Hi, everyone. Welcome to this session of the 22nd Morgan Stanley Global Healthcare Conference. We're thrilled to have Madrigal with us, represented by CEO Bill Sibold. I'm Judah Frommer, one of the mid-cap biotech analysts here. Before we get started, Bill, I'm just gonna read a quick disclaimer. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. So with that, Bill, maybe we can start with a high-level intro for those who are less familiar with Madrigal. Great! Well, Judah, thank you for having us at the conference. It's great to spend some time with you, so Madrigal, we're the leader in NASH, MASH globally. A company that has had a really impressive story. You know, NASH is the number one cause of transplant for women in the United States, and it's not for lack of trying that there haven't been products. There's been over 20 products that have failed trying to find a path, and we were the first to break through, and you know, this is a serious disease. As I said, number one cause for liver transplants for women. You have patients that are just one to two steps away from becoming cirrhotic, which means that you really run out of options at that point. We have a solution, which we think is a really good one with Rezdiffra. Not only is it first, but it's got a product profile that is really kind of a holy grail when you look at it. It's a once-a-day pill, safe, well-tolerated, effective. We're really at the beginning here of creating a market for the future, and I think that what history has demonstrated is that the first movers in a space maintain a disproportionate share over years, especially if you start off with a great product. We're at the very beginning. We got approval in March. We've been out launching. I'm sure we'll talk a little bit more about those stats as we go on today, but we take our leadership position very seriously. That's where we're starting as leaders, but we intend to be leaders for years to come. Okay, great. That's a good intro. Now, you've been at the company about a year now, so how has it tracked compared to your expectations, and where do you see Madrigal going three to five years from now? Yeah. So this is almost the one-year anniversary date, so, it's amazing how quickly that's gone, and it's been just quite a year. You know, I think this is the greatest industry in the world. If we do our jobs right, we can transform and save lives all over the world, and one of the things that really drew me to Madrigal was there was an opportunity to do that. You know, huge unmet need. No one's ever been there before, so we really get to set the bar. And I think that's. You know, just it's a huge obligation, and it's a huge honor to be able to do it. You know, what attracted me here was a disease that is so serious that there's been nothing for it, and as I said earlier on, we do have a solution. What we focused on initially was building from scratch a team to put in place to be able to address this opportunity. You know, we have been pretty consistent from day one about saying what we were gonna do, how we were gonna do it, and what were the results going to be. Just for instance, we said that the product would get accepted for review. It got accepted for review, priority review. People said, "You're gonna have an AdCom." We said, "We're not gonna have an AdCom." We didn't have an AdCom. Concern then moved to, "Are you gonna have a biopsy in the label requirement?" No biopsy requirement in the label. "Well, then payers are gonna require them." Well, payers aren't requiring them in as part of the policy either. So, step by step, we've been saying, "This is what's gonna happen," and this is what's happened, so I feel very good about the last year because we've been extremely, I think, realistic about what we can expect, and that realism is optimism because there's such great potential here. Now, when you look three to five years out, let's say five years out, I expect that people are gonna look back and say that this was one of the best specialty launches over that time. I think you're going to see that we will be executing our launches in Europe and have success there. We'll be at a point where we're getting the results from our outcome studies, so we'll have our 54-month readout from the 52-week MAESTRO-NASH study, so that'll be a big milestone. We'll have our readout from the well-compensated cirrhosis study, which is a potential to get into a population that's even at higher risk than the pardon me, that are F2, F3. F2, F3s have a 10x-17 x higher likelihood of a liver mortality, whereas the F4 patients, in this case, it's even higher than that. It's 42 x higher. So we'll have that readout, and we'll have been building a pipeline for us to really establish this leadership position in NASH. So I think, you know, there's a lot that's already happened in the first year- Mm-hmm. and a lot more that we're expecting in the next five-year period. Okay, that's great. So let's jump into the Rezdiffra launch, and before we get into the track metrics that you pointed investors toward, can you walk us through epidemiology and the target population that you just touched on, along with this concept of wiring the system that you've talked about? Yeah. So look, the epidemiology, there's 1.5 million diagnosed patients in the U.S. 525,000, or roughly 525,000, are F2, F3. And then in the 14,000 physician universe that we're calling on- Mm-hmm. There's about 315,000 patients. Mm. So, you know, that is a very good specialty market. You know, if you look at a lot of specialty markets, they tend to be in that, you know, 300,000 + range, and we've approached this as a specialty launch, so any way you do the math, it's a sizable market, and, you know, we think we're well-positioned for it. You know, and that's even before thinking about what would be the impact of GLP-1s that are driving diagnosis, and that 315 becomes, you know, perhaps a multiple of that. Mm. So, that's the area that we're focusing. We think that, within that 315 and the 14,000, we focus on about 6,000 targets. Mm. So it's something which is highly addressable for us. The final part of that- It's wiring the system. Oh, wiring the system. Yeah. Look, so this is something, again, we've been clear about from the beginning. Mm-hmm. You know, we're not dropping into a well-established market- Right ... where it becomes a switching dynamic or you're just paying for certain levels of coverage and so forth. This is building something from scratch. Until we were approved in March, there had never been a prescription for NASH in the history of medicine. Mm. And that means that you have to take the time and make sure that you're working at different parts of the system. So with the physicians, although they know it's a serious disease- Mm-hmm ... you know, when you don't have a solution for something for a long time, yeah, it's not that you forget about the patients, but it's not part of your day-to-day, unless you're doing trials, to have an intervention. Mm. So we're educating them on what are the NITs that you use, who's the right patient, et cetera. From an office staff perspective, it's really important because they're the ones that are helping create the pathway in a practice to pull a patient through, make sure that they're getting access to the product through prior authorizations, et cetera. The payers, obviously, we're having productive discussions with- Mm ... to make sure that we're establishing policies that patients can get through, and obviously, the patients as well. You know, there's a lot of people that give up when they hear there's no treatment, and trying to re-identify them and help them see that there is, again, a solution for their disease now, so we've been working through kind of all aspects of the wiring, and I feel as though we're making tremendous progress. We had said from the beginning that this is about a twelve-month process to do, and you know, in the Q2, we announced that, you know, that we're moving through that, so really optimistic about where we are, but, you know, it's hard work. It's... You know, day-to-day, you've got to identify the needs of that specific practice, that physician, and how we can help them, and make sure that we're clearing the path for them. One thing I'll say is that, you know, our teams have spent a lot of time upfront in trying to help with patient identification. Mm. When you have the right patients that are identified upfront, it just helps the follow-on to ultimately prescription, and we can talk about that perhaps in a little bit. Okay. If we talk about metrics at all. Yeah, that makes sense. Yeah, so maybe you can just set the table for us regarding the key metrics you've provided to give folks a sense of launch progress, and then we can kind of go one by one. Yeah. So look, at the core of it, again, is this wiring the system- Mm-hmm. Mm-hmm ... which we're well on the way through. But at the call, we talked about demand- Mm ... so sales, $14.6 million- Mm ... which I think is a very strong start to the- Mm ... to the launch. Number of patients on therapy, greater than 2,000. Mm. And just maybe to spend a second there. Patients on drug- Mm ... that is your ultimate measure. There's, of course, a funnel above that, where there's many more patients that have a prescription, and they're making their way through that. Yeah. And so what we wanted to do is to come with the metric that is, we think, the one that really, at the end of the day, counts. Because that includes people that, there could have been people that had started on drug, stopped on drug. Mm-hmm. They wouldn't get counted if they had stopped, so it would be, you know, the most, I would say, rigorous standard to follow. I mean, a lot of people are looking and trying to figure out what the top of the funnel looks like. You know, a comment, for instance, if you look at NRX, there can be some double counting in there, and it may give an impression of a bigger number. Mm-hmm. That's why we're going with patients on drug, knowing, though, that the funnel, there's many more above that. Payer coverage is a big- Mm-hmm ... issue that you want to solve, and we have a goal of 80% of commercial lives covered by the end of the year. We announced that the quarter, that it's greater than 50%- Mm ... which I think is a tremendous progress. And you look at kind of your breadth of prescribers, and we're talking about this 6,000 prescribers that we're looking at- Yep ... as targets, and we had about 20% penetration to that- Mm ... which is all very good. We compare all these stats to, blockbuster and mega blockbuster launches and feel that we're progressing really well. Okay, great. So maybe we'll double-click on a couple of those, starting with patients. Can you give us a little more specific detail on the second quarter performance relative to what you expected? And you mentioned on-drug, paid versus free. Anything you can share on that as well? Yeah. Yeah, look, I would say it's. We're tracking as expected. Mm-hmm. Right? I think this greater than 2,000 in such a short period of time is a really, really good stat to have put up. And obviously, that's something that we're steadily adding to every day, every week, every month, so the number gets bigger. As you add more prescribers, they add patients. Mm-hmm. The former prescribers are prescribing more, that you get this growth in that number. We had very few free drug patients at the first quarter of launch. And the performance has a lot to do with that patient selection that we have the teams focused on. You know, it does no good for a physician to write a prescription and not have success in the end. And if you provide the right description of the patient, and you know what the payers are requiring, and that's in the non-invasive test that the practices are learning how to use on a scale, then you're just gonna have a better experience 'cause patients will flow through. You know, one of the things that we did see was the time from prescription to getting on drug. Mm-hmm. We had talked about for the first six months, it probably being closer to 60 days. Mm-hmm. We saw right out of the gates, it was closer to 30 days, which again, I think has to do with the hard work of the team, how our patient support team is working, and the pre-work and the work that we continue to do with the payers. So I, you know, not a lot of free drug. I think it has to all go back to this really strong focus on patient selection and the execution of our team. Okay, got it. And maybe we could just spend a minute on inventory levels. How did that land in Q2 relative to Q1, and how's it trending? Yeah, so Q2, it was a primarily demand- Mm-hmm ... quarter, little inventory. Got it. So just touching on the physicians, you're about 20% penetrated of the 6,000 target that you mentioned. So can you talk about the mix of docs, GIs versus hepatologists? Are you seeing faster uptake in one group versus the other? Yeah. The 6,000 is made up of heps and GIs. From a sheer number perspective, mostly GIs. Mm-hmm. There's less than 1,000 hepatologists- Mm-hmm ... in the U.S. Mm-hmm. The rest are GIs, some endocrinologists in there as well. When you think about kind of the relative pace, you know, the hepatologists, a lot of them. The liver is their specialty. Yeah. That is it. They know it better than anyone else. Many have been trialists as well- Mm-hmm ... so they're even familiar with the product. So you do see it's a little quicker for them to be able to hit the ground running, with the prescription 'cause they know it already. Mm-hmm. For the gastroenterologists, they're very interested as well. It just takes just a little bit longer because, you know, they're now trying to put a disease into their practice that isn't the primary disease that they treat. They have a heavy focus towards scoping, and they have their staff organized, from a staffing perspective and just from a pathway perspective to support that. So adding NASH now into that equation, it just takes some time. There's-- the interest is there. Sometimes they have to add new staff- Mm-hmm ... or retrain the staff that's there and just think about their pathway. So there's certainly many more gastroenterologists. We're seeing, you know, you know, really good progress there, and we're seeing the same with hepatology, though maybe a little bit quicker. Okay, great. And on payers, like you said, you were greater than 50% penetrated as of Q2. So since then, we have seen one of the large PBMs now covers Rezdiffra. So can you talk about where you are with your payer coverage in general currently? Yeah. So, that's correct. One of the large PBMs made a policy decision that's in line with standard of care, so, that's the trend that we've seen across all the payers. So it is greater than the 50%- Mm-hmm ... and growing. We feel really comfortable with achieving the very aggressive, I would say, objective of 80% by the end of the year. You know, we've set high bars for ourselves along the way here, which I think is really important. We don't think of things on a quarter by quarter as much as we think about what's the potential of this product and how can we get there. So when we start to do our comparisons, as I said, it's to the subset of blockbusters and mega blockbusters. Now, regarding Medicare, that's more of a January impact when that coverage opens up. We're still getting Medicare patients through, and that has a lot to do with the payers' acknowledgment that this is a really serious disease, and with the selection of the patients upfront. And Medicaid, we have it in the 50 states. I think the final piece on what these policies look like is less than 5% require a biopsy. And remember, one of the question marks was, "Well, your label doesn't say it, but our payer is gonna demand it." And we had said there will be outliers. Mm-hmm ... that potentially require it, and what we're seeing is outliers- Mm-hmm ... are doing that, but for the most part, this is a two standard of care, which is very optimistic. Okay, great. That's a pretty comprehensive launch overview. So maybe we can turn to Europe, and you've decided to kinda go it on your own in Europe. So can you walk through why you're planning to do that versus going with a partner? How you're thinking about spend and return on investment in Europe? Yeah. So look, you know, if you look at blockbuster products, they still derive a good amount of their value... Mm-hmm ... from outside of the United States. When we're looking at making decisions, all decisions at the company, we're looking out into the future three to five years. Mm-hmm. We don't wanna project out three to five years or end up three to five years out and say, "Gee, we should have done A, B, or C." So when we look ahead to that period of time and what we think the contribution can be from Europe, we think it's the right decision for us to do it. Now, what does that mean? Well, first of all, we've got experts that have launched many products in Europe before. I've done. All my launches have been global launches. Mm-hmm. And other people on the team, same thing. Mm-hmm. So it's not unfamiliar territory to us, but what we will do is we will be very thoughtful about the way we launch. Mm-hmm. We don't have to launch everywhere and everywhere at once. So we will approach it systematically, we'll go where value is recognized, and we'll do it on our terms with very high standards to say that, you know, we want positive returns within two to three years. So this is not just an open up spend and hope something happens, this is we're gonna gauge things appropriately, but we think that we're the right company to do it. And as time unfolds, as we are out three years, as we are out five years, as our scale has grown, as the product has grown bigger, it's something that we'll be able to handle. Now, there are other reasons for Europe as well. You know, we had about 100 and 25 trial sites in Europe, and about a third of the patients came from Europe. Mm-hmm. Now, those are typically strong prognosticators of receipt in a country. Certainly, at EASL, we saw it as well. Mm ... not only from talking with physicians, but EASL leadership put out their guidelines, and I think they did really an exceptional job. They were incredibly evidence-based, and they were a year plus, probably in advance of approval of the product, where they put Rezdiffra in as the first-line therapy. So there's high anticipation there. You know, we've got the practical issues of having to navigate reimbursement, but again, we think that we have the team, and we'll put together people on the ground that actually have the expertise to do that. Okay. So that's why we're going there. Okay. Final piece is what? This is an unencumbered asset. I don't think everyone always appreciates this. Mm-hmm. We have a single-digit royalty to Roche. That's it. There aren't many companies that are at this stage that haven't traded away big portions of the value of a product. Why would we trade away the value of the product today if we're capable of doing it and building additional value for the future? Okay, that makes sense. Turning back to the U.S. and expectations there, how do you think about sales expectations for this year and in 2025, and maybe what peak potential could be, and maybe mixed into that answer, can you remind us of what your IP position is, where you expect it to be going forward, and how that factors into peak sales? Wow, that's a lot of different, Mm ... pieces in there. So if I miss something, you know, I'll remind you. I'm sure you'll remind me and bring me back. Yeah. So, let me start with kind of two ends. Mm-hmm. First is Q2. I think when you look at the 14.6 with greater than 2,000 patients on drug, I think that's a great start. Doing the math on what I told you with number of patients, and that's even before any kind of positive GLP-1 effect. It's a big specialty market. We've got a great profile. This, we've talked about this being a blockbuster product. We believe that wholeheartedly. Mm-hmm. It's kinda what happens in between. You know, we thought after the first full quarter, Q2, that there might be some drifting up with consensus. There has been- Mm ... some for 24- Mm ... and we feel comfortable- Mm-hmm ... with that. Looking at 2025, you know, we're still really working through 2025. There's, you know. But I think it's in a reasonable place for right now. As we get closer to 2025, as we have additional quarters, we'll be able to comment a little bit more on that. From an IP perspective, we feel like we're in a really good spot. Mm. You know, we have the patent term extension, five years, that we would apply to either the composition of matter or Form I polymorph. Mm. Form I polymorph is a 2033. Mm-hmm. With five years, that gets you to 38. Our approach has been to aggressively pursue additional IP, which we've done, and we had an Orange Book listed dosing patent recently. And so we are even more confident now that the PT would be assigned to the Form I, which gets us to thirty-eight. We're also looking at additional IP that can push it beyond 38. So from day one, the approach has been: how do we make it the strongest IP that we can? So it's not only working on the existing IP, but generating new IP, and I think the team's done a wonderful job. I feel really confident about our position. You got everything. Moving on to what is obviously a hot topic across the conference. So how do you think about the impact of GLP-1s on this market? If semaglutide hits in Phase 3 and they get approval in NASH, how do you expect that to change market dynamics? And I'll layer one more on top: How does route of administration in this disease factor into- Yeah ... the answer here? I mean, I think we start with the problem we're trying to solve. Mm-hmm. Right? These patients are F2, F3, they're one to two steps away from cirrhosis. Mm. You've heard about the 14x-17 x higher likelihood of a liver-related mortality 19,000 patients in an Optum database that were diagnosed as NASH, but not with cirrhosis, within three years, 17% converted to decompensated cirrhosis. So game over, you have lost. Physicians have lost, patients have lost even more. That's the patient. You can't predict who's gonna be a rapid progressor. Time is not your friend. Mm. So here's your choice: I've got a patient that walks in, I've got a product, if semi hits- Mm-hmm ... which is doing a 72-week trial, so 18 months, almost a year and a half to show an effect. Mm-hmm. I'm working against the odds of what could happen. Mm. That'd be okay if it was something that people stayed on, but we know what the discontinuation rates look like. We're up at six months. Blue Cross Blue Shield analysis of 125 or so thousand patients showed that about 60% of people were off. So practically, are you going to be on that product to recognize the effect, regardless of what their data shows, because that's under a well-controlled trial? Or you've got something which has hit on both endpoints, the efficacy is not in dispute, and by the way, is a once-a-day pill that's well-tolerated. Now, the reality is that the market can support both of those things. Mm-hmm. The reality is that by virtue of having an oral GLP-1, or pardon me, an oral GLP-1 against an oral, you're gonna have to satisfy the needs of what they're gonna be looking for from a market potential perspective. Three hundred and fifteen thousand patients isn't so interesting for a GLP-1. Mm. If you do, you know, if you do any kind of math, looking at kinda what expected gross to net is, even times the whole population, it's not that big. Mm-hmm. Right? You saw what Lilly did to raise their expectations, you know, in one year, a $3 billion raise. Mm. So this isn't gonna be so interesting to them. Right. It's gonna require going after more of that hundred and ten million obese patients, and trying to find as many of them that have some NASH. Mm ... and making sure that they understand that they have it, and for and driving them in for care. So when I think about how the world evolves, one is very much that it stays to the three fifteen, and, you know, we've positioned ourselves as a specialty product. The other is that you have the GLP-1s that drive considerable market expansion. Even if everyone were on a GLP-1- Mm We know, based on those stats, that many fall off. Mm-hmm. We're there as the product to be used. You know, we spend time thinking about what's the better reality? Right. The reality is, for us, is that both are fine. Mm-hmm. And so, you know, we're highly anticipating what the news is. No one, you know, we don't have any greater insights than anyone does as a guess as to does it show- Mm significance on fibrosis or not. I guess we'll find out in November sometime, but from my perspective, we're in a win-win situation here. Okay, that makes sense. Just a housekeeping note, if anyone does have questions in the room, this is my last couple questions, so feel free to raise your hand. Maybe we could round it out with capital allocation, business development. How do you think about this for Madrigal over the next several years? And should we expect a transaction in the near term, or are you really just focused on the launch? Yeah. Well, look, the focus is the launch- Mm Right now, it's just a big lift anytime you're building a new market, so that is the focus. However, we have also stated we're not here just for, you know, a short-term win. We're trying to build a company, and to build a company, we're gonna have a pipeline. Mm-hmm. Right? Now, it's very much to me, it's going to be opportunity dependent. I think a lot of companies make a mistake, thinking that there's safety in progress just by having a pipeline. Mm. And a lot of times, if you don't have the right pipeline, it does you no good. It just sucks up resource. So we will be extremely disciplined in any decisions that we make about extending the pipeline. Now, remember, you know, we have a kind of our own internal development program still going, and we have a couple of readouts that will be happening over the next number of years, which we're excited about as well. So it's not as though we don't have anything else that's coming, and we have lifecycle management that we'll be doing, too. But, you know, we'll be very disciplined about how we're investing, where we're investing, and anything we do will be supporting launch or that future expectations that we have of maintained leadership. Okay, that's great. Any questions in the room? All right, I think with that, we'll wrap up, but thank you very much for joining us. Thanks for having us, and, as I said, we're really excited about the opportunity. After 12 months, I'm only more excited than I was, when I got here, so, look forward to updating you along the way. Great. Good luck. Thanks.