Q3 2024 Madrigal Pharmaceuticals Inc Earnings Call
also has high confidence in red differs real world performance as an effective, well tolerated, once it ain't pill.
Supported by positive patients experiences today.
Health Care providers are beginning to recognize reddiffera as standard of care. Re-enforcing its position as the foundational therapy for Nash.
and while we are still early in the launch phase, we're continuing to see great progress across all key performance metrics.
This gives us confidence in our strong growth expectations for risk differ, and reinforces that the launch is tracking and line with other best-in-class specialty medicine blockbuster launches.
So let's start with patients. As a reminder, we're focused on the 315,000 patients diagnosed with nash with moderate to advanced fibrosis.
We ended the quarter with greater than 6,800 patients on reds differer. The figure represents patients on drug or the bottom of the patient funnel and the most rigorous metric to measure. By comparison, we ended the second quarter with more than 2,000 patients on reds differer.
We know that the early quarters of the launch are crucial and often predictive of future success. During these initial quarters, we are closely tracking our metrics, including the pace of patient adds against a group of top peer specialty medicine launches.
We are steadily adding patients at a rate consistent with those benchmarks.
As we discussed last quarter, we have dedicated significant effort with our field and patient support teams to reduce the time it takes for prescriptions to be filled. Thanks to their outstanding work, we achieved our six-month goal with time to fill trending at 30 days or less.
We're also encouraged by the progress we've made with payers. One of our ambitious pre-launch objectives was to secure coverage for 80% of commercial lives by year end. And we achieved this goal during the third quarter, a full quarter ahead of schedule.
At quarter-end, more than 80% of commercial lives have coverage in place for reddiffra. Notably, greater than 95% of reddiffra covered lives, except non-emvasive tests or NITs.
and do not require a biopsy in line with current standard of care.
As we noted last quarter, Medicaid coverage was in place as of July 1st and we expect Medicare coverage to begin on January 1st of next year. Currently, Medicare patients are accessing reds-diffra through the medical exception process with prior authorization requirements aligned with our label.
This process has been smooth, allowing patients to readily access our ed different. We expect many Medicare plans to start to list our ed 25 and would expect this favorable access to continue.
Our business mix has been running in line with their expectations, with commercial at 50 to 55% Medicare at 30 to 35% and Medicaid another at about 10%.
Moving on to prescribers.
As a reminder, we have 14,000 total targets, but they primary focus on the top 6,000. These include hepatologist and gastroenterologist, who treats the majority of the 350,000 diagnosed F2 F3 patients.
The goal with any successful launch is to expand both the breadth and depths of prescribing and we're making strong progress on both fronts. In the third quarter, around 40% of our top targets prescribes are as different, doubling the 20% penetration rate from the second quarter.
Our top targets are continuing to write more than 75% of risk-differed prescriptions, giving us confidence that we're targeting the right prescribers with our efforts.
and as we look at depth among our targets, we are seeing an increasing number of prescription written per per subscriber as well.
The launch is off to a fantastic start with all of our metrics either meeting or exceeding our high expectations. Our success today has also been driven by our ability to continue to wire the system as noted on slide five.
This is a first-indesize launch where the market needs to be built from the ground up. Prior to Resdiffers' approval in March, there had never been a prescription written for Nash.
Our goal has been to drive changes in clinical practice and develop processes for efficient patient and prescription flow to establish a strong foundation that will support our peak sales expectations.
While we still have a lot of work left to do, we have made terrific progress today. Success here allows us to strengthen our leadership position in Nash and achieve one of the most successful specialty launches in the industry.
A key factor of our success thus far has been risked different strong value proposition, which has been recognized by healthcare providers, payers and patients.
As a reminder, Rejipra is a liver-directed medicine that has set a high bar for efficacy and safety.
It's the only medicine to achieve statistically significant results on both endpoints in phase 3, Nash resolution and fibrosis improvement. Importantly, reds different, stopped, or improved fibrosis in more than 80% of patients after one year of therapy.
It's a one-to-date pill that's well tolerated with simple dosing. It's this favorable profile that should allow patients to stay on the medicine over time. Early indicators suggest persistency in line with other well tolerated oral medicines.
is clear from these real world results that is different as well on its way to becoming the foundational therapy for nasch patients with moderate to advanced liver fibrosis.
We believe that this strong product profile will provide a sustainable advantage for ridgiffer-up when new competition emerges.
The next potential entrance could be from the GLT1 class. As we look at the profile of some a gluteide on slide 7, you'll see that risk different compares very favorably across key attributes.
and importantly, more patients taking a GLP-1 in the real world struggle to stay on treatment long term. In fact, data shows that only about 30% of patients with obesity remained on some agglutide after one year, which is especially important given their national study of 72 weeks.
For Nass patients with moderate to advanced fibrosis, who are one or two steps away from having cirrhosis, healthcare providers will want to be confident that their patient is going to take his or her medicine consistently over time to see an effect.
So, as we look ahead and consider the potential impact of a GLP-1 launch on the market on slide 8, we believe it will further accelerate the growth opportunity for a risk different. We are focused on the 315,000 patients diagnosed with moderate to advanced and asked by process.
On its own, this is an attractive specialty market and we are still early in the journey with 2% of those patients on treatment. Noble Nordic is focused on a much larger population of both diagnosed and undiagnosed patients, many multiples of our 350,000.
Their efforts will expand the market and most importantly benefit patients with NASS.
by increasing awareness, patient screening, diagnosis, and treatment. And this significant expansion will also benefit Brazil's different. Both as the foundational therapy and nasch for first-line patients, and from the high-world discontinuation rate of some of Lutide.
and there's clearly room in this large and under-penetrated market for multiple mechanisms to treat this challenging disease.
We expect combination therapy to be part of the treatment paradigm. In fact, it's already happening.
Approximately 25% of risked different patients today are using risked different in combination with GLP1s to treat their comorbidities. And the percentage is less likely much higher when including patients that have previously been on a GLP1.
In summary, we continue to be optimistic about the future market dynamics.
Between Red Differs Attractive Real World Profile, the significant opportunities to penetrate our target market of 315,000, and the potential for significant market expansion beyond that with new competition.
We are confident that Red Differking continued to deliver and continue to deliver strong growth in the years ahead.
We're also pursuing additional growth opportunities for a red zipper beyond our launch in the US as highlighted on slide 9. This includes our efforts in Europe, where we are preparing for a potential, second half 25, launch a bridge, different pending EMA approval.
Additionally, we're working to bring rid of different benefits to patients with dashed cirrhosis.
Earlier this month, we completed enrollment in our Mice Drone Ash outcomes trial, marking a significant milestone for Maggible and the NAS field. Subject to regulatory approval, positive results could make risk difference the first medicine for patients with compensated NASSERosis.
Sources patients are at a high risk of progressing the serious liver related outcomes.
While F2F3 patients have a 10 to 17 times greater risk of liver related mortality in F4 or Cerosis patients, that risk is 42 times higher.
This starts the testic underscores the urge and need for an effective treatment in this vulnerable population.
Results from our Outcomes trial in Cerosis patients, as well as the Outcomes portion of our Mystro NASS trial in F2F3 patients, could very well position rid of different as the only approved therapy with Outcomes data in NASS in this decade.
providing us with data years ahead of the competition.
I'd also like to highlight two exciting developments in our R&D organization that further strengthen our leadership in Nash. Dr. Michael Charlton has joined us as head of clinical development. As a world-renowned expert in Nash, we are thrilled he decided to join Madderville at such a pivotal time for the company.
Secondly, we are preparing for a strong press presence at the upcoming AASL Deliver Meeting in Mid-November in San Diego where Riz Diffra will be in the spotlight as the first ever approved therapy for Natch.
Magiabolo's leading the Nashville to advance the science, our Resmeteron Development Program produced more national abstracts at ASLD than any other program.
Moreover, ASLD recently released guidance that reinforces Ridd Differs' role as the foundational therapy for NASH, following similar recommendations from the evil guidelines in June and the expert panel in July.
Clinicians now have multiple guidance documents to support patient identification, treatment initiation, and monitoring.
Speaker Change: Before I handed over to Mardi, let me briefly summarize our progress on slide 10.
Mardi: This quarter we delivered outstanding results meeting or exceeding our ambitious targets. Net sales of $62 million driven by strong demand, greater than 6,800 patients on REST Differa.
Mardi: More than 80% of commercial lives covered achieving this milestone of full quarter ahead of schedule. About 40% of our top targets are prescribing redsiffra and we continue to drive both breath and depth with significant opportunity ahead.
Mardi: The completed enrollment of our NASSAROSAS outcomes trial. One step closer to bringing the first therapy to market for this vulnerable patient population. And we're tracking well to launch for a different in Europe in the second half of 2025 pending the EMA approval.
Mardi: with that, I'll turn it over to Mardi. Thank you, Belle. Earlier today, we issued a press release with our final, our full financial results, so I'll provide you a few highlights of the third quarter of 2024 as noted on slide 11.
Mardi: U.S. Net Sales for the quarter totaled $62 million. As we've mentioned previously, we expect inventory to run between two to four weeks for Ruth Differa, which is typical for our specialty medicine.
Mardi: As Bill noted, this was another strong demand quarter, which inventory at the low end of that range.
Mardi: Our growth in that was again favorable to our expectation this quarter as our copay assistance program utilization was lower than anticipated for the third quarter. As we said before, we've set growth in that to be chopped in the quarter, particularly early in the launch.
Mardi: R&D expenses for the third quarter of 2024 were $68.7 million compared to $71 million in the third quarter of 2023. We continue to anticipate relatively stable R&D expenses this year compared to last year.
Mardi: SGNA expenses were $107.6 million compared to $27.6 million for the third quarter of 2023. This year over year increased was expected due primarily to the expansion of our commercial operations in the U.S. following [inaudible]
Mardi: Turning to our balance sheet as of September 30th, we had $1 billion in cash, cash equivalents, restrictive cash, and marketable securities. With this strong cash position, we are well-re-sourced to support the ongoing launch of its different in both the U.S. and our planned launch in Europe.
Speaker Change: I'll now turn the call back over to Tina.
Tina: Thanks Mardi. Let's move into the Q&A portion of the call. So Marvin, please provide the instructions for the Q&A session and we'll get started.
Marvin: Thank you. We will now open the lines for questions and answers. To open your line, please press star 1-1 and you will be editing you in the call. Please stand by when we can probably be a Q&A roster.
Marvin: The End
Speaker Change: Our first question, control line of the Asing Brahimi, a pepper standard, the line is now open.
Speaker Change: Good morning team, congrats on amazing quarter, really incredible.
Speaker Change: asked me to give you a question as given the strong performance. Could you maybe talk to us about what your forecasts or what your thoughts are moving forward and to fourth quarter in sort of growth into 2025 and I'll jump back into the queue.
Speaker Change: Yes, thanks very much for the question. We're really thrilled with how the launch is progressing. You know, the team is executing at all levels.
Speaker Change: made great progress on coverage at Inverse Grivers, that in patients. You know, we're really off to a very strong start. And you know, as I said, this trajectory in early launch quarters is important indicator for future success.
Speaker Change: Now, we have our own internal metrics that we look at, but we're also benchmarking ourselves again about.
Speaker Change: Against about 10 specialty launches in the last 10 years that are...
Speaker Change: Unmitigated success of these great launches and we're doing really great against these benchmarks as well.
Speaker Change: and looking at those benchmarks for growth, what you typically see in the third quarter of launch of growth is in the 50% zone on average.
Speaker Change: and like with the other metrics, we're tracking well on this so we're off to a great start.
Mardi: So maybe for 2025, Mardi, you want to comment on that? Yeah, absolutely. Like Bill said, we're off to a strong start. We're really pleased with our third quarter growth and what we're looking forward into fourth quarter.
Mardi: But absolutely, we want to see how 2024 plays out before we provide any more specific points of view on 2025.
Speaker Change: But what we can say is you look at fiscal year 2025 and based on our performance at third quarter and into fourth quarter, we would anticipate that 2025 expectations to increase some to account for this robust growth that we're generating.
Speaker Change: Alright, good. Thanks, Yass. Marvin, next question, please.
Marvin: Thank you, William Ripher, Nick question.
Marvin: Our next question, can you outline the LNM of UPS? Your line is not open.
William Ripher: Thanks for taking my question and the graphs on the quarter.
Speaker Change: Just curious what you're seeing in terms of the cadence of new patients starts. Are you seeing a similar new patient, a number of new patients starts per week or month or is the number of new patients starts accelerating? And then, just a second, in terms of the essence data, what are your expectations for whether the players will require a step through with a GLP1 if the essence data shows?
Speaker Change: are very strong. I just have this kind of hit. Thanks.
Speaker Change: Thanks, Ellie. Appreciate the question. So, yeah, as we said, we have been continuing the steadily ad patient.
Speaker Change: We have, there's a lot of interest out there. You have to remember, we're not in steady state yet either, right? You know, we haven't fully penetrated all of the prescribing physician. So that's going to take longer as we continue to wire the system. And then you get to your baseline that you start to grow from in a patient ad perspective. But, you know, we're making progress every day, adding new prescribers, new patients, etc.
Speaker Change: and you know that's uh we expect this taste to continue.
Speaker Change: and the second question was around essence and step through GLP1? Yeah, so look, thanks for that as well. Today we haven't seen any requirement for step through. We're waiting to see what the results look like as well. And when we get the results, we're really trying to, we're going to want to try to understand what the data says and doesn't say. And we'll have a number of questions to really probe a little deeper on because as you know, the top line read out, don't always translate into labels so well. So, some of the things we're going to be looking for the following.
Speaker Change: What do the intense treat results look like? How are discontinuation handled?
Speaker Change: What percent of patients reach the 2.4 milligrams they're viewed as dose?
Speaker Change: and even things like how are the biopsies red, because that can result in higher response rate as you've seen another NASS trials.
Speaker Change: You know, but in the end we're talking about a well controlled trial. Healers here versus real world practice and that's where I think the profiles really matter. That's where we're really set up for that.
Speaker Change: So we'll see what happens with the results of the trial to see what happens if anything happens with pairs. Now what I was just reinforced is we are.
Speaker Change: In a really strong position, we have a very good profile. We've had ongoing dialogue with pairs now for well over a year. They understand the profile of the product and what it can offer. So we feel like we're in a very strong position as we go into any potential read out that takes place from ethics.
Speaker Change: Great, thanks Bill.
Speaker Change: Marvin, next question please.
Marvin: Our next question comes from a line of accached to our re-objectifed line of not open.
Speaker Change: Hey, this is Mano's info others. Thanks for taking your question. Just one, with trial, are you more confident on hitting on outcomes, the extinction of my strong ass or like the F-ort patient trial?
Speaker Change: Why are you confident that you could show a definite benefit in these late phase patients?
Speaker Change: Oh, thanks for the question. We're confident in both trials. Of course, we don't have the answer yet, so we have to wait and see what that looks like.
Speaker Change: We have for the Cerosis trial. We had a group of 180 Cerosis patients.
Speaker Change: in the Naffold one trial that went on to the open label. It was based on some of the results that we were seeing there that we feel that there's a very good reason why Red Differ may work in this population. In fact, Red Differ has been referred to as a kind of master regulator for fibrosis. So we think that this is something that is a good chance that we hit.
Speaker Change: We're of course always going to push the science here and ask the question about what does the community want to learn about and know. We think especially through the cirrhosis trial that there's going to be a ton of learning for the community overall.
Speaker Change: We're out in front, we're leading these efforts with something that we think is a leader that's important to do to drive the science. So, you know, we'll have to see what the results say.
Speaker Change: Based upon the really significant interest in the Cerosis trial, we know that the community's interested in hearing the answer to the question, you know, you saw that we had about 840 patients that enrolled and that was exceeding expectations really just because of the interest of the trial.
Speaker Change: Thanks, thanks, yes, thank you.
Speaker Change: Marvin, next question, please. Thank you, William, for next question.
Speaker Change: Our next question, control line at Brittle Parallel of 3d Coward, your line is now open.
Speaker Change: Good morning guys, thanks for taking the question. Congratulations on the quarter, but I'm going to complain a little anyway.
Speaker Change: I wanted to ask about Medicare free drugs. Can you talk about a amount of free drugs that's being utilized going into the number? We've heard some discomfort, I would say, from Dr. Street in Medicare Patients with the free drug program that you guys have offered.
Speaker Change: I guess just around logistics and are you satisfied right now with your commercial copay program to promote use in the commercial population just because you guys did say think Mardi said that copay utilization was low this quarter. Do those two things need to be optimized to set up 2025 to success.
Speaker Change: [inaudible]
Speaker Change: That's something that we expect in time. There's a little bit more utilization up. So, not worried at all about where we are. As you're launching a new product, it relates to...
Speaker Change: Any of the services that you offer.
Speaker Change: It takes some time for the community too.
Speaker Change: A, no exactly what is out there and then B, how do they utilize those potential offerings?
Speaker Change: but we're seeing good progress on all those things so we haven't heard that feedback.
Speaker Change: I have to say, and I spent a lot of time talking with practices. Haven't heard the feedback that it's been a challenge for physicians to access any of the service offerings that we have. But, you know, it's certainly something that we keep an eye on. We want to be absolutely best in class in this and to the best experience that we can for not only the practices, but for the providers.
Speaker Change: You know, co-pay utilization, you know, we have a very good program where that for commercial patients, you would expect that they would pay $10 per month that we would cover.
Speaker Change: with the rest of their obligations.
Speaker Change: Again, it's pretty early and it's more of a issue of patients making sure they know about it, how to access it, how physicians that are directing them towards it and the practices that are directing them towards it. So we expect that that is going to increase in time. In fact, we want it to increase in time because we want it to be affordable for patients.
Speaker Change: and as you recall, what we have emphasized in this launch is affordability for patients.
Speaker Change: We've offered it. The way we've done that is through a very, very robust co-pay assistance program. We do have a PAP program as well. And that's if patients can access to them through any of the other means that are possible for them. We will still have that obligation, but we'll keep an eye on any feedback we get. We react very quickly and we've said to the community, we've been very clear.
Speaker Change: is the product.
Speaker Change: We will find a way to help that patient get the product, including it being free product.
Speaker Change: Acquitable access is really important here. We take it really seriously. So we'll keep an eye on it. And if you have any specific feedback from where you heard that, we'll be to follow us and talk with them as well.
Speaker Change: Perfect. Perfect. Perfect. Perfect. It's just we too on, you know, what we're seeing from prescription to drug filled. You know, we mentioned this in the script as well that we've already achieved our goal for the six months mark which was bringing that down from 60 days to 30 days. So things are very, very much working in the system for us right now.
Speaker Change: Good London Burtis.
Speaker Change: Great.
Mardi Dier: Mardi Dier next question please.
Speaker Change: Our next question, close from line up John Wolbin of TAMP, your line is now open
Speaker Change: Thank you for taking my question. This is a question about how payers are currently handling those patients that are already on GLP therapies or want to go on GLP therapies and are as deaf. Are you seeing any issues there in how this informed sort of?
Speaker Change: Walgreens, Walgreens, if it's a, um, the Wukowia's approved for Nashville.
Speaker Change: Yes, so look, I think what we're seeing we've learned, but we should call, I believe, that, about some of our estimations, about 25% of patients that are on red, differ, are also on a GLP1 and that GLP1 had been prescribed for a co-morbidity.
Speaker Change: and the indications that GLP ones are indicated for. Now we've done some market research which could suggest that up to 50% of patients are either on or have been exposed already to a GLP one.
Speaker Change: So we expect to see GLF1s continue to be used to treat comorbidities.
Speaker Change: and I think as you're getting to the real world here, when a physician has a patient who has
Speaker Change: They may be on or may have been on a GLT1 but if they are an S2F3 patient there is evaluating if
Speaker Change: Our next question comes from the line of Andy Chien of Wolfe. Your line is now open.
Speaker Change: Hi, This is Alan on for Andy Thanks for taking my question and congrats on the quarter.
Alan: Just following up on a question asked about utilization of the free drug program are you able to provide a split across branch versus path and.
Alan: And then another.
Alan: Another question from US is just your recent patient campaign in September released a lot of awareness can you speculate on whether they can be converted to Q4 revenue our Q1 revenue. Thank you.
Speaker Change: Great. Thanks for the question no look with the with the utilization.
Speaker Change: Rich and perhaps so let me just provide a little perspective first.
Speaker Change: We do have a rich program.
Speaker Change: For commercially insured patients.
Speaker Change: We have the option to send them product in the interim period well their reimbursement is.
Speaker Change: Being finalized with the insurer.
Speaker Change: As I've said in the past.
Speaker Change: Don't you have to decide.
Speaker Change: Decide when you want to use the bridge program you may not come out of the gates using one.
Speaker Change: In this case since there's such assurance now of <unk>.
Speaker Change: Path to reimbursement with 80% of commercial lives covered as a good times tablet bridge program.
Speaker Change: And this way, we don't want to have a patient delayed in getting product while insurance is being worked out. So we have offered a patients the ability to start while insurance is being worked out and there's utilization of that program I wouldn't call. It broad at this point.
Speaker Change: Month, because you know it can be a little noisy from a month to month, we're looking at it from a quarter perspective, and what Youre seeing is the cumulative effect of all those things make for really strong quarterly growth. So that's what we had in the third quarter and as we move into the fourth quarter <unk>.
Speaker Change: Dynamics remained.
Speaker Change: Okay.
Speaker Change: Yes, I would just I would just add that bill addressed at fourth quarter.
Speaker Change: During the script that you want to go back and listen to that.
Speaker Change: Right.
Speaker Change: Alright, Marvin next question please.
Speaker Change: Thank you one moment for our next question.
Marvin: Our next question comes from the line of Mike Rahm Newkirk of Goldman Sachs. Your line is now open.
Speaker Change: Good morning, Thanks, so much for taking the question and congratulations on the quarter.
Speaker Change: Bill you've mentioned this or maybe referred to this a couple times here, but in terms of the specialty drug analogs or benchmarks that you are looking at.
Speaker Change: Im wondering if youre willing to maybe provide a little bit more specifics there as to which one specifically as we think about the forward trajectory.
And then would love an update here on how uptake has been going across your herpetologist versus your Gastroenterologists I know last quarter.
Speaker Change: The latter had been a key point of focus as they are the majority of the prescribers here, but but how has that been going thank you. So much.
Speaker Change: Great. Thanks for the question. So look these are the group of around and over the last 10 years.
So.
Speaker Change: That gives you a little bit more color around it but half still ahead of GI is just because I think of their training their knowledge of the space.
Speaker Change: But do you guys are moving along really quickly and we're gonna be relying on them heavily.
Speaker Change: The future great. Thanks, Don.
Speaker Change: Marvin next question please.
Speaker Change: Thank you will remember next question.
Marvin: Our next question comes from the line of Lisa <unk> of Evercore. Your line is now open.
Lisa <unk>: Hi, Thanks for taking my question I have sort of two types of questions. One is U S. Based on one Europe. So far you asked related question can you give us a little more color on the gross to net I'm Marty I know you said it was favorable and would be choppy, but where do we land this quarter.
Lisa <unk>: Any color on sort of discontinuation rate.
Lisa <unk>: Thus far that you're seeing and then as you think about Semigloss tied.
Lisa <unk>: And assuming that data is positive do you expect any changes in gross to nets. As a result of that and then for Europe could you give us kind of.
Lisa <unk>: Our lens on from the same kind of way you looked at the U S market you had kind of diagnosed patients and then the the ones that are significant.
Lisa <unk>: The process in care could you provide those kind of numbers for for Europe. Thank you.
Speaker Change: Okay, Great maybe what I'll do is let me start with Europe.
Speaker Change: The gross to net.
Speaker Change: Yes.
Speaker Change: First of all Lisa Thank you for the questions.
Speaker Change: Europe.
Speaker Change: And on the call.
Speaker Change: And we know that there's going to be a real effort by any new entrants to try to drive.
Speaker Change: The size of the market and number of patients that are prescribed and so forth and we're in a position to benefit from that as well regarding.
Speaker Change: The other.
Speaker Change: Trials that are ongoing.
Speaker Change: We haven't commented then we're not going to be able to comment on what the event rates look like.
This is an ongoing trial and.
Speaker Change: We will.
To monitor part of part of if you think about the outcomes trial and I'm, saying the psoriasis pardon me psoriasis cirrhosis outcome.
Speaker Change: Old habits.
Speaker Change: Erosive outcomes trial.
Speaker Change: We had to think about what would event rates look like and since this is really not so well and understood population.
Speaker Change: The best measures that we could around us to try to understand what that would look like and as I said I think this trial is going to really.
Speaker Change: Help educate the community on that cirrhosis population about what event rates to look like and so forth. So.
Speaker Change: We are anxiously awaiting as we have more data will obviously.
Speaker Change: [music].
Speaker Change: [music].