Madrigal's Earnings Call: Patient Growth and Europe Claims Clash

Date of Call: Jul 30, 2026

Financials Results

• Revenue: $364.3 million, representing 71% growth year over year

Guidance:

• Comfortable with consensus quarterly growth rate for Q3 and Q4 2026, expecting robust sales growth for the year.
• Gross-to-net discount expectation for 2026 is mid-to-high 30s, consistent with Q2 and expected for the rest of the year.
• Expect 2026 R&D expenses to be roughly the same as 2025, inclusive of one-time upfront payments.
• SG&A expenses expected to increase compared to 2025 due to commercial investments and annualization of endocrinology sales force.
• Plan to initiate three Phase II trials in 2027 (oral GLP-1, DGAT2 inhibitor, siRNA).
• Expect F4C (Maestro Outcome Study) trial readout in 2027 and F2F3 (Maestro NASH) study data in 2028.
• Expect continued steady patient additions and strong net sales growth for 2026.

Business Commentary:

Revenue and Patient Growth:

• Madrigal reported net sales of $364.3 million for Q2 2026, representing a 71% year-over-year increase.
• The company ended Q2 with more than 49,000 active patients on ResDifera, more than double from a year ago.
• Growth was driven by strong demand for ResDifera, effective commercial execution, and increasing patient diagnoses and referrals.

Pipeline and IP Development:

• Madrigal has built an industry-leading MASH pipeline with more than 10 programs, including four clinical-stage assets.
• The company has secured three additional patents, reinforcing protection for ResDifera's indications in F2, F3, and potential F4C.
• This strategic focus on IP and pipeline expansion aims to sustain long-term growth and market leadership in MASH.

Market Dynamics and Expansion:

• The U.S. addressable MASH market has grown nearly 50% from 315,000 to 460,000 diagnosed F2, F3 patients between year-end 2023 and 2025.
• Market growth is driven by increased disease awareness, diagnosis rates, specialist referrals, and investment in the therapeutic category.

F4C Indication and Outcomes Trial:

• Madrigal is conducting an event-driven outcomes trial in F4C, with potential to double ResDifera's opportunity.
• The trial is expected to read out in 2027, with event accrual tracking in line with the natural history of the disease.

Financial Management and Profitability:

• Q2 2026 saw an increase in operating expenses, primarily due to a one-time upfront business development expense and stock-based compensation.
• The company ended the quarter with a strong cash position, enabling continued investment in R&D and commercial activities for sustained growth.

Sentiment Analysis:

Overall Tone: Positive

• CEO states 'We delivered another strong quarter' and '2026 is going to be another great year.' Mentions 'exceptional execution,' 'strong demand,' and that ResDifera is 'tracking in line with, and in many cases exceeding, the best-in-class specialty launches.' CEO also notes 'we're just getting started' and 'we believe Magical is exceptionally well-positioned to lead and define where this market goes over the long term.'

Q&A:

• Question from Prakhar Agrawal: What are you seeing in expectations for net patient ads for remainder of the year? What segments are driving growth? Thoughts on uptake among endocrinologists?
  Response: Expect to steadily add patients through Q3 and Q4, comfortable with consensus growth rates. Growth continues to be driven by HEPs and GIs. Endocrinology uptake is early (started Q4 2025), promising but not yet a major driver.

• Question from Ellie Marlee (Barclays): What are the drivers of patient growth acceleration? Any clarity on F4C trial timing, event rate tracking?
  Response: Patient growth is measured as active patients on last day of quarter; focus is on adding new patients and improving persistency. For F4C, events are accruing as expected, tracking to a 2027 readout; more precision will be provided later.

• Question from Thomas Smith: Clarify growth through balance of 2026, inventory dynamics, and contribution of Europe/France Early Access Program.
  Response: Gross-to-net discount projected mid-to-high 30s for 2026, consistent with Q2; inventory dynamics normal. Europe contribution is currently negligible due to early-stage launches and reimbursement challenges; more to come in future quarters.

• Question from Ritu Baral (TD Cowen): Confirm F4C outcomes trial event threshold? Comment on event accumulation curve versus linear expectation.
  Response: Target event number not confirmed; in the ballpark of prior estimates. Events are accruing in line with expectations, consistent with natural history; placebo event rate guiding to 5-10% range.

• Question from Dave (Madrigal): When will Phase 2 begin for oral GLP-1 and DGAT2 inhibitor? Update on Arrowhead asset.
  Response: Phase 2 for oral GLP-1 and DGAT2 inhibitor expected to start in 2027 after Phase 1/2 studies this year and regulatory discussions. Arrowhead siRNA (MPLA-3) Phase 2 also estimated to start in 2027.

• Question from Manoj (Jefferies): Is it reasonable to predict F4C trial completion in 2027?
  Response: Yes, trial is tracking to deliver data in 2027; more precision on event estimates will be provided later.

• Question from Yasmeen Rahimi (Piper Sandler): Any real-world observations in F2/F3 population? Confidence in 2027 F4C data readout?
  Response: Real-world feedback is overwhelmingly positive, with prescribers reporting ResDifera performs even better than expected. Confidence in 2027 readout remains, though timeline may be updated with more precision.

• Question from Manoj (Jefferies): Given baseline platelet count in F4C trial, is event rate guide realistic vs. OLE data?
  Response: Trial population enriched for CSPH risk, which may explain event accrual; tracking consistent with 2027 delivery. Placebo event rate guiding to 5-10% range.

• Question from Ash Verma (UBS): What relative risk reduction is needed for broad adoption in F4C? Why might placebo events differ from prior 5-10%?
  Response: Any statistically significant risk reduction would be clinically relevant. Placebo rate guiding to 5-10% based on natural history; trial duration and powering depend on hazard reduction, not placebo rate.

• Question from Michael DeFiore (Evercore ISI): Separate new starts vs. reactivations in Q2 patient growth? What percent of new prescriptions come from existing prescribers?
  Response: Depth of prescriptions (scripts from existing prescribers) increasingly important as base grows; mix not tracked, but HEPs/GIs are predominant. Focus is on steadily adding patients and increasing depth.

• Question from Dave (Madrigal): How are new patents impacting peak sales magnitude and vision for personalized medicine?
  Response: Market dynamics support decades of growth with double-digit expansion expected. Pipeline (e.g., siRNA) targets specific patient segments for added efficacy; ResDifera seen as foundational with broad coverage.

• Question from Kripa Devarkonda (Truist Securities): Impact of competitor and potential IP fragmentation? Comment on recent patent issuance.
  Response: New IP (including F2F3 safety patents and F4C use patent) strengthens profile and extends protection. Competitor may help drive market growth, but ResDifera's profile (once-daily, weight-neutral) is viewed as superior in current market.

Contradiction Point 1

Patient Growth Outlook and Drivers

Expectations for patient adds and growth drivers appear inconsistent.

Prakhar Agrawal (Cantor Fitzgerald) - Prakhar Agrawal (Cantor Fitzgerald)

2026Q2: The company expects to steadily add patients through Q3 and Q4. They are comfortable with the consensus quarterly growth rate. Growth is primarily driven by hepatologists (HEPs) and gastroenterologists (GIs). Endocrinology is still early; prescribers are in their first year of launch (started in Q4 2025) but show promising potential. - [Bill Sibyl](CEO) and [Marty](CFO)

What are the key growth drivers, net patient add expectations for the remainder of the year, and initial thoughts on uptake among endocrinologists as a potential growth segment, relative to the current consensus for Q3 and full year 2026? - Prakhar Agrawal:**

2026Q2: Q3 is off to a great start, and the company expects to steadily add patients throughout the rest of the year. They are comfortable with the consensus quarterly growth rates for Q3 and Q4. Patient growth is primarily driven by Hepatologists and Gastroenterologists. Endocrinology uptake is early (started in Q4 2025); while promising, it is still in the initial stages. - [Bill Sibold](CEO) and [Mardi Dier](CFO)

Contradiction Point 2

European Market Contribution

Characterization of Europe's current revenue/patient contribution appears inconsistent.

Thomas Smith (Analyst) - Thomas Smith (Analyst)

2026Q2: Europe’s contribution remains negligible due to launch timing and reimbursement uncertainties. Early access programs (e.g., in France) show interest but are not yet impactful. - [Marty](CFO) and [Bill Sibyl](CEO)

Can you clarify your growth guidance for the remainder of 2026, the contrast with inventory dynamics in the quarter, details on the early access program launched in France, and Europe's contribution to worldwide revenues and patient numbers? - Thomas Smith (Analyst)

2026Q2: Europe's contribution in Q2 was negligible. Launches in Germany and an early access program in France have been initiated, but broader European contribution is limited by reimbursement uncertainties and the company's disciplined, phased market entry approach. - [Mardi Dier](CFO) and [Bill Sibold](CEO)

Contradiction Point 3

Patient Growth Outlook and Drivers

Contradiction on the primary driver of patient growth and the current state of endocrinology prescribing.

Prakhar Agrawal (Cantor Fitzgerald & Co.) - Prakhar Agrawal (Cantor Fitzgerald & Co.)

2026Q2: Growth is primarily driven by hepatologists (HEPs) and gastroenterologists (GIs). Endocrinology is still early; prescribers are in their first year of launch... but show promising potential. - [Bill Sibyl](CEO), [Marty](CFO)

What are your expectations for net patient adds for the remainder of the year, and what initial thoughts do you have on the uptake among endocrinologists since starting to target them last year? - Ashwani Verma (UBS Investment Bank)

2026Q1: Endocrinology is a newer specialty being wired, but they are a 'valuable future specialty' as they see many patients on GLP-1s who still have F2-F3 MASH. - [Bill Sibold](CEO)

Contradiction Point 4

F4C Trial Event Rate and Readout Timing

Contradiction on the specificity and certainty of the event rate target and the associated readout timing.

Ritu Baral (TD Cowen) - Ritu Baral (TD Cowen)

2026Q2: The target number of events for the F4C trial has not been confirmed... but it is in the ballpark of prior estimates (e.g., a ~10% placebo event rate). Events are accruing and in line with expectations. The trial is designed to read out in 2027. - [Dave](CMO)

Can you confirm that current performance metrics align with your drivers, or is there a possibility you're targeting a specific event/publication to boost performance based on recent observations? - Yasmeen Rahimi (Piper Sandler & Co.)

2026Q1: Events in the MAESTRO-NASH outcomes trial are tracking in range of our expectations. The trial is projected to deliver results in 2027. The company will provide a more precise update on timing when available. - [David Soergel](CMO)

Contradiction Point 5

Gross-to-Net Discount Guidance

Guidance becomes more conservative, shifting from high-single digits to mid-to-high 30s.

Thomas Smith (Leerink Partners) - Thomas Smith (Leerink Partners)

2026Q2: Gross-to-net projected for 2026 is in the mid to high 30s - [Marty](CFO)

Can you clarify the growth outlook for the remainder of 2026 and how inventory dynamics in the quarter compare to future expectations? - Prakhar Agrawal (Cantor Fitzgerald)

2025Q4: For 2026, gross-to-net is expected to be in the high 30% range for each quarter... mid-to-high single-digit decline due to insurance reauthorizations... - [William Sibold](CEO) & [Mardi Dier](CFO)