mm-hmm.
increased penetration into that faster. It's a great opportunity for us. I think it also has a carry-through to F2, F3, where people will see, well, if it's working in F4C, another reason to believe in F2, F3.
Mm-hmm.
I think that, what we have, and, you know, nobody else has this, we already have, you know, over 36,000 patients on drug. By the time we read out and the time we get approval, we're gonna have that much more in our denominator, just that much more experience and certainty about the profile of the brand for when you start to write for F4C.
I have left... Oh, go ahead.
I was just gonna add that the, you know, a positive F4C study opens the F4C indication itself, plus it gives us full approval on F2, F3. Right.
All right. I have left myself 5 minutes to go over your oral GLP-1 ERVO and the siRNA programs. Dave, which one should I start with?
I would start with ERVO.
Okay, let's start with ERVO. How are you approaching the combo dose selection, and what's the most important measurement when you're evaluating dose selection?
Yeah. I mean, just for a bit of background.
Yeah.
ervogastat's a DGAT2 inhibitor that we recently licensed in from Pfizer. It had actually been through a phase II development program, so we know a lot about this drug already. And including the dose range.
Mm-hmm
... which helps us a lot.
They've sorted through, they... Pfizer-
Yeah
... went through? Okay.
They had some-
All right.
They had dose ranging.
Mm-hmm
... data in their phase II program.
Mm-hmm.
That helps us a lot and some of the measures that they used are the same that we've used with resmetirom, for example, MRI-PDFF, which is reduction of fat content in the liver, and we see ervogastat's a very strong reducer of hepatic fat. Why, why is that important? That's important because there's a strong relationship between resmetirom's reduction of PDFF and improvement in fibrosis. The concept here is because of the two complementary mechanisms of action of these two drugs, we'll be able to get more fat reduction out of the liver, push more patients into that high responder range, and get better anti-fibrotic efficacy-
Mm-hmm
with the combination. That's essentially the idea behind it.
timelines.
Uh-
... for the ERVO program right now?
Yeah. You know, all the time, you know, when you in-license a program, there's a little bit of block and blocking and tackling, updating regulatory documents, all that kind of stuff. We'll conduct a drug-drug interaction study with resmetirom and ervogastat later this year, go to the FDA, talk about combination drug development studies in phase II.
Interesting
And do that in 2027.
2027, like a factorial start?
something like that, yeah.
Something like that. Got it.
Yeah.
MGL-2086, this is your oral GLP-1. Remind us what scaffold that is and how it differentiates from existing GLP-1s in terms of efficacy, safety, convenience.
Yeah. It's on the orforglipron scaffold.
Mm-hmm.
That's... There are a few things that were attractive about the product. It's on the orforglipron scaffold. The preclinical data were all done by CSPC, our partner in China. Actually, they compared an to orforglipron in a lot of the studies, so we can get a good sense of the relative efficacy of the study, preclinically at least.
Mm-hmm.
That sort of de-risks it for us. Then from a chemical standpoint, it looks like it should be combinable with resmetirom into a fixed-dose combination.
In, like, a co-formulation tablet kind of thing?
That would be the idea.
Mm-hmm.
Yeah, exactly. I think for a lot of reasons, 2086 was a great opportunity.
Mm-hmm
for us and looks like it could be a great combination product for us.
MGL-2086, that's going to go into phase I as a monotherapy.
Yes
this year?
So-
Okay. 2027
Yeah
... we'll start talking about combinations.
The usual sort of early phase drug development stuff to start with.
Your GalNAc conjugated siRNAs in the last minute or so, how are you going to prioritize which targets to advance into clinical development, when could we expect, like, preclinical data? Because, you know, with RNA mechanisms, preclinical, especially non-human primate data, can be particularly meaningful.
Yeah, I mean, first of all, it was a great opportunity to work with Ribocure. They're a company based in Gothenburg and also in China. A lot of, you know, really great experience with siRNA technology, and, you know, a great team over there. What we've talked about is we've done a deal on six targets.
Mm-hmm.
We haven't been specific about the targets yet. All of them are early. They're all preclinical, at this phase, so it's a bit premature for us to talk about exactly what the targets are. As we get more data and we have more to share, we'll of course update on that.
Don't expect preclinical data in 2026 or anytime?
TBD.
TBD. great. With that, we are at time. Thank you, guys. Thanks, Victor.
Thank you, Rachel.
Thank you for the insight.