Madrigal Pharmaceuticals Reports Second-Quarter 2024 Financial Results and Provides Corporate Updates

Rhea-AI Summary

Madrigal Pharmaceuticals (NASDAQ:MDGL) reported Q2 2024 financial results and corporate updates. Key highlights include:

- Net sales of $14.6 million for Rezdiffra™ (resmetirom)
- Rezdiffra coverage for over 50% of commercial lives; less than 5% require biopsy
- Expert guidelines recommend Rezdiffra as first-line therapy for F2/F3 NASH/MASH patients
- Plans to directly commercialize resmetirom in Europe following expected EMA decision mid-2025
- Cash, cash equivalents, restricted cash, and marketable securities of $1.1 billion as of June 30, 2024

The company reported strong initial U.S. launch progress for Rezdiffra, with high enthusiasm from physicians and patients. New data presented at EASL Congress showed 91% efficacy in halting or improving liver stiffness at three years. Madrigal aims to expand its global leadership in NASH treatment.

Positive

• Net sales of $14.6 million for Rezdiffra in Q2 2024
• Rezdiffra coverage in place for over 50% of commercial lives
• Expert guidelines recommend Rezdiffra as first-line therapy for F2/F3 NASH/MASH patients
• Plans to directly commercialize resmetirom in Europe
• Strong cash position of $1.1 billion as of June 30, 2024
• 91% efficacy in halting or improving liver stiffness at three years

Negative

• Operating expenses increased to $177.2 million in Q2 2024 from $86.5 million in Q2 2023
• SG&A expenses significantly increased to $105.4 million in Q2 2024 from $17.8 million in Q2 2023

Insights

Financial Analyst

Madrigal Pharmaceuticals' Q2 2024 results show promising early traction for Rezdiffra, their newly launched NASH treatment. Net sales of $14.6 million in the first full quarter indicate strong initial uptake. The coverage for over 50% of commercial lives is impressive, especially considering the recent launch.

However, the company's operating expenses surged to $177.2 million, up 105% year-over-year, primarily due to launch-related costs. This resulted in a significant operating loss. The cash position of $1.1 billion provides a substantial runway, but investors should monitor the burn rate closely.

The planned European expansion could open up a significant new market, potentially driving future growth. Overall, while early sales are encouraging, profitability remains a distant goal given the high costs associated with the launch and ongoing R&D efforts.

Medical Research Analyst

The clinical data for Rezdiffra continues to impress, with 91% of patients showing improvement or stabilization in liver stiffness over three years. This long-term efficacy data is important for a chronic condition like NASH. The drug's inclusion in EASL guidelines as a first-line therapy for F2/F3 NASH/MASH patients is a significant endorsement that could drive adoption.

The new data on MetALD (metabolic dysfunction and alcohol-associated liver disease) patients is particularly intriguing. If Rezdiffra proves equally effective in this population, it could substantially expand the drug's potential market. However, more comprehensive studies may be needed to fully validate these findings.

The AI-driven analysis of the MAESTRO-NASH study provides deeper insights into Rezdiffra's antifibrotic effects, reinforcing its mechanism of action. This data-driven approach could lead to more personalized treatment strategies in the future.

Market Research Analyst

Madrigal's strategy to focus on building a strong foundation for Rezdiffra's growth is prudent. The emphasis on educating healthcare providers, creating care pathways and engaging with payers should help drive long-term adoption. The rapid progress in securing coverage, with over 50% of commercial lives covered and less than 5% requiring biopsy, is particularly impressive.

The decision to directly commercialize in Europe following potential EMA approval in 2025 is bold but could yield significant rewards if executed well. However, this will require substantial investment and carries execution risks in a new market.

The health economics studies highlighting the potential cost benefits of NASH interventions could be important in discussions with payers and health systems, potentially supporting broader adoption and reimbursement. The positioning of Rezdiffra as the foundational NASH therapy in expert guidelines is a major win that could significantly influence prescribing patterns.

• Second-quarter 2024 net sales of $14.6 million
• Rezdiffra™ (resmetirom) coverage in place for more than 50 percent of commercial lives; less than 5 percent of Rezdiffra-covered lives require biopsy
• Expert guidelines recommend Rezdiffra as first-line therapy for patients with F2/F3 NASH/MASH
• Plans to directly commercialize resmetirom in Europe following EMA decision expected mid-year 2025
• Reports cash, cash equivalents, restricted cash and marketable securities of $1.1 billion at June 30, 2024
• Company to host conference call today, August 7, 2024, at 8 a.m. EDT

CONSHOHOCKEN, Pa., Aug. 07, 2024 (GLOBE NEWSWIRE) -- Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), a biopharmaceutical company focused on delivering novel therapeutics for nonalcoholic steatohepatitis (NASH)/metabolic dysfunction-associated steatohepatitis (MASH), today reports second-quarter 2024 financial results and provides corporate updates.

Bill Sibold, Chief Executive Officer of Madrigal, stated, “We’re off to a strong start with our U.S. launch of Rezdiffra and are encouraged by the high enthusiasm and early demand from physicians and patients, as well as the favorable coverage from payers. Our efforts to help healthcare practices build patient care pathways are progressing well, setting the stage for future growth. Given the strong start in the U.S., we aim to extend Madrigal’s global leadership in NASH by directly commercializing Rezdiffra in Europe next year upon regulatory approval.”

Mr. Sibold continued, “The urgent unmet need in NASH, which is the leading cause of liver transplant among women in the U.S., is driving the strong reception to Rezdiffra as the first and only approved therapy for NASH. Data presented at the EASL Congress demonstrating 91% efficacy in halting or improving liver stiffness, a key noninvasive measure of fibrosis, at three years reinforce the Rezdiffra efficacy profile; and the new EASL guidelines position Rezdiffra as the foundational NASH therapy.”

Second Quarter and Recent Corporate Updates

• Rezdiffra U.S. launch update
  • On April 9, 2024, the Company announced U.S. availability of Rezdiffra, a once-daily, oral, liver-directed, THR-β agonist designed to target the underlying causes of NASH, which is the number-one cause of liver transplants for women in the U.S.
  • Madrigal is continuing to execute the U.S. launch of Rezdiffra, which is focused on building the foundation for future growth by educating the community on the clinical benefits of Rezdiffra, supporting the creation of care pathways for patients at physician offices, driving breadth and depth of Rezdiffra prescribers, and engaging with payers to increase Rezdiffra coverage.
  • As of June 30, 2024, coverage for Rezdiffra is in place for more than 50 percent of commercial lives covered by health insurance in the U.S., tracking well towards the Company’s goal of 80 percent of commercial lives covered by year-end 2024. Less than 5 percent of Rezdiffra-covered lives require biopsy for diagnosis and instead accept noninvasive tests, or NITs, in line with current standard of care.
• Driving future growth through European expansion
  • Rezdiffra is currently under evaluation with the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) and has the potential to become the first therapy for patients with NASH/MASH with liver fibrosis to receive approval in Europe.
  • The Company plans to directly commercialize resmetirom in Europe following a decision from the EMA on the Marketing Authorization Application (MAA), which is expected mid-year 2025.
• Expert guidelines recommend Rezdiffra as first-line therapy for NASH/MASH
  • In July, updated clinical practice guidelines co-authored by the European Association for the Study of the Liver (EASL), the European Association for the Study of Diabetes (EASD), and the European Association for the Study of Obesity (EASO) for MASH were published in the Journal of Hepatology and recommend Rezdiffra as first-line therapy for patients with F2/F3 NASH/MASH where the medicine is available. The guidelines noted that Rezdiffra is the only disease-specific agent in MASH with positive results from a registrational Phase 3 clinical trial.
  • In July, “Expert Panel Recommendations: Practical Clinical Applications for Initiating and Monitoring Resmetirom in Patients with MASH/NASH and Moderate to noncirrhotic Advanced Fibrosis” were published in the Journal of Clinical Gastroenterology and Hepatology. These recommendations were written by well-recognized experts in NASH/MASH and provide practical guidance for the appropriate use of Rezdiffra, including patient identification, assessment of response and general monitoring.
• Multiple abstracts presented at the EASL Congress in June
  • A late breaking oral presentation that leveraged innovative AI technology provided deeper insight from the Phase 3 MAESTRO-NASH study of the antifibrotic effect of Rezdiffra and the role of THR-β as a suppressor of disease progression.
  • New analyses from noninvasive test data pointed to a durable Rezdiffra treatment response through three years including a 91% improvement or stabilization of liver stiffness (a surrogate for fibrosis), and a positive quality-of-life analysis showing the benefit of Rezdiffra treatment on patient worry, health distress and stigma.
  • The Company also presented for the first time an analysis of Rezdiffra treatment in patients with probable metabolic dysfunction and alcohol-associated liver disease, known as MetALD, which demonstrated that patients achieved similar rates of fibrosis improvement and steatohepatitis resolution compared to the NASH population.
  • Two health economics outcomes research studies in Medicare patients concluded that NASH patients are at a higher risk of progression, which is associated with higher costs, particularly at advanced stages. These studies concluded that interventions that can delay or prevent progression may reduce morbidity and mortality and deliver cost benefits.
    

Second-Quarter 2024 Financial Results

• Total revenues: The Company shipped Rezdiffra beginning in April and generated second-quarter 2024 net revenues of $14.6 million. No product sales were recognized during the comparable prior year period.
• Cost of sales: Second-quarter 2024 cost of sales were $0.6 million. Cost of sales were not recognized during the comparable prior year period given that no product sales were recorded.
• Operating Expenses: Second-quarter 2024 operating expenses were $177.2 million, compared to $86.5 million in the comparable prior year period.
  • R&D Expense: Second-quarter 2024 R&D expense was $71.1 million, compared to $68.6 million in the comparable prior year period. The increase is primarily attributable to an increase related to timing of manufacturing, headcount and stock compensation expense.
  • SG&A Expense: Second-quarter 2024 SG&A expense was $105.4 million, compared to $17.8 million in the comparable prior year period. The increase is primarily attributable to increases in prelaunch and launch activities for Rezdiffra, including significant commercial headcount expansion and stock compensation expense.
• Interest Income: Second-quarter 2024 interest income was $14.2 million, compared to $3.6 million in the comparable prior year period. The increase in interest income is due primarily to higher principal balances and interest rates in 2024.
• Interest Expense: Second-quarter 2024 interest expense was $3.7 million, compared to $2.9 million in the comparable prior year period. The increase in interest expense was a result of a higher outstanding principal balance during the period under the Company’s loan facility.
• Cash, Cash Equivalents, Restricted Cash and Marketable Securities: As of June 30, 2024, Madrigal had cash, cash equivalents, restricted cash and marketable securities of $1.1 billion, compared to $634.1 million at Dec. 31, 2023. The increase in cash and marketable securities was primarily attributable to $574 million of net proceeds from the Company’s March 2024 public offering partially offset by funding of operations.

Conference Call and Webcast
At 8 a.m. EDT today, August 7, 2024, the Company will host a webcast to review its financial and operating results and provide a general business update. To access the webcast, please visit the investor relations section of the Madrigal website or click here to register. An archived webcast will be available on the Madrigal website following the event.

About NASH
Nonalcoholic steatohepatitis (NASH) is a more advanced form of nonalcoholic fatty liver disease (NAFLD). NASH is a leading cause of liver-related mortality and an increasing burden on healthcare systems globally. Additionally, patients with NASH, especially those with more advanced metabolic risk factors (hypertension, concomitant type 2 diabetes), are at increased risk for adverse cardiovascular events and increased morbidity and mortality.

Once patients progress to NASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis), the risk of adverse liver outcomes increases dramatically. NASH is rapidly becoming the leading cause of liver transplantation in the U.S.

Madrigal estimates that approximately 1.5 million patients have been diagnosed with NASH in the U.S., of which approximately 525,000 have NASH with moderate to advanced liver fibrosis. Madrigal plans to focus on approximately 315,000 diagnosed patients with NASH with moderate to advanced liver fibrosis under the care of the liver specialist physicians during the launch of Rezdiffra.

NASH is also known as metabolic dysfunction associated steatohepatitis (MASH). In 2023, global liver disease medical societies and patient groups came together to rename the disease, with the goal of establishing an affirmative, non-stigmatizing name and diagnosis. Nonalcoholic fatty liver disease (NAFLD) was renamed metabolic dysfunction-associated steatotic liver disease (MASLD); NASH was renamed MASH; and an overarching term, steatotic liver disease (SLD), was established to capture multiple types of liver diseases associated with fat buildup in the liver. In addition to liver disease, patients with MASH have at least one related comorbid condition (e.g., obesity, hypertension, dyslipidemia, or type 2 diabetes).

About Madrigal Pharmaceuticals
Madrigal Pharmaceuticals, Inc. (Nasdaq: MDGL) is a biopharmaceutical company pursuing novel therapeutics for nonalcoholic steatohepatitis (NASH), a liver disease with high unmet medical need. Madrigal’s medication, Rezdiffra (resmetirom), is a once-daily, oral, liver-directed THR-β agonist designed to target key underlying causes of NASH. For more information, visit www.madrigalpharma.com.

Forward Looking Statements
This press release includes “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are based on Madrigal’s beliefs and assumptions and on information currently available to it but are subject to factors beyond its control. Forward-looking statements reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events. Forward-looking statements include all statements that are not historical facts; statements referenced by forward-looking statement identifiers; and statements regarding: Rezdiffra (resmetirom) and its expected use for treating NASH with moderate to advanced fibrosis; future growth of Rezdiffra sales; projections or objectives for obtaining approval from EMA for Rezdiffra (resmetirom) and expected commercialization of Rezdiffra (resmetirom) in Europe; the final number of patients who randomize in the MAESTRO-NASH trial, the estimated study duration for such trial and the anticipated timeframe for topline data from such trial; the U.S. opportunity for Rezdiffra in patients with stage 4 fibrosis (F4)/compensated cirrhosis; estimates of patients diagnosed with NASH and market opportunities; and strategies, objectives and commercial opportunities, including potential prospects or results.

Forward-looking statements can be identified by terms such as “accelerate,” “achieve,” “allow,” “anticipates,” “appear,” “be,” “believes,” “can,” “confidence,” “continue,” “could,” “demonstrates,” ”design,” “estimates,” “expectation,” “expects,” “forecasts,” “future,” “goal,” “help,” “hopeful,” “inform,” inform,” “intended,” “intends,” “may,” “might,” “on track,” “planned,” “planning,” “plans,” “positions,” “potential,” “powers,” “predicts,” ”predictive,” “projects,” “seeks,” “should,” “will,” “will achieve,” “will be,” “would”, “future” or similar expressions and the negatives of those terms.

Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to: the assumptions underlying the forward-looking statements; risks of obtaining and maintaining regulatory approvals, including, but not limited to, potential regulatory delays or rejections; the challenges with the commercial launch of a new product, particularly for a company that does not have commercial experience; risks associated with meeting the objectives of Madrigal’s clinical studies, including, but not limited to Madrigal’s ability to achieve enrollment objectives concerning patient numbers (including an adequate safety database), outcomes objectives and/or timing objectives for Madrigal’s studies; any delays or failures in enrollment, and the occurrence of adverse safety events; risks related to the effects of Rezdiffra’s (resmetirom’s) mechanism of action; enrollment and trial conclusion uncertainties; market demand for and acceptance of our product; the potential inability to raise sufficient capital to fund ongoing operations as currently planned or to obtain financings on terms similar to those arranged in the past; the ability to service indebtedness and otherwise comply with debt covenants; outcomes or trends from competitive studies; future topline data timing or results; our ability to prevent and/or mitigate cyber-attacks; the timing and outcomes of clinical studies of Rezdiffra (resmetirom); the uncertainties inherent in clinical testing; and uncertainties concerning analyses or assessments outside of a controlled clinical trial. Undue reliance should not be placed on forward looking statements, which speak only as of the date they are made. Madrigal undertakes no obligation to update any forward-looking statements to reflect new information, events, or circumstances after the date they are made, or to reflect the occurrence of unanticipated events. Please refer to Madrigal’s submissions filed with the U.S. Securities and Exchange Commission, or SEC, for more detailed information regarding these risks and uncertainties and other factors that may cause actual results to differ materially from those expressed or implied. Madrigal specifically discusses these risks and uncertainties in greater detail in the sections appearing in Part I, Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024, , and Part II, Item 1A of its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on May 7, 2024, and as updated from time to time by Madrigal’s other filings with the SEC.

Investor Contact
Tina Ventura, IR@madrigalpharma.com

Media Contact
Christopher Frates, media@madrigalpharma.com

(tables follow)

Madrigal Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
	Three Months Ended							Six Months Ended
	June 30,							June 30,
		2024			2023				2024			2023
Revenues:
Product revenue, net	$	14,638		$	-			$	14,638		$	-
Operating expenses:
Cost of sales		636			-				636			-
Research and development		71,091			68,605				142,328			130,759
Selling, general and administrative		105,448			17,845				186,249			34,027
Total operating expenses		177,175			86,450				329,213			164,786
Loss from operations		(162,537	)		(86,450	)			(314,575	)		(164,786	)
Interest income, net		14,222			3,551				22,556			7,327
Interest expense		(3,656	)		(2,901	)			(7,493	)		(5,237	)
Net loss	$	(151,971	)	$	(85,800	)		$	(299,512	)	$	(162,696	)
Basic and diluted net loss per common share	$	(7.10	)	$	(4.69	)		$	(14.47	)	$	(8.91	)
Basic and diluted weighted average number of common shares outstanding		21,402,646			18,310,952				20,702,041			18,249,778
Madrigal Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
	June 30,			December 31,
		2024			2023
Assets
Cash, cash equivalents, restricted cash, and marketable securities	$	1,062,794		$	634,131
Other current assets		28,934			3,150
Other non-current assets		8,061			3,266
Total assets	$	1,099,789		$	640,547
Liabilities and Equity
Current liabilities	$	125,162		$	118,548
Long-term liabilities		117,507			116,666
Stockholders’ equity		857,120			405,333
Total liabilities and stockholders’ equity	$	1,099,789		$	640,547

FAQ

What were Madrigal Pharmaceuticals' (MDGL) Q2 2024 net sales for Rezdiffra?

Madrigal Pharmaceuticals reported net sales of $14.6 million for Rezdiffra in the second quarter of 2024.

What percentage of commercial lives have Rezdiffra coverage as of Q2 2024?

As of June 30, 2024, Rezdiffra coverage is in place for more than 50 percent of commercial lives covered by health insurance in the U.S.

When does Madrigal Pharmaceuticals (MDGL) expect an EMA decision on resmetirom?

Madrigal Pharmaceuticals expects a decision from the European Medicines Agency (EMA) on the Marketing Authorization Application (MAA) for resmetirom by mid-year 2025.

What was Madrigal Pharmaceuticals' (MDGL) cash position as of June 30, 2024?

As of June 30, 2024, Madrigal Pharmaceuticals had cash, cash equivalents, restricted cash and marketable securities of $1.1 billion.

What efficacy did Rezdiffra show in improving liver stiffness according to data presented at EASL Congress?

Data presented at the EASL Congress demonstrated 91% efficacy in halting or improving liver stiffness, a key noninvasive measure of fibrosis, at three years for Rezdiffra.