Earnings call transcript: Madrigal Pharma Q3 2025 falls short of EPS forecast

Madrigal Pharmaceuticals reported its third-quarter 2025 earnings with a significant EPS miss, posting an actual EPS of -5.08 compared to the forecast of -1.97. Despite this, the company exceeded revenue expectations, reporting $287.3 million against a forecast of $244.42 million. The stock reacted negatively, dropping 1.56% in after-hours trading to $405.

Key Takeaways

• Madrigal Pharma’s Q3 2025 EPS fell short by 157.87%.
• Revenue surpassed expectations by 17.53%, reaching $287.3 million.
• The stock price decreased by 1.56% in premarket trading.
• Strong growth in net sales and product adoption was noted.
• The company ended the quarter with $1.1 billion in cash.

Company Performance

Madrigal Pharmaceuticals demonstrated robust revenue growth in Q3 2025, with net sales increasing by 35% quarter-over-quarter. The company is on track to annualize over $1 billion in net sales. This growth is primarily driven by the successful launch of Rezdiffra, with over 29,500 patients now on therapy and strong adherence rates of 60-70%. However, increased R&D and SG&A expenses have impacted earnings, resulting in a significant EPS miss.

Financial Highlights

• Revenue: $287.3 million, up 35% quarter-over-quarter.
• Earnings per share: -5.08, a significant miss compared to the forecast of -1.97.
• R&D expenses rose to $174 million from $68.7 million in Q3 2024.
• SG&A expenses increased to $209.1 million from $107.6 million in Q3 2024.
• Cash and equivalents stood at $1.1 billion at the end of the quarter.

Earnings vs. Forecast

Madrigal’s actual EPS of -5.08 was well below the forecast of -1.97, representing a negative surprise of 157.87%. This miss is largely attributed to higher-than-expected R&D and SG&A expenses. On the revenue side, the company reported $287.3 million, exceeding the forecast by 17.53%, indicating strong sales performance.

Market Reaction

Following the earnings announcement, Madrigal’s stock price declined by 1.56% in premarket trading, closing at $405. This movement reflects investor concern over the EPS miss, despite the positive revenue surprise. The stock remains within its 52-week range, with a high of $463.63 and a low of $265.

Outlook & Guidance

Madrigal Pharmaceuticals anticipates robust net sales growth in 2026, with continued patient addition and European market expansion. The company is preparing for potential F4C approval in 2027 and is advancing its outcomes trial. Guidance revisions were not provided for the current quarter, but future projections indicate improving EPS and revenue figures.

Executive Commentary

CEO Bill Sibold emphasized the company’s strategic focus: "Our goal is to not be leaders in the short term, but to have long-term leadership in MASH." Chief Medical Officer David Soergel highlighted the company’s innovative approach: "We are not just advancing a pipeline. We’re laying the foundation to transform how MASH is treated."

Risks and Challenges

• High R&D and SG&A expenses could continue to pressure margins.
• Market penetration remains below 10%, indicating growth potential but also challenges.
• Competitive pressures from Novo’s entry into the MASH market.
• Regulatory risks associated with upcoming F4C approval.
• Economic factors affecting healthcare spending and reimbursement rates.

Q&A

During the earnings call, analysts inquired about the company’s payer access strategy and pricing, with management clarifying their broad first-line access approach. Questions also focused on potential combination therapies and the impact of Novo’s market entry on diagnosis rates.

Full transcript - Madrigal Pharmaceuticals Inc (MDGL) Q3 2025:

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Good morning, and thank you for standing by. Welcome to the Madrigal Pharmaceuticals third quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. As a reminder, today’s conference call is being recorded. I’d like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

Thanks, Marvin. Good morning, everyone, and thank you for joining us to discuss Madrigal’s third quarter 2025 earnings. We issued a press release this morning and posted a slide deck that accompanies this webcast on the Investor Relations section of our website. On the call with me today is Bill Sibold, Chief Executive Officer; David Soergel, Chief Medical Officer; and Mardi Dier, Chief Financial Officer. They will provide prepared remarks, and then we’ll take your questions. Please note on slide two, 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.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Thanks, Tina. Good morning, and thanks for joining us. We have delivered another excellent quarter as we continue to execute on our strategic priorities. We’re maximizing the value of Rezdiffra and building our pipeline, which sets us up for continued value creation. Rezdiffra is quickly becoming one of the most successful specialty launches in the industry, with sales now annualizing at greater than $1 billion in only its sixth quarter of launch. More than 29,500 patients are being treated with Rezdiffra, and more than 10,000 healthcare providers have prescribed it. We’ve made great progress on our 2026 payer contracting strategy for first-line access. Our new U.S. Rezdiffra patent was listed in the Orange Book. It extends Rezdiffra’s value into 2045. We’re expanding globally with our launch in Germany following European approval.

On the pipeline front, we’re advancing our phase 3 Maestro NASH outcomes trial in F4C, where we could once again be first to market, this time for compensated MASH cirrhosis. We look forward to sharing more from our F4C open-label cohort at AASLD later this week. We’re executing on our Rezdiffra combination strategy, where we completed the transaction of our new oral GLP-1, and we continue to evaluate opportunities to add additional assets to our pipeline through business development. Today, we’ll focus on our two key priorities: our top line and our pipeline. Starting with Rezdiffra’s third quarter performance on slide four, we delivered net sales of $287 million, up 35% quarter over quarter. The significant demand we’re generating is driven by the positive response to Rezdiffra from prescribers and patients and the strong execution by our team.

As shown on slide five, we ended the third quarter with more than 29,500 patients on Rezdiffra, up from more than 23,000 patients at the end of the second quarter. This number represents patients actively on therapy accounting for any discontinuations. As we’ve discussed since the beginning of our launch, we’ve been steadily adding patients each quarter, and we expect that to continue going forward. It’s incredibly gratifying to see Rezdiffra already making a meaningful difference for so many patients. What’s most exciting is that we’ve only just begun. More than 90% of our 315,000 target population remains untreated. That leaves tremendous room for growth, driven by Rezdiffra’s highly differentiated profile and our clear first-mover advantage. Moving to slide six in our continued progress on physician penetration. As I’ve said before, building a strong prescriber base early in a launch is one of the best indicators of long-term success.

That’s why the pace of adoption has been so encouraging. This quarter, we hit another launch milestone: more than 10,000 prescribers. This breadth achieved this quickly is at the high end of the benchmarks we track, and it reflects the work we’ve done to wire the system. Looking ahead, our focus will increasingly shift to depth. This metric is already tracking at the high end of best-in-class launches. We’re also continuing to enhance our targeting. While our efforts have mostly centered on hepatologists and gastroenterologists, we’re seeing growing interest from endocrinologists. These are specialists with a deep expertise in metabolic health who are interested in Rezdiffra’s mechanism and its potential in MASH. In response, we’ve expanded our field team to further target this group. These efforts substantially started in the fourth quarter. On slide seven, let’s take a look at how we see the MASH market evolving.

We see clear parallels between MASH and other large chronic disease markets like IBD, rheumatoid arthritis, and psoriasis. Each of these evolved into multi-billion-dollar categories through continuous innovation driven by new mechanisms and tailored treatment regimens that address diverse patient needs. We believe MASH will follow that same path. Today, this market is still in its early stages, essentially where those categories were two decades ago, but with one important difference: Rezdiffra’s profile. As an effective, liver-directed, well-tolerated oral medicine, it far surpasses that of the other first-to-market products in those diseases. We believe this gives us a durable advantage and a unique opportunity to lead and shape the market’s evolution, first with Rezdiffra and next with the pipeline we are building. We welcome new entrants to this evolving market. Wegovy’s recent approval in MASH adds momentum to a market that’s just starting to take shape.

As seen on slide eight, our focus remains on the 315,000 diagnosed patients with moderate to advanced fibrosis. Novo was targeting a much larger population, which will raise awareness and drive more screening, diagnosis, and treatment. As a reminder, GLP-1s aren’t new. They have been available for over a decade and are already used to treat the metabolic comorbidities that oftentimes accompany MASH. As we’ve reported, about 50% of Rezdiffra patients are currently on or have previously been on a GLP-1. We also understand the limitations of GLP-1 monotherapy in MASH. Few patients reach and sustain a therapeutic dose, and tolerability remains a real challenge. Real-world data show that 70% of obese patients discontinue within one year. New data to be presented at AASLD shows similar discontinuation rates in patients with MASH-LD.

Looking ahead, we expect Rezdiffra to benefit in two ways: as first-line therapy in a market that will expand and from the high real-world discontinuation rates of GLP-1s. We’re in a strong position and are confident in Rezdiffra’s growth potential going forward. As we’ve already mentioned, it’s Rezdiffra’s best-in-class profile that gives us such strong confidence, as summarized on slide nine. It is a liver-directed medicine that delivers consistent efficacy across F2F3 fibrosis, BMI, genetic makeup, and patient subtypes, including those with type 2 diabetes, who comprise approximately 60% of the MASH population. It’s also simple to use. It’s a once-daily, well-tolerated pill with no titration requirements. That simplicity matters to providers, to patients, and ultimately to adherence. We continue to see strong adherence consistent with other well-tolerated oral therapies. The seriousness of MASH and Rezdiffra’s compelling profile continues to resonate with payers.

Our objective is to provide first-line access to patients, preserving treatment choice for patients and providers. We are pleased to share an update on slide 10. We are making great progress with our payer negotiations for 2026, which to date have resulted in contracts for broad first-line access, no step-edit requirements, and improvements in utilization management criteria that are better aligned with clinical practice. Overall, the dialogue has been collaborative and productive, and discussions are progressing really well. Payers understand the seriousness of the disease, the unique clinical value of Rezdiffra, and the importance of access and choice for patients and providers. We have already achieved favorable outcomes with several national payers while continuing constructive dialogue with others. We are encouraged by the progress and expect contracts to be finalized by the end of the year, covering the vast majority of commercial lives.

Gross-to-net management remains a core component of our strategy and guides how we approach payer contracting. We started contracting in April of this year, and as we have said, it was not everywhere and was not all at once. In fact, through the third quarter, contracting had a minimal impact on gross-to-net, reflecting our disciplined approach. Now that we expect to have payer contracts finalized in the fourth quarter for either an immediate or a January 1st implementation, we expect the fourth quarter gross-to-net to be at the midpoint of the 20-30% range we had previously discussed. Starting in the first quarter and continuing throughout 2026, we expect our gross-to-net impact to be in the high 30% range, which is consistent with other innovative multi-billion-dollar specialty medicines. Objectively, we are in a great position. We are executing on one of the most successful specialty launches in the industry.

With less than 10% of our target market treated, the growth opportunity ahead is substantial. We have taken a thoughtful approach to contracting, which provides for outstanding patient access and durable long-term growth. In short, this strategy paves our path to peak sales. Beyond the U.S., we are expanding access to Rezdiffra, as shown on slide 11. We are taking a focused country-by-country approach in Europe and launched in Germany at the end of September. Just like in the U.S., the team is wiring the system for a first-in-disease launch. This requires educating physicians on the risks of MASH and the urgency to treat. We are also driving change in clinical practice to develop processes for patient identification, diagnosis, and use of non-invasive tests. This work happens practice by practice to help develop the infrastructure for sustained adoption.

The team is off to a great start, and we anticipate our efforts will start to make an impact in 2026. Now, I will turn it to Dave to discuss the second pillar of our strategy, expanding our pipeline to extend our leadership and build long-term value. Dave?

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Thanks, Bill. It’s an incredibly exciting time to be at Madrigal. Over the past six months, I’ve had the opportunity to work closely with this exceptional team. The more I’ve dug into our programs, the more energized I’ve become about what we’re building. We’re not just advancing a pipeline. We’re laying the foundation to transform how MASH is treated. As shown on slide 12, we already have a robust clinical program for Rezdiffra. Our phase 3 Maestro NASH outcomes trial in compensated MASH cirrhosis, or F4C, is expected to read out in 2027. Positive results could make Rezdiffra the first approved therapy for F4C and support full approval in F2F3. Our ongoing phase 3 Maestro NASH trial in F2F3 MASH is expected to read out in 2028 and would also support full FDA approval. Beyond Rezdiffra, we’re building a pipeline through our business development efforts.

To date, we’ve added an oral GLP-1, now called MGL-2086, which we intend to develop in combination with resmetirom to deliver a best-in-disease, well-tolerated oral combination. As we think about how to build our pipeline further, we’re looking for mechanisms that fit scientifically, strategically, and commercially, those with complementary biology and combination potential. Continued success in treating patients will come from combining mechanisms and tailoring treatment regimens to specific risk factors, much like what we’ve seen in other chronic complex diseases. With Rezdiffra’s patent protection into 2045, we can be thoughtful and disciplined and build the right kind of pipeline that will define the future of MASH care. The combination of our oral GLP-1 and THR-β agonists is a great example of this approach to building the pipeline. From Maestro NASH, we know that even a modest amount of weight loss enhances resmetirom’s efficacy.

Unlike in GLP-1 monotherapies that strive for double-digit weight loss, we’ve seen that as little as 5% weight loss can enhance Rezdiffra’s efficacy in MASH. This will allow us to dose-escalate the MGL-2086 component of the combination with the goal of optimizing both efficacy and tolerability in a once-daily oral pill. It is also important to note that with the combination, patients would be on an effective dose of resmetirom on day one as the MGL-2086 dose is being adjusted, in contrast to injectable and GLP-1 monotherapies that require a lengthy titration period. On slide 13, we see how these mechanisms could work well together. GLP-1 works from the outside in, improving systemic metabolism, insulin sensitivity, and weight loss. Rezdiffra works from the inside out, reversing hypothyroidism in the liver, restoring mitochondrial function, and increasing fat processing through beta oxidation.

The combined mechanisms lead to lower levels of inflammation and inhibition of stellate cell activation and downstream fibrosis. By combining these complementary mechanisms, we expect to see greater reductions in both liver fat and fibrosis. We plan to start a phase 1 trial for MGL-2086 in the first half of next year. Next, let’s move to our phase three Maestro NASH outcomes trial in compensated MASH cirrhosis, or F4C, on slide 14. People living with F4C MASH today have no effective treatment options that prevent progression of their disease to decompensated cirrhosis. Our two-year open-label extension data presented at EASL earlier this year demonstrated sustained efficacy of Rezdiffra in this population and supports our confidence in the ongoing Maestro NASH outcomes trial. Mean liver stiffness decreased by 6.7 kilopascals at two years, a statistically significant reduction from baseline.

More than half the patients achieved at least a 25% reduction in liver stiffness, a level tied to improved outcomes. 65% of patients with clinically significant portal hypertension, or CSPH, at baseline moved to a lower risk category by year two. CSPH is a key driver of the most severe outcomes of cirrhosis and marks the tipping point into decompensated disease. Improvement in CSPH suggests Rezdiffra could delay or even prevent life-threatening complications. We’ll be presenting new data from this two-year open-label F4C cohort at AASLD later this week, as noted on slide 15. What I’m really excited about is that this data shows promising efficacy in even the most advanced F4C patients who are on the cusp of progressing to liver decompensation. This is the first time any data will be shown in such a severe population, which gives us additional confidence in our outcomes trial.

Also at AASLD, from our phase three Maestro NAFLD one trial, we’ll highlight how F2F3 patients regress when Rezdiffra treatment is interrupted, demonstrating the importance of staying on therapy. We’ll also share multiple posters that examine early real-world experience with Rezdiffra and the burden of uncontrolled MASH across health systems. In total, MASH will have 15 abstracts, including two oral presentations and two posters of distinction. With that, I’ll hand over to Mardi.

Mardi Dier, Chief Financial Officer, Madrigal Pharmaceuticals: Yes, thank you, Dave. Turning to slide 16 and a summary of our financials. Third quarter 2025 net sales totaled $287.3 million, up 35% from the second quarter of 2025. This was another strong demand quarter. As Bill mentioned, we’re making great progress with our contracting discussions for continued broad first-line access to Rezdiffra in 2026, with no step-through requirements and improved utilization management criteria. As a reminder, there are several components to gross-to-net, including commercial rebates, government rebates, copay assistance costs, and channel distribution costs. Across the board, the team has done an exceptional job managing these dynamics, and we’re seeing minimal impact through the third quarter of this year.

As certain contracts take effect in the fourth quarter, we anticipate a step-up in the gross-to-net impact to the midpoint of our 20-30% range, resulting in a full-year average near the low end of that range, a great outcome for 2025. Looking ahead to 2026, we expect the full effect of our payer agreements to begin January 1st, bringing our total gross-to-net impact into the high 30% range, consistent with specialty medicine analogs. As noted, we are confident that we will continue to steadily add Rezdiffra patients, and we expect robust net sales growth for Rezdiffra in 2026 and beyond. R&D expenses for the third quarter of 2025 were $174 million compared to $68.7 million in the third quarter of 2024. The increase was primarily due to the one-time $117 million expense associated with the global licensing agreement for MGL-2086.

This was expensed in the third quarter and will impact fourth-quarter cash flows. SG&A expenses for the third quarter of 2025 were $209.1 million compared to $107.6 million in the third quarter of 2024. The increase primarily reflects the annualization of higher commercial investment to support the Rezdiffra launch. Looking ahead, we expect fourth-quarter R&D expenses to be modestly higher than third-quarter levels, excluding the third-quarter one-time expense for our oral GLP-1, and expect fourth-quarter SG&A expenses to continue to increase quarter over quarter as we continue to support the launch of Rezdiffra. Turning to our balance sheet, we ended the third quarter of 2025 with $1.1 billion in cash, cash equivalents, restricted cash, and marketable securities.

The increase reflects the $350 million initial term loan under our senior-secured credit facility, a portion of which was used to repay all outstanding obligations under the Hercules loan facility, offset by the funding of operations. With this strong cash position, we continue to be well-resourced to support the ongoing launch of Rezdiffra and advance multiple pipeline programs. With that, on slide 17, let me briefly recap our third-quarter progress, where we remain focused on our top line and our pipeline. We are driving strong performance in our sixth quarter of our launch, with Rezdiffra now annualizing over a billion dollars in net sales and expect continued strong growth in 2026 and beyond. More than 29,500 patients are on therapy, and we expect to continue to steadily add patients going forward. We have reached another major launch milestone with greater than 10,000 prescribers.

Our payer discussions are progressing very well, and we expect continued strong access for patients in 2026. We are working to further expand our pipeline to solidify our leadership in F2 to F4C MASH. Now I will turn the call back over to Tina and open up the Q&A session.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Thanks, Marty. Let’s move into the Q&A portion of the call. Marvin, please go ahead and provide instructions for the Q&A session.

Marvin, Conference Call Operator: We will now open the lines for questions. To open your line, please press star 11, and you’ll be added to queue on the call. Our first question comes from the line of Yasmeen Rahimi of Piper Sandler. Your line is now open.

Hi, good morning, team, and congrats to our great quarter. Team, with AASLD right around the corner, we’d love to learn sort of how this, through your data, especially the NIT-driven responses, could further de-risk Maestro NASH outcome, which is reading out in 2028, and also maybe also some color on what visibility do you guys get in terms of that it’s on track based on events to come in at that time point. I’ll jump back in the queue.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Great, guys. Thanks for the call. Look, we’re really, really excited about AASLD. I’ll tell you, we’re just coming off of the ACG meeting in Phoenix, I guess it was just last week. What a difference a year makes when you think about the progress that we’ve made with the gastroenterologists. I mean, a year ago, people didn’t know about NITs. They were still putting their pathways in place. Now we’re seeing that Rezdiffra has really moved to being the foundational therapy standard of care with that audience and a lot of positive feedback. We’re headed into the Super Bowl this week with AASLD. We’re really excited about it. We have a lot going on. Maybe, Dave, you want to provide a little bit of context around some of the data and so forth?

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Yeah, I think your question, yeah, has had to do with the data that we’re reading out at AASLD and how it reflects on Maestro outcomes. Correct?

That’s correct.

Yeah. Okay, great. Yeah. As we presented at EASL and as we showed in the presentation, we have an open-label cohort of individuals from the Maestro NAFLD study. Where we’ve been able to show sustained efficacy of Rezdiffra in this cohort, both on liver stiffness and on a variety of biomarkers, including LFTs and so forth. At AASLD, we’re looking more deeply into this cohort and examining some of the more severe patients within this cohort and understanding whether Rezdiffra’s efficacy is in this group as well. What we see is really exciting and gives us a lot of confidence about Maestro outcomes. The reason why this is important is because when you think about Maestro outcomes and you think about this open-label cohort, the patient populations are really very similar. The baseline characteristics are similar.

When we see efficacy in the open-label group, it gives us evidence and a lot of confidence that the outcomes trial will end up being positive as well.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great. Thanks, Yaz. Marvin, next question, please.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Jay Olson of Oppenheimer. Your line is now open.

Oh, hey. Congrats on the quarter, and thanks for taking the question. Can you talk about the pros and cons of combining Rezdiffra with MGL-2086 versus some other oral GLP-1 like orforglipron? And then any other potential mechanisms beyond GLP-1 that might be synergistic with Rezdiffra? Thank you.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Jay, thanks for the question. Just for clarification as well. Our oral GLP-1 is an orforglipron derivative. We were very, very specific in the criteria that we had for selecting an oral GLP-1, and we wanted to be in an orforglipron derivative. Maybe, Dave, do you want to talk a little bit about it and a little bit about the future mechanisms and just how we’re thinking in general about potential combinations?

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Yeah. So I mean, first, the GLP-1 mechanism and why one would combine resmetirom with a GLP-1. What we know from Maestro NASH, from the 52-week experience of Maestro NASH, is just a little bit of weight loss enhances resmetirom’s efficacy. We see better anti-fibrotic effects with resmetirom in people who lose as little as 5% of their body weight. It is a natural sort of extension of that to consider combining with a GLP-1 that can produce a bit of weight loss, have some metabolic benefits, and enhance resmetirom’s efficacy in a fixed-dose combination. That is the rationale for combining with a GLP-1. Your point is a great one. There are other mechanisms that may also be attractive to combine resmetirom with. There are multiple pathways in this very complex disease of MASH that lead to hepatic steatosis, fibrosis, and ultimately poor outcomes in patients.

As we have said before, we are looking at pretty much every mechanism of action to potentially combine with resmetirom, where there is a good scientific rationale for it and where we believe that the combined efficacy is going to be an advantage to patients. We are casting the net wide, and we are looking for the best opportunities.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Yeah, Jay, and just also a little context as well here. With the IP to 2045, that gives us time to really thoughtfully think about building this pipeline. We’re not in a rush just to try to fix a problem of a pending patent cliff. We can thoughtfully think about building a franchise that’s durable because starting with the 2045 IP for Rezdiffra. Thanks for the question.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Next question, please, Marvin.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Michael Dushori of Evercore SI. Your line is now open.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Hi, guys. Thanks for taking my question and congrats on the continued progress. Just two quick ones for me. In light of the recent M&A in the space, I would love to get your thoughts on Madrigal’s future competitive positioning and market access once large pharma inevitably bundles their MASH assets, if approved. The second question I have is just any thoughts on Sagimet’s plan for testing denifanstat with Rezdiffra? I realize your priority is focusing on a combination therapy with your own GLP-1, but would Madrigal be open, in principle, to a combination such as this, or is this just too early at this stage? Thank you.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Yeah, Mike, thanks for the questions. Let me start with that one. We do not know what Sagimet is doing. We have not spoken with them, do not know any of the plans. Is it a combination that makes sense, maybe, but we are not involved in that and do not really know. That is all our comment at the moment there. Look, the recent M&A really for us is a validation of the MASH market. Ultimately, what you see happening in these markets, and we talked about IBD, RA, and psoriasis, you would have a—you know, we are a little bit like that—where you have a company shows that there is a market and an attractive opportunity, and then the investment in innovation, science, and ultimately more products really accelerates. That is what we think is going to happen in MASH. We are leading the way in this case.

Now, the recent moves of the big pharma to get an FGF21, we think, validates that. We are excited about it because that means there is going to be more attention on the space, which ultimately leads to greater diagnosis, treatment, and with the profile that we have with Rezdiffra, we think it ultimately favors us. In creating our market access strategy, we have taken a very long-term approach, just like we did from day one when we announced approval of the product. You almost have to start with 2045 where Rezdiffra’s IP goes out to, that we are going to have F4C, that we are going to have a pipeline, and there are going to be other products that enter. Everything has been thoughtfully designed with that end in mind to preserve the most value for not only Rezdiffra, but for our franchise of the future.

We feel we are in a really strong place. Dave just talked a little bit about F4C. We are really excited about the data that we have seen, and we are very confident about hitting in our Maestro NASH outcome study, which we are reading out in 2027. Of course, we have to read out. It is an event-driven study, and we will anticipate those results. We think that from a competitive perspective, our data is going to be the leading data in that space with that population so that we will be the leaders not only in F2, F3, but from F2 to F4C. All of this is thought out. We are thinking of things in the long term. We think of that, how we build a pipeline, how we evolve gross-to-net, and how we interact with the community. Let me just be crystal clear.

Our goal is to not be leaders in the short term, but to have long-term leadership in MASH.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great. Thanks, Mike, for the question. Marvin, next question, please.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Akash Tawari of Jefferies. Your line is now open.

Hey, thanks so much. We’re hearing feedback that Rezdiffra’s adherence rate is meaningfully higher than the kind of 40-60% your team cited for drugs in this category, more in the order of 80% plus. Can you confirm that? Also, how should we think about Rezdiffra net pricing? I know you’ve talked about GLP—we’ve heard GLP-1 players talk about mid-single-digit net price declines annually. Is that a similar dynamic for Rezdiffra, or should we see stable net pricing after you get into the high 30s range on gross-to-net next year? Thank you.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Thanks for the question, Akash. First of all, on the adherence, I think what we said at about the one-year rate, well-tolerated orals are in that 60-70% range. That has not changed our view. The data that we have today—remember, there are still only so many patients that are getting to that one-year mark—that we are similar to well-tolerated orals. Like you, we have heard very positive feedback from a lot of clinicians that are treating patients and seeing very strong adherence. I think that, again, goes back to the profile of the product. All encouraging and as we would expect. To the question of gross to net and what we would expect to see. I think that you, looking ahead to the future, gross to net only goes in one direction, right? The difference after 2026, you do not have this zero-to-contracting effect. After 2026, we will have contracting.

Right now, we are going to be bidding on 2027 Medicare. We have some Medicare in place for 2026. You expect to see some future decline in gross to net because that is just what happens. Again, we had this effect of zero-to-contracting as we enter 2026. We think that we are in a really great place. Our strategy is for broad first-line access, no step edits, and improved utilization management criteria. That was the goal. That is what we are achieving. We are really, really excited about where we are entering 2026. In fact, I would say, in my experience, I really believe that this is as good as you could possibly be for a product of this stature at this point in launch.

In fact, I would go as far as to say I think this is the best market access from a criteria perspective and everything that I have seen with any of the launches that I have done. Thanks.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great. Thanks, Akash. Marvin, next question, please.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Thomas Smith of Lurie Partners. Your line is now open.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Hey, guys. Good morning. Thanks for taking the questions. And let me add my congrats on the really strong quarter. The other one on coverage, I appreciate the high-level comments here on the payer contracting efforts. I think everyone saw the recent Aetna formulary coverage decision. Could you just comment specifically on that and the potential impact of non-covered decisions? And then any comments on kind of where you are with respect to the contracting for commercial lives next year? Is there an explicit goal or expectation for what % of commercial lives you think will continue to have that broad first-line access to Rezdiffra for 2026? Thanks so much. Yeah. Thanks, Tom. Maybe we’ll start there. Look, we’re expecting broad commercial live coverage. So we feel really good about that at this point.

As it relates to Aetna, let me start with Rezdiffra was not on formulary in 2025, and it’s not again in 2026. That is really no change. We do not expect to see a meaningful impact here. It will be available through prior authorization or medical exception. That is not a practical change in access for patients. Our Madrigal patient support team are really experts at helping patients navigate and helping practices navigate through that. Yeah, no change. No effect.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great. Next question, please.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Andrea Newkirk of Goldman Sachs. Your line is now open.

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Good morning. Thanks for taking the question. Bill, recognizing it’s still early here, but just curious if you’ve observed any signs of Novo’s marketing campaign broadening the pool of addressable patients to date. Do you still believe that 315,000 patients is the accurate number for Rezdiffra’s target population? Marty, if I can just ask quickly, just in the context of the successful launch that you’ve seen to date, how are you thinking about the path to profitability from here? Thanks so much.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Thanks, Andrea. Look, this is the first quarter where we’ve had Novo in the market, and you saw that we continued to steadily add patients. I think, by all measures, had an absolutely outstanding quarter. Three months in, we haven’t really seen too much. We know that they seem to be educating PCPs and trying to drive diagnosis, which we think is ultimately great for patients and the market. We’re starting to hear some practices say, and this is very anecdotal at this point, that they’re reporting more referrals that are coming in. It’s a little early to quantify if there is additional growth to the market as we get through the end of the year and are able to do a more proper analysis. We’ll come back with any real growth rates. Now, the 315,000, great question. Let’s just remind people.

The 315,000 are the diagnosed patients in the 14,000 prescribers that we’re targeting. We know that we have patients that are on Rezdiffra now that weren’t part of that 315,000, that they were newly diagnosed. We also know that the diagnosis rate at the moment remains quite low. Originally, we saw it as around 10% diagnosis rate. We know that there are more prevalent patients out there. I think what we will see and what we’re excited about is having somebody else that is going to help us carry the load of increasing diagnosis. It’s not something that’s been a focus of ours. It still remains not a focus of ours. When we have somebody else who needs to have literally millions of patients that are diagnosed in order to serve their needs, that ultimately helps us.

That’s why we said in the script, it’s the 315,000 that we win from and the increased diagnosis and ultimately people that can’t tolerate or have an effect with a new competitor that will ultimately come to us. A little early to quantify. We’ll do so in later quarters, but we see some signs that we’re starting to see additional growth. Novo, we just don’t really have a lot of information. Haven’t seen them too much out there, but clearly they are there and starting to drive a little bit more diagnosis. Thanks.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great. Yeah. Go ahead. Oh, yes. Thanks, Andrea, for the question on the path to profitability. Our focus right now and into 2026 is really focused on driving our top line and then building out our pipeline, which Dave described. That is going to be our focus going forward. It does not mean profitability will not happen at some point, but again, we are focused on the top line and building out R&D and continuing to support our efforts in building out the MASH, our leadership in MASH. Good. Thanks, Andrea, for the question. Marvin, next question, please.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Andy Chang of Wolfe Research. Your line is now open.

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Hi. It’s Emma on for Andy. Thanks for taking our question. Rezdiffra uptake has been strong so far, and you mentioned the strong 60-70% adherence rate. I know it’s still very early days in the launch, but I guess how do these dynamics inform your view of the drug’s chronic use potential and just steady-state demand over the long term? Thank you.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Thanks, Emma. Look, I think that this is where we win. We have a profile, once-a-day pill, that is well-tolerated, and the feedback, some have reported, extremely high adherence rates. So we feel extremely well-positioned for this to be a long-term chronic therapy. It’s really one of the exciting parts of Rezdiffra. As I said, versus other categories, which have become really multi-billion, over $20 billion categories, the profiles, especially the profiles initially of products to launch, were kind of hairy, right? They were not orals. They had tolerability issues, sometimes safety issues. We feel that we have got, and you’ve heard me refer to it in the past as what I believe is kind of like a holy grail profile. That’s something which is where we win in this category, frankly. At the end of the day, profiles matter.

This is a product which is really designed for chronic use. So we feel really good. Thanks.

Can I just add on one thing? The other part that also, of course, matters is sustained efficacy. I think what we are showing at AASLD gives us a lot of confidence in the sustained efficacy of Rezdiffra in this group. In fact, what we show in the F2-F3 population is that if you come off of therapy, you have reversion of your disease, which is, of course, a big challenge. I think those two facets, both the efficacy, sustained efficacy, and the sustained tolerability are two big picks.

Yeah. Thanks for that, Dave.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great. Thanks so much. Next question, please, Marvin.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Ruth Barra of TD Cowen. Your line is now open.

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Good morning, guys. Thanks for taking the question. I wanted to ask, well, one and a half questions. One on this growth forward, given the two strategies, Bill, that you outlined. One, salesforce expansion and marketing to the endocrinologists. At the same time, you mentioned that you want depth in the going forward marketing strategy. Can you help us reconcile the two in what sort of metrics and current targets for depth that you hope to report and how GLP-1s figure into all of this? This is a very quick email that we’ve been getting from clients. We’re having a problem sort of stretching the patient numbers with the revenue numbers. Are there any elements to either stocking or Europe or some other aspect of those numbers that need to be addressed in our models to reconcile everything reported this morning? Thanks.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Yeah. For the quarter, nothing to do with inventory, nothing to do with Europe. I mean, just be crystal clear, U.S. demand is the driver of the success for the quarter. Let me take that one. Next, let’s talk about growth going forward. Your question about how do we manage expansion, if you will, of into endocrinology and depth otherwise. We can walk and chew gum at the same time, so to speak. We have to continue to be building for the future as well. Remember, we’ve got 20 years ahead of us from an IP perspective. We are going to look for where to currently focus and where do we want to explore. That’s exactly what we’re doing here. We’ve already, from, and we’ve been always looking at a basket of products in the last 10 years that have been great specialty launches.

We look at each metric, and we’re kind of at or near the top on a number of those. Rep, we’re doing great as well. You need to continue to grow your depth of prescribing, right? I mean, we have 10,000 plus prescribers. Now, your next step, and I consider that like a checkmark, now you go deeper and deeper into that set of core physicians, which are gastroenterologists and hepatologists. The pursuit now of the endocrinologists, we had endocrinologists targeted as part of the 14,000, but what we’ve seen is additional endocrinologists have come forward and said, "You know what? I’m still seeing a lot of MASH and would like to learn more about Rezdiffra." There was enough interest that we said, "Let’s put a dedicated team on that opportunity." Just to give you a sense, it’s not a huge number.

It’s a couple thousand physicians that we add to the target list. That can be handled with a very concentrated, dedicated effort. We’ll see how that evolves. One of the interesting things is, as you talk about GLP-1s, if GLP-1s were truly solving MASH, there wouldn’t be a need in this prescriber group that uses GLP-1s predominantly that another product would be needed. I think that that is a very good sign for us as well that GLP-1s aren’t the solution. They’ve been on the market for over 10 years. You’ve got a specialty that uses them, and they still are looking for Rezdiffra. We’re putting an effort there. This is a little bit of a, we have our present focus, which is driving breadth, and we are starting with these endocrinologists, which you have to wind the clock back to even before 2024 because they’re not familiar with NITs.

They don’t have their system wired at all. That’s going to take a very long time for them to really catch up to where gastroenterologists and hepatologists are now. We think it’s worth effort, resource, and we think there’s promise for the future there as well.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Thanks.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Thanks so much. Next question, please, Marvin.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of John Wolbein of Citizens. Your line is now open.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Hey, thanks for taking the question. Bill, wondering if you could comment a little bit as we look down the road at expected GLP-1 price erosion and how that might affect access and payer decisions for Rezdiffra.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Thanks, John. I think if you, I’ll take you back to the comments that we made on the call that in January, we would expect to be in the high 30% range. That is in the presence of a rapidly, I would say, eroding gross-to-net of GLP-1s. We believe that we’re well-positioned for the future. As I said, gross-to-net only goes in one direction. I think you have to start with the problem that we’re trying to solve. This is an expensive disease. I think if you take a look at ICER, recently commented again on products that they have recently reviewed, and we’re seeing that once again, Rezdiffra is highlighted as a product that is looked at as cost-effective and really is offsetting the very costly disease without intervention. I think that you have to start with the problem you’re trying to solve. This is an expensive disease.

I think payers understand that. Certainly, the system is starting to understand that. You’re always going to have products that have different prices within the category. We’ve seen even with the categories that I mentioned today, IBD, RA, and psoriasis, there’s huge variability. There’s a need for more than one medication. There’s a need for multiple mechanisms. You ultimately have to try to solve the problem in front. We, through an independent third-party, ICER, have proven twice now about the cost-effectiveness of Rezdiffra.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great. Thanks so much. Next question, please.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Parker Argewall of Cantor Fitzgerald. Your line is now open.

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Hi. Thank you for taking my questions and congrats on another strong quarter. I appreciate the clarity on the gross-to-net for Q4 and 2026. If you can talk about your expectations for Q4 growth and comfort around 2026 consensus estimates with the set. Maybe second question, what percentage of Rezdiffra volume currently is Medicare? How are you thinking about the implications of semaglutide IRA pricing decision on the long-term prospects for that channel? Thank you.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Great. Let me just give you the—I’ll give you the quick answer on what the distribution is. We’re anticipating it’s 50-55% commercial, 30-35% Medicare, and then about 10% Medicaid and other. We’re still, remember, we’re at less than 10% penetration here. That is going to evolve a little bit in time, but we’re staying in that range at the moment. Maybe, Mardi, do you want to talk about Q4?

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Yes, definitely. Hypercar, thanks for the question. Listen, we’ve had a great 2025 so far. In fourth quarter, we expect that to continue in terms of steadily adding patients, really sort of the driver for our business. We do not see any change there. We did have a very high base in our revenue coming into third quarter that was very much patient demand. We did have some favorability in gross-to-net, which we discussed, and a high-demand quarter from an inventory standpoint. We are in a very strong position. Going into fourth quarter, working off that base and taking into effect that there are fewer selling days in the fourth quarter in general, and as we discussed, the gross-to-net begins to—we will see the commercial rebating starting to take effect in the fourth quarter, so we will be at the midpoint of that 20%-30% range.

All that put together, we think we will see high single-digit growth quarter over quarter going into the fourth quarter, but still a very strong quarter. Of course, we are on over a billion-dollar run rate in revenue. Fantastic. Good. Great.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Parcar, maybe just one comment there as well. I think more and more the measure turns to patients. And patients being treated. As you can see, we are doing really, really great in our steadily adding patients. That is something that is going to, we’ve said, remain to be steadily adding in the future and feel really, really great. Again, where we are, it’s less than 10% penetration. There is a ton of patients that are out there that still need to be treated, and that represents a great opportunity for us.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Yeah. I just wanted to come back to 2026 that Parcar asked about too. Again, everything Bill just said for the steadily adding patients, we see that going into 2026 as well. Steadily adding patients, we anticipate, and we said in the script, robust net sales growth in 2026. If you think about—just think about the phasing, right? We are going to have the impact of the gross-to-net starting in January, right at the beginning of the year. You are going to see that step up from the contracting, and we will be in the high 30s. Of course, we always have the Q1 effect on top of that, right? In terms of the phasing, you will see some of that play through in 2026. Net net, we see robust growth going into 2026. Great. Thanks, Mardi. Operator, next question, please.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Sugripa Devakonda of True Securities. Your line is now open.

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Hi, guys. Thank you so much for taking my question, and congratulations on the quarter. I was wondering if you can talk a little bit on the expected cadence for EU launch and how that, when we think about 2026, that might add to the growth. I know it takes time for EU launches. Also, the SG&A that was reported, does that include Salesforce in Europe, or should we be thinking about a slight increase in SG&A over the next several months to reflect Salesforce on the ground in Europe? Thank you.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Mardi, do you want to take that first?

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Yeah. I’ll definitely answer the SG&A question first, and we can talk about just EU launch in general. SG&A for building out Germany, right? Because that’s where we’re only launching there as of right now, is included in our SG&A expenses. You’ll continue to see that included in SG&A. As we’ve said, when we move into country by country, we’re going to be very disciplined, and we look at a two- to three-year positive contribution metric for each country. The spend will increase with Europe. Again, we’re mindful with each country. Just the EU launch, let’s just talk about that. I’ll start, and Bill, I don’t know if you want to add. We did start launching in the third quarter, but really, we were just testing the channel. Just the de minimis amount of revenue.

For 2025, we believe, and where we said we can start that, we can start seeing some impact in 2026. I would say the robust sales growth that we’re talking about 2026 is by far and predominantly the US sales growth and adding patients, which we’ve discussed. Europe, again, it’s going to play out. It is slow. We have to build the system. We have to wire the system. In countries in Europe, it’ll just be Germany next year. It’ll add, but not a significant amount.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Yeah. I think that’s a really, really great comment. It is Germany right now. And we’re really excited. I mean, first of all, we’ve hired an outstanding team there. The team is great. The feedback that we’re getting is that MASH needs to be treated. It’s prevalent. Very similar to the US in that sense. It takes time, right? You got to wire the system. It’s practice by practice, prescriber by prescriber. We’re taking all the steps in the usual next countries to look at as well. We’ve started putting teams in place that are evaluating the market and our launch strategy there. Again, just absolutely high-quality team that’s in place. We feel really good about the long-term prospects. We also know that there’s a lot of wiring to do, and we’ve got to navigate the reimbursement process in each country, which takes some time.

We got a great team to do that. Thanks.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Thanks, Bill. Operator, we have time for one more question, please.

Marvin, Conference Call Operator: Thank you. One moment for our next question. Our next question comes from the line of Kaveri Pullman of Clear Street. Your line is now open.

David Soergel, Chief Medical Officer, Madrigal Pharmaceuticals: Great. Good morning. Congrats on the progress, and thank you for taking my question. Are there any systemic differences or challenges in insurance approval rates for Rezdiffra depending on whether the prescription comes from an endocrinologist versus a hepatologist or a gastroenterologist? Maybe just like a connected question to that. Besides the clinical data that you showed on slide 14, is there any real-world evidence that you have collected or showing that Rezdiffra can prevent or delay the progression of F4 cirrhosis, perhaps based on the feedback from its current use by physicians? In other words, is there any evidence leading to the preference of Rezdiffra or GLP-1s in F2, F3 MASH patients? Thank you.

Bill Sibold, Chief Executive Officer, Madrigal Pharmaceuticals: Yeah. Thanks for the question. Maybe starting there. We’re seeing more and more real-world evidence that’s coming to light. Some of it will be presented at AASLD this week or this week into next week. We expect as more patients start to hit the one-year mark and beyond that there will be more. Anecdotally, we’re hearing really, really great feedback. When you launch a product, you never know what’s going to happen in the real world. You have your clinical data, and you’re not sure what real-world experience is going to be. So far, the anecdotal feedback has been extremely strong by prescribers. They’re seeing effects on, obviously, liver fat. They’re seeing effects on fibrosis and all the other myriad of other things, LFTs, lipids, etc. We’re really excited about the real-world evidence reading out. We’ve done work with claims databases, etc.

More to come, but early indicators are extremely strong. We’re really excited about that. To your first question, it really is payer to payer about this utilization management criteria, who can prescribe, etc. For the most part, it refers to specialists. In the specialists, that can be hepatologists and gastroenterologists. In some cases, it may or may not name endocrinologists. It’s usually either a requirement to be prescribed by a specialist or in consultation with a specialist. Again, that’s something which really varies on a plan-by-plan basis. We don’t see that as any kind of a hindrance now. Remember, our focus is the specialists. We believe Rezdiffra should be prescribed by these specialists. In time, that may change, but we think that this is a very serious disease. It is a very serious disease.

We want to have the specialists get experience with Rezdiffra in treating these patients before it would ever extend beyond that. That’s crystal clear. We make that crystal clear with payers as well. That is our intent.

Tina Ventura, Chief Investor Relations Officer, Madrigal Pharmaceuticals: Great. Thanks, Bill. 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 approximately two hours. Thanks for joining us.

Marvin, Conference Call Operator: Ladies and gentlemen, thank you for participating in today’s conference. You may now disconnect. Have a wonderful day.

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