Q1 2025 Madrigal Pharmaceuticals Inc Earnings Call
Okay.
Good day, and thank you for standing by.
Welcome to magical Pharmaceuticals first quarter 2025 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.
Tina Ventura: I would now like to introduce Ms. Tina Ventura cheap.
Speaker Change: Our relations officer. Please go ahead.
Speaker Change: Thank you Toyota good morning, everyone and thank you for joining us to discuss Medical's first quarter 2025 earnings.
Speaker Change: A press release this morning, and have a slide deck that accompanies this webcast, which will post on the Investor Relations section of our website right after the call.
Speaker Change: On the call with me today is the civil Chief Executive Officer, and Mardi Dier, Chief Financial Officer. They will provide prepared remarks, and then we'll take your questions. We plan to keep today's call to about 45 minutes.
Speaker Change: Please note on slide two we will be making certain forward looking statements today, we refer you to our SEC filings for a discussion of the risks that may cause actual results to differ from the forward looking statements.
Speaker Change: With that I will now turn the call over to Bill on slide three.
Bill: Thanks, Tina and good morning, and thanks for joining today I'll provide an update on the significant momentum we continue to build with the U S launch of <unk> is different.
Bill: I'll briefly recap the impressive two year F foresee data we shared on our last earnings call, which has since been selected as a late breaking oral presentation at the easel Congress in Amsterdam next week, we plan to review this data and an investor webcast. Following meso on Tuesday may 13th.
Speaker Change: And I'll close with a review of our strategy to expand our leadership position in match, but before we move to the quarter I want to take a moment to recognize Becky taub.
Speaker Change: <unk> founder and a driving force behind the development and ultimate approval of rates differ as we announced in April Becky is taking on the new role of senior scientific and medical adviser and she will continue to serve on our board of directors and we are very pleased that Dave Stoehr Gal joined US on April 21, as our new Chief medical.
Speaker Change: Officer, succeeding Becky.
Speaker Change: Becky is vision pioneering work and relentless drive led to the development improve we'll have the first ever FDA approved medicine for mash. This is a landmark achievement in our industry and one that has already changed the lives of thousands of patients. It's also changed magical we transform from an R&D focused company to.
Speaker Change: A fully integrated commercial stage organization.
Speaker Change: Dave brings more than 20 years of leadership experience in metabolic and cardiovascular disease drug development spanning both biotech and large pharma. He was most recently EVP and global head of cardiovascular renal and metabolism development at Novartis, where he was overseeing 10 late stage clinical develop.
Speaker Change: <unk> programs, we believe Dave is the right leader to take the reins at this critical juncture and build on the foundation <unk> created.
Speaker Change: Along those lines I would also like to highlight the recent addition to our board of directors Jackie Fouse Jacqui brings a depth of experience from her leadership roles at several successful biotechs, including our Geos and Celgene I look forward to working with her as we continue to grow the company.
Speaker Change: Now, let's turn to slide four and Reds difference first quarter 2025 performance.
Speaker Change: We're a little more than 12 months into the launch of Reds differ and what a difference a year makes we've gone from zero approved match treatments and no market infrastructure to securing FDA approval in March 2024, launching with the best case label and a world class team achieve.
Speaker Change: Achieving over 80% commercial payer coverage helping.
Speaker Change: Helping lay the foundation practice by practice to build the infrastructure structure required for patient treatment treating.
Speaker Change: Trading more than 17000 patients, who previously had no options and.
Speaker Change: And generating $317 million in net sales in our first 12 months on the market.
Speaker Change: By any measure this is an exceptional launch and we know that because we are benchmarking ourselves against some of the most successful specialty medicine medicine launches in the past decade, whether it's patient growth depth and breadth of prescribing payer coverage or net sales were performing at or near the top but the most.
Speaker Change: Exciting part, we're just getting started as we enter year two we're bringing the same intensity and focus on execution that got us here and we believe the best is still ahead.
Speaker Change: This momentum carried us into another impressive quarter with first quarter 2025, net sales of $137 million.
Speaker Change: Up 33% quarter over quarter. Despite the typical headwinds we see in Q1 across the industry.
Speaker Change: Our patient support and field teams did a great job navigating those dynamics to keep patients on therapy and.
Speaker Change: And we're continuing to generate strong demand and steadily add patients into the second quarter driven by the urgent need Reds differ addresses its compelling product profile and the exceptional execution of our team.
Speaker Change: In addition to net sales we continue to make great progress on key performance indicators that are driving our launch.
Speaker Change: First on patients as shown on slide five we ended the first quarter of 2025 with more than 17000 patients on <unk> differ up from 11800 patients at the end of the fourth quarter of 2020 for.
Speaker Change: This figure represents patients actively on therapy accounting for any discontinuation, making it the most rigorous and meaningful metric to track sustained treatment adoption.
Speaker Change: And when we compare it to other top tier specialty launches, we're adding patients at a rate that's consistent with those benchmarks and yet we're still in the very early innings of this launch only about 5% of the 315000 diagnosed <unk> patients who are.
Speaker Change: Under the care of our target prescribers are being treated with Reds Debra.
Speaker Change: We also see that awareness is driving action or disease and product education efforts are preparing patients to have better conversations with their mass specialists about their care.
Speaker Change: We remain focused on those 315000 patients, which represents a highly attractive specialty market. Looking ahead. The stated efforts of the next entrant are focused on expanding the market to many multiples of our initial target market.
Speaker Change: We believe that the strength of bridge different efficacy and attractive real world profile positions. It for leadership in either scenario, creating multiple paths to success for us different in the years ahead.
Speaker Change: Moving to slide six and our progress on physician penetration occur.
Speaker Change: Across the many launches I've led one thing is clear building a strong base of prescribers early in our launch is one of the best indicators of long term success.
Speaker Change: That's why the pace at which we've added new prescribers has been so encouraging.
Speaker Change: And just a year since approval, 70% of our 6000 top targets have prescribed <unk> different.
Speaker Change: This level of penetration puts us at the high end of the benchmarks, we track and shows we built a strong foundation of health care providers, who believe in res differ and are seeing the benefits.
Speaker Change: Achieving this type of uptake. This quickly is the result of the work we've been doing since day, one wiring the system for a first in disease launch like Reds differ is no small feat.
Speaker Change: We built and deployed a world class team. We educated physicians on a disease that had no approved therapies, we partnered with payers to secure broad access and worked hand in hand with practices to help create the infrastructure needed to support sustained prescribing.
Speaker Change: As a result, more and more practices are integrating reds defer into their standard of care.
Speaker Change: We're driving the same momentum as we establish a strong base within our 14000 total targets to support the significant peak sales potential we expect.
Speaker Change: At the end of the first quarter of 2025, approximately 50% of the 14000 target prescribers have prescribed <unk> differ up from 40% at the end of the fourth quarter of 2024, reflecting a growing and durable foundation.
Speaker Change: Our in office support and cross functional field engagement are not only driving breadth there also driving depth.
Speaker Change: We are steadily turning new writers into repeat prescribers and seen more prescriptions written per provider.
That has consistently increased quarter over quarter as well.
Speaker Change: Whereas differs broad uptake is being driven by its attractive real world profile, our medicines profile often diminishes once it enters real world.
Speaker Change: With Reds differ we hear the opposite physicians and patients continue to highlight meaningful improvements they see on the efficacy measures that matter most to patients such as liver stiffness liver fat liver enzymes LDL and triglycerides.
Speaker Change: And our phase III data demonstrate that differ halts or improved liver stiffness and 91% of patients.
Speaker Change: A once daily well tolerated pill with simple dosing. It's also easy to take we're seeing strong early signs of adherence with rates that are comparable to other well tolerated oral therapies.
Speaker Change: We believe <unk> different liver directed mechanism strong efficacy and attractive real world profile will translate well from F. Two F. Three matched patients to those with FRC or compensated Nash cirrhosis as noted on slide eight.
Speaker Change: As mashed progresses, it can lead to cirrhosis marked by significant liver damage loss of liver function liver cancer in depth.
Speaker Change: Many <unk> patients are also experienced clinically significant portal hypertension or CSP H, a major consequence of cirrhosis, that's responsible for its most severe complications such as societies, <unk> bleeding and hepatic encephalopathy the.
Speaker Change: The risk of progression is striking F. Two F. Three patients face a 10% to 17 fold increase in liver related mortality compared to patients without fibrosis for F for that number jumps to a 42 fold increase that's why we are evaluating Reds differ and 845 F. Four C patients.
Speaker Change: And Maestro Nash outcomes, a large phase III double blind placebo controlled trial evaluating progression to liver decompensation, we expect data from this trial in 2027.
Speaker Change: Last quarter, we shared two year data from the open label active treatment arm of our Maestro Napoli one trial in <unk> patients. These results demonstrated <unk> ability to reduce liver stiffness, a key predictor of adverse liver related events.
Speaker Change: Turning to slide nine let me quickly recap the two primary efficacy findings.
Speaker Change: Patient saw a mean reduction of $6 seven kilo Pascal in liver stiffness at two years, which was statistically significant as compared to baseline for context physicians use the divina rule of five to stratify risk and mash cirrhosis. So a $6 seven kpa reductions suggests that many patients are moving.
Speaker Change: To a lower risk category.
Speaker Change: 51% of patients achieved a greater than or equal to 25% reduction in liver stiffness as published in Jama. This level of reduction is associated with a lower risk of progression to end stage liver disease, essentially a reversal of cirrhosis.
Speaker Change: These results and additional insights will be presented at the upcoming easel Congress on may 10th by Dr. <unk> E Mail, Corey Chief Academic officer at Summit clinical research and the director of the <unk> liver disease program at the clinical Research Institute of Ohio.
Speaker Change: This abstract was accepted as a late breaking oral presentation and one of the most important findings will highlight is red difference impact to reduce liver stiffness measures and other biomarkers that are linked to a reduction in risk of CSP H importantly, CSP is the cause of many adverse liver.
Speaker Change: Related outcomes that mark the progression from compensated to D compensated cirrhosis.
Speaker Change: Preventing these devastating outcomes is the central goal of treating liver disease.
Speaker Change: As I mentioned earlier, we will also be hosting a brief investor webcast on may 13th to review the data and discuss the evolving mash cirrhosis landscape. Dr. Corey will join us for that discussion and we hope many of you will tune in.
Speaker Change: The expansion to treatment of FERC is a key pillar of our long term match leadership strategy as shown on slide 10.
Speaker Change: While we continue to execute a successful U S launch in F. Two F. Three we're advancing efforts to expand <unk> indication to F foresee our phase III Maestro Nash outcomes trial is in alignment with FDA guidance for clinical trial design in cirrhosis patients. We expect to have data years ahead of the competition and.
Speaker Change: First mover advantage in this segment of the market as well.
Speaker Change: If approved this could potentially double risk different market opportunity.
Speaker Change: We're also preparing to bring risk defer to patients outside the U S. We remain on track for a midyear regulatory decision in Europe, and if we receive a positive outcome, we plan to launch in Germany in the second half of the year.
Beyond Europe, we're evaluating additional high priority global markets.
Speaker Change: At the same time, we're focused on building the right pipeline beyond <unk>, we're in the enviable position of delivering a first in disease medicine to patients today and now we're looking to extend that leadership with a portfolio of differentiated assets, we're actively evaluating opportunities across multiple mechanisms and stages of <unk>.
Dave: <unk> and as I mentioned earlier, we're excited to have Dave <unk> onboard as our new Chief Medical officer to help lead our pipeline development efforts.
Dave: With that let me briefly recap our first quarter progress on slide 11.
Dave: We're off to a great start in year two of our launch we generated $317 million in net sales over the last 12 months and are seeing continued momentum into the second quarter.
Dave: Physician adoption continues to build with 70% of our 6000 top targets now prescribing <unk> differ.
Dave: We're expanding our leadership in mass with compelling two year F foresee data two pivotal outcome trials underway and a potential EMA approval on the horizon. We believe breads differ is well on its way to becoming the foundational therapy across F. Two F foresee period with that.
Speaker Change: I'd like to turn it over to Marty Yes. Thank you Bill and good morning, I just wanted to take a moment to comment on how magical is positioned in the current macro economic environment, we're positioned extremely well as a commercial stage biotech with a first in disease medicine addressing a serious unmet need they felt a U S based supply chain.
Dave: But it's different manufactured in the U S and its intellectual property is also down U S domiciled.
Dave: Moving to our financial results as noted on slide 12.
Dave: First quarter 2025, net sales totaled $137 3 million up 33% from the fourth quarter of 2024. This was another strong demand quarter with inventory levels well within our expected two to four week range.
As we said we expect gross to net to be choppy in the early early in the launch and the team managed through our first first quarter very well in 2025, we expect gross to net discount to increase and step up as they move through the year and we think as they began to contract with payers, which is in line with our expectation.
Dave: Importantly, this is already reflected in our expectations for robust year over year net sales growth in 2025.
Dave: R&D expenses for the first quarter of $2025 or $44 $2 million compared to $71 2 million for the first quarter of 2024. The decrease was primarily due to the change in accounting for inventory cost following FDA approval of <unk> in March 2024, and lower clinical trial costs.
Dave: Looking ahead, we expect a similar level of R&D spend in 2025 compared to 2024.
Dave: SG&A expenses for the first quarter of 2025, $467 $9 million compared to $88 million in the first quarter of 2024.
Dave: SG&A expenses increased by $87 $1 million, primarily due to increases in commercial launch activities for <unk>, including a corresponding increase in head count and stock compensation expense.
Dave: Looking ahead, we expect SG&A expenses to increase in 2025, including a step up into the second quarter as we continue to invest in the U S launch and prepare for our launch in Europe.
Dave: Turning to our balance sheet. We ended the first quarter of 2025 with $848 $1 million in cash cash equivalents restricted cash and marketable securities with a strong cash position, we continue to be well resource to support the ongoing launch of various different both in the U S and our plan.
Dave: Launch in Europe in the second half of this year.
Tina Ventura: I'll now turn the call back over to Tina.
Tina Ventura: Thanks, Marty let's move into the Q&A portion of the call Tomorrow. Please go ahead and provide instructions for the Q&A session.
Tina Ventura: Thank you.
Speaker Change: Ladies and gentlemen to ask a question. Please press star one on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question. Please press star one again please.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Ellie Merle with UBS. Your line is open.
Ellie Merle: Hey, guys. Thanks for taking my question and congratulations on the quarter.
Ellie Merle: Curious if it got a little bit more in depth on your expectations for the growth trajectory for Safra, particularly when Sandoz label is expanded to include Nash.
Ellie Merle: To see new patients at a similar rate and can you just elaborate on sort of how you see a graph from Nash. Thanks.
Ellie Merle: Alright. Thanks, Yes, it was a great quarter really excited about it and as we said we've continued that momentum into <unk>.
Q2.
Ellie Merle: We look towards the potential approval of summer as we pointed out on one of the slides here.
Ellie Merle: We have a couple of different views of how the market's going to evolve clearly theyre talking about a market, which is multiples the size of our 315000 patients. Our efforts to date have really been focused on the 315000. So there's plenty of patients when you consider where they are at about 5% penetration today. So we see really years.
Ellie Merle: Growth in this market ahead summer is only going to accelerate diagnosis and add to that $3 15, as I said our efforts around the $3 15, we believe there is a great market there, there's even a greater market if what they do happens, which makes as I said multiples of the $3 15, So long way of saying, we feel really comfortable.
Ellie Merle: Well with our profile, we believe ours is the winning profile and we believe that we can grow through there.
Ellie Merle: Potential approval and launch.
Ellie Merle: Maybe I'll jump in here and just to add a little bit as Bill said, we expect this momentum of growth to continue into Q2.
Ellie Merle: So we do expect quarter over quarter growth and also the same for 2025.
Speaker Change: Robust growth for 2025, and I would just give the commentary here for both the quarter and for the year, we expect consensus to narrow and move up a little bit. Okay. Thanks, Paul. Thanks, Marty next question. Please.
Speaker Change: Thank you please standby for our next question.
Speaker Change: Our next question comes from the line of Andrew <unk> with Goldman Sachs. Your line is open.
Speaker Change: Hi, everyone. Good morning, and congratulations on the quarter Bill.
Speaker Change: Bill could you talk us through your expectations around payer reauthorization requirements that you might be seeing right now and how are you thinking about the persistency of these patients to continue on Roger Farah.
Speaker Change: Beyond this first year. Thanks, so much.
Speaker Change: Thanks, Andrea So we authorizations are part of the process for every medicine. So we're not really concerned about that most of the policies as we said in the past require 12 month three off and Thats in line with most drugs typically it ends up being at kind of provider.
Speaker Change: Ration or requires stabilization or some kind of measure one of the entities. So we don't see that as an issue specifically because we're hearing such great results from physicians and patients that have been on the drug in fact, I've said a lot of products when they launch they typically don't live.
Speaker Change: Up to the <unk>.
Speaker Change: Well controlled clinical trial environment that may show, a certain level of efficacy they end up declining a little bit we're seeing absolutely the opposite in our case, we have physicians and patients coming back and saying, we're really seeing efficacy across a bunch of parameters and exceeding expectations in that sense, which leads to the <unk>.
Speaker Change: Persistency piece, which is because it's a well tolerated oral we would expect persistency to be very good like other well tolerated oral so we feel we're in a really great spot because of the profile of the product and what the one year results are seeing such strong real world.
Andrea: Experience great. Thanks, Andrea next.
Andrea: Next question please.
Andrea: Please standby for our next question.
Speaker Change: Our next question comes from the line over to Laurel with TD Cowen Your line is open.
Good morning, guys.
Speaker Change: Thanks for taking the question and congratulations on this quarter.
Speaker Change: My question has to do with Europe I believe you guys are.
Speaker Change: Well on your way for the <unk> documents as they post.
Speaker Change: But can I ask.
Speaker Change: Where you are on responding to your questions. I believe you requested an extension of the clock stop.
Speaker Change: What's the I guess the driver for the extra time needed to respond as you go through these discussions.
Speaker Change: <unk> has different label can you talk to how maybe Europe is approaching non.
Speaker Change: Non invasive testing different than FTE, it looks like they may be on accelerated acceptance in it.
Speaker Change: Does this factor into what label Reza for me get in Europe. Thanks.
Speaker Change: Okay. That's a lot there I'm going to try to try to remember it all look the questions. We're getting I think are.
Speaker Change: All expected we're still on track for our mid year action. We would expect this is you have to remember just like with the FDA. This is the first match product ever approved in Europe, and I think agencies want to take their time and make sure that they understand and that they are putting forth. The best label that they can that is.
Speaker Change: Going to be really the foundation for all other match label. So we're really happy with how the review is going and as I said, we're expecting approval and we will expect to launch later this year.
Speaker Change: The question on.
Speaker Change: Yes look so it's interesting I know Europe's.
Speaker Change: Had a year plus to digest, the fact that theres going to be a match product as we talked about last year physicians in the U S. Until the product was approved almost didn't believe there was going to be a product approved because of the.
Speaker Change: Over two dozen or almost two dozen failures before us Europe on the other hand with the approval in the U S is much more certainty. So the actions they've taken starting with the easel guidelines last year are actually quite far ahead of the U S.
Speaker Change: Now from an NII perspective.
Speaker Change: We believe that there are.
Speaker Change: Theres enough installed.
Speaker Change: Is that that will allow us to launch effectively but just like the U S. There's going to have to be additional nic's added as you have a new product that is approved and you actually have to start thinking about now how are you going to diagnose and stage patients a little bit differently. So.
Speaker Change: In many ways. The EU is ahead of the U S from an action perspective, and we think thats, probably more important than anything right now so.
Speaker Change: So we have equal next week, we're really excited to talk directly to a lot of the physicians and hear firsthand from them how their prep is going but I was impressed last year as.
Speaker Change: As well so I'm sure that that much further ahead and that's certainly what our teams are telling us now.
Speaker Change: Thank you. Thank you.
Speaker Change: Next question please.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of of cost to worry with Jefferies. Your line is open.
Speaker Change: Hey, Thanks, so much can you talk about your relative confidence in showing an outcomes benefit on hepatic events in <unk> versus that four we're digging this internally and there's some clear encouraging signals, whether it's the intercept trial or even semi and <unk> III theres almost no correlation we are seeing in that floor between.
Speaker Change: Liver fat reduction and actual hepatic events.
Speaker Change: What gives you your team confidence the liver stiffness data will actually translate I really appreciate it.
Speaker Change: Thanks for the question nice to hear from you.
Speaker Change: Look I think that.
Speaker Change: As we showed in the slides today.
Speaker Change: This $6 seven kpa reduction at two years, we think is actually quite meaningful I think the letter literature supports that but if we take even a step back further.
Speaker Change: Economically RM away a liver directed therapy.
Speaker Change: It is.
Speaker Change: It's.
Speaker Change: It really looked at is kind of the master regulator of fibrosis, and we believe that starting from that point, we have great confidence in the mechanism now the data to date with the reduction in liver stiffness in this cohort of patients and we're going to explain more about it next week I would encourage you to listen in.
Speaker Change: It gives us further confidence that that is getting at the heart of the problem and therefore, we won't have the events that you would without treatment. So I think everything from the biology to what we've seen early gives us great confidence.
Speaker Change: In our <unk> trial, that's ongoing that we have 845 patients are well sized trial and we're more encouraged as I said by the data that we've talked about today and we're going to talk about at Eagle next week. So yeah.
Speaker Change: Like anything else. That's why you do the trials right and we'll have to see what results ultimately look like but so far we remain.
Speaker Change: Extremely confident in the outcome great. Thank you Kash next question. Please.
Speaker Change: Our next question comes from the line of Yasmin Rahimi with Piper Sandler Your line is open.
Speaker Change: Good morning team congrats on a great quarter Mike.
Speaker Change: My question is just now that you've had patients for over a year on therapy have you been able to quantify sort of what the compliance rate is and sort of as patients are.
Speaker Change: Kind of talk to.
Speaker Change: Do they feel function better at their own the drug. So what is the adherence rate that youre seeing and how do you think it will be projected moving forward and I'll jump back in the queue.
Speaker Change: Yes. Thanks for the question, it's a little early.
Speaker Change: To be making a call on ultimately what does adherence look like however, all the early signs are very promising and I think again it goes back to the.
Speaker Change: Well tolerated nature of the product and the overall profile of the product.
Speaker Change: One of the questions that I think people were asking was this is an asymptomatic disease.
Speaker Change: Why would someone stay on well.
Speaker Change: The physicians have been able to give really positive feedback to patients because they are seeing these results across a number of parameters and that always gives people a reason to stay on especially if they're not feeling any really.
Speaker Change: Significant tolerability issues along the way.
Speaker Change: We've had talked to a lot of patients and anecdotally, we hear some patients that are saying as well that they feel better and I think it's a little bit of a hope.
Speaker Change: They they're worried about the consequences of severe liver disease right.
Speaker Change: <unk> seen some of them have family members that have gone through transplant. Some family members have died from mash.
Speaker Change: And if.
Speaker Change: I hadn't expected this as much but the hope that they now have because there is a once a day pill.
Speaker Change: That's really kind of astonishing and that's giving people as well I think the reason to stay on so we're really optimistic it's early but all signs right now suggest that we will have a.
Speaker Change: Adherence rate very consistent with well tolerated oral <unk> great.
Speaker Change: Thanks, So much yes next question please.
Our next question comes from the line of Lisa <unk> with Evercore. Your line is open.
Lisa: Hi, Thanks for taking my question and congratulations on a strong quarter.
Speaker Change: I just wanted to drill a little bit more in Q.
Speaker Change: Two topics one is if you could give any more granularity on gross to net for the quarter.
Speaker Change: And then.
Speaker Change: Protect the trajectory from here I know you said it was sort of it would be kind of.
Speaker Change: A little bit up and down but just curious.
Speaker Change: On more specifics and then on <unk>.
Speaker Change: Like DLP once this whole concept I guess today.
Speaker Change: What is your estimate of what percentage of your patients are on <unk>. How do you expect us to change as <unk> gains a label expansion into mass and do you expect any kind of step through our any.
Speaker Change: Payers to kind of lean that way as that comes on board.
Speaker Change: Later on this year.
Speaker Change: Thanks, Lisa it's a couple of questions.
Speaker Change: Those are ones that I'm sure are on People's minds, So maybe we will.
Speaker Change: We'll go with that maybe starting.
Speaker Change: Good.
Speaker Change: Starting.
Speaker Change: With the.
Speaker Change: <unk> chemo combo, so as we reported previously.
Speaker Change: 25% of patients are on <unk> that are on res differ that's our estimate right now and it jumps to above 50% that had been exposed previously.
Speaker Change: GOP ones, we have to remember theyre not new they've been here for over a decade, despite them being here for over a decade. There is still this.
Speaker Change: Mash challenge that exists.
Speaker Change: People are still diagnosing and seeing mash and patients are progressing so.
Speaker Change: GOP ones and the question of is there a step through look it's early they havent been approved yet we have to see what the label.
Speaker Change: <unk> looks like and ultimately what their approval looks like however.
Speaker Change: Plan for all scenarios and as I said on a question earlier, we feel very confident that we can grow through all scenarios. So part of that has to do with the fact that.
Speaker Change: Hey, this is a.
Speaker Change: High unmet need B, we've got a great profile, where liver directed once a day pill, you've heard me call. It the Holy Grail of profiles.
Speaker Change: Profiles matter at the end of the day, you've got to take a drug for it to work.
Speaker Change: Yeah.
Speaker Change: Controlled well controlled.
Speaker Change: Studies are great, but in the real World you got to take a drug for it to work and we feel like we're in a really really good place now from a gross to net perspective, we've been extremely diligent in both gross to net you have heard me say from the beginning.
Speaker Change: We have planned for years ahead, not a single quarter, but we really look towards the evolving landscape.
Speaker Change: We're looking at different products coming into the market thinking about new indications for us.
Speaker Change: And as you know we started in a really great position physician.
Speaker Change: Really preserved gross to net out of the gate by not contracting largely because of the innovative nature of the product right. We have this has been the graveyard of drug development in red differ really broke through and we take that into consideration. However.
Speaker Change: You can't escape the dynamics of the market payers are always evaluating the landscape evolves, whether it's a new calendar year or you get a competitive entrant. So we've thought about gross to net anticipating that there will be additional competition et cetera, and we've had good partnerships with payers, we're going to keep those good part.
Speaker Change: <unk> ships, but in line with that we started contracting in Q2 and its not everywhere and it's not all at once it's an evolution thats going to take time. So we are right, where we thought we would be we're executing kind of our plan for the short medium and long term and feel we're in a really strong position, but maybe Marty perhaps you could comment a little bit more on the dynamic in.
Speaker Change: <unk> 25.
Speaker Change: Im happy to as Bill said, we've been very disciplined with our gross to net but it is absolutely part of our business going forward.
Speaker Change: We've also said it continues to be choppy.
Speaker Change: That's going to be the case as we continue to launch, but our team did a fantastic job.
Speaker Change: Fourth quarter into first quarter, and manage that mix really well I would say specifically for Q1 were a little favorable across the board expressed as net debt.
Speaker Change: But we're really.
Speaker Change: Staying within the range that is typical for a specialty pharmacy products.
Speaker Change: And we.
Speaker Change: Yes, we do see as we said last quarter that this will continue to step up throughout the year in 2025, particularly with some of the contracting that as Dale said not everywhere and not all at once but as that continues to.
Speaker Change: Take effect throughout the year.
Speaker Change: So anyway, we're really great great shape with our gross to net and right as part of our expectations moving forward great. Thanks, Lisa for the question.
Speaker Change: Next question please.
Speaker Change: Our next question comes from the line of Jay Olson with Oppenheimer. Your line is open.
Speaker Change: Oh, Hey, congrats on the impressive launch progress thanks to Becky for her pioneering efforts successfully bringing different to market.
Speaker Change: Can you talk about any feedback on the key messages in your DTC campaign, and how that's impacted the launch trajectory.
Speaker Change: Then with regards to business development as you look ahead to extending your leadership position in Nash, what sort of complementary assets would you like to add to its different thank you.
Jay: Great Jay Thanks for the question first of all on DTC.
Speaker Change: Feedback is very positive about our DTC.
Speaker Change: Idea is to get to mostly diagnosed patients and have them prepared to take action when they go to see their provider.
Speaker Change: Feedback from the whole community has actually been very strong and we're really encouraged by it and we think it's an important piece of the mix. Because this is a disease that people don't know a lot about.
Speaker Change: We still know that the biggest issue is taking.
Speaker Change: Taking action.
Speaker Change: And we hear everyday of tragic stories of patients, where physicians haven't taken action or where patients didn't know what fatty liver disease men and came back years later to find out they have neither transplant that is something that we as a company. Our purpose is really to lead the fight against mash, we take it seriously education through DTC is important.
Speaker Change: We as our DTC continues to evolve.
Speaker Change: Good.
Speaker Change: Direct you to our new campaign that we have at diffuse mash Dot com. This really gets to the heart of <unk>.
Speaker Change: This is a serious disease and action is required that's once again diffuse match dot com I feel like I know it.
Speaker Change: It sounds it sounds like I'm doing a commercial myself right there that wasn't the intent, but I wanted to make sure that Jay you got the the.
Speaker Change: The website to go to.
Speaker Change: Your second question was on business development look we've been really clear all along.
Speaker Change: We are in this really enviable positions most.
Speaker Change: <unk> most companies have a pipeline looking for a great asset we have a great asset and now we have the luxury of building a pipeline to sustain our leadership position.
Speaker Change: You don't get many opportunities like this in the industry, where youre. The first to launch in a very significant disease that has that has had a checkered past in development because it's been such a difficult disease to attack where first we've done it and it's really with a product that is very specific to the <unk>.
Speaker Change: <unk>, it's liver directed and is a great profile, but in order for us to extend our leadership. We think it is important to have additional products available.
Speaker Change: The focus will be in mash and we're looking at next mechanisms of action better compelling or products that could be combined with <unk>.
Speaker Change: Reds different to make Reds differ and the new entity that much better so that allows us to either extend efficacy work in new different.
Speaker Change: Pardon me different segments of the population et cetera. So we're looking across the entire pipeline early stage to late stage, we're going to base. It on mechanisms that we're interested in mechanisms that we think could be.
Speaker Change: Helpful for patients and we will then be very diligent in our.
Speaker Change: And the way that we actually go about doing our deals we're not going to do a bet. The company strategy on any of this.
Speaker Change: Don't have to so we will maintain that financial discipline will do good deals. We'll do deals that are going to make a difference ultimately for patients and sustain our leadership for the future. So more to come on that when we have something to presents.
Speaker Change: Thanks, Jay next question please.
Speaker Change: Our next question comes from the line of <unk> <unk> with B Riley Securities. Your line is open.
Speaker Change: Good morning team, thanks for taking our questions and congrats on the strong quarter.
Speaker Change: Digging into the new <unk> new.
Speaker Change: Union obligations from last night.
Speaker Change: It seems that the benefit is coming in interesting mid low to mid BMI as two patients out of <unk> would be great to hear.
Speaker Change: Thoughts on how maybe you're thinking about patient segmentation.
Speaker Change: Obviously, you benefited seems more pronounced in the mortgage was at CFO and just quickly on going back to the comments on EU approval launch strategy midyear.
Speaker Change: Curious the obligations of the set for data coming in as easily but also on pricing given macro discussions on innovations being possibly better rewarded in EU countries.
Speaker Change: Thanks again to the cancellations.
Speaker Change: Right. Okay. Thank you very much for the question look we didn't see anything new actually we just got it last night like everyone else. So we're looking through it but really nothing new there.
Speaker Change: Well controlled trial, you get results from a well controlled trial I think that the real question is what's the applicability to the real World and I think we know that in the real world GOP ones.
Speaker Change: Challenge, specifically of keeping people on drug and getting them to the.
Speaker Change: Highest dose so.
Speaker Change: Nothing's changed from our perspective looking at looking at that.
Speaker Change: <unk> now.
Speaker Change: Right now where were used.
Speaker Change: It's about 50, 50, <unk> III patients and what happens is physician pardon me a patient comes into their practice into the C. The physician every six months 12 months.
Speaker Change: And.
Speaker Change: The physicians looking at that patient at that moment, and if they have app too to say well, let's wait a year.
Speaker Change: They could go to <unk>, III, who knows where they're going to go.
Speaker Change: They're making that decision at the moment and that's why we're seeing that they're often choosing to treat.
Speaker Change: Whether it be <unk>. So we expect that mix to continue as you know we have hopes to move into air force fee as well and we think that we will be the product <unk> period, which is I think.
Speaker Change: A ambition ambitious but ultimately realistic.
Speaker Change: Realistic goal, so feel really comfortable with our with our <unk>.
Speaker Change: Positioning and our profile.
Speaker Change: Regarding.
Speaker Change: Europe, and thinking about pricing and so forth.
Speaker Change: Look we're going through our pricing analysis now our belief is we have a very innovative product.
Speaker Change: And that the innovation will be recognized in Europe.
Speaker Change: I think that.
Speaker Change: The dynamics of.
Speaker Change: GOP ones look.
Speaker Change: As we said.
Speaker Change: A lot of patients are already have already been exposed to <unk> and still have mass that's 50% of our patients.
Speaker Change: <unk> been exposed, but they still have this problem. So we think that the two can coexist. We are only going to be focusing on those patients that we think are most in need those that need a liver directed therapy, and we think that there's plenty of room for us in <unk> or at the very beginning of a market.
Speaker Change: You know what my experiences that every time you have a new entrant.
Enter a market the market growth increases pretty significantly and clearly that's a stated.
Speaker Change: Our goal by Novo, so theres going be lots of patients that are going to be available for us regardless of how the dynamics evolve. Thanks, great. Thanks, Mike next question. Please.
Speaker Change: Our next question comes from the line of Procol Agarwal with Cantor Fitzgerald. Your line is open.
Procol Agarwal: Hi, Thank you so much wondering my questions and congratulations on the strong quarter.
Speaker Change: I had a couple.
Speaker Change: Follow up on gross to net as well, but maybe longer term for 2026 and beyond.
Speaker Change: Having been initial payer contracting discussions for next year or do you expect in terms of the net pricing evolution for.
Speaker Change: 2026, do you expect a big step up compared to 235, given December long term just curious as to what youre hearing from the payers, especially given the pricing differential and secondly, maybe quickly on BD really seems to be a priority, but what exactly is the beauty capacity given the ongoing investments in the launch in the U S.
Speaker Change: You so much.
Speaker Change: Alright. Thanks for the question, maybe I'll start with just a comment on gross to net and then Marty can provide a little bit more I mean look as I said you heard my answer earlier.
Speaker Change: Taking a long term view of gross to net we know.
Speaker Change: Pretty good certainty what the potential market evolution looks like with new entrants just looking at the pipeline and so forth.
Speaker Change: A little early to comment on 'twenty six.
Speaker Change: Gross to net only goes in one direction.
Speaker Change: And we've been very disciplined about it we'll continue to be we have a very significant value proposition with the product that we have so we think that will continue to be in a very favorable place from a gross to net perspective, but maybe Marty if you want to comment anymore on that are literally yes, it's really too early.
Speaker Change: <unk> so on 2020 to expand its all part of our business. It's all part of our expectations, we have ongoing dialogue and good relationships with the payers and we will talk about that more as the year progresses.
Speaker Change: And then regarding BD.
Speaker Change: As I said, we're not doing a bet the company strategy, we're going to be very very diligent and disciplined about the way we do deals.
Speaker Change: And Marty do you want to comment you talked about the capacity and I think Bill's point is right. We're not betting the company here and Brian in a great position from a cash standpoint and that cash is.
Speaker Change: We're focused on building out the U S launch in the ex U S launch.
Speaker Change: If we do do BD that may put a different lens on our cash flow, but right now we're in a very good position with our cash.
Ed: Thanks, Ed.
Speaker Change: It looks like we have time for one more question. Please.
Ed: Thank you.
Ed: Our final question comes from the line of the line of Andy Chien with Wolfe Research. Your line is open.
Speaker Change: Hi, This is Sam on for Andy Thanks for taking my question and congrats on the quarter.
Speaker Change: Six abstracts will be presented at Google next to me I guess, just aside from the late breaker, which is more focused on the FRC data what are other key findings still about four thank you.
Speaker Change: Well look thats going to be the big data that we're going to be presenting there we think it's really important especially.
Speaker Change: <unk>.
Speaker Change: We've seen that there's been this kind of gravitation and interests in FGF 20 ones.
Speaker Change: <unk>.
Speaker Change: Foresee.
Speaker Change: We have data, which we think is just really really impressive and youre going to see that in the.
Speaker Change: In the late breaker, we have as you said, we have six different.
Speaker Change: Posters et cetera, there it covers really a large gamut everything from some of the unmet need to more specific.
Speaker Change: Results that we're seeing in Germany for instance.
Speaker Change: From claims analysis that we've done et cetera, so it's a little bit of a.
Speaker Change: Evolution of the data that we have in some more details about the severity of the disease and what youre seeing in the real world from incidents of things like HCC et cetera, So it's a pretty.
Speaker Change: It's a pretty exciting meeting for us.
Speaker Change: The presentations were going to be doing a great I'd say, probably more than anything we're looking forward to just the interaction with the community there and what we're hearing is there's a lot of anticipation about the dialogue that we're going to be having with.
Speaker Change: Various physicians from literally around the world that are 10, so it's a great meeting for us.
Speaker Change: Big news as a late breaker and thus therefore, it's at the late breaker because it is such interests. So stay tuned I hope to see some of you over there and certainly hope that you will join us on our call looking at that FERC data.
Speaker Change: After easily great and then thanks for that question.
Speaker Change: Thanks for your time and thank you all for your interest today. This is now the time, we're going to conclude the call. A replay of this webcast will be available on our website in approximately two hours. So thank you so much for joining us.
Speaker Change: That concludes today's conference call. Thank you for your participation you may now disconnect.
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