Madrigal Pharmaceuticals, Inc.

Good day, and thank you for standing by. Welcome to Medical Pharmaceuticals' third quarter 2024 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.

Thank you, Marvin. Good morning, everyone, and thank you for joining us to discuss Madrigal's third quarter 2024 earnings. We issued a press release this morning and have a slide deck that accompanies this webcast, which we'll post on the investor relations section of our website right after the call. On the call with me today is Bill Sibbold, Chief Executive Officer, and Marty Deer, Chief Financial Officer. They will provide prepared remarks, and then we'll take your questions. Our goal is to keep today's call to about 45 minutes. 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 on slide three.

Well, thanks, Tina. Good morning, and thanks for joining. I'll cover three topics on our call this morning. First, an update on the RISDiffer launch. Second, how we see the NASH treatment landscape evolving over time. And third, the progress we've made to strengthen our long-term leadership position in NASH, including completing enrollment of our cirrhosis outcomes trial. Let's start with the U.S. ResDifera launch on slide four. As we announced in our earnings release this morning, we delivered an exceptional quarter generating $62 million in net sales. This was another strong demand quarter with inventory at the low end of our expected two- to four-week range. We're now six months into the launch, and the feedback we're hearing from prescribers continues to be very positive. They're finding it easier to prescribe ResDiffer to their patients thanks to our efforts to wire the system and the improved access we've secured. They also have high confidence in ResDiffer's real-world performance as an effective, well-tolerated, once-a-day pill supported by positive patient experiences to date. healthcare providers are beginning to recognize ResDifera as standard of care, reinforcing its position as the foundational therapy for NASH. And while we are still early in the launch phase, we're continuing to see great progress across all key performance metrics. This gives us confidence in our strong growth expectations for ResDifera and reinforces that the launch is tracking in line with other best-in-class specialty medicine blockbuster launches. So let's start with patients. As a reminder, we're focused on the 315,000 patients diagnosed with NASH with moderate to advanced fibrosis. We ended the quarter with greater than 6,800 patients on ResDifera. The figure represents patients on drug or the bottom of the patient funnel and the most rigorous metric to measure. By comparison, we ended the second quarter with more than 2,000 patients on ResDifera. We know that the early quarters of the launch are crucial and often predictive of future success. During these initial quarters, we are closely tracking our metrics, including the pace of patient ads against a group of top-tier specialty medicine launches. We are steadily adding patients at a rate consistent with those benchmarks. As we discussed last quarter, we have dedicated significant effort with our field and patient support teams to reduce the time it takes for prescriptions to be filled. Thanks to their outstanding work, we achieved our six-month goal with time-to-fill trending at 30 days or less. We're also encouraged by the progress we've made with payers. One of our ambitious pre-launch objectives was to secure coverage for 80% of commercial lives by year-end, and we achieved this goal during the third quarter, a full quarter ahead of schedule. At quarter end, more than 80% of commercial lives have coverage in place for ResDifera. Notably, greater than 95% of ResDifera-covered lives accept non-invasive tests or NITs and do not require a biopsy in line with current standard of care. As we noted last quarter, Medicaid coverage was in place as of July 1st, and we expect Medicare coverage to begin on January 1st of next year. Currently, Medicare patients are accessing ResDifera through the medical exception process with prior authorization requirements aligned with our label. This process has been smooth, allowing patients to readily access ResDifera. We expect many Medicare plans to start to list ResDifera in 2025 and would expect this favorable access to continue. Our business mix has been running in line with our expectations with commercial at 50 to 55%, Medicare at 30 to 35%, and Medicaid and other at about 10%. Moving on to prescribers. As a reminder, we have 14,000 total targets with a primary focus on the top 6,000. These include hepatologists and gastroenterologists who treat the majority of the 315,000 diagnosed F2, F3 patients. The goal with any successful launch is to expand both the breadth and depth of prescribing, and we're making strong progress on both fronts. In the third quarter, around 40% of our top targets prescribed resdifera, doubling the 20% penetration rate from the second quarter. Our top targets are continuing to write more than 75% of resdifera prescriptions, giving us confidence that we're targeting the right prescribers with our efforts. And as we look at depth among our top targets, we are seeing an increasing number of prescriptions written per prescriber as well. The launch is off to a fantastic start with all of our metrics either meeting or exceeding our high expectations. Our success to date has also been driven by our ability to continue to wire the system as noted on slide five. This is a first in disease launch where the market needs to be built from the ground up. Prior to ResDifera's approval in March, there had never been a prescription written for NASH. Our goal has been to drive changes in clinical practice and develop processes for efficient patient and prescription flow to establish a strong foundation that will support our peak sales expectations. While we still have a lot of work left to do, we have made terrific progress to date. Success here allows us to strengthen our leadership position in NASH and achieve one of the most successful specialty launches in the industry. A key factor of our success thus far has been ResDifera's strong value proposition, which has been recognized by healthcare providers, payers, and patients. As a reminder, ResDifera is a liver-directed medicine that has set a high bar for efficacy and safety. It's the only medicine to achieve statistically significant results on both endpoints in Phase III, NASH resolution and fibrosis improvement. Importantly, ResDifera stopped or improved fibrosis in more than 80% of patients after one year of therapy. It's a once-a-day pill that's well-tolerated with simple dosing. It's this favorable profile that should allow patients to stay on the medicine over time. Early indicators suggest persistency in line with other well-tolerated oral medicines. It's clear from these real-world results that risdifera is well on its way to becoming the foundational therapy for NASH patients with moderate to advanced liver fibrosis. We believe that this strong product profile will provide a sustainable advantage for risdifera when new competition emerges. The next potential entrant could be from the GLP-1 class. As we look at the profile of semaglutide on slide seven, you'll see that risdifera compares very favorably across key attributes. Importantly, more patients taking a GLP-1 in the real world struggle to stay on treatment long-term. In fact, data show that only about 30% of patients with obesity remained on semaglutide after one year, which is especially important given their NASH study of 72 weeks. For NASH patients with moderate to advanced fibrosis who are one or two steps away from having cirrhosis, healthcare providers will want to be confident that their patient is going to take his or her medicine consistently over time to see an effect. So as we look ahead and consider the potential impact of a GLP-1 launch on the market on slide 8, we believe it will further accelerate the growth opportunity for risdifera. We are focused on the 315,000 patients diagnosed with moderate to advanced NASH fibrosis. On its own, this is an attractive specialty market, and we are still early in the journey with 2% of those patients on treatment. Novo Nordisk, is focused on a much larger population of both diagnosed and undiagnosed patients, many multiples of our 315,000. Their efforts will expand the market and, most importantly, benefit patients with NASH by increasing awareness, patient screening, diagnosis, and treatment. And this significant expansion will also benefit ResDifera, both as the foundational therapy in NASH for first-line patients, and from the high world discontinuation rate of semaglutide. And there is clearly room in this large and underpenetrated market for multiple mechanisms to treat this challenging disease. We expect combination therapy to be part of the treatment paradigm. In fact, it's already happening. Approximately 25% of resdifera patients today are using resdifera in combination with GLP-1s to treat their comorbidities. and the percentage is likely much higher when including patients that have previously been on a GLP-1. In summary, we continue to be optimistic about the future market dynamics. Between ResDiffer's attractive real-world profile, the significant opportunity to penetrate our target market of 315,000, and the potential for significant market expansion beyond that with new competition, we are confident that ResDifera can continue to deliver strong growth in the years ahead. We're also pursuing additional growth opportunities for ResDifera beyond our launch in the U.S., as highlighted on slide 9. This includes our efforts in Europe, where we are preparing for a potential second half 25 launch of ResDifera pending EMA approval. Additionally, we're working to bring ResDifera's benefits to patients with NASH cirrhosis, Earlier this month, we completed enrollment in our Maestro NASH outcomes trial, marking a significant milestone for Madrigal and the NASH field. Subject to regulatory approval, positive results could make ResDiffer the first medicine for patients with compensated NASH cirrhosis. Cirrhosis patients are at a high risk of progressing to serious liver-related outcomes. While F2-F3 patients have a 10 to 17 times greater risk of liver-related mortality, in F4 or cirrhosis patients, that risk is 42 times higher. This stark statistic underscores the urgent need for an effective treatment in this vulnerable population. Results from our outcomes trial in cirrhosis patients, as well as the outcomes portion of our Maestro NASH trial in F2, F3 patients, could very well position resdifera as the only approved therapy with outcomes data in NASH in this decade. providing us with data years ahead of the competition. I'd also like to highlight two exciting developments in our R&D organization that further strengthen our leadership in NASH. Dr. Michael Charlton has joined us as head of clinical development. As a world renowned expert in NASH, we are thrilled he decided to join Madrigal at such a pivotal time for the company. Secondly, we are preparing for a strong presence at the upcoming AASLD liver meeting in mid-November in San Diego, where ResDifera will be in the spotlight as the first ever approved therapy for NASH. Madrigal is leading the NASH field to advance the science. Our ResMetarom development program produced more NASH abstracts at ASLD than any other program. Moreover, AASLD recently released guidance that reinforces Riz Differ's role as the foundational therapy for NASH, following similar recommendations from the EASL guidelines in June and the expert panel in July. Clinicians now have multiple guidance documents to support patient identification, treatment initiation, and monitoring. Before I hand it over to Marty, let me briefly summarize our progress on slide 10. This quarter, we delivered outstanding results meeting or exceeding our ambitious targets. Net sales of $62 million driven by strong demand. Greater than 6,800 patients on ResDifera. More than 80% of commercial lives covered, achieving this milestone a full quarter ahead of schedule. About 40% of our top targets are prescribing ResDifera, and we continue to drive both breadth and depth with significant opportunity ahead. The completed enrollment of our NASH cirrhosis outcomes trial, one step closer to bringing the first therapy to market for this vulnerable patient population. And we're tracking well to launch ResDifera in Europe in the second half of 2025, pending EMA approval. With that, I'll turn it over to Marty.