Title

Presentation

Madrigal Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-3.32, expectations were $-3.62.

Operator: Good day, and thank you for standing by. Welcome to Madrigal Pharmaceuticals’ First Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there’ll be a question-and-answer session. As a reminder, today’s conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

Tina Ventura: Thank you, Tawana. Good morning, everyone, and thank you for joining us to discuss Madrigal’s first quarter 2025 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 Sibold, Chief Executive Officer; and Mardi Dier, Chief Financial Officer. They’ll provide prepared remarks, and then we’ll take your questions. We plan 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.

Bill Sibold: Thanks, Tina. Good morning, and thanks for joining. Today I’ll provide an update on the significant momentum we continue to build with the US launch of Rezdiffra. I’ll briefly recap the impressive two-year F4c data we shared on our last earnings call, which has since been selected as a late breaking oral presentation at the EASL Congress in Amsterdam next week. We plan to review this data in an investor webcast following EASL on Tuesday, May 13th. And I’ll close with a review of our strategy to expand our leadership position in MASH. But before we move to the quarter, I want to take a moment to recognize Becky Taub, Madrigal’s Founder and a driving force behind the development and ultimate approval of Rezdiffra.

As we announced in April, Becky is taking on the new role of Senior Scientific and Medical Advisor and she will continue to serve on our Board of Directors. And we are very pleased that Dave Soergel joined us on April 21st as our new Chief Medical Officer succeeding Becky. Becky’s vision, pioneering work and relentless drive led to the development and approval of the first ever FDA approved medicine for MASH. This is a landmark achievement in our industry and one that has already changed the lives of thousands of patients. It’s also changed Madrigal. We transformed from an R&D focused company to a fully integrated commercial stage organization. Dave brings more than 20 years of leadership experience in metabolic and cardiovascular disease drug development spanning both biotech and large pharma.

He was most recently the EVP and Global Head of Cardiovascular, Renal and Metabolism Development at Novartis where he was overseeing 10 late-stage clinical development programs. We believe Dave is the right leader to take the reins at this critical juncture and build on the foundation Becky created. Along those lines, I’d also like to highlight the recent addition to our Board of Directors, Jackie Fouse. Jackie brings a depth of experience from her leadership roles at several successful biotechs including Agios and Celgene. I look forward to working with her as we continue to grow the company. Now let’s turn to slide four and Rezdiffra’s first question quarter 2025 performance. We’re a little more than 12 months into the launch of Rezdiffra and what a difference a year makes.

We’ve gone from zero approved MASH treatments and no market infrastructure to securing FDA approval in March 2024. Launching with the best-case label and a world class team, achieving over 80% commercial payer coverage, helping lay the foundation, practice by practice to build the infrastructure required for patient treatment, treating more than 17,000 patients who previously had no options and generating $317 million in net sales in our first 12 months on the market. By any measure, this is an exceptional launch, and we know that because we’re benchmarking ourselves against some of the most successful specialty medicine launches in the past decade. Whether it’s patient growth, depth and breadth of prescribing, payer coverage, or net sales, we’re performing at or near the top.

But the most exciting part? We’re just getting started. As we enter year two, we’re bringing the same intensity and focus on execution that got us here, and we believe the best is still ahead. This momentum carried us into another impressive quarter, with first quarter 2025 net sales of $137 million, up 33% quarter-over-quarter despite the typical headwinds we see in Q1 across the industry. Our patient support and field teams did a great job navigating those dynamics to keep patients on therapy. And we’re continuing to generate strong demand and steadily add patients into the second quarter, driven by the urgent need Rezdiffra addresses, its compelling product profile and the exceptional execution of our team. In addition to net sales, we continue to make great progress on key performance indicators that are driving our launch.

First on patients, as shown on slide five. We ended the first quarter of 2025 with more than 17,000 patients on Rezdiffra, up from 11,800 patients at the end of the fourth quarter of 2024. This figure represents patients actively on therapy, accounting for any discontinuations, making it the most rigorous and meaningful metric to track sustained treatment adoption. And when we compare it to other top tier specialty launches, we’re adding patients at a rate that’s consistent with those benchmarks. And yet we’re still in the very early innings of this launch. Only about 5% of the 315,000 diagnosed F2-F3 MASH patients who are currently under the care of our target prescribers are being treated with Rezdiffra. We also see that awareness is driving action.

Our disease and product education efforts are preparing patients to have better conversations with their MASH specialists about their care. We remain focused on those 315,000 patients, which represents a highly attractive specialty market. Looking ahead, the stated efforts of the next entrant are focused on expanding the market to many multiples of our initial target market. We believe that the strength of Rezdiffra’s efficacy and attractive real-world profile positions it for leadership in either scenario, creating multiple paths to success for Rezdiffra in the years ahead. Moving to slide six, in our progress on physician penetration. Across the many launches I’ve led, one thing is clear. Building a strong base of prescribers early in the launch is one of the best indicators of long-term success.

That’s why the pace at which we’ve added new prescribers has been so encouraging. In just a year since approval, 70% of our 6,000 top targets have prescribed Rezdiffra. This level of penetration puts us at the high-end of the benchmarks we track and shows we built a strong foundation of healthcare providers who believe in Rezdiffra and are seeing the benefits. Achieving this type of uptake this quickly is the result of the work we’ve been doing since day one. Wiring the system for a first in disease launch like Rezdiffra is no small feat. We built and deployed a world class team. We educated physicians on a disease that had no approved therapies. We partnered with payers to secure broad access and worked hand in hand with practices to help create the infrastructure needed to support sustained prescribing.

As a result, more and more practices are integrating Rezdiffra into their standard-of-care. We’re driving the same momentum as we establish a strong base within our 14,000 total targets to support the significant peak sales potential we expect. At the end of the first quarter of 2025, approximately 50% of the 14,000 target prescribers had prescribed Rezdiffra, up from 40% at the end of the fourth quarter of 2024, reflecting a growing and durable foundation. Our in-office support and cross functional field engagement are not only driving breadth, they’re also driving depth. We are steadily turning new writers into repeat prescribers and seeing more prescriptions written per provider that has consistently increased quarter-over-quarter as well.

Rezdiffra’s broad uptake is being driven by its attractive real-world profile. A medicine’s profile often diminishes once it enters real-world. With Rezdiffra we hear the opposite. Physicians and patients continue to highlight meaningful improvements they see on the efficacy measures that matter most to patients such as liver stiffness, liver fat, liver enzymes, LDL and triglycerides. And our Phase 3 data demonstrate that Rezdiffra halts or improved liver stiffness in 91% of patients. As a once daily, well-tolerated pill with simple dosing, it’s also easy to take. We’re seeing strong early signs of adherence with rates that are comparable to other well-tolerated oral therapies. We believe Rezdiffra’s liver directed mechanism strong efficacy and attractive real-world profile will translate well from F2-F3 MASH patients to those with F4c or compensated MASH cirrhosis as noted on slide eight.

As MASH progresses, it can lead to cirrhosis marked by significant liver damage, loss of liver function, liver cancer and death. Many F4c patients also experience clinically significant portal hypertension or CSPH, a major consequence of cirrhosis that’s responsible for its most severe complications such as ascites, variceal bleeding and hepatic encephalopathy. The risk of progression is striking. F2-F3 patients face a 10-to-17-fold increase in liver related mortality compared to patients without fibrosis. For F4, that number jumps to a 42-fold increase. That’s why we are evaluating Rezdiffra in 845 F4c patients in MAESTRO-NASH OUTCOMES, a large Phase 3 double-blind placebo-controlled trial evaluating progression to liver decompensation. We expect data from this trial in 2027.

Last quarter we shared two-year data from the open label active treatment arm of our MAESTRO-NAFLD-1 trial in F4c patients. These results demonstrated Rezdiffra’s ability to reduce liver stiffness, a key predictor of adverse liver related events. Turning to slide nine, let me quickly recap the two primary efficacy findings. Patients saw a mean reduction of 6.7 kilopascals in liver stiffness at two years, which was statistically significant as compared to baseline. For context, physicians used the Bavino rule of 5 to stratify risk in MASH cirrhosis, so a 6.7 kPa reduction suggests that many patients are moving into a lower risk category. 51% of patients achieved a greater than or equal to 25% reduction in liver stiffness. As published in JAMA, this level of reduction is associated with a lower risk of progression to end stage liver disease, essentially a reversal of cirrhosis.

These results and additional insights will be presented at the upcoming EASL Congress on May 10 by Dr. Naim Alkhouri, Chief Academic Officer at Summit Clinical Research and the Director of the Steatotic Liver Disease Program at the Clinical Research Institute of Ohio. This abstract was accepted as a late-breaking oral presentation and one of the most important findings we’ll highlight is Rezdiffra’s impact to reduce liver stiffness measures and other biomarkers that are linked to a reduction in risk of CSPH. Importantly, CSPH is the cause of many adverse liver-related outcomes that mark the progression from compensated to decompensated cirrhosis. Preventing these devastating outcomes is the central goal of treating liver disease. As I mentioned earlier, we’ll also be hosting a brief investor webcast on May 13 to review the data and discuss the evolving MASH cirrhosis landscape.

Dr. Alkhouri will join us for that discussion, and we hope many of you will tune in. The expansion to treatment of F4c is a key pillar of our long-term MASH leadership strategy, as shown on slide 10. While we continue to execute a successful US launch in F2-F3, we’re advancing efforts to expand Rezdiffra’s indication to F4c. Our Phase 3 MAESTRO-NASH OUTCOMES trial is in alignment with FDA guidance for clinical trial design in cirrhosis patients. We expect to have data years ahead of the competition and first-mover advantage in this segment of the market as well. If approved, this could potentially double Rezdiffra’s market opportunity. We’re also preparing to bring Rezdiffra to patients outside the US. We remain on track for a mid-year regulatory decision in Europe.

And if we receive a positive outcome, we plan to launch in Germany in the second half of the year. Beyond Europe, we’re evaluating additional high priority global markets. At the same time, we’re focused on building the right pipeline beyond Rezdiffra. We’re in the enviable position of delivering a first-in-disease medicine to patients today. And now we’re looking to extend that leadership with a portfolio of differentiated assets. We’re actively evaluating opportunities across multiple mechanisms and stages of development. And as I mentioned earlier, we’re excited to have Dave Soergel on Board as our new Chief Medical Officer to help lead our pipeline development efforts. With that, let me briefly recap our first quarter progress on slide 11.

We’re off to a great start in year two of our launch. We generated $317 million in net sales over the last 12 months and are seeing continued momentum into the second quarter. Physician adoption continues to build with 70% of our 6,000 top targets now prescribing Rezdiffra. We’re expanding our leadership in MASH with compelling two-year F4c data, two pivotal outcome trials underway and a potential EMA approval on the horizon, we believe Rezdiffra is well on its way to becoming the foundational therapy across F2 to F4c period. With that, I’d like to turn it over to Mardi.

Mardi Dier: Yes. Thank you, Bill and good morning. I just want to take a moment to comment on how Madrigal is positioned in the current macroeconomic environment. We’re positioned extremely well. As a commercial stage biotech with a first-in-disease medicine addressing a serious unmet need, we’ve built a US-based supply chain. Rezdiffra is manufactured in the US and its intellectual property is also US domiciled. Moving to our financial results, as noted on slide 12. First quarter 2025 net sales totaled $137.3 million, up 33% from the fourth quarter of 2024. This was another strong demand quarter with inventory levels well within our expected two to four-week range. As we’ve said, we expect gross to net to be choppy in the early — early in the launch and the team managed through our first quarter very well.

In 2025, we expect gross to net discount to increase and step-up as we move through the year, and as we’ve begun to contract with payers, which is in line with our expectations. Importantly, this is already reflected in our expectations for robust year-over-year net sales growth in 2025. R&D expenses for the first quarter of 2025 were $44.2 million compared to $71.2 million for the first quarter of 2024. The decrease was primarily due to the change in accounting for inventory costs following FDA approval of Rezdiffra in March 2024 and lower clinical trial costs. Looking ahead, we expect a similar level of R&D spend in 2025 compared to 2024. SG&A expenses for the first quarter of 2025 were $167.9 million compared to $80.8 million in the first quarter of 2024.

SG&A expenses increased by $87.1 million, primarily due to increases in commercial launch activities for Rezdiffra, including a corresponding increase in headcount and stock compensation expense. Looking ahead, we expect SG&A expenses to increase in 2025, including a step-up into the second quarter as we continue to invest in the US launch and prepare for our launch in Europe. Turning to our balance sheet. We ended the first quarter of 2025 with $848.1 million in cash, cash equivalents, restricted cash and marketable securities. With this strong cash position, we continue to be well resourced to support the ongoing launch of Rezdiffra, both in the US and our planned launch in Europe in the second half of this year. I’ll now turn the call back over to Tina.

Tina Ventura: Thanks, Mardi. Let’s move into the Q&A portion of the call. Tawana, please go ahead and provide instructions for the Q&A session.

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Eli Merle with UBS. Your line is open.

Eliana Merle: Hey guys, thanks for taking the question and congratulations on the quarter. Just curious to go a little bit more in depth on your expectations for the growth trajectory for Rezdiffra, particularly when sema’s label is expanded to include MASH. Do you expect to see new patients at a similar rate? And can you just elaborate on sort of how you see the growth from there? Thanks.

Bill Sibold: Eli, thanks. Yeah. It was a great quarter. We’re really excited about it. And as we said, we’ve continued that momentum into Q2. As we look towards the potential approval of sema, as we pointed out on one of the slides here, we have a couple of different views of how the market is going to evolve. Clearly, they’re talking about a market which is multiples the size of our 315,000 patients. Our efforts to date have really been focused on the 315,000. So, there’s plenty of patients when you consider where they’re at about 5% penetration today. So, we see really years of growth in this market ahead. Sema is only going to accelerate diagnosis and add to that 315. As I said, our efforts are around the 315. We believe there’s a great market there.

There’s even a greater market if what they do happens, which makes, as I said, multiples of the 315. So, a long way of saying, we feel really comfortable with our profile. We believe ours is the winning profile, and we believe that we can grow through their potential approval and launch.

Mardi Dier: Yeah. And maybe, Eli, I’ll jump in here and just add a little bit. As Bill said, we expect this momentum of growth to continue into Q2. So, we do expect good quarter-over-quarter growth and also the same for 2025, robust growth for 2025. And I would just give the commentary here for both the quarter and for the year, we expect consensus to narrow and move up a little bit.

Tina Ventura: Thanks, Bill. Thanks, Mardi. Next question, please.

Operator: Thank you. Our next question comes from the line of Andrea Newkirk with Goldman Sachs. Your line is open.

Andrea Newkirk: Hi, everyone. Good morning and congratulations on the quarter. Bill, could you just talk us through your expectations around payer reauthorization requirements that you might be seeing right now? And how are you thinking about the persistency of these patients to continue on Rezdiffra beyond this first year? Thanks so much.

Bill Sibold: Thanks, Andrea. So, reauthorizations are part of the process for every medicine. So, we’re not really concerned about that. Most of the policies, as we’ve said in the past, require a 12-month reauth and that’s in line with most drugs. Typically, it ends up being at kind of provider discretion or requires stabilization or some kind of measure on one of the NITs. So, we don’t see that as an issue, specifically because we’re hearing such great results from physicians and patients that have been on the drug. In fact, I said a lot of products when they launch, they typically don’t live up to the well-controlled clinical trial environment that may show a certain level of efficacy. They end up declining a little bit. We’re seeing absolutely the opposite in our case.

We have physicians and patients coming back and saying, we’re really seeing efficacy across a bunch of parameters and exceeding expectations in that sense, which leads to the persistency piece, which is because it’s a well-tolerated oral, we would expect persistency to be very good like other well-tolerated orals. So, we feel we’re in a really great spot because of the profile of the product and what the one-year results are of seeing such strong real-world experience.

Tina Ventura: Great. Thanks, Andrea. Tawana, next question please.

Operator: Our next question comes from the line of Ritu Baral with TD Cowen. Your line is open.

Ritu Baral: Good morning, guys. Thanks for taking the question and congratulations on this quarter. My question has to do with Europe. I believe you guys are well on your way for the CHMP documents as they post. But could I ask where you are on responding to their questions? I believe you requested an extension of the clock stop. What’s the — I guess, the driver for the extra time needed to respond? And as you go through these discussions for the Rezdiffra label, can you talk to how maybe Europe is approaching non-invasive testing different than FDA? It looks like they may be on accelerated acceptance. And does this factor into what label Rezdiffra may get in Europe? Thanks.

Bill Sibold: Okay. Ritu, that’s a lot there. I’m going to try to remember it all. Look, the questions we’re getting, I think, are all expected. We’re still on track for our mid-year action we would expect. This is — you have to remember, just like with the FDA, this is the first MASH product ever approved in Europe. And I think agencies want to take their time and make sure that they understand and that they are putting forth kind of the best label that they can that is going to be really the foundation for all other MASH labels. So, we’re really happy with how the review is going. And as I said, we’re expecting approval and we’ll expect to launch later this year. The question on NITs. Yeah. Look, so it’s interesting. Europe had a year plus to digest the fact that there’s going to be a MASH product.

As we talked about last year, physicians in the US until the product was approved, almost didn’t believe there was going to be a product approved because of the over two dozen or almost two dozen failures before us. Europe, on the other hand, with the approval in the US has much more certainty. So, the actions they’ve taken, starting with the EASL guidelines last year are actually quite far ahead of the US. Now from an NIT perspective, we believe that there are — there’s enough installed NITs that, that will allow us to launch effectively. But just like the US, there’s going to have to be additional NITs added as you have a new product that is approved and you actually have to start thinking about now how are you going to diagnose and stage patients a little bit differently.

So, in many ways, the EU is ahead of the US from an action perspective and we think that’s probably more important than anything right now. So, we have EASL next week. We’re really excited to talk directly to a lot of the physicians and hear firsthand from them how their prep is going. But I was impressed last year as well. So, I’m sure they’re that much further ahead, and that’s certainly what our teams are telling us now.

Ritu Baral: Thank you.

Tina Ventura: Great. Thanks, Ritu. Next question, please.

Operator: Thank you. Our next question comes from the line of Akash Tewari with Jefferies. Your line is open.

Akash Tewari: Hey, thanks so much. Can you talk about your relative confidence in showing an outcomes benefit on hepatic events in F2-F3 versus F4? We’re digging this internally, and there’s some clear encouraging signals, whether it’s the INTERCEPT trial or even sema in F2-F3, there’s almost no correlation we’re seeing in F4 between liver fat reduction and actual hepatic events. So, what gives your team confidence the liver stiffness data will actually translate? I really appreciate it.

Bill Sibold: Thanks for the question. Nice to hear from you. Look, I think that as we showed in the slides today, the 6.7 kPa reduction at two years, we think, is actually quite meaningful. I think the literature supports that. But if we take even a step back further, mechanistically, our MOA, a liver-directed therapy. It’s really looked at as kind of the master regulator of fibrosis. And we believe that starting from that point, we have great confidence in the mechanism. Now the data to date with the reduction in liver stiffness in this cohort of patients and we’re going to explain more about it next week. I would encourage you to listen in. It gives us further confidence that, that is getting at the heart of the problem, and therefore, we won’t have the events that you would without treatment.

So, I think everything from the biology to what we’ve seen early gives us great confidence in our F4c trial that’s ongoing that. We have 845 patients. It’s a well-sized trial. And we’re more encouraged, as I said, by the data that we’ve talked about today, and we’re going to talk about at EASL next week. So yeah, look, like anything else, that’s why you do the trials, right? And we’ll have to see what results ultimately look like. But so far, we remain extremely confident in the outcome.

Tina Ventura: Great. Thanks, Akash. Next question, please.

Operator: Our next question comes from the line of Yasmeen Rahimi with Piper Sandler. Your line is open.

Yasmeen Rahimi: Good morning, team. Congrats on a great quarter. My question is just now that you’ve had patients for over a year on therapy, have you been able to quantify sort of what the compliance rate is, and sort of as patients are kind of talking like do they feel function better as they’re on the drug? So, what is the adherence rate that you’re seeing? And how do you think it will be projected moving forward? And I’ll jump back in the queue.

Bill Sibold: Yeah. Thanks for the question. It’s a little early to be making a call on ultimately what does adherence look like. However, all the early signs are very promising. And I think, again, it goes back to the well-tolerated nature of the product and the overall profile of the product. One of the questions that I think people were asking was this is an asymptomatic disease is why would someone stay on? Well, the physicians have been able to give really positive feedback to patients because they’re seeing these results across a number of parameters. And that always gives people a reason to stay on, especially if they’re not feeling any really significant tolerability issues along the way. We’ve had talked to a lot of patients.

And anecdotally, we hear some patients that are saying as well that they feel better. And I think it’s a little bit of a hope. They’re worried about the consequences of severe liver disease, right? They’ve seen — some of them have family members that have gone through transplant, some family members have died from MASH. And it’s — I hadn’t expected this as much. But the hope that they now have because there’s a once-a-day pill, that’s really kind of astonishing and that’s giving people as well, I think, the reason to stay on. So, we’re really optimistic. It’s early, but all signs right now suggest that we will have an adherence rate very consistent with well-tolerated orals.

Tina Ventura: Great. Thanks so much, Yas. Next question, please.

Operator: Our next question comes from the line of Liisa Bayko with Evercore. Your line is open.

Liisa Bayko: Hi, thanks for taking the question and congratulations on a strong quarter. I just want to drill a little bit more into two topics. One is if you could give any more granularity on gross to net for the quarter. And then the trajectory from here, I know you said it would be kind of a little bit up and down, but just curious on more specifics. And then on — in terms of like GLP-1s and this whole concept, I guess, today what is your estimate of — what percentage of your patients are on GLP-1s? How do you expect this to change as semaglutide gains label expansion into MASH? And do you expect any kind of step through or any payers to kind of lean that way as that comes on board later on this year? Thanks.

Bill Sibold: Thanks, Liisa. It’s a couple of questions, but those are ones that I’m sure are on people’s minds, so maybe we’ll go with that. Maybe starting with the GLP-1 combo. So, as we reported previously, 25% of patients are on a GLP-1 that are on Rezdiffra. That’s our estimate right now. And it jumps to about 50% that have been exposed previously. So, GLP-1s, we have to remember, they’re not new. They’ve been here for over a decade. Despite them being here for over a decade, there’s still this MASH challenge that exists. People are still diagnosing and seeing MASH and patients are progressing. So, GLP-1s — and the question of, is there a step through? Look, it’s early. They haven’t been approved yet. We have to see what the label looks like and ultimately, what their approval looks like.

However, we’ve planned for all scenarios. And as I said on a question earlier, we feel very confident that we can grow through all scenarios. So, part of that has to do with the fact that, A, this is a high unmet need; B, we’ve got a great profile. We’re a liver-directed once-a-day pill. You’ve heard me call it the holy grail of profiles. Profiles matter at the end of the day. You’ve got to take a drug for it to work. Well-controlled studies are great. But in the real-world, you got to take a drug for it to work. And we feel like we’re in a really, really good place. Now from a gross to net perspective, we’ve been extremely diligent about gross to net. You’ve heard me say from the beginning, we have planned for years ahead, not a single quarter, but we really look towards the evolving landscape.

We’re looking at different products coming into the market, thinking about new indications for us. And as you know, we started in a really great position. We really preserved gross to net out of the gate by not contracting largely because of the innovative nature of the product, right? We have — this has been the graveyard of drug development and Rezdiffra really broke through and we take that into consideration. However, you can’t escape the dynamics of the market. Payers are always evaluating the landscape evolves, whether it’s a new calendar year or you get a competitive entrant. So, we thought about gross to net anticipating that there will be additional competition, et cetera. And we’ve had good partnerships with payers. We’re going to keep those good partnerships.

But in line with that, we started contracting in Q2. And it’s not everywhere and it’s not all at once. It’s an evolution. It’s going to take time. So, we are right where we thought we would be. We’re executing kind of our plan for the short, medium and long-term and feel we’re in a really strong position. But maybe, Mardi, perhaps you could comment a little bit more on the GTN dynamic in ’25.

Mardi Dier: I’m happy to. As Bill said, we’ve been very disciplined with our gross to net, but it is absolutely part of our business going forward. We’ve also said it continues to be choppy, and that’s going to be the case as we continue to launch. But our team did a fantastic job from fourth quarter into first quarter and manage the dynamics really well. I would say, specifically for Q1, we are a little favorable across the board for gross to net, but we’re really staying within the range that’s typical for specialty pharmacy products. And we do see — as we said last quarter, that this will continue to step-up throughout the year in 2025, particularly with some of the contracting, as Bill said, not everywhere, not all at once, but as that continues to take effect throughout the year. So, we’re in really great shape with our gross to net and right as part of our expectations moving forward.

Tina Ventura: Great. Thanks, Liisa for the question. Next question, please.

Operator: Our next question comes from the line of Jay Olson with Oppenheimer. Your line is open.

Jay Olson: Hey, congrats on the impressive launch progress and thanks to Becky for her pioneering efforts successfully bringing Rezdiffra to market. Can you talk about any feedback on the key messages in your DTC campaign, and how that’s impacted the launch trajectory? And then with regards to business development, as you look ahead to extending your leadership position in MASH, what sort of complementary assets would you like to add to Rezdiffra?

Bill Sibold: Great. Jay, thanks for the question. First of all, on DTC, yeah, we’ve — feedback is very positive about our DTC. The idea is to get to mostly diagnosed patients and have them prepared to take action when they go to see their provider. Feedback from the whole community has actually been very strong, and we’re really encouraged by it. And we think it’s an important piece of the mix because this is a disease that people don’t know a lot about. We still know that the biggest issue is taking action. And we hear every day of tragic stories of patients where physicians haven’t taken action or where patients didn’t know what fatty liver disease meant and came back years later to find out they have need a transplant. That is something that we, as a company — our purpose is really to lead the fight against MASH.

We take it seriously. Education through DTC is important. As our DTC continues to evolve, I would direct you to our — a new campaign that we have at defusedmash.com. This really gets to the heart of this is a serious disease and action is required. That’s once again diffusedmash.com. I feel like — it sounds like I’m doing a commercial myself right there. That wasn’t the intent, but I wanted to make sure that, Jay, you got the website to go to. Your second question was on business development. Look, we’ve been really clear all along. We are in this really enviable position. Most position — most companies have a pipeline looking for a great asset. We have a great asset. And now we have the luxury of building a pipeline to sustain our leadership position.

You don’t get many opportunities like this in the industry where you’re the first to launch in a very significant disease that has had a checkered past in development because it’s been such a difficult disease to attack. We’re first. We’ve done it, and it’s really with a product that is very specific to the problem. It’s liver-directed and is a great profile. But in order for us to extend our leadership, we think it is important to have additional products available. The focus will be in MASH. And we’re looking at next mechanisms of action that are compelling or products that could be combined with Rezdiffra to make Rezdiffra and the new entity that much better. So that allows us to either extend efficacy, work in new different — pardon me — different segments of the population, et cetera.

So, we’re looking across the entire pipeline, early stage to late stage. We’re going to base it on mechanisms that we’re interested in, mechanisms that we think could be helpful for patients. And we will then be very diligent in our — in the way that we actually go about doing our deals. We’re not going to do a bet the company strategy on any of this. We don’t have to. So, we’ll maintain that financial discipline. We’ll do good deals. We’ll do deals that are going to make a difference ultimately for patients and sustain our leadership for the future. So more to come on that when we have something to present.

Tina Ventura: Thanks, Jay. Next question, please.

Operator: Our next question comes from the line of Mayank Mamtani with B. Riley Securities. Your line is open.

Mayank Mamtani: Good morning, team. Thanks for taking our questions and congrats on strong quarter. Digging into the Novo’s New England publication from last night on ESSENCE. It seems that the sema benefit is coming in interestingly, low to mid BMI, F2 patients rather than F3 more advanced. It would be great to hear, though your thoughts on how maybe you’re thinking about patient segmentation. Obviously, your benefit seems more pronounced in the more advanced F3-F4. And just quickly on — going back to the comments on EU approval launch strategy mid-year. Curious the implications of this F4 data coming in at EASL, but also on pricing given macro discussions on innovations being possibly better rewarded in EU countries. Thanks again for taking our questions.

Bill Sibold: Right. Okay. Thank you very much for the question. Look, we didn’t see anything new. Actually, — we just — we got it last night like everyone else. So, we’re looking through it, but really nothing new there. Well-controlled trial, you get results from a well-controlled trial. I think that the real question is what’s the applicability to the real-world. And I think we know that in the real-world GLP-1s, there’s a challenge specifically of keeping people on drug and getting them to the highest dose. So, nothing has changed from our perspective looking at that news. Now we’re — right now, where we’re used, it’s about 50-50 F2-F3 patients. And what happens is — pardon me — a patient comes into their — see the physician every six months, 12 months.

And the physician is looking at that patient at that moment. And if they have F2 to say, well, let’s wait a year. they could go to F3, they could — who knows where they’re going to go. They’re making that decision at the moment and that’s why we’re seeing that they’re often choosing to treat whether it be F2 or F3. So, we expect that mix to continue. As you know, we have hopes to move into F4c as well, and we think that we will be the product F2 to F4c period, which is, I think, an ambitious, but ultimately realistic goal. So, I feel really comfortable with our positioning and our profile. Regarding Europe and thinking about pricing and so forth. I mean, look, we’re going through our pricing analysis now. Our belief is we have a very innovative product and that the innovation will be recognized in Europe.

I think that the dynamics of GLP-1s, look, as we said, a lot of patients are already — have already been exposed to a GLP-1 and still have MASH. That’s 50% of our patients have already been exposed, but they still have this problem. So, we think that the two can coexist. We are only going to be focusing on those patients that we think are most in need, those that need a liver-directed therapy. And we think that there’s plenty of room for us in GLP-1s. We’re at the very beginning of a market. What my experience is that every time you have a new entrant enter a market, the market growth increases pretty significantly. And clearly, that’s a stated goal by Novo. So, there’s going to be lots of patients that are going to be available for us regardless of how the dynamics evolve.

Thanks.

Tina Ventura: Thanks, Mayank. Next question, please.

Operator: Our next question comes from the line of Prakhar Agrawal with Cantor Fitzgerald. Your line is open.

Prakhar Agrawal: Hi. Thank you so much for taking my questions and congratulations on the strong quarter. So, I had a couple. A follow-up on gross to net as well, but maybe longer term for 2026 and beyond, as you are having the initial payer contracting discussions for next year. What do you expect in terms of the net pricing evolution for 2026? Do you expect a big step-up compared to 2025 given the sema launch? And just curious as to what you’re hearing from the payers, especially given the pricing differential. And secondly, maybe quickly on BD, clearly seems to be a priority, but what exactly is the BD capacity given the ongoing investments in the launch in the US and later Europe? Thank you so much.

Bill Sibold: All right. Thanks for the question. Maybe I’ll start with just a comment on gross to net and then Mardi can provide a little bit more. I mean, look, as I said, you heard me answer earlier, we’ve taken a long-term view of gross to net. We know with pretty good certainty what the potential market evolution looks like with new entrants, just looking at the pipeline and so forth. It’s a little early to comment on ’26. Gross to net only goes in one direction. And we’ve been very disciplined about it. We’ll continue to be. We have a very significant value proposition with the product that we have. So, we think that we’ll continue to be in a very favorable place from a gross to net perspective. But maybe, Mardi, do you want to comment any more on that or it’s still early?

Mardi Dier: Yeah. It’s really too early, Prakhar, so on 2026, but it’s all part of our business and it’s all part of our expectations. We have ongoing dialogue and good relationships with the payers and we’ll talk about that more as the year progresses.

Bill Sibold: And then regarding BD, as I said, we’re not doing a bet the company strategy. We’re going to be very, very diligent and disciplined about the way we do deals. And Mardi, do you want to comment?

Mardi Dier: Yeah. You talked about the capacity. I think Bill’s point is right. We’re not betting the company here. We’re in a great position from a cash standpoint, and that cash is — we’re focused on building out the US launch and the ex-US launch. If we do BD, that may put a different lens on our cash flow. But right now, we’re in a very good position with our cash.

Tina Ventura: Thanks. Tawana, it looks like we have time for one more question, please.

Operator: Thank you. Our final question comes from the line of Andy Chen with Wolfe Research. Your line is open.

Unidentified Analyst: Hi. This is Emma on for Andy. Thanks for taking our question and congrats on the quarter you mentioned. You mentioned six abstracts will be presented at EASL next week. I guess, just aside from the late breaker, which is more focused on the F4c data, what are other key findings to look out for? Thank you.

Bill Sibold: Well, look, that’s going to be the big data that we’re going to be presenting there. We think it’s really important, especially we’ve seen that there’s been this kind of gravitation and interest in FGF21s in F4c. We have data, which we think is just really, really impressive and you’re going to see that in the late breaker. We have — as you said, we have six different posters, et cetera, there. It covers really a large gamut of everything from some of the unmet need to more specific results that we’re seeing in Germany, for instance, from claims analysis that we’ve done, et cetera. So, it’s a little bit of an evolution of the data that we have and some more details about the severity of the disease and what you’re seeing in the real-world from incidence of things like HCC, et cetera.

So, it’s a pretty exciting meeting for us. The presentations we’re going to be doing are great. I’d say probably more than anything, we’re looking forward to just the interaction with the community there. And what we’re hearing is there’s a lot of anticipation about the dialogue that we’re going to be having with various physicians from literally around the world that attend. So, it’s a great meeting for us. The big news is the late breaker and thus — therefore, it’s a late breaker because it is of such interest. So, stay tuned. Hope to see some of you over there and certainly hope that you will join us on our call looking at that F4c data after EASL.

End of Q&A:

Tina Ventura: Great. Emma, thanks for that question. And Tawana, thanks for your time, and thank you all for your interest today. This is now the time we’re going to conclude the call. A replay of this webcast will be available on our website in approximately two hours. So, thank you so much for joining us.

Operator: That concludes today’s conference call. Thank you for your participation. You may now disconnect.