Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) Q4 2025 Earnings Call Transcript

Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) Q4 2025 Earnings Call Transcript February 19, 2026

Madrigal Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-2.57 EPS, expectations were $0.04.

Operator: Good morning, and thank you for standing by. Welcome to Madrigal Pharmaceuticals Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] 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, Michelle. Good morning, everyone, and thank you for joining us to discuss Madrigal’s Fourth Quarter and Full Year 2025 earnings. We issued a press release this morning and posted a slide deck to accompany this webcast on the Investor Relations section of our website. On the call with me today is Bill Sibold, Chief Executive Officer; Dave Soergel, Chief Medical Officer; and Mardi Dier, Chief Financial Officer. They will provide prepared remarks followed by Q&A. Please note on Slide 2, 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 3.

William Sibold: Thanks, Tina. Good morning, and thanks for joining us. Today, I’ll provide an update on the Rezdiffra launch, where we ended our first full year on the market at nearly $1 billion in net sales and solidified Rezdiffra as the foundational therapy in MASH. We’ll discuss the significant growth in the U.S. MASH market, which is up nearly 50% since the end of 2023 and growing at a double-digit pace. And then Dave will provide an update on our R&D strategy, where we now have more than 10 programs in our pipeline. Before turning to our fourth quarter results, I want to reflect on what we accomplished in 2025 and in just the first 6 weeks of this year. In a remarkably short period of time, we’ve built the leading company in MASH and assembled a pipeline we believe will help define the future of this category.

We continue to execute on a fantastic U.S. launch, extended Rezdiffra’s patent exclusivity to 2045 and initiated our ex-U.S. rollout beginning in Germany. We’re advancing our F4c trial for Rezdiffra, and we’re accelerating evidence generation to further differentiate the product. At the same time, we moved quickly to build a high-quality pipeline around Rezdiffra, completing 3 transactions in roughly 6 months, adding an oral GLP-1, a late-stage DGAT-2 inhibitor and a portfolio of 6 preclinical siRNA targets, each designed to be studied in combination with Rezdiffra. The reason we’re moving with this level of urgency is simple, assets like Rezdiffra don’t come along often. We have a high-quality, high-growth foundational therapy, driving strong top line performance with patent protection into 2045.

When you have an asset like that, you have an opportunity to build a sustainable and durable franchise for the long term. That’s exactly what we’re doing. Rezdiffra gives us a unique ability to pursue combinations, to attract high-quality assets and to shape the market in ways other companies simply can’t. As a result, we are fundamentally a different company today than just 6 months ago, transitioning from a single asset launch story into a fast-growing biotech with a pipeline designed to extend our leadership for years to come. Let’s turn to net sales performance on Slide 5. We delivered fourth quarter 2025 net sales of $321 million, more than tripling fourth quarter 2024. For our first full year on the market, net sales totaled $958 million, an exceptional launch by any industry standard.

That nearly $1 billion result took a lot of work. We didn’t just launch a product. We’ve built a market from scratch. Let’s take a second and really think about that. Remember, MASH was long viewed as the graveyard of drug development. No treatment, no market and skepticism that one would ever exist, particularly with GLP-1s on the horizon. We took a different view. The unmet need was substantial and demand for an effective therapy was real. We believed in the science and Rezdiffra’s ability to become the standard of care. We built the right team, people who have created categories and launched blockbuster brands, and we got to work. We executed with a long-term mindset, wiring the system practice by practice, educating prescribers, establishing care pathways, expanding prescriber breadth and depth and securing first-line access through disciplined contracting, and we continue to iterate and improve.

The results speak for themselves. We were first to market, and that matters. Rezdiffra with its liver-directed and differentiated profile has established itself as the foundational therapy in MASH. The market is real and only beginning to take shape. GLP-1s are here and as we expected, we’re still steadily adding patients. There is room for competition, which we believe will further expand the market, and we are building a pipeline designed to extend our leadership over time. As a result of the foundation we’ve built and our large base of prescribers, we continue to steadily add patients quarter-over-quarter as seen on Slide 7. Remember, the number we report reflects the net of new starts and discontinuations at the end of each quarter. We continued to steadily add patients ending the fourth quarter with more than 36,250 patients on Rezdiffra, up from more than 29,500 at the end of the third quarter.

That tells us 2 things. First, Rezdiffra’s profile is exceptional and resonates very well with prescribers and patients. Second, this large and expanding market is capable of supporting multiple therapies. This represents a small fraction of the growing addressable population, and we expect to continue to steadily add patients quarter-over-quarter going forward. Let me spend a moment on the U.S. MASH market on Slide 8. We are still in the early stages of what we expect to become a large specialty market. In just the last 2 years, the F2/F3 target population of 315,000 representative of patients seen by our target specialists has expanded nearly 50% and we expect this market to grow at a double-digit pace for the foreseeable future. Rezdiffra’s approval and increased industry investment across the ecosystem has fundamentally changed the market dynamic, driving increased awareness, diagnosis, referrals, specialist involvement and patients seeking care.

This is a category in its very early stages where Rezdiffra is now established as the standard of care. As the market expands, we expect to benefit from its growth, increased penetration and ultimately the introduction of additional therapies from our pipeline. MASH is a rare opportunity in biotech. Few therapeutic areas offer this combination of scale and high growth potential. That’s why we expect MASH to follow the trajectory of other large specialty markets as shown on Slide 9. Markets that support 10 to 15-plus therapies and have grown over decades to exceed $20 billion in annual sales. We believe MASH will evolve the same way with one important difference. We are first to market with a product that has an unmatched profile. As an effective liver-directed, safe and well-tolerated oral medicine, it far surpasses the profile of first-to-market products in those other categories.

And we continue to hear from our prescribers that Rezdiffra is performing even better than expected in the real world. This profile positions us well to expand into compensated MASH cirrhosis or F4c, the next phase of our growth strategy outlined on Slide 11. We believe F4c could double Rezdiffra’s opportunity with approximately 245,000 patients, no approved therapies and a significantly higher urgency to treat. Assuming regulatory approval, we expect to be first to market in F4c. Importantly, our F4c trial focuses on clinically meaningful outcomes, preventing decompensation rather than relying on biopsy. Rezdiffra would be the only medicine with outcomes data solidifying it as the standard of care in MASH and supporting full approval across F2 to F4c.

Before I turn it over to Dave, I want to briefly outline how we see the MASH market evolving and why Madrigal is uniquely positioned to lead it by building on the pipeline strategy that I described earlier. MASH is a complex heterogeneous disease. Over time, we expect distinct patient subpopulations to emerge, each requiring different mechanisms, combinations and sequencing approaches, all anchored by Rezdiffra. We’ve seen this evolution before in other diseases where progress was driven by matching the right combinations to the right patients. That’s the model we’re pursuing in MASH, and it’s why we’ve moved quickly to add these specific assets to our portfolio. And the reason we can execute on this strategy is our high confidence in the growth potential of Rezdiffra.

We’re able to build an industry-leading MASH pipeline because we have an outstanding product. One that is performing exceptionally well today and is positioned for continued strong growth. That strong foundation allows us to develop the next generation of MASH therapies for patients. That’s exciting, and it’s a true differentiator for Madrigal. Dave, I’ll turn it over to you to walk through our R&D strategy.

David Soergel: Thanks, Bill. Our objective in R&D at Madrigal is straightforward, build the industry-leading pipeline in MASH to make better therapies for patients. We’re doing that through targeted business development and smart clinical execution, leveraging the expertise of an R&D team that pioneered modern MASH drug development. Our strategy has 4 goals, deliver outcomes data and full approval for Rezdiffra from F2 through F4c, advance complementary mechanisms for combination with Rezdiffra to deliver the best efficacy across the MASH spectrum, remain modality agnostic, keeping development to the best combination regimens as our strategic aim, note our recent addition of injectable siRNAs, leverage our experience to evolve the science, design smarter, more informative clinical trials enabled by our extensive data and operational experience in MASH.

Our aim is to use capital efficiently to take more shots on goal and advance only the most promising programs for patients. The first pillar of our R&D strategy is delivering outcomes data in F4c. The basis of our high confidence in our outcome study are the data from our 2-year open-label study. The importance of the 2-year data is better understood in the context of how cirrhosis progresses. Development of clinically significant portal hypertension or CSPH, is a critical inflection point in the disease. It marks a transition from compensated cirrhosis towards decompensated disease and is when the most serious complications like variceal bleeding and development of ascites begin to occur. Crossing the threshold into decompensated cirrhosis predicts poor prognosis with an average survival time of 2 to 3 years without a liver transplant.

From the literature, it’s clear that patients with CSPH have meaningfully higher rates of liver-related events and reducing CSPH risk lowers liver-related events. That’s why the 2-year open-label 122 patient F4c data from our NAFLD-1 trial are so exciting. As shown here on Slide 14, 65% of patients with CSPH at baseline moved into lower risk categories by year 2. These data support Rezdiffra’s potential in F4c and reinforce confidence in our outcomes trial, particularly given that both trials have very similar patient populations. The second pillar of our R&D strategy is advancing combination therapies anchored by Rezdiffra. Slide 15 shows many of the known mechanisms involved in MASH. MASH is driven by excess free fatty acid delivery to the liver, leading to steatosis, inflammation and fibrosis.

While there are many potential points to intervene in the disease, it took decades and more than 20 industry failures before Madrigal cracked the code with Rezdiffra. To date, only 2 mechanisms have crossed the finish line, THR-beta agonism addressing MASH at its source in the liver and indirect acting GLP-1 agonism. But MASH is a heterogeneous chronic disease, and therefore, we expect treatment to evolve toward combinations. Rezdiffra gives us a unique solid foundation on which to build combinations to achieve better efficacy overall or in certain patient subpopulations. Our combination strategy is simple: prioritize validated, mechanistically complementary approaches that enhance efficacy while preserving Rezdiffra’s strong safety and tolerability profile.

In Orange, you see where we’ve already acted an oral GLP-1, a late-stage DGAT-2 inhibitor and multiple targets using siRNA. Let’s discuss why we’re excited about these new mechanisms starting with siRNA on Slide 16. First, siRNAs target validated genes that drive MASH progression. Using precise mRNA knockdown, we can either enhance efficacy broadly or develop more tailored approaches for defined patient subpopulations. Second, the modality. GalNAc-conjugated siRNA is well established and highly liver targeted. The clinical safety of the platform is supported by multiple marketed products. We acquired 6 preclinical siRNA assets that are highly complementary to resmetirom, positioning us for next-generation and more personalized combination regimens.

Slide 17 covers our DGAT-2 inhibitor, which we’re excited about for a number of reasons. First, DGAT-2 inhibition is a complementary mechanism to THR-beta agonism. Ervogastat prevents free fatty acids from being incorporated into triglycerides and resmetirom restores mitochondrial function to allow those free fatty acids to be turned into energy through beta oxidation. The 2 mechanisms together therefore address both the production and the clearance of excess hepatic fat. Second, we know a lot about ervogastat. It’s already completed a Phase IIb trial in MASH, demonstrating robust MRI-PDFF reductions and clean safety. In the MYRNA study, 72% of patients at the 150-milligram dose achieved at least a 30% reduction in PDFF and 61% achieved a 50% reduction, while many experts now consider a super response, predicting a greater likelihood of a reversal of fibrosis.

The combination of these 2 mechanisms has the potential to move more patients into that super responder category and drive better antifibrotic efficacy and better outcome. We plan to initiate a drug-drug interaction study this year and expect to begin a Phase II combination program in 2027 following FDA discussions. Next, our oral GLP-1 on Slide 18. Let’s start by acknowledging that there’s strong real-world enthusiasm for combining GLP-1s with resmetirom with an understanding of the mechanistic complementarity of GLP-1 in resmetirom. GLP-1s act outside the liver by improving systemic metabolism and reducing free fatty acid delivery to the liver. This complements resmetirom’s liver-directed mechanism of action. Importantly, our focus for this program is on developing a better treatment for MASH, not maximal weight loss.

And therefore, our goal is to balance the right amount of weight loss to potentiate resmetirom’s antifibrotic effect. So what is the right amount of weight loss to achieve better efficacy in MASH. In MAESTRO-NASH, we saw that as little as 5% weight loss meaningfully potentiated Rezdiffra’s fibrosis benefit. So our aim is a once-daily, well-tolerated oral fixed-dose combination that optimizes efficacy while maintaining good tolerability. A Phase I single ascending dose study of MGL-2086 is expected to start in the second quarter. Putting it all together on Slide 19, we are translating our leadership into action with one goal in mind, build the leading MASH pipeline. And this is really just the beginning of an exciting journey. With Rezdiffra protected into 2045, we have a long runway to invest and innovate, building a pipeline that will define the future of MASH care.

With that, I’ll hand it over to Mardi.

Mardi Dier: Thanks, Dave, and good morning. Turning to Slide 20 and a summary of our financials. Fourth quarter 2025 net sales totaled $321.1 million, reflecting another quarter of strong demand and bringing full year 2025 net sales to $958.4 million, As we’ve discussed, we’ve made excellent progress contracting for first-line access in 2026, with some contracts taking effect in the fourth quarter of last year as anticipated. As a result, our gross to net impact increased from the third quarter to the fourth quarter. As a reminder, gross-to-net includes several components: commercial rebates, government rebates, co-pay assistance and channel distribution costs. The team did an exceptional job managing the dynamics resulting in a full year average at the low end of the 20% to 30% range we previously outlined, an excellent outcome for 2025.

We’re off to a strong start this year and continue to steadily add patients. As indicated last quarter, we expect our payer agreements to bring our full year 2026 gross-to-net impact into the high 30% range, consistent with specialty medicine analogs. Looking ahead, we expect robust net sales growth in 2026 despite the step-up in gross to net from contracting that begins in Q1, plus the typical first quarter dynamics related to benefit plan changes and insurance reverifications. The fundamentals of the business are strong, and we’re looking forward to another outstanding year of performance. Moving briefly to operating expenses. R&D expenses for the fourth quarter and full year 2025 were $116.3 million and $388.5 million, respectively, The increase over the prior year period was primarily due to business development.

In the third quarter, this included $120 million upfront payment for oral GLP-1, and in the fourth quarter, a $50 million upfront payment for ervogastat and our 2 additional early-stage MASH pipeline assets. Of note, the upfront payment of $60 million for our siRNA targets will be paid and included as an R&D expense in the first quarter of 2026. SG&A expenses for the fourth quarter and full year 2025 were $240 million and $813.8 million, respectively. The increase over the prior period was expected to support the Rezdiffra launch. Looking ahead, we expect 2026 R&D expenses to be roughly the same as 2025 as we build our organization and begin to invest in our pipeline programs. We anticipate SG&A expenses to increase next year as we continue to support the launch of Rezdiffra and build the foundation for exceptional long-term growth.

Turning to our balance sheet. We ended the fourth quarter of 2025 with $988.6 million in cash, cash equivalents, restricted cash and marketable securities. With a strong cash position, we continue to be well resourced to support the ongoing launch of Rezdiffra and the advancement of multiple pipeline programs and continued business development. So to close, Slide 21 captures why we’re so confident about where Madrigal is headed. Rezdiffra is the foundational therapy in F2, F3 MASH and is just getting started. F4c represents another meaningful growth driver that could double our commercial opportunity and our pipeline. Now more than 10 programs deep, positions us to extend our leadership position as a durable category-leading franchise. Taken together, this is a company built for sustained value creation across our launch, indication expansion and pipeline.

We believe we’re exceptionally well positioned to lead in MASH in 2026 and beyond. I’ll now turn the call back to Tina to open the Q&A session.

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

Q&A Session

Operator: [Operator Instructions] And our first question is going to come from Ellie Merle with Barclays.

Eliana Merle: So you’re seeing meaningful growth in the number of diagnosed patients. Can you elaborate on the drivers here and talk about your expectations for category growth in 2026. And then second, you’re also seeing an acceleration in patient starts despite the launch of Wegovy. Can you elaborate on the types of patients you’re seeing starting on Rezdiffra now versus say, in the past and any trends you’re seeing across the types of different prescribers?

William Sibold: Great. Ellie, thanks for the question. Yes, we are seeing really strong growth. As you saw on the slides, which say a lot, almost 50% growth over a 2-year period. And this — we had talked about the market is in a position to grow, right? The 315,000 diagnosed patients was diagnosed sitting in the offices of the target specialists that we were calling on. And what we’re seeing is our efforts are really paying off on a couple of fronts. Number one, as awareness goes up, there’s going to be more people that are diagnosed. I think that having another company in the mix, Novo, who’s really trying to drive, I would say, broad awareness and uptake in the primary care offices, et cetera is leading to more diagnosis.

Our focus has always been the 315,000, as we see a path to peak essentially through what’s already available. Now inevitably, though, as you bring products to market, you see higher growth in that space, and that’s where we’ve seen the 50% and double-digit growth we’re expecting into the foreseeable future. So we’re really quite excited about it. And it gives us not only a clearer path to peak, but also perhaps it gives us a greater opportunity than we had even anticipated and planned around. So growth you see in all these markets, you’re going to see patient growth for really years and years. And I’ll leave that there. The question on patient adds, we’ve been saying and we continue to steadily add patients. And we’ve seen really no difference in the type of patients that is being prescribed Rezdiffra.

They tend to be a pretty even mix between F2 and F3. And as it relates to I think you mentioned a little bit about endocrinology or how our efforts are just in general with growing, we’re seeing prescriptions mostly in the Hep/GI space. That is the predominant number of physicians, obviously, more gastroenterologists than endocrinologists. They’ve just gone deeper into the deck, I would say. We’ve said that we’ve established really great breadth of prescribing, and now it’s a matter of going deeper into their patient population. And I think what we’re seeing is proof points that this is becoming the standard of care. Patients are being put on Rezdiffra, having great experiences staying on the drug, and you see that reflected in the patient adds.

Operator: And our next question will come from Thomas Smith with Leerink Partners.

Thomas Smith: Congrats on the quarter. Maybe just 1 quick clarification question on — I just wanted to ask about the contribution of the Germany launch to the worldwide revenues and patient numbers and maybe if you could expand a little bit on expectations for 2026. And then on the pipeline combo programs, I know you’re starting to look and you’ve guided today to a Phase II study with ervogastat next year. Could you just elaborate on how you’re thinking about sort of mid-stage Phase II studies from here? Do you think these studies will need to evaluate liver histology via biopsy before you progress into pivotal studies? Or is there a potential for a more accelerated path that perhaps leverages NITs?

William Sibold: Tom, thanks for the question. I’ll start off with answering Germany. Germany contribution in ’25 was negligible. And we don’t see actually a lot in ’26 as well. Really, part of the driver of that is as we’re launching into an MFN world, it is still uncertain how ex U.S. is going to evolve. And that’s not a Madrigal issue. That’s for the whole industry. So negligible in ’25, we’re just getting started really in ’26. Don’t expect a lot of contribution from Germany or ex U.S. in ’26. U.S. is the base business. U.S. has exceptionally strong dynamics to it, as you’ve seen, not only from a performance perspective, but from an outlook perspective, so we’re very, very comfortable being able to have robust growth in 2026, the way ’26 is unfolding from an international market perspective.

Mardi Dier: Maybe I’ll just put on finer point about our 2026, Tom. We really do expect robust growth and where consensus is coming out for 2026 already. We feel really good about that, which reflects very good growth from where we ended up with $958 million for 2025.

William Sibold: Dave, do you want to…

David Soergel: Yes, sure. For the combination — thanks for the question, Tom. So it’s a bit early to be definitive about our program in Phase II at this point because we do need to go to the FDA and have a conversation about their expectations for the Phase IIb program then leading into the Phase III program. However, what I’ll say with respect to NITs is that clinical care has moved well past biopsy. Biopsy is not used in clinical care anymore and FDA has shown more and more interest in qualifying noninvasive tests for use in drug development. I’d say in Phase II, our expectation is that NITs will play a major role in our assessment as we show in the slides, we have a strong understanding of the relationship between PDFF production and the potential improvement in fibrosis. So as you can see, we’re anchoring a lot of how we’re looking at the program around valuation of NITs in Phase II.

Operator: And the next question will come from Yasmeen Rahimi with Piper Sandler.

Emma Nesson: This is Emma, on for Yas. Firstly, maybe help us understand for MAESTRO-NASH outcomes in F4c, how are you tracking blinded event rates? And how is this like tracking for on-time data? At what point in this year might you tighten guidance in that regard? And is there any additional cirrhosis open-label NAFLD data follow-up that we could get to further strengthen conviction and success?

William Sibold: Great. Thanks for the question. Dave, I’ll turn that over to you.

David Soergel: Yes, sure. I guess thanks for the question. I think on the — let’s start with the last part. Is there going to be any additional open-label data? I mean I think we’ve shown quite a bit already. So we’ve gotten quite a lot of information out of those 122 patients in the open-label NAFLD-1 study. And I think what you can see from that, that experience is that even patients with the most severe disease, so individuals with clinically significant portal hypertension, we see what look like positive effects of Rezdiffra in that population. You can move people into lower-risk categories of CSPH over a 2-year time frame. So we’ve already gotten a lot out of this open-label experience. With respect to the progress of MAESTRO outcomes, we are seeing events track in the range that were expected.

So — as we’ve talked about historically, if you look at natural history data, you see about a 5% to 10% annual event accrual in patients with cirrhosis. We estimate in the placebo group somewhere in that range and we are seeing events track with expectation to deliver data in 2027. With respect to guidance, we need to get a little bit further along to get more precise on our timing.

Operator: And the next question will come from Prakhar Agrawal with Cantor Fitzgerald.

Prakhar Agrawal: Congrats on a strong quarter. Maybe firstly, on gross to net, if you could comment on gross to net for 4Q and cadence for the rest of 2026. And would you still expect broad first-line access without step edits for Rezdiffra in 2026, now that we’re seeing Novo contract? And maybe just another follow-up, if you can comment on compliance, persistence and discontinuation rates that you’re seeing, especially since Wegovy’s launch in the market?

William Sibold: Great. So maybe I’ll start a little bit with just the payer contracts. They’re complete. They were in place January 1 or earlier. And as we previously said, we were contracting for broad first-line access, no step edits and improved utilization criteria where it’s possible. So that holds true. We are in a really great place for contracting. I think this — when I think about kind of the accomplishments, the way we’ve managed contracting and gross to net is absolutely best in industry that I’ve seen certainly any launch I’ve been a part of. Remember, we came out of the gates, we didn’t contract. It’s now only entering into the eighth quarter of launch that you’re going to be having broad contracting. So the focus really has been preservation of gross to net.

And I think we’ve done a great job at it, and we’ve set ourselves up exceptionally well for 2026. Before turning it over to Mardi for gross to net, let me finish the compliance and persistence questions. Same as what we’ve said, well tolerated oral — well-tolerated oral at the 1-year mark is in this 60% to 70% range. Certainly, we’re continuing to see that strong performance, and really encouraged. As I said, we’ve seen some institutions have been able to have persistence up in the 90% range. We’re doing everything we can to learn from kind of the best performance and how to apply that to the broader population. We’ve got an outstanding patient services team that is all over this. We work closely with specialty pharmacy and providers and patients to work on that.

You asked a question about Wegovy and what’s the impact that we’re seeing there. Well, look, Wegovy is being used, but certainly not to the detriment of Rezdiffra. In fact, we just had our best NBRx week since launch, which says to me that just as we had said, you can have multiple products in the space, but that Rezdiffra really is the winning profile. So maybe with that, why don’t I turn it over to Mardi talk about gross to net evolution.

Mardi Dier: Yes. Great. Thanks, Bill. Yes, let’s break down gross to net a little bit, Prakhar. Thanks for the question and maybe a little comment on Q1 as well. So nothing’s really changed from what we discussed last quarter with respect to gross to net. So we ended the fourth quarter exactly where we thought we’d be, which was the midpoint of our 20% to 30% range, and that was a bit of an increase from third quarter as anticipated as some of the commercial contracting, which remember is one component of gross to net, took hold in the fourth quarter. So again, ending fourth quarter in that midpoint of the 20% to 30% range as expected. Now going into 2026, none of our messages have changed here either with basically 0 to contracting that we’ve been discussing as we put those commercial contracts into effect as of 01/01/2026 that moves our gross to net discount, our overall gross to net discount with all the components into the high 30s for 2026.

And we’ve broken that down really by quarter. It really stays in that high 30s for each of the quarters for 2026. There’s always inter-quarter variability because there are so many components that generally in the high 30s for gross to net, all as expected. And remember, as Bill just said, we get that excellent first-line access, no step edits, et cetera. So we are in very good shape and have always taken our gross to net — our diligence around gross to net very seriously. But as we discussed about Q1, looking at Q1 and what our expectations are for Q1, not much has changed there either. So we have to take into effect which is different than most companies that we have this 0 to contracting impact to gross to net for Q1 in addition to just the normal Q1 effect.

So if we look at our analogs — all specialty medicine analogs that we refer to frequently and have since launch. If we look at what the typical first quarter impact is, it’s a decline in net sales of mid- to high-single digits. And that takes into effect the reverifications of the insurance plans and sort of a typical Q1 effect. And that’s really reflective of where we believe our first quarter will be as well. But you have to consider not only do we have the Q1 effect. We’re never immune to that, but we also have this in this quarter the 0 to contracting impact on gross to net that we just discussed. So we feel that, that’s pretty impressive considering that we’ve been able to steadily add patients and still have a strong Q1 with the typical Q1 effect in 0 to contracting.

So we think we’re going to be in good shape overall for 2026. And as I already mentioned, we’ll have robust sales growth in 2026.

Operator: Next question comes from Akash Tewari with Jeffrey.

Unknown Analyst: This is Manoj, on for Akash. Just 1 from our end. So you mentioned about like 60 to 70 percentage persistence rate. When we looked at the AASLD data, there were like some presentations showing more than 90% adherence rate in the real world. How important is to keep the adherence rate to that 90 percentage to maintain the current patient adds and the revenue growth? And also do you expect any acceleration in patient adds going forward now with all the contracts in place? Or should we think about like probably around 6,000 to 7,000 patients, net patient adds every quarter? Just trying to understand that point.

William Sibold: Great. So thanks for the question. Let me start with the patients. Look, we’ve said that we have been steadily adding patients, and we expect to steadily add patients going forward. And I think that is — it’s certainly an important measure as we show you this quarter how we did in light of having another product on the market. So the fundamentals are really, really great. And we would expect in this environment to continue to steadily add. The contracting, remember, we’ve had great access from the beginning. The contracting doesn’t really accelerate anything because we — through — if there was no policy in place if you had medical exception, those were flowing through very quickly. But in this next phase of launch, we’ve partnered with the payers.

I think we’ve had some really great discussions. I think they’ve understood the value of Rezdiffra. They see the cost of these patients in their systems. And I think we’ve landed in a really good place for the future with them. And we do appreciate the partnership that we have. Now regarding persistence, we are in that well-tolerated oral range, as I said, the 60% to 70%. And yes, as you point out, there are some institutions that have reported rates all the way up to 90%. Now what we will always try to do is look for ways to help appropriate patients stay on product as long as they need it. And I think that sense of urgency has increased coming out of AASLD, where we presented data from both the F2/F3 population and the F4c population, if you discontinue therapy, disease comes back and it comes back quickly.

So we do believe this is a chronic therapy and that it’s in patients’ best interest, obviously, prescribers’ best interest and overall for the system best interest that they stay on therapy. So we have a lot of initiatives underway that we’re doing with our own patient services group, partnering with specialty pharmacy and institutions, and working with patients as well directly to try to help that persistence rate improve to a level which is even higher than the well-tolerated oral range. But that takes a lot of work. And there’s just people, look, regardless of whether it’s for — regardless of the type of indication, people tend to drop off drugs in time, but we’re going to do everything we can to educate to keep people on appropriately.

Operator: The next question will come from Michael DiFiore with Evercore.

Michael DiFiore: Congrats on the continued progress. Two for me. The first, over the past several months, you’ve added multiple combination assets around Rezdiffra including DGAT-2 and GLP-1 and siRNA programs. My question is, how do you avoid diminishing return from putting too many synergistic mechanisms into the pipeline? And what is your go/no-go criteria for advancing a second agent, both clinically and commercially? And then my second question is, briefly, has there been any change in expected timing of MASH or NASH outcomes now that the FDA has approved AI-supported pathology reads?

William Sibold: Okay. Dave, I’m going to pass it over to you in a second, but just — let’s just take a step back, what we’re trying to do here, Mike, and thanks for the question because I think this is really important. So with Rezdiffra, we have what has become standard of care and is truly a foundational therapy. And that’s just not from use — looking at the clinical data, one of the things that is really striking is that across all subgroups, you have essentially a consistent effect. So in other words, it tends to be that — all these F2/F3 patients do well. And it’s not as a 1 group that’s like a super responder group. Now that is a great therapy. And rarely do you see something that has that type of result. Now if we can, through the addition of new mechanisms of action, find a way to have the whole population or a subpopulation do better, then that really provides an opportunity for better patient outcomes.

And that’s how we’re thinking about this. So when we’re going out and looking at any of the mechanisms we’re bringing in, it starts with — we believe that there is a strong mechanistic rationale that in combination we could see a better effect for all or some patients. Now we have to test that theory and that’s why we’re going to do these trials to quickly determine whether we — if there’s a there, there, and we will kill or move forward quickly. The goal is not to have a lot of straggling things in the pipeline that never do anything except for suck up resource. We’re not doing that. We’re going to try to only take forward what is meaningful for patients. Now, we also see the market evolving though, where various subpopulations or let’s call them segments, may emerge.

And we’re well positioned not only with Rezdiffra, but now as we make these combo programs, to provide a better product for those segments. So this is extremely — when I say well thought out, it’s well thought out. It’s deliberate. It is based on mechanism, what we like, and it all starts with the fact that Rezdiffra is a foundational therapy that is really one which is amenable to either fix those combinations or combinations, for instance, with siRNA where you may have a pill in an injectable, but in a very favorable regimen. So that’s — just to give you the thinking of it, Dave, maybe just over to you for a little bit more color around it.

David Soergel: Yes, yes. I think the only thing I would add there is that when you start with a solid foundation that works in everybody, that’s not necessarily true of every combination partner you add, right? So it could be that a particular combination partner, for example, DGAT or the GLP-1 or one of the siRNAs does better for certain patient subtypes, whether they’re a genetic predilection to disease progression or they have some comorbidity that sort of the combination partner happens to target more effectively. So there — the other thing I think that’s really important about our strategy is that it’s adaptable, right? It’s adaptable to the science. So as we run our Phase II studies, we’ll be able to determine whether or not the drug is kind of going to be broadly applicable in the population and broadly does something that’s going to be meaningful for patients with MASH or a subsegment within that the MASH population is going to be a better target for that combination treatment.

So I would just add the adaptability part for how we’re thinking about pursuing these agents. Then I think your second question was about MAESTRO outcomes and AI path reading. So it’s great that the agency, again is sort of evolving their perspective on MASH drug development. MAESTRO outcomes is an event-driven trial. So it doesn’t — it’s not a histology driven study. So AI path reading really wouldn’t be relevant there. For MAESTRO-NASH, our F3 study, that is a biopsy-driven trial, but it’s a landmark study. So in other words, everybody gets a biopsy at month 54, which is then compared to baseline. So we would certainly consider using AI path reading as part of our analysis, but it’s not the primary assessment we would do.

Operator: Next question comes from Jay Olson with Oppenheimer.

Jay Olson: Congrats on the impressive progress. Just to follow up on the previous question. Since you have 2 oral combos, where do you envision the siRNA modality to fit into the future treatment landscape of MASH? And is there any color that you can share with us on the targets of those 6 siRNA programs? And when should we expect the timing of clinical development?

William Sibold: Thanks, Jay. Look, first of all, on the siRNA targets for competitive reasons, we’re not going to disclose the targets at this point. But stay tuned as we move along, we’ll certainly be sharing that with you. Look, where does it fit? So first of all, we thought any of the targets that we’re looking at, we believe there’s a rationale for MASH and potentially making a better product. As I said, it starts with mechanism and the rationale to make a better drug. I’m going to let Dave kind of walk through kind of our whole siRNA strategy. But we really think it’s a nice combo when you think about it, every 3- to 6-month injection and a daily pill. Pretty easy. If you’re getting — if you get a better effect from that, that is not a — that’s a pretty strong value proposition.

What makes it an even stronger value proposition is it’s all within the same company. So this isn’t going to be a — it’s not a battle for somebody having to optimize a single product, it is us being able to look holistically across the disease and say, what’s the right solution for that patient or segment of patients. And we can provide that in an efficient manner. And so it will always be about what’s the right therapy rather than having to sell a therapy. So Dave, maybe I’ll pass it over to you.

David Soergel: Yes. I mean I think just to add on, I mean, from a scientific standpoint, as Bill mentioned, siRNA technology has really had a breakthrough over the last 10 years or so. And we can develop now highly-targeted, well-tolerated therapies that last 3 to 6 months as Bill said, or even up to 12 months. The latest technology can even get you that much further. So we’re very fortunate to be working with Ribo Life Sciences, a leader in siRNA technology to be developing these drugs. And I think the key is that, that sort of — that combination regimen that sort of approach will make sense for either all patients or some patients. Again, we look for drugs that either have preclinical, clinical or genetic validation and all of these targets kind of fit within those categories. And so we think that with Rezdiffra is that solid foundation to add on these long-acting therapies, this could be a real advantage for patients with MASH.

Operator: Next question will come from Jon Walden with Citizens.

Jonathan Wolleben: Congrats. You guys have talked about this growth in the market. This is the first time you guys have put some numbers to it. And it doesn’t seem like any of these dynamics you’re attributing it to are going to go away anytime soon. So wondering how should we think about 5 years from here, the F2/F3 target population growing? And then also, should we expect further growth of the F4 population as well with patients still advancing? Just trying to get a bigger picture about the road ahead.

William Sibold: Jon, thanks for the question. Yes. I mean, look, what we said is that we’d expect double-digit growth for the foreseeable future. That’s certainly for the 5-year period. So pretty robust growth. I think now, again, you’ve got a therapy that works. People are talking about the disease. And as I said, we’re benefiting from having a competitor that’s out there talking a lot about it. And as we know, they need really lots of patients in order to make MASH a meaningful indication for them. So we think that it’s positioned for years of growth. And your other question was — F4, yes, we would expect to see similar — not similar growth, but growth there. We’re still working through the details of what that F4c population looks like.

But I think you can assume that there will be growth. As we get a little bit further into our analysis of the market and we’re getting closer to our launch, we’ll provide updates as to where that’s going. But overall, as MASH grows F4c will grow as well.

Operator: Next question is from Ritu Baral with TD Cowen.

Unknown Analyst: This is Nicole on line for Ritu. I’m just wondering about the extensive script growth needed over the fiscal year ’26 to grow revenue off of the increase for the gross to net. And just a quick second question. What do you think companion diagnostics would need to be developed to show any genetic predisposition for MASH, if you are getting to eventually move forward with the siRNAs if data is positive?

Mardi Dier: Nicole, can you just clarify your first question? It was the..

William Sibold: We missed a word.

Unknown Analyst: Sure. Yes, absolutely. The extent of script growth or patient adds needed over fiscal year ’26 to see a growth in revenue to offset the increase in gross to net.

William Sibold: Well, okay. So let me start — let me be clear. There’s — we’re growing. The fundamentals of the business are exceptional. We’re steadily adding patients. We’re going to see robust growth in 2026 and into the future. So I mean, let me just be crystal clear. When we talk about Q1, Q1 has 2 Q1 things going on. First of all, the Q1 effect that every single product in the industry experiences, reauthorizations, et cetera. On top of that, though, we have this 0 to contracting. So instead of contracting for the 2 years previously and having a steady increase in gross to net, we held off contracting until the seventh quarter of launch and or eighth quarter of launch, I guess, — and so you have this 0 to contracting effect.

So we are still — despite that in the range of the comps that we look at, which is kind of really remarkable. It says how strong the underlying business is. So expect to see growth. Our — look, we’re not going to do — the model is the number of patient adds, et cetera, but robust growth now and in the future. Mardi, do you have any other comment on that?

Mardi Dier: Exactly. We talked about it, Nicole for 2026. From a consensus standpoint, we feel really good where — the street is right now for 2026, which reflects robust growth from where we ended in 2025. So we feel like we’re in good shape. We already talked about the Q1 effect and gross to net, it’s daily adding patients. And I’ll just reiterate what Bill said last week was our best NBRx week ever. So the underlying business is in really good shape, and we anticipate that growth through 2026 and beyond, quite frankly.

David Soergel: Yes. So companion diagnostic. Interesting question. I mean, it’s early to sort of comment on that because to consider a companion diagnostic, you’ve got to be looking for a particular, for example, genetic or biomarker type target to tie your therapy to. So as Bill mentioned, Rezdiffra , of course, doesn’t need that because it works very well across all patient subpopulations. We’ll see as the combination products move forward if there is a need to develop a companion diagnostics. But as of right now, we don’t foresee that with these programs.

Unknown Analyst: Just really quickly to follow up, are genetic screenings common in the clinic already?

David Soergel: They’re becoming, I think, generally speaking, I can speak in MASH, in particular, necessarily. But across general clinical care genetic screening is becoming more common, yes. But I think producing a genetic or another biomarker companion diagnostic takes an additional lift for sure.

William Sibold: Yes. I just remember, we’re — let’s just put a fine point on this. We are 7 quarters into the launch of an entirely new category. There are decades of growth and evolution in front of us. The decisions that we’re making today with the pipeline aren’t 2026 decisions. They’re not even ’27 decisions. These are helping to form treatment, which will include diagnosis any kind of test that obviously will be done to segment patients, et cetera, that will evolve in time. So we are very much on the forming side of this. And remember, we’re less than 12% penetrated into the 315,000. It’s less than 8% into the 460,000 that we talked about. This is at the beginning of a very significant specialty market. We are the company at the front end of it that can drive it, not only for the coming years, but for, we believe, decades in advance.

Operator: Next question is from William Wood with B. Riley Securities.

William Wood: Congrats on a very nice quarter. Just sort of sticking with what you were just talking about, Bill, in terms of the market increase from 315,000 to 460,000. Just curious if you see that correlated with the increase of patient prescriber interest and potentially how we should think about that as reading through to sort of new patient adds? Is this more of a longer term, just more runway in terms of patients? Or is this actually feeding increased new patient additions? And then I have a follow-up.

William Sibold: Yes, thanks. Look, so I think one of the real important pieces of this — of the update is if you look and see where that real growth is taking place is in the target specialists that we are calling on. And I think that’s really important. What it’s saying is that our efforts really are working in that. Patients that are diagnosed are making their way to the specialists that treat MASH. And we’ve been clear from the beginning. We think this is a specialist disease. That’s why we’re focused on hepatology, gastroenterology and now some endocrinology as well. That’s where the patients are, those are the experts that should be treating it, and that’s where we’re seeing the biggest growth taking place, which is indicative of our wiring of the system being extremely successful.

So I think what you’re going to see is, remember, we’re still at a very low penetration rate in the already diagnosed, and so we still have a lot of patients to get through just in that initial 315,000. And then as more and more come in and this becomes standard of care, that’s when you see just treatment rates get higher as well as diagnosis rates get higher. So that just gives you a little bit of flavor around it. And you said you had a quick follow-up, maybe it’s just real quick because we got to move on.

William Wood: In reference to your GLP-1 and your DGAT, it looks like GLP-1 might be initiation starting for Phase I. It looks like it might be pushed back slightly from first quarter to second quarter. In terms of both those programs, just curious what remaining gating activities still need to be completed.

William Sibold: Yes. So we — I think we guided initially to first half, and then we’ve refined it to second quarter. So there’s been no delay in that.

David Soergel: No change, no delay.

Operator: The last question will come from Kripa Devarakonda with Truist.

Unknown Analyst: This is Alex on for Kripa. Congrats on the progress. Now that we are seeing more and more patients on Rezdiffra for longer time periods, we want to know, have you seen any challenges in the reimbursement process to keep patients on drug for the extended time periods. We can imagine that for many patients with Rezdiffra that their fibrosis scores could improve and they might technically be outside of the label requirement.

William Sibold: Okay. Thank you very much for the question. So first of all, the reauthorizations we said are very routine. Oftentimes, it’s physician attestation are showing some kind of stabilization or improvement in one of the NITs that has been used initially. I think — look, we’re — again, we’re really early into the treatment of the disease. I think what is very compelling for the community is — I’ll go back to the AASLD data, which showed that discontinuation of Rezdiffra led to a return of disease in both F2 and F3 and also F4c patients. So I think that more and more of the belief is that this is a chronic disease. And you can’t stop the medicine even if you have a response because you will have done all that hard work and then you’re just going to have disease come back.

So we think that’s how it’s going to evolve in the future again, though. Look, it’s early, but our belief is that this is a chronic therapy. That’s the way the community tends to be using it. So we feel really quite confident that will be the case. May be I’ll finish off just with a remark of just kind of what’s the state of the union, if you will. Rezdiffra is performing exceptionally well. This is truly a best launch I’ve ever been associated with. And I can tell you that is from a — that’s a factual perspective, nothing’s done as well as this and it’s poised for substantial long-term growth in a rapidly growing market. It’s because of those 2 things that we can build a pipeline now to establish long-term leadership. Most companies have a pipeline looking for a great product.

We have a great product that is performing exceptionally, is poised to perform exceptionally for the future. Now we have a chance to build long-term leadership. It doesn’t happen often. This is an opportunity. We are not going to waste the opportunity. So with that, we’ll close the call.

Tina Ventura: Perfect. Thanks, Bill. And thank you all for your time and interest today. This now concludes our call. A replay of this webcast will be available on our website in about 2 hours. Thank you for joining us.

Operator: Ladies and gentlemen, thank you for your participation in today’s conference. You may now disconnect. Have a wonderful day.