On Wednesday, Madrigal Pharmaceuticals (NASDAQ:MDGL) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

Madrigal Pharmaceuticals reported $311 million in net sales for Q1 2026, marking a 127% year-over-year growth, driven by their lead product, Rezdifra, which achieved blockbuster status with over $1.1 billion in net sales in the past 12 months.

The company continues to focus on expanding its market presence, bolstering its pipeline with new assets like a SIRNA targeting PNPLA3 mutation, and advancing trials for expanding indications of Rezdifra, which could potentially double its market opportunity.

Madrigal highlighted strong patient growth, with over 42,250 active patients on Rezdifra, and aims to maintain momentum by leveraging its leading position in a rapidly expanding market, with strategic initiatives in R&D and business development to sustain long-term growth.

Full Transcript

OPERATOR

Good morning and thank you for standing by. Welcome to Madrigal Pharmaceuticals' first quarter 2026 earnings conference call. At this time all participants are in a listen only mode. After the speakers' presentation there will be a question and answer session. As a reminder, today's conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer of Madrigal Pharmaceuticals. Please go ahead.

Tina Ventura (Chief Investor Relations Officer)

Thanks everyone. Good morning everyone and thank you for joining us to discuss Madrigal's first quarter 2026 earnings. We issued a press release this morning and posted a slide deck to accompany this webcast on the Investor Relations section of our website. On the call with me today is Bill Sibold, Chief Executive Officer, Dr. David Sorgel, Chief Medical Officer and Marty Johnson, Chief Financial Officer. They will provide prepared remarks followed by Q and A. Please Note on slide 2 we will be making certain forward looking statements today. We refer you to our SEC filings for a discussion of the risks that may cause actual results to differ from the forward looking statements. With that, I will now turn the call over to Bill on slide three.

Bill Sibold

Thanks Tina. Good morning and thanks for joining us. 2026 is off to a terrific start. We've made impressive progress towards our strategic growth priorities to maximize the value of Resmetirom and build our pipeline. Resmetirom has achieved blockbuster status, generating more than $1.1 billion in net sales in the last 12 months. That's a billion dollar run rate in a market that's still in its infancy. Penetration is low, the diagnosis rate is low, unmet need is high and the market is expanding at a double digit pace. When you put those fundamentals together, the future growth opportunity is quite remarkable. Competition has helped grow the market, but not at the expense of Resmetirom. Beyond F2, F3 MASH, we're advancing our F4C outcomes trial (a trial for advanced MASH) where an indication expansion could double the opportunity for Resmetirom. And because we believe this is one of the most compelling opportunities in the industry, we've moved quickly to build the leading pipeline in mash. We added to it yesterday with a new SIRNA asset that targets a mutation in the PNPLA3 (patatin-like phospholipase domain-containing protein 3) gene, a genetically validated driver of disease in a meaningful subset of patients. When you step back, it is hard to find another opportunity. With this combination of market fundamentals and product strength, we have a first in disease approval, a foundational therapy, a rapidly expanding market, and we are building an industry leading pipeline. We believe Madrigal is exceptionally well positioned to win here and continue to shape the future of mash. I'll begin with an update on the Resmetirom launch, hand it to Dave to discuss our pipeline and RD strategy and Marty will wrap up with a review of our financials. Turning to slide 5 and net sales first quarter 2026 net sales were $311 million, representing year over year growth of 127%. This performance continues to reinforce that Resmetirom is tracking in line with and in many cases exceeding the best in class specialty launches we compare ourselves to. Over the last two years we have wired the system to drive Resmetirom's growth. We built a large and growing prescriber base, secured first line access with commercial payers and established Resmetirom as the foundational therapy in mash. Combined with Resmetirom's differentiated profile and strong patient adherence, our execution has enabled us to steadily add patients quarter over quarter. As shown on Slide 6, we ended the first quarter with more than 42,250 active patients on Resmetirom. On a year over year basis, patients on therapy increased by two and a half times compared to the first quarter of 2025. That is a significant achievement by any standard, but especially in a market that didn't exist before Resmetirom's approval. This momentum reflects strong execution by the team, the clear unmet need in MASH and continued demand from both prescribers and patients. And importantly, we are seeing that momentum carried into the second quarter. Slide 7 shows how quickly the MASH market is expanding. Since launch, We've seen the US addressable market grow nearly 50% from 315,000 patients at the end of 2023 to 460,000 patients at the end of 2025. These are diagnosed F2F3 patients seen by our target specialists. Resdfer's approval, together with increased industry investment has helped transform the market by driving greater awareness, referrals, diagnosis specialist involvement and more patients seeking care. And yet this market is still in its earliest stages. The diagnosis rate is just over 10% and Resmetirom penetration remains just under 10% of the 460,000 addressable patients. The MASH market has expanded rapidly and the opportunity ahead is substantial. That gives us a clear path to peak sales, and we believe no company is better positioned than Madrigal to capitalize on it. But being first in a large and growing market is only part of the story. We have established this leadership position because Resmetirom is delivering what the MASH market wants and that is what Slide 8 highlights. After two years on the market, three things are clear. First, profile matters. Resmetirom is the only approved liver directed therapy in mass. It has broad proven efficacy across all patient subtypes and is an oral, once daily, well tolerated medicine with no titration requirements in a chronic disease. This profile is a key reason why we continue to see strong persistence and increasing depth of prescribing. Second, real world performance matters Clinical trials get a drug approved but real world experience determines a product success. With tens of thousands of patients treated, we've received overwhelming feedback from the community that Resmetirom's efficacy continues to exceed expectations. In the real world, this includes improvements across liver stiffness, liver fat, liver enzymes, LDL cholesterol and lp. This is the kind of real world experience that builds confidence with prescribers and and helps establish a true standard of care. And third, we have built not only a leading product but a leading MASH company. We have the right team, the right model and the right start in a market we developed from the ground up. We have executed one of the best launches in the industry where our differentiated specialty model has set a high bar for anyone launching in this space and we have learned, refined and improved our approach along the way. We were first to market and now have a pipeline with more than 10 programs designed to extend our leadership over time. Our leadership is also reflected in our presence at key hepatology, gastroenterology and endocrinology focused medical meetings this month where more than 40 Resmetirom abstracts with more than 40 Rezdiffra abstracts being presented. This includes a poster presented at DDW this week where nearly 70% of Rezdiffra prescribers surveyed said Rezdiffra has improved their patients quality of Life and nearly 70% expect to increase their Resmetirom use over the next six months. Later this month at EASL in Barcelona, we will present additional data that reinforcements the breadth of Resmetirom's effect. That includes a secondary analysis from our maestro, Nash and Nafld1 trials showing that Rezdiffra reduced Lp and LDL C in patients with MASH, supporting its potential to reduce cardiovascular risk independent of baseline statin use, along with two real world data sets that demonstrate Resmetirom's benefit in everyday clinical practice. We believe evidence generation is a strategic advantage for Madrigal. The more we can show prescribers and payers about Rezdiffer's performance across clinically relevant endpoints, the more it's solidified as the foundational therapy. Everything we've discussed so far speaks to the strength of Rezdiffra in F2 F3 match. But there's another significant opportunity ahead of us in well compensated mash cirrhosis or F4C. As noted on slide 10, it's an untapped market with no approved therapies and a much higher urgency to treat. We believe F4C could double RISDPRA's opportunity with approximately 245,000 patients under specialist care in the U.S. we have an event driven outcomes trial underway in F4C that if positive, is expected to support expansion into this indication as well as support full approval across F2 to F4C. So before I turn it over to Dave to talk about our pipeline, let me reiterate how rare an opportunity Madrigal has. We were first to launch, we rapidly achieved blockbuster status and we are still at the very beginning of the development of this market. It's hard to find a comparable opportunity in the industry where the fundamentals are this attractive and from that position of strength we are now investing in the next wave of innovation to extend our leadership and define the future of mash. With that, I'll turn it over to Dave.

Dave Sorgel (Chief Medical Officer)

Thanks a lot Bill. Our objective at RD is straightforward. Deliver the industry leading pipeline in MASH to make better therapies for patients with Resmetirom as the foundation as shown on slide 11. We're doing that through targeted business development and smart clinical execution, leveraging the expertise of an R and D team that pioneered modern MASH drug development. Our strategy has four first, deliver outcomes data and full approval for Resmetirom from F2 through F4C. Second, advance complementary mechanisms for combination with Risdiffra to deliver the best efficacy across the MASH spectrum. Third, remain modality agnostic with development of the best combination regimens as our strategic aim. The recent addition of SIRNA assets to our pipeline underscores that approach and fourth, leverage our experience to design smarter, more informative clinical trials and use capital efficiently, taking more shots on goal and advancing only programs that serve patients needs more effectively. The first pillar of this strategy is delivering outcomes data in F4C on slide 12. Our confidence in the Maestro Nash outcomes trial is informed by the two year open label experience in 122 F4C patients from our Maestro NAFLD1 trial. Those data are best understood in the context of how MASH progresses to cirrhosis. The critical inflection point in this process is the development of clinically significant portal hypertension or csph. It marks the transition from well compensated disease towards decompensation when the most serious complications begin to occur. The literature is clear that patients with CSPH have meaningfully higher rates of liver related events and reducing CSPH risk lowers those event rates. That's why the two year data are so important 65% of patients with CSPH at baseline shifted into lower risk categories by year two. We also saw favorable movement in other biomarkers including liver stiffness and fibrosis related measures. Taken together, These results support Rezdiffra's potential in F4C and reinforce confidence in our event driven outcomes trial. The second pillar of our RD strategy is advancing combination therapies anchored by Rezdiffra, which we know works broadly across patient subtypes. Slide 13 highlights our newest addition ARO PNPLA3 (patatin-like phospholipase domain-containing protein 3), a clinical stage siRNA (small interfering RNA) that we recently in licensed from Arrowhead. We're especially excited about this asset for a couple of reasons. 1pmple3 is a well understood and known target for MASH based on extensive epidemiological and genome wide association studies 2 this is a clinical stage asset that has completed phase 1 studies and 3 we know Risdiffra works well across all patient subtypes including PNPLA3 (patatin-like phospholipase domain-containing protein 3) so a combo including Mdiffra and this asset has the potential for improved efficacy in a subset of patients with that are especially vulnerable due to their genetics. The PMPLA3 mutation is particularly prevalent among Hispanic patients compared to those with wild type PMPLA3. MasLD patients homozygous for the I148M mutation of PMPLA3 have a twofold higher risk of liver related events. Approximately 30% of F2F3MASH patients are homozygous carriers of the PMPLA3 mutation, making it a meaningful target for our development efforts. This asset has completed phase one studies and demonstrated two important things. First, it's selectively effective in the genetically defined population of PNPLA3 homozygotes. Second, after a single dose it reduced liver fat by up to 46% at 12 weeks at the highest dose. We know from Maestro Nash that greater reductions in MRI PDFF are associated with better fibrosis reductions with Rezdiffra. So the goal here is straightforward. Combine a foundational therapy Rezdiffra that works broadly with a targeted agent that may move more patients into a high response category and potentially improve anti fibrotic efficacy with a genetically tailored approach. Stepping back on slide 14, our pipeline now includes more than 10 programs. Resmetirom continues in two phase three outcomes based trials. First, our F4C study which is an event driven trial that we expect to read out in 2027 and second the F2 F3 study which is primarily histology driven with data expected in 2028. These trials would make Resmetirom the first fully approved drug with outcomes data well ahead of other competitors moving down the pipeline For Avergostat or DGAT2 (diacylglycerol O-acyltransferase 2) inhibitor the drug Drug Interaction study with Resmetirom remains on track to begin in the fourth quarter of this year and we expect to initiate a phase 2 combination study in 2027 following regulatory discussions for MGL-2086, our oral GLP-1. The phase 1 single ascending dose study remains on track to initiate later this quarter for ARO PNPLA3 (patatin-like phospholipase domain-containing protein 3). Our next step will be to engage with regulatory authorities on a Phase two combination trial and our six SIRNA targets are progressing at various stages of preclinical development. Our approach is consistent. We're building around a foundational therapy and prioritizing mechanisms that we believe are complementary, mechanistically sound and capable of improving outcomes either broadly across the population or in important patient subgroups. Our goal is to ensure Madrigal is engaging with the community and driving the science, so we are delivering meaningful advances for patients. With risdifra's long term patent protection. We we have the Runway to invest, innovate and define the future of MASH care. With that, I'll hand it over to Marty.

Marty Johnson

Thank you Dave. Turning to slide 15 and a summary of our financials. First quarter 2026 net sales totaled $311.3 million, up 127% year over year. We're off to a strong start in 2026. As we discussed on the last call, our results reflect a typical Q1 effect due to benefit plan changes and insurance reverifications, plus a step up in gross to net related to our commercial contracting efforts for First Line Access. The team did an excellent job managing all the moving parts in the quarter. We were able to steadily add patients and our gross to net came in better than we anticipated. We now expect our gross to net discount to be in the mid to high 30s for the rest of 2026. Looking ahead, the fundamentals of the business are strong and as Bill discussed, Q2 is off to a great start. For the rest of 2026 we expect to steadily add patients and generate robust net sales growth. Moving to operating expenses which include a total of $34 million of non cash stock based compensation expense in the quarter. Cost of sales for the first quarter of 2026 was $26.8 million compared to $4.5 million in the prior year period. Cost of sales at this point primarily reflects royalties owed to Roche. R&D expenses for the first quarter of 2026 were $108.7 million compared to $44.2 million in the prior year period. The increase was primarily due to one time upfront business development expenses of $54.3 million. As a reminder, the $25 million upfront payments and related expenses for ARO PNPLA3 (patatin-like phospholipase domain-containing protein 3) will be recorded in the second quarter. SG&A (Selling, General and Administrative Expenses) expenses for the first quarter of 2026 were $268.5 million compared to $167.9 million in the prior year period. The increase was primarily due to continued investment in commercial activities for risdiffra including headcount for the endocrinology field force expansion that occurred in the fourth quarter of 2025 as well as marketing efforts and including our DTC campaign. Looking ahead, we Expect Full Year 2026 R&D expenses to be roughly the same as 2025 which is inclusive of the one time upfront payments we've announced for strategic business development investments. In both periods we Expect full year 2026 SG and A expenses to increase compared to 2025 with the annualization of the ENDO sales force as we continue to support the launch of Resmetirom and build the foundation for expected long term growth. This includes some choppiness with higher Q2 SG and A expenses in 2026 due to timing of certain marketing expenses including DTC then studies for the rest of the year. Net loss for the first quarter of 2026 was $94.4 million compared to $73.2 million for the prior year period. Net loss for the first quarter was inclusive of one time upfront business development expenses of 54.3 million do. While our focus remains on supporting our top line growth and building our pipeline, we are also preparing for profitability. Turning to our balance sheet, we ended the first quarter of 2026 with $817.9 million in cash, cash equivalents, restricted cash and marketable securities compared to $988.6 million at the end of 2025. The balance reflects several quarter specific uses of cash including onetime upfront business development payments and timing of API purchases to support future risdifra manufacturing. With a strong cash position, we continue to be well resourced to support the ongoing launch of RISDIFRA and the advancement of multiple pipeline programs and continued business development. So to close slide 16 captures what we've discussed this morning. Rosdiffra continues to deliver incredible commercial performance with a trailing 12 month net sales now exceeding 1.1 billion and demand remains strong with patient growth more than doubling since Q1 2025. We are leading in a market that is still in the early stages of development but has already expanded nearly 50% in the last two years. This reinforces both the scale and the opportunity and the Runway that remains ahead of us. We also see significant upside beyond F2, F3 with F4C representing an important next phase of growth and an indication where there are currently no approved therapies. And importantly, we're not standing still. We're investing in our pipeline of more than 10 programs designed to build on Risdiffra's foundation and extend our leadership across the full spectrum of mash. Taken together, this is a company built for sustainable value creation. We believe Madrigal is exceptionally well positioned in 2026 and beyond. I'll now turn the call back over to Tina and open the Q and A session. Thanks Marty. Let's move into the Q and A portion of the call. Brilla, please go ahead and provide instructions for the Q and A session.

OPERATOR

Thank you. We will now open the lines for questions. To open your line please press STAR followed by the number one on your telephone keypad to be added to the queue on the call. Our first question comes from the line of Prakar Agrawal with Cantor Pitzreal. Please go ahead.

Prakar Agrawal (Analyst)

Hi, congrats on the quarter and thank you so much for taking my questions. Maybe just on Resmetirom, what are you seeing on the two Q trends so far and the expectations for patient adds for rest of the year? And as a follow up, now that Wegovy has been on the market for MASH for a few quarters, what are you seeing on the impact to Resmetirom the market, if any? Thank you.

Bill Sibold

Thanks for the question. Prakar. , as we take a at the Q2 trends, I mean stepping first of all they're great so I'll get to that in a second context. Over 42,250 patients on drug as we exit Q1 2 and a half times growth over last year at this time. Really impressive. And in the context of we are at the very beginning of a market we fully expect this is going to be a mega blockbuster, 1.1 billion in the last four quarters. We're in a really great space. So to put in perspective, how are Things going in the second quarter, we're off to a strong start. We're carrying that momentum. We're steadily adding patience. Maybe it's best to put it in the context of Wegovy that you mentioned as well. You know, wegovy's had now three quarters of launch that we've been out there. It's being used, but certainly not to the detriment of Resmetirom. We continue to steadily add patients through it. You know, you have to think Wegovy and GLP-1s are really becoming a background therapy. In fact, most of the doctors that we talk to say they're already on a GLP-1 when they come into the office. So they're coming into the Office on a GLP-1 and they have F2, F3MASH. So our profile looks really, really strong there. So it's out there. We're seeing them, but we're not seeing any real difference. And maybe as a final proof point, last quarter I talked about us having our best MADR (Madrigal Pharmaceuticals Stock Symbol) week in the last quarter. And as we exit April, it's been our best MADR (Madrigal Pharmaceuticals Stock Symbol) month since launch. So we're really excited about the rest of the year. We'll be steadily adding patients, just as we've said in the beginning. Thanks, Prakar.

OPERATOR

Thanks, Prakar. Next question, please. The next question comes from the line of Ash Burma with ubs. Please go ahead.

Ash Burma (Analyst)

Hi, congrats on the quarter and thanks for taking a question. So maybe just can you talk about the breadth of prescribing right now and how do you think that would evolve? Is it fair to assume that bulk of the prescribing right now is coming from gastroenterologists? And when do you start to get traction from hepatology, which is kind of like a smaller patient? And then endos, when does that become a big source? And then on the 1Q, new patient ADD dynamics. So it seems like roughly 6,000 new patients that you added, which is lower than some of the recent quarters. We saw this dynamic in the first quarter of last year as well, when you had 5,000 and then kind of doubled from there. So is it primarily the new year insurance deductible reset that's driving that? And how does the rest of the year shake out on a new patient? Thanks.

Bill Sibold

Great, great. Thanks, Ash. You know, let me start there. So the Q1 adds again, it falls into our steadily adding patients, you know, and it is a Q1 effect. That's really it. I mean, when you think about the Q1 effect, the Q1 effect applies to virtually 100% of your patients on therapy. And remember, what we are presenting is the number of patients that are on drug on the last day of the quarter. Right? So you have patients that are coming in the top and then the patients that are on drug. So it is a. That's the Q1 effect that you have since everyone's exposed to it. So, as I said in the last question, we expect to steadily add patients throughout the rest of the year. Q2 is off to a strong start. Maybe discussion then about breadth of prescriber. We have over 10,000 prescribers now, which is plenty of breadth for us, though we continue to add new prescribers every day. When you think about just the numbers of physicians, gastroenterologists outnumber hepatologists 10 to 1. So you're going to see the majority of prescriptions that are flowing through them. Hepatologists, they were out of the gates a little faster. They treated the disease longer, probably a little bit better prepared. In fact, we know they were better prepared. We had to wire the system practice by practice with the others. Endocrinology, they're just coming on board. It was really fourth quarter that we started our efforts there. And you have to think about endocrinologists as being where gastroenterologists were about two and a half years ago. It's something that they've been seeing some MASH, but they haven't really thought about it. Now they're starting to more actively look and, and we're wiring the system for each of those endocrinologists as well. So we see them as in the future being a really productive specialty for us. As I said, they see all these patients on background GLP-1s, yet they're still seeing F2, F3MASH. So we think that in the future that becomes a valuable specialty for us as well.

OPERATOR

Thanks. Great. Next question, please. The next question comes from the line of Kripa Dwerakunda with Truvis Securities. Please go ahead.

Kripa Dwerakunda (Analyst)

Hey, guys, thank you so much for taking my question. A question about patient mix. I think you just mentioned that GLPs are likely going to be backbone therapy. But you had also previously talked about how 25% of residue for patients are on a combo. Can you talk about how that has evolved over the last few quarters? And also some of the KOL checks, not all, but that we've done, say that they differ for F2. Would be helpful to understand the F2 and F3 split that you are seeing in the real world. Thank you.

Bill Sibold

Yeah, thanks for the question. And you're right, we still continue to see 25 plus percent of patients that are on Resmetirom are Also on a GLP-1 and over 50% have been previously exposed. So we expect that trend to continue. We expect that most patients that are going to come in in the future will have had experience with the GLP-1. So those dynamics seem to be in place. Now. Your second question is F2 and F3 split. F2 and F3 split. It's about 50, 50 still. And I know some people have thought, well, wouldn't prescribers want to clear the F3s first? And I think it has to do with you have a patient sitting in front of you that's one to two steps away from cirrhosis. Are you going to wait to treat an F2 not knowing how fast they're going to progress to F3 or to cirrhosis? And no, you're not going to wait. You're going to make the call on that patient, what you think their risk factors are and initiate therapy. So we still see, and that's been pretty consistent since the start of launch, about a 50, 50 split between F2 and F3.

OPERATOR

Great, thanks. Kripa. Next question please. The next question comes from the line with TD Cowan. Please go ahead.

Ritu

Hi guys, thanks for taking the question. I have a more sort of high level question on diagnostic growth as you see it, Bill, through the, through the rest of the year and next year. Do you think that it could be worthwhile to spend more on disease awareness now that competitive diagnostic awareness programs may be slowing with the maturity of the GLP1 launches in Mash and how you think about maybe stepping up SGA to support top line growth versus clinical development versus your approach to profitability. And then if you have some client questions coming in on how you think about estimates for the full year, which still sit at 1.48, I think, but this change in gross to net. Thanks. Okay, so let me start off on the diagnostic growth question. Ritu, thanks for the question. So look, I think the proof is in the market sizing that we've seen. In just two years, the market grew almost 50% from 315,000 addressable patients to 460,000 addressable patients. And we think that, and remember, diagnosis went from 1.5 to 1.9 million. What you're seeing there is, is that there are more patients that are being diagnosed and most importantly, they're getting into the specialist offices that we're calling on so that there's a potential for them to get a Resmetirom or prescription. So I think our efforts, and this is where we believe Novo Nordisk helped as well by creating more awareness of the disease. So I think that we've already seen the proof that point that by having a product, by having more than one company, the market's growing. Now, specifically on diagnostics, what we're also seeing is more and more interest by practices purchasing nits and being able to do point of care diagnosis. And that's another good trend that we expect to continue over time. So I think that will also facilitate staging of patients and then the ability to treat and then most importantly, to see how the patients are doing over time. So maybe what I'll do now is turn it over to Marty to answer the rest of the questions.

Marty Johnson

Yeah, thanks, ritu. And I think you had a number of questions embedded in there, so I'll pick through them, starting with SG and A. Yeah. So clearly we want to support this, what we think is going to be a mega blockbuster brand through the efforts of our sales force and our commercial efforts, including marketing campaign at DTC. And we talked about that and we talked about SG&A (Selling, General and Administrative Expenses) for the rest of the year, you're going to see an increase in Q2 and then studies for the rest of the year. But absolutely, we want to be in front of the growth and support the brand as best we can. And then that leads to a question about gross to net for the year as well. So how did that look? So gross to net? As we said, we believe we have some favorability going into the rest of the year. We now have better clarity after we got through Q2. Remember, this is a new brand, so we get clarity every quarter. This was a Q1 quarter that we look at what the various components are. And I would say the team did an excellent job managing gross to net for the quarter and set us up for the rest of the year. So we believe we'll be in the mid to high 30s for the rest of the year. And I would say for Q1 we were even a little bit more favorable to that, that we're in good shape on the gross to net sales side. So that leads us to now SG&A (Selling, General and Administrative Expenses) and gross to net what we think for the full year. So the full year, yes, we are good with the consensus that you mentioned for the full year. That sounds good. And we're also looking good for Q2 with the same analogy. So we seem to be right on track and feel good about the rest of the year. And then the last Point that you brought up was about profitability. You know, as we look at it, profitability we believe is inevitable. We're going to be a profitable company and that's why we're preparing for profitability. Now, if we look at 2026 specifically, we're not going to be profitable in 2026. And you know, specifically in Q2 with the PNPLA3 (patatin-like phospholipase domain-containing protein 3) acquisition, you know, we will not be profitable in Q2 either. Could there be other quarters where we tip into profitability? Perhaps, but it's really going to depend on our one time spending. But beyond 2026 and without specifics, profitability is inevitable and we're planning for that. Great, thanks, Margie. Next question please.

OPERATOR

The next question comes from the line of Yasmin Rahimi with Piper Sandler. Please go ahead.

Dave Sorgel (Chief Medical Officer)

Congrats team to a strong quarter and also really great news on hearing gross to net go down as one of our favorite questions. But let's maybe transition to Maestro Outcome. I mean, we're almost halfway through the year. Would love to understand at what point do you really get visibility on how the events are tracking and fine tuning guidance and sort of also helping understand expectations. I know you take blinded looks at the event rates you've been consistent saying they're tracking. Would love to kind of get sort of color on how you're thinking about what we could learn more around Maestro Outcome in the upcoming between now and sort of year end to kind of prep us for a very important pipeline expansion opportunity. Great, Yaz, thank you very much for the question. And you know, it represents a huge opportunity for us. This is a really high unmet need. Need. Dave, could I pass it over to you to answer the specific questions please? Yeah, sure. Yeah. Thanks, Yasmin. Yeah, I mean, obviously a critical study for us and as we said, we're seeing events track in range of our expectations and we continue to project the trial to deliver in 2027. You know, with these smaller size trials, precision is sometimes difficult and we want to give you a good estimate of when to expect that. And so when we have that precision, we'll provide you an update. But right now we're still saying 27 events are tracking and we're excited to see the results.

OPERATOR

Great, thanks, Yaz. Next question please. The next question comes from Ellie Merle, Wade, Barclays, please go ahead. Hey guys, good morning. Thanks for taking the question. Bill, you alluded to this with patients coming in already on GLP1, but can you elaborate on what you're seeing in terms of combination use with GLP1 specifically,

Ellie Merle

maybe the latest in terms of the proportion of Resmetirom patients also on GLP-1s. And then I guess what does payer coverage for combination looked like since Wegovy got the formal lease for MASH? Thanks.

Bill Sibold

Great. Thanks, Ellie. We're still seeing around 25% of patients that are concomitantly on GLP-1 with Resmetirom. And you know, we think that's going to increase. That's our belief is that it's just inevitable. I mean, there's just really so many patients that are on a GLP-1. Regarding access, we have great access, I have to say. I mean, since day one of launch, we have had, I would call it even exceptional access. And as we moved into 2026 with the contracting that we did, we maintained that great access. You know, I think it's like everything else, it's a subtlety. You can use a GLP-1 in combination with Resmetirom if the GLP-1 is prescribed for one of the other indications that a GLP-1 is indicated in. Now, what we haven't seen and don't have good data on is just if there's any that have a double mash prescription, we don't think payers would allow that, but they're certainly allowing a GLP-1 to be used for another indication and then Rezdifr being used for mashed. And I think what we're hearing more and more from prescribers is that having the combination makes sense in a lot of ways. And certainly we believe that based upon us going out and getting an oral GLP one last year, we think that it is a combination that could make sense. If you recall, if we saw greater than 5% weight loss in patients that were not on a GLP-1 in our Maestro Nash trial, that it led to an improved effect on fibrosis for Rezdifera. So we're going to pharmacologically induce that, so to speak, with the GLP-1. That's the hope and that's the study that, as Dave said, or we said previously, we have that phase one study of our oral GLP-1 kicking off in the next weeks.

OPERATOR

Great. Thanks, Ellie. Next question, please. The next question comes from Thomas Smith with Lyering Partners. Please go ahead.

Thomas Smith

Hey guys, good morning. Congrats on the quarter and thanks for taking our questions. Your pipeline's expanded substantially here over the last 12 months. Multiple SIRNA programs. The oral GLP, the DGAT2 inhibitor, sounds like a lot of optionality, but can you just provide some updated thoughts on the clinical strategy and positioning across these doublet or triplet combos. Maybe the criteria you're going to use to advance these programs beyond proof of concept. And then can you also comment on your appetite for additional deals in BD following this string of recent deals?

Bill Sibold

Thanks so much. Thanks, Tom. Let me just provide maybe some context about how we're thinking about our pipeline and then, Dave, if you could jump into the specifics, it goes back to this opportunity that we have. We're at the very beginning of the treatment of a disease that's had no therapies and is an incredibly high unmet need. Number one cause of liver transplants for women in America, number two for men. We have the foundational therapy and we expect that this market is really set up for decades of growth. We're at the front end with a foundational therapy that is really effective and we're seeing that in the real world. Feedback has just been, you know, truly impressive from what we're hearing from prescribers that are using the product and from patients as well. So when you've got this opportunity with a product that's already a blockbuster to think about long term leadership, you take that opportunity based on the success of Resmetirom and the future dynamics of the market and the fact that so many people have decided to step out of the market, pfizer steps out, JJ steps out, Bristol-Myers Squibb steps out, etc. Etc. Based on failure with some of them, Pfizer actually just, they just can't bring it, they couldn't bring it forward. So, you know, it was better in our hands. So what we've done is we've gone out and looked for mechanisms of action that we think makes sense in combination with Resmetirom. Those mechanisms may not have been strong enough, good enough to compete as a monotherapy, but if we can put them together with Rezdiffra and get even more efficacy across the whole population or a subpopulation, that is a step to long term leadership, either as a fixed dose combination, if it's Noral, or as a regimen where you've got a once a day pill and in every three to six month, siRNA (small interfering RNA), like the deal that we did with Arrowhead, which we think is fantastic, we've also been able to do this in an incredibly capital efficient manner for under $300 million. We have assembled a leading pipeline. You just don't see that. I haven't seen that in any other therapeutic area. And we, because of our leadership position, I think have been able to, to access opportunities that others it probably wouldn't make sense for. So that's how we're thinking about it. And yes, we've done a really good amount of BD in the last 10 months now. I guess it is what's our appetite going forward? Look, we're still constantly looking at everything out there that is potential in mash and where we see an opportunity that could make sense with the mechanism that we like and we don't have, we would look at that opportunity and bring it in. But again, think about how we've done it already, which is extremely efficiently and we will keep that discipline going forward. So maybe with that I'll just pass it over to Dave to comment on any specifics.

Dave Sorgel (Chief Medical Officer)

Yeah, that's, I mean, great summary, Bill. I mean, I think the, you know, one way to think about it as Bill was highlighting is we have the foundational therapy, right? So we have Resmetirom to look for combination partners with to improve efficacy and improve outcomes for patients. So that's the idea. And our approach has been we look for validated targets with complementary biology and we're modality agnostic. So that's how we built the pipeline. We have small molecules, we have sirnas, anything that could potentially work more effectively with Resmetirom. That's great. Now, you know, it's important to start off with, you know, Resmetirom also sets a high bar. Resmetirom works very well across all subpopulations, as we've seen from Maestro-NASH. So our bar for bringing products forward when we conduct phase two studies is that they have to be meaningfully, they have to deliver a potential meaningful benefit to patients at the end of phase two. But our decisions will all be data driven. And we've talked about a couple of different examples where we talk about, for example, PMPLA 3, where there's a very specific patient population that we're targeting. So patients who are homozygous for I148M PNPLA3 mutations, again, highly prevalent mutation, highly burdensome in terms of clinical outcome. But we believe that with Resmetirom as the foundation, adding PNPLA3 may provide an even greater benefit for those patients. And as Bill was just highlighting for GLP1, it's a different strategy. Right? So that's to produce modest but important weight loss for patients that can drive Resmetirom's anti fibrotic effect. So what we're looking for in early clinical development and these sort of initial combination studies are Primarily will be biomarkers like changes in mri, pdff, but also other biomarkers of fibrosis and other other blood based and imaging biomarkers to help us make decisions about what to move forward into phase three. But that phase three transition has to be underpinned by data that leads us to believe that these products are going to be meaningful additions to the therapeutic armamentarium. And in every case we believe that these programs all have that potential and

Bill Sibold

just maybe put a finer point on it as well. If they show a benefit, move them forward fast. If they don't, kill them fast. And that is a little bit of a difference. Again, another difference with Madrigal, because we're not beholden to a single pipeline asset performing for the company to actually be something. We can be ruthless in our prosecution of these trials and we will. If it works, great. If it doesn't, I mean, great, we move on because we're already starting with the product that we have, which is Resmetirom, which is the enabler of this strategy. So thanks for the question.

OPERATOR

Yeah, good question Tom. Next question please. Operator. The next question comes from Akash Jewarize. Please go ahead.

Manojan

Hey, this is Manojan for Agas. Just one note from our end. So Maestro Outcome baseline data show around 150k mean platelet count in the population. While this seems lower than around 180k seen in the Symmetry Phase 2, it still seems to be higher than the F4C (F4 Compensated Cirrhosis). The oily data you were showing like, which was I think around 120k. So in the oily data you saw around 2 to 3 percentage of annualized event. But given this outcome, that baseline population platelet count is above that OLE data, do you expect to see some difference in the event rate there based on this platelet count difference? Mean platelet count difference. Great, thanks for the question, Dave. I'm going to pass that over to you.

Dave Sorgel (Chief Medical Officer)

You got it? Yeah. So you're highlighting a really important point which is in these F4C trials you have to ensure that you enroll the right patient population within the F4C population. F4C is not a monolithic disease. So patients who just transitioned, for example from F3 to F4, it might take them a while to progress to decompensation. Whereas patients who have CSPH clinically significant portal hypertension are right on the cusp of having a decompensation event. And those are the patients that are more likely to drive events in the near term. So as you're highlighting one way that you measure clinically significant Portal hypertension is including platelet counts along with liver stiffness measurements using the Baveno criteria criteria. And as we've talked about before, both in our open label extension study and in Maestro Outcomes, we've allowed patients with low platelet counts so greater than OR equal to 70,000 K to enroll in the study. So there are patients with quite low platelet counts, and that's not uniform across all phase 3 F4C protocols. So we believe that our outcomes trial is enriched exactly the right way. So using a variety of criteria to enrich the population to make sure that we see the outcomes as we are and yet have an opportunity to bring these patients back from the brink of being on the cusp of decompensation and bring them into a less urgent stage of their disease. So I think on that basis, if you look across the open label extension study and Maestro Outcomes, the populations are broadly comparable. There are going to be some differences just because the sample sizes are very different, but the inclusion criteria are very similar and we are seeing rates of CSPH in both studies that give us confidence. So I think I'll leave it there.

OPERATOR

Great. Appreciate it. Thanks, Dave. Operator, next question please. The next question comes from Michael defiore with Evercore isi. Please go ahead.

Bill Sibold

Hi guys. Thanks so much for taking my questions and congrats on all the progress. Two for me. First on PNPLA 3 that was previously partnered and later returned to Arrowhead. And without asking you to speak for J and J, could you walk us through what Madrigal saw in the asset that made it attractive today and what diligence gave you confidence in the program? And then I have a follow up. Great. Look, maybe just a general statement and I started with that, then I'll pass it to Dave. A lot of companies, big Pharma, have opted out of mash. They either had failures or they thought they have a single asset. Maybe it's not enough, which is a little bit different than us. But Dave, I'll pass it over to you to ask the specific question about why we're so excited about this asset. Yeah, look, I think, I mean you touched on it before, Bill. I mean, I think starting with the fact that we have Risdifra, we think in our hands, adding a PNPLA3 (patatin-like phospholipase domain-containing protein 3) targeted agent could deliver even better efficacy to the patients who are homozygous. So again, coming back to the strategy. So validated targets, complementary biology to Resmetirom and being modality agnostic. So why did this asset sort of fit into this? So clearly it's a validated genetic target. PNPLA3 is a validated genetic target, clearly linked to more rapid and progression of disease of MASH and an emergence of liver related events in patients who are homozygous versus those who are wild type. And I think second, it's a proven modality. So siRNA (small interfering RNA), as we've seen with other products getting to the siRNA (small interfering RNA) products, getting to the market, it's a safe modality that you can deliver once every three to six, even up to 12 months. So a highly attractive modality with great tolerability. And then last, there are clinical data. Right. So we had phase one data in patients where we could see reductions of liver fat. So we had a proof of concept in phase one. And as we've seen with the Maestro Nash data with Rezdifra, if you can reduce more liver fat, we can see more efficacy with Resmetirom. So again, the complementarity of these two mechanisms was particularly compelling as well. So I think for all those reasons, we bring in a clinical stage asset, advance our pipeline and have a potential offering for patients who really need a therapy. Yeah, and I mean look, it was a 46% reduction in liver fat. So I mean that's pretty impressive the efficacy from our perspective. And let's see what happens when you put it in combination. I think it's a really exciting question to ask. And look, it's been through phase one, right. You know, this is an acceleration of our SIRNA efforts.

OPERATOR

Great, thanks, Mike. Operator. Next question please. The next question comes from Andy Chen with Wolf Research. Please go ahead.

Brandon

Hey, this is Brandon on for Andy and thanks for taking the question. We're curious to know if you can rank order the different NASH combos that you have. Which one are you most excited about clinical efficacyly?

Dave Sorgel (Chief Medical Officer)

Thank you. Thanks for the question. You know, I'll pass it over today. My view is it's whichever one works the best is going to be the one that we like the best or those that work the best. But Dave, how are you thinking about it? Right. Pick amongst our children, I mean, you know, I think they're, look, we brought them in, we brought each of these assets in for the reasons that we've talked about because they all have the potential to significantly move the needle on efficacy for a subpopulation or within the broader group. You know, the decision about which to move forward into phase three programs and ultimately to registration depends on the combination data. So as we've outlined, you know, we have because we're focused in MASH and we have experience in this field, a lot of experience running clinical trials in mash. We know the sites well, we know how to run the trials. So we're going to be able to be efficient, run these studies and deliver the data that helps us make that decision. But as I said, but the data have to be meaningfully different. So for PMPLA 3, like Bill said, 46% reduction in MRI, PDFF is great. Combined with Resmetirom. If that's even more, we push more patients into that super responder category. Amazing. We're going to bring that program into phase three and that's true for all of these programs. So it's really proof, proof will come from phase two and we'll move the programs forward in a way that's going to make sense to, to build the pipeline and to deliver value to patients.

OPERATOR

Great. Thanks, Dave. Operator, next question, please. The next question comes from John Wollivan with citizens. Please go ahead.

Bill Sibold

Hey, thanks for taking the question and congrats on the progress. Bill, you made a comment about, I think a path to peak sales and I'm wondering if you could talk a little bit about what that path looks like in terms of timing, how long you get there and how big you think Rizdeffer can be down the road. Thanks. John. You noticed. Look, I think that in our belief this is going to be a mega blockbuster. How do we get there? We continue to do what we're doing. We have the diagnosis rates increasing, we have more patients get on drug, we steadily add patients and we build our path to peak sales. I think it's pretty straightforward. We just continue to do the hard work we're doing. There's plenty of patients, the market's growing, penetration rate is low, diagnosis rate at the moment is low. All of these things are increasing. So there's literally years and years and years ahead of this market expanding. And as I said earlier, as more companies come in, it actually helps us because it drives market expansion. You know, our initial focus was always on that 315,000 just who was sitting in those prescribers offices at the moment. Fortunately, now we even have more potential with the advent of other companies coming in and driving diagnosis, et cetera. So keep doing what we're doing, you know, steadily add and we'll find our path to peak.

OPERATOR

Great. Thanks, John. Operator, we have time for one more question, please. And the next question comes from William Wood with B. Riley Securities. Please go ahead.

Bill Sibold

Hi, thanks for taking our questions and congrats on a very nice quarter. Just thinking about in terms of your pipeline. As you said, you've got about 10 pipeline assets as is. You know, should we expect any more add ons to your pipeline? You know, and if so, what might you be looking for? Whether it's more oral options, more SIRNAs, or maybe something that, that we're not really discussing here. And then also in terms of just sort of, in terms of that go, no go situation, I was curious if any projects that you've sort of brought on or been developing internally have sort of hit that threshold that you've already called and maybe speak to anything that you know, that might have changed where you're looking in the future or if you're pretty content with what you're gotten now, you're just looking to execute. Thank you, William. Thank you very much for the question. Look, we have assembled, I think, the leading pipeline in MASH and we've done it for less than $300 million. Again, as I said, it says a few things. It says a lot of people still aren't interested in MASH, which is great because we are and we're in a better position to lead the innovation based on our ability to use red stiffer as a foundational backbone therapy. So, yeah, we're still looking. Clearly, you know, we've taken quite a bit off the table for us to pursue, but it would be very mechanistic driven. Is there something that we think looks particularly interesting? There's still, you know, I would say a couple of mechanisms out there which would look, which look interesting. Then the question becomes finding one and finding one that's transactable. So, you know, expect that there may be additional. Certainly we'd like to kind of round out the pipeline, if you will, with some remaining mechanisms. But we're a big way through it now. Efforts are really focused towards now getting these in the clinic, generating data and being able to make decisions. So that's how we're thinking about it. But it's really again, in less than a year's time to have come from a single asset company that has an incredibly promising future growing into a mega blockbuster to now, because of that success, be able to build that next stage of leadership which we think is really long term focused.

OPERATOR

Great. Thanks, Bill. And thank you all for your time and interest today. This now concludes our call. A replay of this webcast will be available on our website in about two hours. Thanks for joining us, ladies and gentlemen.

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