Madrigal Pharmaceuticals (NASDAQ:MDGL) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Madrigal Pharmaceuticals reported a strong financial performance, with Q3 2026 net sales of $431 million, up 50% year-over-year, and year-to-date net sales exceeding $1 billion.
Rezdiffra continues to show rapid growth in the MASH market, with an active patient base nearly doubling year-over-year to over 55,850 patients.
The company is advancing its F4C program, aiming to be the first approved therapy in this space, with MAESTRO-NASH Outcomes and MAESTRO-CSPH Phase 3 trials underway.
Madrigal achieved its first quarter of profitability, with net income of $55.4 million, and expects continued growth supported by strong market demand and strategic investments.
Management expressed confidence in Rezdiffra’s mega-blockbuster potential, citing a growing market and competitive advantages, including patent protection into 2045.
Full Transcript
OPERATOR (Moderator)
Good morning and thank you for standing by. Welcome to Madrigal Pharmaceuticals third quarter 2026 earnings conference call. At this time all participants are in a listen-only mode. After the speaker’s presentation there will be a question and answer session. As a reminder, today’s conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.
Tina Ventura (Chief Investor Relations Officer)
Thanks. Good morning everyone and thank you for joining us to discuss Madrigal’s third quarter 2026 results. 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 are Bill Sibold, Chief Executive Officer, David G. Soergel, Chief Medical Officer, and Mardi Dier, Chief Financial Officer. They will provide prepared remarks followed by Q and A. Please note that 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 (Chief Executive Officer)
Thanks, Tina, and thank you all for joining. The business is performing exceptionally well. Rezdiffra is growing rapidly and the MASH market is accelerating. Rezdiffra’s best-in-disease profile and our team’s strong execution have established Rezdiffra as the foundational therapy in MASH. I’ll summarize a few highlights. First, we delivered a $431 million quarter, crossed the $1 billion milestone in year-to-date net sales, and are now annualizing at more than $1.7 billion.
Based on this quarter’s results, we’re continuing to steadily add patients and believe we’re well on our way to mega-blockbuster status. Second, the U.S. F2/F3 MASH market is accelerating, on track to grow more than 30% this year. When you combine rapid market growth with Rezdiffra’s patent protection expected into 2045, it’s hard to find a more attractive growth opportunity in biotech. And third, we’re advancing our F4C program with the same objective that has guided us in F2/F3: to be first and best.
Our ongoing MAESTRO-NASH Outcomes trial positions us to deliver the first approved therapy for F4C. Our new MAESTRO-CSPH Phase 3 trial is designed to be a practice-shaping trial that we expect to extend our competitive advantage and strengthen our long-term leadership. Let’s move to our Q3 results where I’ll cover Rezdiffra and the expanding MASH market. Dave will discuss our pipeline progress and Mardi will close with our financials. Turning to slide 5, third-quarter 2026 net sales were $431 million, up 50% year over year. This performance reflects growing demand for Rezdiffra and outstanding execution by our team. We built a broad and durable prescriber base early and now we are driving depth. The positive experience our target specialists are having with Rezdiffra in the real world is translating into action.
They are prescribing it more often. That growing depth, combined with excellent access, Rezdiffra’s differentiated profile, and strong patient adherence is why we continue to steadily add patients. As shown on slide 6, we ended the third quarter with more than 55,850 active Rezdiffra patients compared to more than 29,500 a year ago. That’s nearly twice as many patients on therapy. As a reminder, this is the number of patients actively on therapy at quarter end, net of discontinuations.
Slide 7 shows why we are so confident in the opportunity ahead. Our latest research shows that the market is accelerating. As we said at the end of 2025, the diagnosed U.S. F2/F3 MASH population had grown nearly 50% in two years to 460,000 patients. As of June 30 of this year, we estimate the market expanded to more than 530,000 patients and is on track to grow more than 30% by the end of 2026. The growth in this market is primarily being driven by an increase in awareness and diagnosis.
Slide 8 makes clear just how much runway remains. The MASH diagnosis rate is still only around 10% and Rezdiffra has penetrated approximately 10% of the market. At 10% of 10%, we are only about 1% into the total opportunity. With more than $1 billion in year-to-date net sales, we are at the very beginning of what we believe will become one of the large specialty markets in the industry. As noted on slide 10, building a successful medicine takes much more than a positive top-line readout. That’s only the beginning of the story. Launch success depends on several important drivers. Labels matter; boxed warnings and burdensome monitoring requirements create barriers. You need efficacy, safety, and tolerability to translate into a positive real-world experience. And you need a medicine that is easy to prescribe, easy to take, and easy to stay on.
Then there’s execution: the right infrastructure, the field team, medical affairs, reimbursement, market access, fulfillment, and patient support—all working together to get patients on therapy and keep them on therapy. Building that system takes experience, resources, and time. Ten quarters into launch, those questions have been answered for Rezdiffra, as shown on slide 11. We have what we believe is the best-in-disease profile. Rezdiffra is highly effective across each patient subtype. It’s well tolerated and simple to use, and with nearly 56,000 patients on therapy, its safety profile is exceptionally well defined, which actually may be the most important thing. That’s the real-world profile you want for a chronic disease.
We also built the industry-leading infrastructure and we are continuously improving it. We’ve done the hard work to wire the system and have set an extremely high bar. This doesn’t just happen overnight and it is difficult to replicate. We already have thousands of prescribers and more than two years of real-world experience. Any new entrant will have to build what we are already optimizing and answer the question: what problem are they trying to solve?
We have delivered one of the best specialty launches of the last decade and established clear leadership in F2/F3. By being first and best, we will leverage this formidable advantage in F4C as well. Let’s turn to slide 12. The F4C market is increasingly attractive. It’s a rapidly growing multi-billion-dollar market opportunity. We now estimate 360,000 addressable F4C patients in the U.S., up more than 45% from the 245,000 we previously shared. That is larger than the F2/F3 patient population when we launched Rezdiffra. Expanding into F4C could double Rezdiffra’s opportunity and bring patients their first approved therapy. We’ve also seen recently that competitors have modified their programs, increased their study sizes, and delayed their timelines, with the earliest potential entrant now not expected until 2030.
Our lead in F4C has widened. MAESTRO-NASH Outcomes puts us in a unique position to be first to market. Events continue to accrue in this study and we’re now anticipating a readout in late 2027. We are confident in Rezdiffra’s potential in F4C and are exceptionally well positioned to lead. The addition of our new Phase 3 trial, MAESTRO-CSPH, raises the bar for the field. It builds on MAESTRO-NASH Outcomes while unlocking new opportunities to shape clinical practice as the treatment landscape continues to evolve.
This trial will benefit from what we’ve learned about F4C over the last five years and is another tangible demonstration of our leadership in MASH. Our objective remains clear: be first and best in F4C. Dave will walk you through our plan. Over to you, Dave.
David G. Soergel (Chief Medical Officer)
Thanks, Bill. Patients with F4C MASH face serious risks, including liver decompensation, liver cancer, and premature death. The unmet need is urgent. Our two-year data from the 122-patient open-label F4C cohort in MAESTRO-NAFLD-1 show that patients treated with Rezdiffra for two years have improved MASH-related biomarkers and imaging parameters. Among the patients with clinically significant portal hypertension, or CSPH, confirmed at baseline, 65% moved to a lower-risk category, suggesting a lower risk of liver decompensation.
These data reinforce our confidence in Rezdiffra’s potential to benefit these patients. MAESTRO-NASH Outcomes gives us the opportunity to deliver the first approved treatment for F4C. This is our 845-patient, placebo-controlled, event-driven Phase 3 trial. The primary endpoint is improvement in liver-related clinical outcomes consistent with FDA guidance. A positive result would support both an F4C indication and full approval across F2 through F4C MASH. We continue to accrue events and, as Bill referenced, we now anticipate a readout in late 2027.
In parallel, we plan to initiate MAESTRO-CSPH in the first half of 2027. This second Phase 3 outcomes trial will draw on our open-label F4C data, our experience conducting MAESTRO-NASH Outcomes, and the latest advances in the field to generate highly relevant data to support Rezdiffra’s benefit in F4C. There are four features that distinguish this new trial and our F4C program, as noted on slide 14. First is the patient population. We plan to enroll more than 2,000 patients and enrich the trial for CSPH.
Development of CSPH is a critical inflection point in the pathophysiology of compensated cirrhosis, so we’re focusing this new trial where the unmet need is greatest and where preventing or delaying a clinical event is especially meaningful. Second is the breadth of evidence we intend to generate. We expect to have the most comprehensive dataset in F4C. The size of this new trial, combined with MAESTRO-NASH Outcomes, should allow us to conduct meaningful analyses across clinically important subgroups.
Third, MAESTRO-CSPH enhances our opportunity to build Rezdiffra-specific biomarker evidence. We plan to collect a rich set of biomarkers and non-invasive data in MAESTRO-CSPH, as we’ve done in MAESTRO-NASH Outcomes. Using the data from MAESTRO-NASH Outcomes, we can identify measures that are most closely associated with treatment benefit and potentially validate those findings in MAESTRO-CSPH. And fourth is scale. Across MAESTRO-NASH Outcomes and MAESTRO-CSPH, we expect our F4C outcomes-based clinical program to include approximately 3,000 patients, which will give us the greatest insight into this population and further strengthen our competitive advantage. Overall, we believe MAESTRO-CSPH will be the defining F4C study in this space. We plan to finalize the study protocol following our discussions with FDA and initiate the study in the first half of next year, with results expected in the early 2030s.
Having two complementary outcomes trials gives us a unique advantage and the opportunity to demonstrate consistent clinical benefit across studies, replicate key biomarker findings, advance the science in F4C, and give prescribers a more complete understanding of Rezdiffra. Now let’s turn to what we’re doing today to further expand the evidence base supporting Rezdiffra in F2/F3. In a heterogeneous disease like MASH, predictable efficacy across patient subgroups is critical for patients and providers. The forest plot on slide 15 from our Phase 3 MAESTRO-NASH trial demonstrates Rezdiffra’s consistent efficacy across each patient subgroup, including patients with F2 or F3 fibrosis with or without type 2 diabetes, across BMI categories, and across common genetic variants.
Slide 16 builds on that evidence with a more detailed examination of Rezdiffra’s profile in patients with common genetic variants associated with MASH progression, recently published in the Journal of Hepatology. As shown, in the genetic subgroups evaluated, Rezdiffra improved fibrosis and reduced liver fat with a consistent treatment effect. These data support Rezdiffra’s utility as a foundational treatment for MASH and form the basis of the combination programs in our pipeline.
We’re also expanding Rezdiffra’s evidence base to include data from everyday clinical practice. This will be a major theme at AASLD later this week. Resmetirom will be featured in more abstracts than any other MASH therapy across the conference. This includes 13 real-world data abstracts, the largest of which includes nearly 12,000 patients. We continue to hear the feedback from prescribers that Rezdiffra is performing even better than they expected.
The data highlight the evidence base supporting this positive real-world experience with Rezdiffra. Slide 18 outlines three areas where we’re continuing to broaden our understanding of MASH and Rezdiffra. This includes real-world evidence generation, data in special populations and practice, and studies evaluating Rezdiffra with approved therapies to treat common comorbidities. Examples include combinations with pioglitazone or an SGLT2 inhibitor. These initiatives are intended to answer the practical questions prescribers face when treating complex patients with MASH.
We’ll use what we learn to inform future development. Slide 19 showcases our pipeline. In addition to our ongoing Phase 3 studies, our portfolio now includes more than 10 resmetirom combination programs. Each program follows the same strategy: start with resmetirom as the foundation and add complementary mechanisms with the potential to deliver better efficacy to some or all MASH patients. We expect to initiate three Phase 2 combination trials in 2027 following regulatory discussions. The first will evaluate our oral DGAT2 inhibitor, VIRGOstat, with resmetirom, following a Phase 1 drug–drug interaction study initiated in October.
The second will evaluate MGL286, our oral GLP-1 agonist, with resmetirom, following completion of the ongoing Phase study. Our goal remains to dial in the right amount of weight loss to enhance resmetirom’s anti-fibrotic effect while preserving tolerability. The third will evaluate MGL0795, our siRNA targeting PNPLA3, with resmetirom. This is our genetically targeted approach for patients homozygous for a PNPLA3 disease-accelerating mutation. Our earlier-stage pipeline is advancing as well, with six siRNA programs and three exploratory assets.
Our approach to our pipeline remains disciplined and focused on combination programs with the potential to deliver the greatest benefit to patients living with MASH. With that, I’ll hand it over to Mardi.
Mardi Dier (Chief Financial Officer)
Thank you, Dave. Turning to slide 20 and a summary of our financial results where comparisons are made to the prior year period. Third quarter 2026 net sales were $431.3 million, up 50% year over year, with year-to-date net sales of $1.1 billion. This was another outstanding demand quarter. In addition, the team continues to do an excellent job managing gross-to-net. With nine months of the year behind us and good visibility into the fourth quarter, we expect gross-to-net to come in at the low end of our mid- to high-30s range for 2026.
Moving to operating expenses, which included $38.9 million of non-cash stock-based compensation in the quarter compared to $26.3 million. Cost of sales for the third quarter was $37.8 million compared to $18.1 million. Cost of sales was primarily driven by an increase in royalties payable to Roche. R&D expenses for the third quarter were $71.8 million compared to $174.0 million. The decrease was primarily due to a one-time upfront business development expense of $117.3 million in the third quarter of last year.
SG&A expenses for the third quarter were $265.7 million compared to $209.1 million. The increase was primarily due to continued investment in commercial activities for Rezdiffra. Looking ahead, we expect full year 2026 R&D expenses to be nominally lower than 2025, inclusive of the previously announced upfront business development expenses in both periods. We expect full year 2026 SG&A expenses to increase compared to 2025 as we continue to support Rezdiffra’s growth.
As we discussed earlier in the year, we expected some quarter-to-quarter choppiness in SG&A throughout the year due to timing of certain marketing expenses, and expect higher Q4 SG&A expenses compared to Q3. The third quarter marked another important milestone for Madrigal Pharmaceuticals — our first quarter of profitability. We reported net income of $55.4 million compared to a net loss of $114.2 million. As we’ve said, we remain a top-line growth story and may dip in and out of profitability in the near term based on the timing of investments, business development, as well as typical 1Q dynamics. We will continue to make investments thoughtfully with a focus on long-term value creation.
We also ended the quarter with a cash position of $961.8 million. We’ve been operating cash-flow positive for the last two quarters, driven by strong revenue generation and disciplined investment. We remain well resourced to support Rezdiffra, advance our pipeline and pursue continued business development. So to conclude on slide 21, there are four important takeaways. First, Rezdiffra is tracking toward mega-blockbuster status with year-to-date net sales of more than $1 billion. We continue to steadily add patients, ending the quarter with nearly twice as many patients as a year ago. Second, the addressable market is accelerating, expected to grow more than 30% for the full year. Third, we’re strengthening our leadership position in CSPH with our new trial, MAESTRO CSPH.
And fourth, we continue to advance our industry-leading MASH pipeline. With more than 10 programs, including a leading CSPH clinical development program and three Phase 2 combination trials planned for next year, we’re in an incredible position of strength. Less than three years post launch, we’re already generating positive operating cash flow by continuing to invest in our rapidly growing top line and pipeline. Our operating model is working. We are in a unique position to be able to self-fund strategically important initiatives that we believe will result in sustained value creation.
Thank you, and I’ll now turn the call back over to Tina to begin the Q&A session.
Tina Ventura (Chief Investor Relations Officer)
Thanks, Mardi. Let’s move into the Q&A portion of the call. Operator, please go ahead and provide instructions for the Q&A session.
OPERATOR (Moderator)
We will now open the lines for questions. To open your line, please press star and you will be added to the queue on the call. Our first question comes from Prakhar Agarwal with Cantor. Your line is now open.
Prakhar Agarwal (Analyst at Cantor Fitzgerald)
Hi. Thank you so much for taking my questions and congrats on a great quarter. So first question, 3Q looked great on new patient adds and revenue as well. Maybe if you can talk about the 4Q trends based on what you’re seeing in October, should we continue to assume steady patient adds or any pushes/pulls in 4Q that we should be aware of? And secondly, if you can talk about the new CSPH trial in detail, why start this trial now and how will it differ versus the Maestro Outcomes trial, both on trial design and event rate assumption, and then the addressable market.
Thank you so much.
Bill Sibold (Chief Executive Officer)
Hey, Prakhar. Bill, thanks for the question. First of all, just a little context on the quarter. Great quarter, 431 million. Greater than a billion year to date, annualizing at 1.7 billion. We are firing on all cylinders. And in the backdrop we have the market which is now accelerating, expected to grow over 30% this year in F2, F3. So we’re up to over 530,000 patients at the middle of the year. So all the dynamics are really great. And that led to steadily adding patients in the third quarter.
And that’s exactly what we expect to continue doing, is to steadily add patients. But maybe, Mardi, I’ll pass it over to you to talk about Q4.
Mardi Dier (Chief Financial Officer)
Yes, Q4 looks really good. As we steadily add patients, we’ll just remind you what we said last quarter for Q3 to Q4. We feel good about the consensus growth rate between the two quarters, and we’ll just reiterate that today. So again, good growth into Q4 and that leads to the robust growth rate for 2026. We’re in good shape.
Bill Sibold (Chief Executive Officer)
And with the second question, Prakhar, thanks. Why the CSPH study now, et cetera? Well, I mean, look, we’re building a mega blockbuster here and this is the type of trial that leaders in a space do. We talked, and you heard me say in the prepared remarks, first and best — that’s what we’re trying to do. This is a practice-shaping trial that is a leapfrog study, if you will. So we are going to raise the bar for the entire industry, drive the science forward, and we’re going to win in the category — that’s ultimately the objective here.
And you do a study like this so that it can be the most useful for you when you are launching. And if you look at the timing, we’re going to be reading this study out about the same time there could be some potential other companies there, and we move the bar even further. So this is truthfully a study which, as a leader, you do and it’s consistent with first and best. But Dave, I don’t know if you could comment just a little bit on the study.
David G. Soergel (Chief Medical Officer)
Yeah, yeah, I think — thanks, Bill. I mean, a couple things, Prakhar. We’ve learned a lot about CSPH, about the patient population, over the last several years, both from the open-label study that we’ve talked quite a bit about from MAESTRO-NAFLD-1, but also from executing the MAESTRO Outcomes study and learning more about the patient population through that. And then the field has evolved as well. So there have been new approaches, ways of being able to identify patients with CSPH and be able to enrich the population more effectively.
So in terms of the scientific understanding in the field, the timing is also really, really great because a lot of things sort of are converging to create the possibility of delivering that practice-shaping study that Bill was just describing. Thanks, Prakhar.
Bill Sibold (Chief Executive Officer)
Thanks, Prakhar. Angela, next question please.
OPERATOR (Moderator)
Your next question comes from the line of Andrea Newkirk with Goldman Sachs. Your line is now open.
Andrea Newkirk (Analyst at Goldman Sachs)
Good morning. Thanks for taking the question and congrats on the quarter. Dave, maybe I can ask you on the Maestro NASH outcomes trial that’s currently guided for late 2027 readout. Just wondering if you could provide any color on what you’re observing in terms of the blinded aggregate event-rate accrual relative to the baseline assumptions in your statistical analysis plan. And then secondly, just given increasing real-world uptake of GLP-1 agonists, are you able to share what proportion of patients in the trial are on these background therapies and how will the stat plan adjust for background or drop-in use of these competing agents?
Thanks so much.
Bill Sibold (Chief Executive Officer)
Thanks, Andrea. Dave?
David G. Soergel (Chief Medical Officer)
Yeah, thanks, Bill. So, yeah, great question. So, you know, what we’re talking about now — we’ve talked about in the past about MAESTRO Outcomes. We’ve talked about, sort of, you know, 2027 timeframe in terms of when we expect the trial to deliver. And we’ve always said as more events accrue over time, we’ll be able to be more precise. And so now we’re able to be more precise and say late 2027, and so I think that’s the answer to your first question.
We’re not providing really specifics around event accrual because, you know, these more modest-sized trials tend to be a bit choppy. So, you know, the important information is that events are accruing and we expect a late 2027 delivery. Now, with respect to the GLP-1s. So about 25% to 30% of patients were on stable GLP-1 therapy at the start of MAESTRO NASH Outcomes. We presented those data a couple of years ago at EASL. Now, GLP-1s have not been shown to be effective in F4 and therefore they’re excluded in the trial as patients continue on the study. So it would be a protocol deviation to add a GLP-1 for weight loss, for example, in the study.
Bill Sibold (Chief Executive Officer)
Great. Thanks, Andrea. Angela, next question please.
OPERATOR (Moderator)
Your next question comes from the line of Yasmin Rahimi with Piper Sandler. Your line is now open.
Yasmin Rahimi (Analyst at Piper Sandler)
Good morning team. Congrats — an outstanding quarter and also giving guidance, closer fine tuning, narrowing down the Maestro outcome study. I guess first quick question is, given that late 2027, can we say you are — based on the visibility of the events — tracking that there is no chance that it could get pushed into 2028, just like the confirmation of truly having this in late 2027 rather than falling off. And then also if there’s a translation from this study and its event rates to predicting the probability of success in your newly CSPH study.
Bill Sibold (Chief Executive Officer)
Yes, thanks for the question. It’s an event-driven trial and we’ve been saying that all along. Our best estimate now is late ’27. Again, as I’ve said for a long time, if we’re at December 31, 2027 and we don’t have the right number of events, we’re just not going to stop the study. So this is our latest. We’re going to keep you up to date along the way if anything changes with that. Dave, do you want to handle the second piece?
David G. Soergel (Chief Medical Officer)
Yeah, I mean, yes, if I understood your question properly. I mean, so MAESTRO CSPH is designed to really provide a depth of data to complement MAESTRO Outcomes. So there’s a real power in having two outcome studies where, in the first study, in MAESTRO Outcomes, we can identify potential biomarkers or imaging approaches or subpopulations to then confirm or validate in the second trial. So that’s the real power behind having the two studies together.
And I think it really presents us with a clear advantage because we can provide data to the practicing community about these relevant subpopulations and biomarkers to accentuate — to sort of make it clear — about which patients should be treated and how they should be treated and followed with resmetirom once the drug’s approved.
Bill Sibold (Chief Executive Officer)
Great. Thanks so much. Next question please. Angela,
OPERATOR (Moderator)
Your next question comes from the line of Nicole Martusi, TD Cowen. Your line is now open.
Nicole Martusi (Analyst at TD Cowen)
Hi all, thank you for taking my question. I’m on for Ritu Baral. I’m wondering if you guys can comment on how long you think the diagnosis can continue growing at the current rate and if you can comment on any details for Rezdiffra use within the endocrinology practice.
Bill Sibold (Chief Executive Officer)
Thanks for the question, Nicole. Look, you know what we’ve talked about is we expect to see double-digit growth for the foreseeable future. I think that this year — let’s just take a step all the way back. At the end of 2023, prior to launch, we communicated there were 315,000 patients. We reran the analysis at the end of 2025 We were up to 460. So that was almost 50% growth in two years. And now we wanted to take a peek in the middle of the year to see what was happening. And that’s where we saw the over 530, which, if we project that out, is greater than 30% growth that we would anticipate for this year. Remember where we are: we’re at about a 10% diagnosis rate and we’re at about a 10% penetration rate, which you do the math, is about 1% into this opportunity. We are at the very beginning of the MASH market, the F23 market.
So we really see this growing for years, this market. This is going to be one of those specialty areas that I think probably takes decades to fully emerge. If you look at RA, IBD, psoriasis, after 20 and almost 30 years, they’re still growing. I would expect this is going to be consistent with that. We’re starting to see that diagnosis rates are starting to go up, people are looking for the disease. That usually happens when you have an approved therapy, when you have more companies that start to do any of their premarketing work, or even if they’re approved, it leads to greater diagnosis and so forth.
So we really see that this is a very long-term growth market, and that’s what gives us really such confidence in the future. 1%, 1.7 billion annualized. Find another opportunity in the industry that looks like that. Regarding endo, making progress with endo. We got going with endo in fourth quarter of last year. And it’s really interesting. I mean, the big takeaway for us there are kind of two key takeaways. One is they’ve got a lot of patients sitting at their practice and they are tending to follow the pattern similar to gastroenterology.
Remember, they’re still learning to put their pathways in place, et cetera. And one of the things we’ve seen actually is when endos convert, they tend to go deeper, faster. And we have some examples of practices that have really been some of the probably best growth practices that we’ve seen. So confident in endo. Again, remember, we’re not solving this overnight. This is providing us long-term growth as we get deeper into endo and deeper into diagnosis rates across all the specialties that we’re calling on.
So thanks for the question.
Tina Ventura (Chief Investor Relations Officer)
Yeah, thanks, Nicole. Angela, next question please.
OPERATOR (Moderator)
Your next question comes from the line of Ash Verma with UBS. Your line is now open.
Paritosh (Analyst at UBS)
Morning. Thank you for taking a question. This is Paritosh on for Ash. A couple quick ones. The first one, can you talk about the Medicare channel for Rezdifra and how much of that is already contracted? And then as we head towards 2027, is there appetite to contract more and what type of volume pull-through could drive that and what would be the impact on overall gross to net? And the second quick one is on the F4 outcome study. Historically, some of the highest placebo event rates cited for F4 patients come from natural history cohorts instead of controlled intervention studies.
And the controlled studies have reported placebo rates close to 2 to 3%. So the question for this is, what makes you confident that a placebo event rate above 5% is achievable in the actual study? Thank you.
Bill Sibold (Chief Executive Officer)
Thanks for the question. Marty, do you want to start with Medicare?
Mardi Dier (Chief Financial Officer)
Yep, I would, and thanks for the question. I think I’ll take this moment and just comment more broadly on gross to net, and then we’ll get into the Medicare Part D question specifically as it affects 2027. So, you know, let’s start with 2026 and looking into the fourth quarter with respect to gross to net. So we had an outstanding demand quarter this quarter again, and we expect that to continue. You know, we focus and we’re very disciplined on gross to net.
As we are, we’re solving for the long term. So we spend a lot of time here managing gross to net. And so with nine months behind us in 2026, we have really good visibility into the fourth quarter. And just want to say that we expect to come in at the low end of our stated range for 2026, for the fourth quarter in 2026, which is mid to high 30s. So the low end of that range for 2026. So now thinking about 2027. So what have we said? We have terrific access, right, both from the commercial standpoint and now on the Medicare side as well. And we said that we’re in the middle of negotiating Medicare Part D contracts that will go into effect in Q1 2027, and that’s ongoing right now. So it’s a little early to get very specific about 2027, but we can reiterate that we’re comfortable that the big step up in gross to net happened between 2025 and 2026 as we entered commercial contracting.
And there will be an impact, somewhat of an impact, in 2027 as those Medicare Part D contracts go into effect. So while I said it was a little early, we do expect our gross to net next year to be plus or minus the high end of our range that we gave this year, which was mid to high 30s. So great management by the team, and we remain really happy about our gross to net efforts. Great.
Bill Sibold (Chief Executive Officer)
Thanks, Marty. Dave.
David G. Soergel (Chief Medical Officer)
Yeah. So Paritosh, on the F4 study, I mean, you’re right. You can look at natural history studies and you’ll find a whole range of estimates. So as you’re aware, we’ve talked about a placebo rate in our trial between 5 and 10%. And the basis for that is really that, you know, F4C is not a monolithic disease. There’s a gradation in risk of decompensation as you go from the patients who’ve just converted from F3 to F4, for example, all the way to those who are starting or have already developed portal hypertension.
And so the risk profile of that patient, of that patient population across that spectrum, is very different. And so what Becky and the team did very well four or five years ago was actually enrich MAESTRO NASH Outcomes to be able to have a good representation of patients on the sort of more advanced part of the spectrum of cirrhosis. And what we’re doing now, having had that five years of experience, is we can do that even better, right? So we can now enrich for CSPH even more effectively because of that experience we’ve had in MAESTRO NASH Outcomes, because of the experience we’ve had with the open-label cohort from MAESTRO NAFLD1, and because of some of the advances in the field, especially through the Baveno Consortium, and so forth. So there have been a variety of advances that really allow us to now run an even more contemporary and practice-shaping study.
Tina Ventura (Chief Investor Relations Officer)
Great, thanks for the question. Angela, next question please.
OPERATOR (Moderator)
Your next question comes from the line of Akash Tiwari with Jefferies. Your line is now open.
Manoj (Analyst at Jefferies)
Hey, this is Manoj on for Akash. Just one from our end. How do you view the new emerging siRNA data sets from the space? Specifically, how does that compare with your internal in-licensed assets, preclinical efficacy? And also, region round has started a phase three with non-invasive endpoint as the second endpoint, of course. But do you expect this going forward? You can run the registrational trials with the noninvasive measures as the primary endpoint.
Just wondering on that timeline.
Bill Sibold (Chief Executive Officer)
Great, thanks for the question. Dave, do you want to comment?
David G. Soergel (Chief Medical Officer)
Yeah, yeah. I think, Manoj, the field has been moving more and more towards non-invasive evaluation of MASH. So there are several consortia now that are working towards eliminating biopsy as a requirement for clinical trials, and we participate in all of those consortia, of course. The latest understanding, though, at this point is that for a diagnosis of MASH, for clinical trial purposes, a biopsy is still required. So you’d have to ask the sponsor of that particular trial what exactly their approach is.
My understanding is that it’s a high-risk MASH SLD study, so it’s not actually MASH. But, you know, again you’d have to ask for the details. With respect to the target itself, we haven’t, I don’t think we’ve seen data yet from that trial. I think it’s coming out in the next week or so, maybe at AASLD. So it’d be premature to comment on it. But, you know, I think what you’re raising is there are a lot of great, you know, approachable genetic targets with siRNA. And that’s why we’re especially excited about our PNPLA3 program and the research collaboration we have with Ribacure around six siRNA targets.
Yeah, remember, just to fill in there, we have seven total siRNA targets. We haven’t named them for competitive reasons, but sure would be interesting to see how these siRNAs do in combination with Rezdifra. Next question.
Tina Ventura (Chief Investor Relations Officer)
Yep, next question.
Manoj (Analyst at Jefferies)
Thank you.
Tina Ventura (Chief Investor Relations Officer)
Thanks, Manoj. Angela,
OPERATOR (Moderator)
Your next question comes from the line of Eric Joseph with Citi. Your line is now open.
Eric Joseph (Analyst at Citi)
Hi, good morning. Congrats on the progress and congrats on the quarter, and thanks for taking the questions. Just on MAESTRO NASH Outcomes, curious to know the extent to which you have visibility into the study’s dropout rate, how that’s tracked relative to expectations, and whether that’s a factor here in terms of timing of the study readout. And just also on MAESTRO CSPH, just trying to better understand some of the contrasts with the NASH outcome study.
Would patients in this trial be closer to potential disease progression? Just wondering whether the event rate might be a little bit faster in this planned, this additional planned outcomes study relative to the one well underway, NASH Outcomes. Thank you.
Bill Sibold (Chief Executive Officer)
Great. Thanks for the question, Eric. Dave?
David G. Soergel (Chief Medical Officer)
Yeah, thanks for the question, Eric. I mean, so MAESTRO NASH Outcomes, as we’ve said, it’s an event-driven trial. And as events accumulate, we can get more precise about how we estimate the, you know, the trial delivery date—when that would occur. And so, you know, we’ve gotten to a point now where we can estimate that late 2027 is when we would expect the data. Yeah, we track blinded event rates, we track dropouts. We’re heavily involved in managing this trial, as one always is with an outcomes trial.
It’s crucial to have a very sort of compulsive approach to outcomes trials and just making sure that the quality and the retention in the study is as expected. And we are, you know, the dropout rate that we’re seeing is within our expectations. So I think I’ll leave it there. And with respect to MAESTRO CSPH, yeah, I mean, like I’ve said a couple of times now, you know, we’re better able to enrich the population for CSPH given the experience that we’ve had with Rezdifra in the F4 population as well as, you know, how the science and medicine is shaping—has evolved—in cirrhosis, so we are better able to identify patients at higher risk. But what I’ll point out, I made the comment that F4 is not a monolithic disorder.
And there could be a point at which patients are too far along in the CSPH journey to where it gets more and more difficult to treat them. So we also have visibility not just on the less severe end, but also on the more severe end. So it gives us really the opportunity to identify the sweet spot within CSPH to find patients for the trial.
Tina Ventura (Chief Investor Relations Officer)
Thanks so much, Angela. Next question, please.
OPERATOR (Moderator)
Your next question comes from the line of Chad Wolliband with Citizens. Your line is now open.
Chad Wolliband (Analyst at Citizens)
Hey, thanks for taking the questions and congrats on the progress. Just wondering, you guys mentioned mega-blockbuster a few times. Wondering if you could give us some guideposts on what you consider as mega-blockbuster. And then, with a lot of investment coming next year in the pipeline, can you talk about how you think about profitability versus reinvesting in the pipeline and the strategic initiatives there?
Bill Sibold (Chief Executive Officer)
Yeah, John, thanks a lot for the question. Mega blockbuster, it’s a little bit of a moving target in how it’s defined. Certainly if you look at where consensus is for us for peak, that certainly puts you, from our definition, in the mega blockbuster category. I think that there’s very few products in the industry that could actually make a claim like that, that we believe that there’s that much potential in the market. And again, it’s just based on, as we said from the beginning, high unmet need, increasing number of patients.
And we have what I continually have said that I believe we really have a holy grail profile with a once-a-day pill that is effective, well tolerated and safe, kind of what you need to be successful. And I’m just talking about F2, F3 at this point. One of the things that’s happening in F4/CSPH, that market opportunity has gotten to be as big as the F2, F3 opportunity was in 2023, with signs of rapid growth and a long future ahead of it. And as we said, F4/CSPH could double the opportunity for us. So the fundamentals in this market are so positive that we believe that this could really be a mega blockbuster product. And we’re well on our way with each of the quarters that we’re delivering out here.
So maybe I’ll turn over to Marty with the question on profitability.
Mardi Dier (Chief Financial Officer)
Yeah, thanks for the question, John, and good morning. We’re pretty excited that we hit our milestone of our first quarter profitability. So it’s another milestone for Madrigal and Rezdiffra. And again, it just reflects our excellent launch execution and the strength of the business and the underlying demand. So it was a good question about is profitability and cash flow positivity going to be sustainable. And it’s a good time to remind everybody that we’re still a top-line growth story and that’s our focus right now.
And we continue to invest in that top line as well as building our pipeline, which you mentioned. So I’m going to reiterate the same message that we said in our prepared remarks, that we may dip in and out of profitability in the near term based on those investments. And also remind you of the 1Q dynamics, which for us is very consistent to what the analogs and specialty medicines. But the good news is the operating model is working and we’re in this great position that we’re able to self fund these important initiatives like MAESTRO-CSPH and that we believe will result in the sustained value creation.
So we’re in good shape, lots of momentum. We do believe the growth of the top line will outstrip the spend even with these investments. But right now we may dip in and out of profitability in certain other quarters in the near term.
Bill Sibold (Chief Executive Officer)
Great. Thanks, John. Angela, next question please.
OPERATOR (Moderator)
Your next question comes from the line of Thomas Smith with Leerink Partners. Your line is now open.
Thomas Smith (Analyst at Leerink Partners)
Hey guys, good morning. Congrats on the quarter. Thanks for taking our questions. With respect to the new Phase 3 F4 study, could you talk a little bit more about how exactly you plan to enrich for patients with CSPH and how that compares to the population you’ve already enrolled in the MAESTRO-NASH Outcome study? And then can you just talk about next steps for engagement with FDA? Like what’s outstanding that you need to gain alignment on here with this study and how are you thinking about the potential to achieve differentiated labeling with this study relative to MAESTRO-NASH Outcomes and some of the competing F4 programs?
Thanks so much.
Bill Sibold (Chief Executive Officer)
Yeah, sure, Tom. Thanks for the question. Dave, I’m going to pass it over to you.
David G. Soergel (Chief Medical Officer)
Yeah, thanks, Tom. Yeah, great question. So MAESTRO-CSPH is really being designed as a practice-shaping study. So again, I’ve said it a couple of times, we can really leverage our experience in the F4 population to be able to enrich more effectively. You know, at this point, you know, it’s a bit of a competitive advantage for us. So I’m not going to go into a lot of detail, but, you know, suffice it to say, we have imaging, we have biomarkers, we have a lot of things from the open-label study and from MAESTRO-NASH Outcomes that helps us understand more about how to shift that patient population to the more severe group.
I mean, even if you look at some of the published literature recently, you look at ANTICIPATE-NASH scores or you look at the Baveno consensus criteria, there has been continued evolution of those consensus statements over time and a refining of the ability to be able to identify these folks with more severe disease. So that’s kind of the broad brushstrokes. And of course, as we get more information, as we get closer to finalization with the protocol, we’ll share more information with you. And part of that, to your second question about FDA engagement, really around the finalization of the protocol, we’ll be engaging with FDA to talk about exactly your third question, which is how does this study potentially affect labeling? Our goal is that this study would be designed to fully be represented in the product label.
And so obviously an engagement with the agency is required for that. Just make sure we’re all aligned.
Bill Sibold (Chief Executive Officer)
Right. And, you know, just one other comment on this. You know, a lot of companies would wait and start a trial, you know, after approval and ultimately find themselves in a bit of a data desert and they’re playing continuous catch up. That’s not what you do as the leader in this space. We don’t want to have any daylight between our approval and, ultimately, if any other company is successful to get there. We want to assert ourselves as the leader.
And that’s why you start this study today, so that you have no daylight between anyone potentially launching and you generating new, important data for the field. Good. Thanks, Tom. Angela, next question, please.
OPERATOR (Moderator)
Your next question comes from the line of Ellie Merle with Barclays. Your line is now open.
Ellie Merle (Analyst at Barclays)
Hey guys, thanks for taking the question and congrats on a quite strong quarter. On 2027, how are you thinking about revenue growth there as well as consensus as it currently stands and your latest thinking around whether you would issue revenue guidance? Thank you so much.
Bill Sibold (Chief Executive Officer)
Ellie, thanks for the question. Marty.
Mardi Dier (Chief Financial Officer)
Yeah, great. Hi, Ellie, thanks for the question for 2027. We’re a little on the early side to give specific direction on 2027. But listen, the business is doing great. We have a lot of momentum and I would say the underlying characteristics of 2027 are lining up in a fantastic way. So we’re continuing to steadily add patients. We have great access and the market, of course, is accelerating. So as Bill said a couple times, we’re firing on all cylinders and that will continue into 2027.
So, you know, I can give a little bit of direction. We did look at consensus for 2027 and, you know, I think we’re in a pretty good spot there. So we can say that about 2027. But I’ll also take this opportunity to once again remind everybody about the Q1 dynamics going from Q4 to Q1, just like what you see with the analogs. You know, we’re not immune to that and, you know, we expect, you know, similar Q1 dynamics and you can just look at the analogs for the specialty products in the sector. But otherwise we look forward to continued growth, continued fantastic growth into 2027. And with respect to guidance, yep, nope, we’re not providing guidance at this point, but we’ll continue as we have, give pretty good direction both on the quarters and the years as we have.
Bill Sibold (Chief Executive Officer)
Great. Thanks a lot, Ellie. Angela, next question, please.
OPERATOR (Moderator)
Your next question comes from the line of Andy Chen with Wolfe Research. Your line is now open.
Andy Chen (Analyst at Wolfe Research)
Hey, thank you for taking the question. Regarding the TAM expansion to 530k, if you can talk about the patient journey and how that has evolved through your launch, especially the prescribers and how they work up the patient. Are physicians behaving differently today? Is time to diagnosis, is that becoming shorter? And do you also anticipate any future changes in a favorable way going into the future? Thank you.
Bill Sibold (Chief Executive Officer)
Hey, Andy, thanks for the question. Look, the patient journey — well, let me answer a few things for you here. First of all, we are seeing increased diagnosis as evidenced by the numbers. And what’s driving that is familiarity with the disease and familiarity as well with the product that’s approved in the disease. We also see that there is more of an emphasis in guidelines on testing and looking for MASH, and that certainly helps people start to look for the disease.
Right. I mean, that’s what we’re seeing in all of the specialties that we’re calling on, including endocrinology. Now, what happens after somebody starts diagnosing is there is this moment where they put their own pathway in place. And the sophistication level of that really varies upon the practice and the institution. And some are all the way — an institution where they’re using electronic medical records to actually go out and proactively find patients using either, beyond a diagnosis code, looking at symptoms somebody may have, or are they at high risk factors.
That’s kind of on the far end. That’s what the future, I think, holds, where there’ll be much more of a desire to go out and look for these patients. And then in other practices, it’s, you know, I have a suspicion someone is obese, has type 2 diabetes. That’s reason enough that I should be testing. Access to NITs is something that will continue to grow in time as well. We’re seeing a continued increase in the number of scanning equipment that’s available, and that certainly helps as well.
So I would say, like everything else, we’re at the very beginning here. There’s still variability on the far end of people using technology, et cetera, and at the beginning, where people have a suspicion of a patient or something that they’ve previously seen in a file that triggers it. But everyone is starting to formalize their approach. And the one thing that we can’t control for — we can help try to accelerate — but it’s really time. It just takes time for people to incorporate something into their day-to-day practice.
And all these positive signs — greater than 30% growth that was previously greater than 50% growth over two years, so this acceleration — those are all signs that it is becoming more incorporated into the daily practice. And we only expect that to increase and improve over time, which again is why we have such confidence in the prospects of this market and of us competing in that market. Great, thanks Andy. Next question please, Angela.
OPERATOR (Moderator)
Your next question comes from the line of Jay Olson with Oppenheimer. Your line is now open.
Jay Olson (Analyst at Oppenheimer)
Oh, hey, congrats on a great quarter. Since Madrigal has pioneered the diagnosis and treatment of MASH with noninvasive methods, are you planning to drive similar innovations in CSPH to provide diagnosis and monitoring with safe, easy-to-use noninvasive approaches that could replace the current gold standard invasive testing for CSPH? And then separately, since you have a wealth of combination programs and recognizing that your decisions will be entirely data driven, how will you prioritize this portfolio of combos and how much clinical data will you need to generate before identifying the ideal combination or combinations to advance into registrational development? Thank you.
Bill Sibold (Chief Executive Officer)
Great, Jay, thank you very much for the question. Dave.
David G. Soergel (Chief Medical Officer)
Yeah, great question, Jay, on noninvasive diagnosis of CSPH. I mean, short answer is yes. I mean, you know, the idea of combining MAESTRO-NASH Outcomes with MAESTRO-CSPH gives us the opportunity to really move the field forward with respect to noninvasive testing and biomarkers and specifically do it for Rezdiffra. So a lot of these biomarkers are mechanism dependent and so we will have a large data set that we’ll be able to use to validate some of these measures.
So when a practitioner puts a cirrhotic patient on Rezdiffra, after it’s approved, they’ll be able to have Tools to be able to monitor that patient’s progress. That’s the vision of being able to validate some of these markers. So that’s exactly the whole idea. So the second question you had was with respect to the combination therapy pipeline. Look, our stated strategy has been to be disciplined and efficient in developing the pipeline and really only bring forward combination products that have a meaningful benefit for patients, either some patients or all patients. So if you think about the PNPLA3 siRNA, for example, there’s a clearly defined population of people who live with disease-accelerating homozygous mutations of PNPLA3 who are the natural targets for that siRNA treatment in combination with, so that’s one very clear example.
Similarly, if you think about the DGAT2 inhibitor, some patients will require additional efficacy to really pull them back from a rapidly accelerating disease process. So the type of data we’ll be generating in Phase 2 will help us make those decisions. And as I said during the remarks, we’ll have those three programs starting in 2027. So it’s very exciting to see this pipeline evolve.
Bill Sibold (Chief Executive Officer)
Yeah. Remember, we’ll be generating data in combo therapy, where others will be still attempting to move forward in monotherapy, and jumping off a great product with just a great profile, so trying to make it even better.
Tina Ventura (Chief Investor Relations Officer)
Thanks, Jay. Thanks for the question. And, Angela, looks like we have time for one more question.
OPERATOR (Moderator)
Your last question comes from the line of Michael DiFiore with Evercore. Your line is now open.
Michael DiFiore (Analyst at Evercore ISI)
Hey, guys, thanks so much for taking my question, and congrats on all the great progress. Two questions for me. When you say that a positive F4c trial could support full approval in F2 and F3, what constitutes a sufficient result? Is it just on the primary composite alone or consistency across components separately? Earlier this year, you said around 25% of Rezdiffra patients were also on a GLP-1, and you expected that to rise. So now we’re a year into Wegovy’s MASH launch.
Has that share moved? And are you seeing more patients come to Rezdiffra after trying a GLP-1? Thank you.
Bill Sibold (Chief Executive Officer)
Yeah, Mike, thanks for the question. You know, first of all, that 25%, it’s moving up some. It stayed fairly consistent. I mean, what we’re seeing is GLP-1s as a background therapy here. They’re kind of ubiquitous, and it’s hard to say when have people been on one? A lot of them, if you ask, they’ve been on one at some point. So it’s kind of this background therapy. Yes, we are seeing some patients that have come over, but again, it hasn’t really dented us, our growth in any way, having the GLP-1 Wegovy approved on the market.
In fact, I think that that’s helped with some of the market growth. So, again, as I said, we’re seeing it more as a background therapy, though. We’re very interested in trying our combo. We have our oral GLP-1, and we think that with just the right amount of weight loss, that it can potentiate the impact of Rezdiffra. Dave, you want to take the first question?
David G. Soergel (Chief Medical Officer)
Yeah. On MAESTRO-NASH Outcomes, Mike. Guidance from the agency is that a positive NASH outcomes trial could support both the new indication of F4c and full approval for F2, F3. So it serves both those purposes. I guess I’ll leave it at that.
Bill Sibold (Chief Executive Officer)
Well, look, why don’t we end there? Maybe just to sum things up a little bit here. Launch is objectively outstanding for us and it’s continued to be so for the 10 quarters that we’ve been on the market and on all metrics. And I think, you know, some of the context here is important. This has been while competing against one of the largest companies in the industry with one of the largest products in the history of the industry, we’ve had five quarters of competition with Wegovy and it has not made an impact on our growth.
And we’re going to have at least 15 quarters of a lead on the next potential competitor. Now in the background, the market’s growing at 30% as well. We’re at 1% penetration and that’s at 55,850 patients in F2, F3. Every day, we’re adding patients. Every day, the real-world experience is increasing. And I can tell you in the conversations I’ve had with many, many prescribers, I have never had anyone question the efficacy of Rezdiffra. In fact, they’ve been extremely pleased with what they’re seeing in the real world.
And next is F4c. We have MAESTRO-NASH Outcomes, quickly followed by CSPH, our new study in a market which is now bigger than the F2, F3 opportunity when we started 10 quarters ago. And finally we have the leading pipeline. And all of this is going to be in combination with Rezdiffra, as I said, while others are attempting to bring their first product to market. So we are performing exceptionally and we are exceptionally well positioned for the future.
This remains, from certainly my perspective, the best opportunity that’s out there. So we thank you for joining us today and look forward to updating you with our future progress.
Tina Ventura (Chief Investor Relations Officer)
Great. 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 two hours. Thank you for joining us.
OPERATOR (Moderator)
Ladies and gentlemen, thank you for your participation in today’s conference. You may now disconnect. Have a wonderful day.
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