MADRIGAL PHARMACEUTICALS, INC. Q3 FY2026 earnings call

• Commercial Execution & Patient Growth: ResDifera is rapidly expanding its patient base, ending Q3 with over 55,850 active patients, nearly double the count from a year ago. The team attributes this to strong prescriber adoption, excellent market access, and high patient adherence.
• Market Acceleration: The diagnosed US F2-F3 MASH population has grown significantly, reaching an estimated 530,000+ patients by mid-2026. Management projects the market will grow more than 30% in 2026, driven by increased awareness and diagnosis rates.
• F4C Strategic Positioning: Management aims to be 'first and best' in the F4C (compensated cirrhosis) market. They estimate 360,000 addressable F4C patients in the US, a market larger than the current F2-F3 opportunity. Competitors face delays, with earliest potential entrants not expected until 2030.
• Pipeline Advancement: The company is advancing two Phase III trials for F4C: MaestroNAS Outcomes (readout anticipated late 2027) and the new Maestro CSPH trial (initiation planned for H1 2027). Additionally, three Phase II combination trials involving DGAT2 inhibitors, GLP-1 agonists, and siRNA targets are planned for 2027.
• Real-World Evidence: ResDifera demonstrates consistent efficacy across various subgroups, including those with Type 2 diabetes and specific genetic variants. Real-world data supports its safety profile and tolerability, reinforcing its position as a foundational therapy.

ResDifera (MASH Therapy): Reported net sales of $431.3 million for Q3 2026, representing a 50% year-over-year increase. Year-to-date net sales exceeded $1 billion, with annualized run rates surpassing $1.7 billion. The product segment constitutes the entirety of the company's reported revenue, driving the firm to its first quarter of profitability.

• Q4 2026 Trends: Management anticipates steady patient additions and robust growth into Q4 2026, maintaining the consensus growth rate between Q3 and Q4.
• Full-Year 2026 Gross-to-Net: Expected to settle at the low end of the mid-to-high 30s percentage range.
• 2026 Expense Outlook: R&D expenses are expected to be nominally lower than 2025 due to one-time business development costs in the prior year. SG&A expenses are projected to increase compared to 2025 to support commercial growth, with higher Q4 expenses anticipated.
• 2027 Outlook: No specific revenue guidance provided for 2027, but management expects continued strong momentum, accelerating market growth, and stable patient acquisition. They anticipate some quarter-to-quarter choppiness typical of specialty medicines (Q1 dynamics).

• Competitive Landscape: While currently leading, the MASH space faces competition from major pharmaceutical companies and emerging therapies, particularly GLP-1 agonists which are ubiquitous in the patient population.
• Regulatory & Clinical Trial Uncertainty: The success of the F4C indication relies on positive outcomes from the MaestroNAS Outcomes trial. Delays or failures in achieving event accrual targets could impact timelines.
• Gross-to-Net Pressure: Future Medicare Part D contracts going into effect in Q1 2027 may impact gross-to-net margins, potentially pushing them toward the high end of the current guidance range.
• Profitability Volatility: Although profitable in Q3, management warns that the company may dip in and out of profitability in the near term due to timing of investments, business development activities, and seasonal Q1 dynamics.

Q: Analyst asked about Q4 trends and details on the new F4C trial (Maestro CSPH), specifically why it is being launched now and how it differs from the existing MaestroNAS Outcomes trial. / A: CFO Mardi Dier confirmed Q4 looks good with steady patient addition and robust growth continuing into the fourth quarter. CEO Bill Sibold stated the F4C trial is a 'practice-shaping' leapfrog study designed to raise industry standards and assert leadership. CMO Dave Soergel added that the trial leverages five years of open-label and outcomes experience to better enrich the population for Clinically Significant Portal Hypertension (CSPH), aiming to deliver comprehensive data before competitors launch.