Madrigal Pharmaceuticals, Inc.

Good day, ladies and gentlemen, and welcome to the Madrigal Pharmaceuticals first quarter 2022 conference call. At this time, all participants are in a listen-only mode. Following remarks from the company, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone requires operator assistance, please press star then zero key on your touch-tone telephone. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Dr. Paul Friedman, Chairman and Chief Executive Officer of MAGICAL. Dr. Friedman, you may begin.

Thank you. Good morning and thanks to all of you for joining us on the call. Here's the fine print dealing with our forward-looking statements. Please see today's press release and our SEC filings for forward-looking statement and risk factor considerations associated with these statements and our business. With me on today's call are Becky Taub, President of R&D and Chief Medical Officer, Rami Sakija, Chief Commercial Officer, and Alex Howarth, Chief Financial Officer. We also have Dr. Steven Harrison joining us to provide his perspective on the Maestro program updates we're announcing today. This morning, we issued a press release outlining a number of important clinical development program updates, including the acceptance of four resmediram abstracts as oral presentations at ECIL's International Liver Congress next month, additional positive data from the Phase III Meister of NAFLD I safety study, and a new outcomes trial that will evaluate resmediram for the treatment of patients with compensated cirrhosis. We also announced that Madrigal secured a term loan facility, which puts us in a strong financial position for the road ahead. The decision to expand our clinical development program and raise additional capital reflects our conviction in the potential of resmeteron to be a transformational therapy for patients with NASK. The emerging data from Maestro NAFLD-1 safety study, including the results we're announcing today, continue to support that conviction. and we look forward to sharing additional data in our late-breaker presentation at ESL. Now, Becky's going to review the design of the new Meister Nash Outcome Study in more detail in a few minutes, but I'd like to say a few words about the medical and commercial rationales for the study. First, and I think fairly obviously, patients with compensated cirrhosis are at significantly elevated risk of progression to negative clinical outcomes and there's a high unmet need for an approved therapy to treat these patients. Second, resveratrol has been well tolerated in this population, and early efficacy results are quite encouraging. Third, we believe this study can be conducted in a timely manner, and since in this more advanced population events will accrue faster, it can provide an alternative path to an early full approval in non-cirrhotic NASH than our ongoing clinical outcome studies in Meister and NASH. And finally, by substantially expanding the NASH market opportunity to include patients with compensated cirrhosis, the therapeutic and commercial value of resmediram for madrigal and potential business development partners should be strengthened. As we've gained increasing confidence that we'll achieve both NASH resolution and the fibrosis improvement endpoints in the Meister and Nash biopsy study, we are moving one-point fibrosis reduction up the hierarchy to a primary endpoint along with Nash resolution. The dual primary endpoints now for Meister and Nash are Nash resolution without worsening of fibrosis or fibrosis improvement without worsening of Nash. And while we fully expect to achieve both endpoints, making either endpoint is compatible with a subpart H NDA submission according to FDA's draft guidance. Importantly, our planned mice or NASH outcome study and the move to a dual primary endpoint in the biopsy study do not alter our timeline assumptions for readout of the biopsy study in Q4 or subpart H NDA submission in non-serotic NASH next year. The term loan financing we announced today will help fund the expansion of the Res Mederan Clinical Development Program and reinforces Madrigal's solid financial position. As of March 31, Madrigal had cash, cash equivalents, and marketable securities of $220 million. An additional $50 million is drawn at closing of the new loan agreement. Alex will share additional details shortly. As we noted in our press release, Maestro NAFLD-1 double-blind data were submitted as a late-breaking abstract to ESIL and accepted as an oral presentation at the International Liberal Congress next month. So while we'd like to share the full data set with you, we're not going to be able to provide you with any additional data beyond today's update because the data are now under embargo. Our team is looking forward to ESIL, the first major in-person hepatology conference since 2011. I'd like to thank our R&D team for the work they've done in generating multiple accepted abstracts for the meeting, including the Meister & Appleton One Late Breaker. We'll be conducting an investor event after the new data are presented at ESOL, so please reach out to us if you plan to be in London for the meeting. And now I'll turn the call over to Becky.

Good morning. So on slide seven, Here's the summary of the data that we presented at the January 31st webcast when we announced the top-line data from Meister-Nafl. Resmetamol was safe and well-polarized at the top dose of 100 as well as 80 milligrams in Meister-Nafl. T-secondary and 0.13 in Meister-Nafl at both 80 and 100 milligram dose groups, including PDFF, LDL, cholesterol, APOE, and triglyceride reductions, which are consistent with the parallel randomized 100-milligram open-label arm that had been from this same study that had been presented at AASLD earlier in November 2021. The safety and efficacy of the study are in line with the expectations from the Phase II liver biopsy study and the randomized parallel open-label labeled 100 milligram arm of Meister-Nafl. And positive results from this trial support our conviction that resmetirum has the potential to be the first medication approved for the treatment of NASH patients with liver fibrosis. Next slide. Now, there will be multiple presentations of MAGICL's program data at ECIL's International Liver Congress, including a late-breaking presentation primary data analyses of Meister-Nafl, 52-week double-blind placebo-controlled Phase III clinical trial of resmeterol in patients with NAFL. We will also be presenting three other oral abstracts, the impact of resmeterol-mediated reductions in liver volume and steatosis compared with placebo on the quantification of fibrosis using second harmonic generation in a serial liver biopsy. This refers to a technique using artificial intelligence to read fibrosis on the liver biopsy slides. We will present an abstract utility of FIB4 thresholds to identify patients with at-risk F2, F3 NASH based on screening data from a 2,000-patient liver biopsy cohort of our Phase III Clinical Trial Meister NASH. And a fourth presentation, Biomarkers, Imaging, and Safety in a Well-Compensated Nascerotic Cohort Treated with Resmataram, a Thyroid Hormone Receptor Beta Agonist for 52 Weeks. And we also have two posters, one looking at the association of FIP4 with healthcare costs, and a second using a different AI methodology to review our slides that confirms the significant treatment-induced changes in histologic features of NASH from our Phase II study. There's an additional satellite symposium, which will discuss identifying, managing, and treating patients with NASH and significant fibrosis. So, on the next slide, slide nine, additional data from the MEISTER-NAFL trial, as Dr. Friedman mentioned, detailed results of this trial are under ARGO until the late-breaking presentation at ESOL. However, we will focus on some of the important results here. similar to what was reported for the 100-milligram open-lab arm in November of 2021. Patients in the parallel arms, 80-milligram and 100-milligram treated with resmediram achieved reductions from baseline in ALT that P equals 0.002 and less than 0.0001 relative to placebo. Transient LT increases that were greater than three times the upper limit of normal occurred in 0.61% in the resmetarom 80 milligram group, 0.31% in the 100 milligram group, and 1.6% of patients in the placebo group, indicating that, if anything, there was a lower increase in patients treated with resmetarom. and this was across the entire 52 weeks of the study. Treatment, emergent, adverse events of greater than grade 3, greater than or equal to grade 3, occurred in 7.6% of patients in the res metarome 80, 9% in the 100-mil group, and 9.1% in the placebo group. This was data that we also presented in January. Withdrawals due to adverse events were... very low in the study, 2.4% in the 80-milligram group, 2.8% in the 100-milligram group, and 1.3% in the placebo group. The GI-related adverse events that we had shown at the end of January were increased in the drug arms relative to placebo. Further analysis has shown that These increases in GI adverse events, diarrhea and nausea, did not occur after the first few weeks of therapy. Next slide, slide 10. Endpoints related to a fiber scan were evaluated in this study. Patients had a screening or pre-screening FibroScan that then allowed them to screen for the study based on the CAP and KPA values. And then they had a second FibroScan at week 52. The FibroScan CAP score, which is reflective of hepatic fat, were statistically significantly reduced, P less than 0.0001 in the resveratrol arms as compared with placebo. Fibro-scanned liver stiffness reductions were presented for the 100-milligram open-label arm in November of 2021 and showed a marked reduction from baseline, and these reductions were similar in the 100-milligram open-label and double-blind arms. Responder analyses of the FibroScan VCTE reduction or KPA reduction and percent reduction from baseline comparing res metarom 100 milligram open label and the two double-blind arms with placebo showed a significant increase in responders in the treatment arm around 44%. averaged across the risk of Medirhom arms compared with the placebo, and this was statistically significant. There appeared to be some dose relationship between the 180 milligram doses in this study. If we examine the mean reduction in FibroScan liver stiffness, In the res medarum double-blind arms, these were numerically greater than placebo, but not statistically significant in this study. I will note also at this point that the threshold for an eligible FibroScan was 7.2 kPa, which is consistent with approximately F1 to F2 fibrosis. stage compared to liver biopsy historically in the literature, and this was a fraction of the patients in the Meister-Nafl study, which was, in general, an earlier population than Meister-Nash. MRE responders, as measured by KPA reduction, were also significantly greater in resmetarone-treated groups compared with placebo and showed a similar level of responders in all res mutter off dose arms. So that would be 100 milligram open label, 100 milligram double blind, and 80 milligram double blind arms showed a similar reduction in MRE, and this was in patients who had at least a 2.9 KPA at baseline. The intrinsic variability of FibroScan, 35% to 40%, which has been confirmed many times in the literature, limited to choose as a sole measure to diagnose or follow NASH patients, but it is an excellent office-based enrichment test and was an excellent enrichment test in both of our maestro studies. enabling us to rule out patients without significant fibrosis and identify potential NASH fibrosis patients. We will be presenting additional data on FibroScan and other eligibility criteria to diagnose NASH in one of our oral abstracts at ESL. However, a few of the highlights are shown here. The screening FibroScan of greater than 8.5 kPa in Maestro-Nash predicted significant fibrosis on biopsy in approximately 50%, and a high percentage of positive FibroScans did not have significant liver fibrosis. The MRE of 2.9, which was not used as a pre-screening test, but we have data from the study, predicts significant fibrosis on screening biopsy in about 80 percent of the NICE, Meister, NASH population. The intrinsic variability of the MRE is approximately 19 percent, so lower than the FibroScan. And we believe that additional biomarkers, and there's a huge amount of work going on this in the field, including composites or more specific imaging tests like MRE and MRI-PDFF with the FibroScan may increase the accuracy in diagnosing and monitoring patients with NASH. In the Meister-NASH outcome study, that we are planning to start over the next few months. Just to give you some brief comments on the study design, it's a randomized, double-blind, placebo-controlled study in approximately 70 patients with early NASH cirrhosis to allow for non-invasive monitoring and progression to liver decompensation events. make this clear. These are patients who have never decompensated, so they have early NASH cirrhosis. This is a similar population to an ongoing open-label arm of more than 180 patients with well-compensated NASH cirrhosis from our Maestro NAFLD study. The FDA has publicly stated that an outcome study in NASH cirrhosis patients can support full approval of non-cirrhotic NASH and matter well met with FDA to confirm the strategy and study design. Maestro NASH outcomes is designed to assess the rate of disease progression in early NASH cirrhosis patients and enhance the statistical power of Maestro trials to assess clinical benefit. The decompensation events that will be assessed include development of ascites, bleeding varices, hepatic encephalopathy, and increased smell greater than or equal to 15 and are expected to occur at a rate that is higher than in Maestro Nash. This is because the Maestro Nash patients who are past week 52 and are assessed out to month 54 are non-serotic, and these are in maestro-NASH outcomes. These are early NASH-serotic patients, and so the rate of decompensation will be higher in this population. Importantly, liver biopsy is not an endpoint. In maestro-NASH outcomes, the outcome portion of the trial of maestro-NASH, the liver biopsy study, there is a third liver biopsy occurs at month 54. So here in mice or NASH outcomes, the invasiveness and variability of liver biopsy is avoided. Several biomarker and imaging techniques will also be employed to assess correlates with disease progression. We will be presenting additional data on the open-label study of more than 180 patients with well-compensated NASH cirrhosis. at ESOL, and these data support the potential of resmeterom in this patient population. We have reported data from the patients with NASH cirrhosis at international meetings and demonstrated that resmeterom reduces liver fat, liver enzymes, liver volume, fibrosis markers, and atherogenic lipids in this population.