Good day, ladies and gentlemen, and welcome to the Madrigal Pharmaceuticals First Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode. Following the remarks from the company, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Dr. Paul Friedman, Chairman and Chief Executive Officer of Madrigal. Dr. Friedman, you may begin.

Thank you. Good morning, and thanks to all of you for joining us on the call. Here's the fine print dealing with our forward-looking statements. Please see today's press release and our SEC filings for forward-looking statement and risk factor considerations associated with these statements and our business. With me on today's call are Becky Taub, President of R&D and Chief Medical Officer; Remy Sukhija, Chief Commercial Officer; and Alex Howarth, Chief Financial Officer. We also have Dr. Stephen Harrison joining us to provide his perspective on the MAESTRO program updates we're announcing today. This morning, we issued a press release outlining a number of important clinical development program updates, including the acceptance of 4 resmetirom abstracts as oral presentations at EASL's International Liver Congress next month. Additional positive data from the Phase 3 MAESTRO-NAFLD-1 study and a new outcomes trial that will evaluate resmetirom for the treatment of NASH patients with compensated cirrhosis. We also announced that Madrigal secured a term loan facility, which puts us in a strong financial position for the road ahead. The decision to expand our clinical development program and raise additional capital reflects our conviction in the potential of resmetirom to be a transformational therapy for patients with NASH. The emerging data for MAESTRO-NAFLD-1 safety study, including the results we're announcing today, continues to support that conviction, and we look forward to sharing additional data in our late breaker presentation at EASL. Now Becky is going to review the design of the new MAESTRO-NASH outcome study in more detail in a few minutes, but I'd like to say a few words about the medical and commercial rationales for the study. First, and I think fairly obviously, patients with compensated cirrhosis are at significantly elevated risk of progressing to negative clinical outcomes, and there's a high unmet need for an approved therapy to treat these patients. Second, resmetirom has been well tolerated in this population and early efficacy results are quite encouraging. Third, we believe this study can be conducted in a timely manner. And since in this more advanced population, events will accrue faster, it can provide an alternative path to an early full approval in non-cirrhotic NASH than our ongoing clinical outcome studies in MAESTRO-NASH. And finally, by substantially expanding the NASH market opportunity to include patients with compensated cirrhosis, the therapeutic and commercial value of resmetirom for Madrigal and potential business development partners should be strengthened. As we've gained increasing confidence that we'll achieve both NASH resolution and the fibrosis improvement endpoints in the MAESTRO-NASH biopsy study, we are moving 1-point fibrosis reduction up the hierarchy to a primary endpoint along with NASH resolution. The dual primary endpoints now for MAESTRO-NASH are NASH resolution without worsening of fibrosis or fibrosis improvement without worsening of NASH. And while we fully expect to achieve both endpoints, making either endpoint is compatible with the subpart H NDA submission according to FDA's draft guidance. Importantly, our planned MAESTRO-NASH outcome study and the move to a dual primary endpoint in the biopsy study do not alter our timeline assumptions for readout of the biopsy study in Q4 or subpart H NDA submission in non-cirrhotic NASH next year. The term loan financing we announced today will help fund the expansion of the resmetirom clinical development program and reinforces Madrigal's solid financial position. As of March 31, Madrigal had cash, cash equivalents and marketable securities of $220 million, an additional $50 million of drawn at closing of the new loan agreement. Alex will share additional details shortly. As we noted in our press release, MAESTRO-NAFLD-1 double-blind data were submitted as a late-breaking abstract to EASL and accepted as an oral presentation at the International Liver Congress next month. So while we'd like to share the full data set with you, we're not going to be able to provide you with any additional data beyond today's update because the data are now under embargo. Our team is looking forward to EASL, the first major in-person hepatology conference since 2011. I'd like to thank our R&D team for the work they've done in generating multiple accepted abstracts for the meeting, including the MAESTRO-NAFLD-1 late breaker. We'll be conducting an investor event after the new data are presented at EASL, so please reach out to us if you plan to be in London for the meeting. And now I'll turn the call over to Becky.

Good morning. So on Slide 7. Here's the summary of the data that we presented at the January 31 webcast when we announced the top line data from MAESTRO-NAFLD-1, resmetirom was safe and well-tolerated at the top dose of 100, as well as 80 milligrams in MAESTRO-NAFLD. Key secondary endpoints were key in MAESTRO-NAFLD at both 80 and 100-milligram dose groups, including PDFF, LDL cholesterol, APOB and triglyceride reductions, which are consistent with the parallel randomized 100-milligram open-label arm that had been from the same study that had been presented at AASLD in earlier on November 2021. The safety and efficacy of the study are in line with the expectations from the Phase 2 liver biopsy study and the randomized parallel open-label 100-milligram arm of MAESTRO-NAFLD. Positive results from this trial support our conviction that resmetirom has the potential to be the first medication approved for the treatment of NASH patients with liver fibrosis. Next slide. Now there will be multiple presentations of Madrigal's program data at EASL's International Liver Congress, including a late-breaking presentation, primary data analysis of MAESTRO-NAFLD, a 52-week double-blind placebo-controlled Phase 3 clinical trial of resmetirom in patients with NAFLD. We will also be presenting three other oral abstracts, the impact of resmetirom mediated reductions in liver volume and steatosis compared with placebo on the quantification of fibrosis using second harmonic generation in a serial liver biopsy. This refers to a technique using artificial intelligence to read fibrosis on the liver biopsy slides. We will present an abstract utility of FIB-4 thresholds to identify patients with at-risk F2-F3 NASH based on screening data from a 2,000-patient liver biopsy cohort of our Phase 3 clinical trial, MAESTRO-NASH and a fourth presentation biomarkers, imaging and safety in a well compensated NASH cirrhotic cohort treated with resmetirom, a thyroid hormone receptor beta agonist for 52 weeks. And we also have two posters: one looking at the Association of FIB-4 with health care costs and a second using a different AI methodology to review our slides that confirms the significant treatment-induced changes in histologic features of NASH from our Phase 2 study. There's an additional satellite symposium, which will discuss identifying and managing and treating patients with NASH in significant fibrosis. So on the next slide, Slide 9. Additional data from the MAESTRO-NAFLD trial, as Dr. Friedman mentioned detailed results of this trial are under embargo until the late-breaking presentation at EASL. However, we will focus on some of the important results here, similar to what was reported for the 100-milligram open-label arm in November of 2021. Patients in the parallel arms 80 milligram and 100 milligram treated with resmetirom achieved reductions from baseline in ALT, p equals 0.002 and less than 0.0001 relative to placebo. Transient ALT increases that were greater than three times the upper limit of normal occurred in 0.61% in the resmetirom 80-milligram group, 0.31% in the 100 milligram group and 1.6% of patients in the placebo group, indicating that, if anything, there was a lower increase in patients treated with resmetirom. And this was across the entire 52 weeks of the study. Treatment emergent adverse events of greater than grade 3, greater than or equal to grade 3 occurred in 7.6% of patients in the resmetirom 80-milligram group, 9.8% in the 100 milligram group, 9.1% in the placebo group. This was data that we also presented in January, withdrawals due to adverse events were very low in the study, 2.4% in the 80 milligram group, 2.8% in the 100 milligram group and 1.3% in the placebo group. The GI-related adverse events that we had shown at the end of January were increased in the drug arms relative to placebo. Further analysis has shown that these increases in GI adverse events, diarrhea and nausea, did not occur after the first few weeks of therapy. Next slide, Slide 10. Endpoints related to a FibroScan were evaluated in the study, patients had a screening or prescreening FibroScan that then allow them to screen for the study based on the CAP and KPA values. And then they had a second FibroScan at week 52. The FibroScan CAP score, which is reflective of hepatic fat, were statistically significantly reduced P less than 0.0001 in the resmetirom arms as compared with placebo. FibroScan liver stiffness reductions were presented for the 100 milligram open-label arm in November of 2021 and showed a marked reduction from baseline and these reductions were similar in the 100 milligram open-label and double-blind arms. Responder analyses of the FibroScan VCTE reduction or KPA reduction and percent reduction from baseline comparing resmetirom 100-milligram open label and the two double-blind arms with placebo showed a significant increase in responders in the treatment arm around 44%. Average across the resmetirom arms compared with the placebo, and this was statistically significant. There appeared to be some dose relationship between the 80 and 100-milligram doses in this study. If we examine the mean reduction in FibroScan liver stiffness in the resmetirom double-blind arms, these were numerically greater than placebo but not statistically significant in this study. I will note also at this point that the threshold for an eligible FibroScan was 7.2 KPA which is consistent with approximately F1 to F2 fibrosis stage compared to liver biopsy historically in the literature, and this was a fraction of the patients in the MAESTRO-NAFL study, which was in general, an earlier population than MAESTRO-NASH. MRE responders as measured by KPA reduction were also significantly greater in resmetirom treated groups compared with placebo and showed a similar level of responders in all resmetirom dose arms. So that would be 100 milligram open-label, 100 milligram double-blind and 80 milligram double-blind arms showed a similar reduction in MRE and this was in patients who had at least a 2.9 KPA at baseline. The intrinsic variability of FibroScan 35% to 40% in which has been confirmed many times in the literature, limited the use of sole measure to diagnose NASH patients, but it is an excellent office space enrichment test and was an excellent enrichment test in both of our MAESTRO studies enabling us to rule out patients without significant fibrosis and identify potential NASH fibrosis patients. We will be presenting additional data on FibroScan and other eligibility criteria to diagnose NASH in one of our oral abstracts at EASL. However, a few of the highlights are shown here, the screening FibroScan of greater than 8.5 kPa in MAESTRO-NASH predicted significant fibrosis on biopsy and about 50% and a high percentage of positive FibroScan's did not have significant liver fibrosis. The MRI - E of 2.9, which was not used as a prescreening test, but we have data from the study predicts significant fibrosis on screening biopsy and about 80% of the nice MAESTRO-NASH population. The intrinsic variability of the MRE is approximately 19%, so lower than the FibroScan. And we believe that additional biomarkers and there are a huge amount of work going on this in the field, including composites or more specific imaging tests like MRE and MRI-PDFF with the FibroScan may increase the accuracy of diagnosing and monitoring patients with NASH. In the MAESTRO-NASH outcome study that we are planning to start over the next few months. Just to give you some brief comments on the study design. It's a randomized, double-blind, placebo-controlled study in approximately 700 patients with early NASH cirrhosis, to allow for non-invasive monitoring of progressive to liver decompensation events. Just to make this clear, these are patients who have never decompensated. So they have early NASH cirrhosis. They're very similar - this is a similar population to an ongoing open-label arm of more than 180 patients with well-compensated NASH cirrhosis from our MAESTRO-NASH – NAFL study. The FDA has publicly stated that an outcome study in NASH cirrhosis patients can support full approval in non-cirrhotic NASH and Madrigal met with FDA to confirm the strategy and study design. MAESTRO-NASH outcomes is designed to assess the rate of disease progression in early NASH cirrhosis patients and enhance the statistical power of MAESTRO trials to assess clinical benefit, the decompensation events that will be assessed, include development of ascites, bleeding varices, hepatic encephalopathy and increased MELD score greater than or equal to 15 and are expected to occur at a rate that is higher than in MAESTRO-NASH. This is because the MAESTRO-NASH patients who are past week 52 and are assessed out to month 54 are non-cirrhotic. And these are in MAESTRO-NASH outcomes, these are - these are early NASH cirrhotic patients. And so the rate of decompensation will be higher in this population. Importantly, liver biopsies are not an endpoint of the MAESTRO-NASH outcomes, the outcome portion of the trial of MAESTRO-NASH, there is a third liver biopsy occurs at month 54. So here in MAESTRO-NASH outcomes, the invasiveness and the variability of liver biopsy is avoided. Several biomarker and imaging techniques will also be employed to assess - correlates with disease progression. We will be presenting additional data on the open-label study of more than 180 patients with well-compensated NASH cirrhosis at EASL. And these data support the potential of resmetirom in this patient population. We have reported data from the patients with NASH cirrhosis at international meetings and demonstrated that resmetirom reduces liver fat, liver enzymes, liver volume, fibrosis markers and atherogenic lipids in this population.

So before asking Remy to give us a commercial update, I'd like to ask Dr. Harrison to give his perspectives from the planned MAESTRO-NASH outcome study.

Thanks, Paul. So first of all, I think this is incredibly important. I think it shows progression in the development of resmetirom to address all the different aspects of what the FDA is looking for. So I think this is the final piece. The MAESTRO-NASH outcomes trial in a well-compensated group of over 700 cirrhotic patients. So I think the unique thing about this study that I find incredibly important and encouraging is the fact that we're able to use non-invasive techniques to enroll the patient population. And so here, for the first time in a very large study, we're able to move away from liver biopsy. And so I think that provides an additional positive point relative to the study. The outcomes are well validated. They're known development of ascites, bleeding varices, hepatic encephalopathy, increase in the MELD score greater than or equal to 15. So I think this sets everything up very nicely to augment the MAESTRO-NASH program and also extend benefit potentially into cirrhotic patients as well. So just think it's - I think it's exactly what we needed.

Okay. Thanks very much, Stephen. Appreciate that. I'll turn the call now over to Remy to provide a commercial update.

Thank you, Paul. Good morning, everyone. NASH is a truly exciting commercial opportunity, and I feel both fortunate and privileged to lead our team's commercial planning efforts for a potential first-to-market launch in the category. As a reminder, we view this as a specialty product launch focused on the NASH specialists, who we define as a subset of hepatologists, gastroenterologists and endocrinologists who already manage a substantial number of patients that are living with NASH with fibrosis. To create the NASH therapeutic market, we are engaging with all key stakeholders. So far in 2022, we have gained a deep understanding of market dynamics with the healthcare provider, payer and patient lenses based on extensive market research and advice from thought leaders. And we have advanced health economics and outcomes research that will inform future value assessments of resmetirom and health disease education sessions with U.S. payers that together cover roughly 80% of all branded prescriptions in the U.S. You can see examples of our market development activities on this slide. For the remainder of the year, we will have a particular focus on education initiatives at U.S. Medical Congresses like DDW, ACE, AGA and of course, AASLD. Our first major digital disease education campaign for the healthcare provider audience, NASH Reimagined, will be launching in the U.S. in the coming weeks. We remain heavily focused on partnering discussions. As we have stated previously, our plan is to establish an ex-U.S. commercial partnership following Phase 3 MAESTRO-NASH data readout. And we have already begun discussions with multiple potential partners. Overall, I'm pleased with the progress we made so far in 2022 and the momentum we have established with our commercial strategy and execution. With that, I will turn it over to Alex for a financial update.

Thanks, Remy, and good morning, everyone. Based on our cash position and term loan facility announced today, Madrigal is on solid financial footing for the road ahead. As of March 31, 2022, Madrigal had cash, cash equivalents and marketable securities of $220 million compared to $270.3 million at December 31, 2021. Operating expenses were $57.6 million for the 3-month period ended March 31, 2022, which comprised research and development expenses of $47.9 million and G&A expenses of $9.7 million. The operating cash burn for the period was $49.9 million. Please refer to this morning's press release and 10-Q filing, if you would like additional details on Q1 financial results. I'll now turn to the term loan facility. Madrigal has secured a $250 million term loan facility with Hercules Capital, Inc. The committed capital strengthens Madrigal's balance sheet, providing an additional source of funding to support strategic priorities, including the new MAESTRO-NASH outcome study. Under the terms of the credit facility, $50 million was drawn at closing. Madrigal may also draw an additional $125 million in two separate tranches upon achievement of resmetirom clinical and regulatory milestones. An additional $75 million may be drawn by Madrigal to support operational activities subject to the approval of Hercules Capital. With our existing cash access to the term loan, our existing ATM facility and other potential financing sources, we are well positioned to execute on our strategic objectives for resmetirom. With that, I'll now turn the call back to Paul.

Thanks, Alex. So we've delivered quite a bit of news today. I'm sure you have questions you would like to address. We're going to open the call in momentarily for Q&A. I just wanted to let you know that the company has a hard stop at 9 o’clock. So we have 30 minutes. We'll answer as many questions as we can in that time. Operator, please open the call for Q&A.

Thank you. Our first question comes from Ritu Baral with Cowen. Your line is open.

Good morning, guys. Thanks for taking the question. I'll keep it brief. So is it fair to say that now that you've incorporated fibrosis that you've got a hierarchical non-gating analysis as the prior NASH company did. And since this isn't in interim, is the assumption that you guys have full alpha 0.05 of alpha to spend on that primary endpoint?

So this is Becky. Thank you, Ritu. I think that your comments showed an excellent understanding of what we said. We are in the process of the finalization of the statistical analysis plan. And so the details of the alpha and the hierarchy, et cetera, we aren't discussing. But the idea is that this is similar to really every other NASH study where there are dual endpoints of both fibrosis and NASH resolution dual primary endpoints, so that achievement if either of those two endpoints can lead to a successful study. So we're not requiring achievement of both of NASH resolution and fibrosis, although we believe that both endpoints will be achieved.

And what drove inclusion? Was it FDA input, payer input or the data, the MRE data that you generated?

We've actually had this plan for quite some time, and it was a matter of consolidating the entire MAESTRO development plan and finalizing that at this point in time. The - as we mentioned on the call, the FDA providing the opportunity for the MAESTRO-NASH outcomes in the early NASH cirrhosis population helps support the statistical power for determining clinical benefit. And so I think that also helped us in terms of our statistical plan for MAESTRO-NASH week 52 biopsy.

Great. Thanks squeezing the questions.

Our next question comes from Thomas Smith, SVB Securities. Your line is open.

Hey, guys. Good morning. Thanks for taking the questions. I guess first on the MAESTRO-NAFL detail data that we're expecting at EASL. I understand you're under embargo and kind of limited in what you can say in terms of the additional data sets. But maybe if you could help set the stage for what other data sets we can expect to see from this presentation at the meeting?

I think it is a primary presentation of the data from MAESTRO-NAFL and will include the primary endpoint and the key secondary endpoints and as well as additional safety and more exploratory endpoints of the study. Beyond that, I don't want to get into more detail, but I think that it will provide a lot of information about the clinical trial, much of which we've already presented. So in fact, we have said that in terms of the safety that the only AE that was disproportionate in the MAESTRO resmetirom arms were the early diarrhea and nausea, the GI-related AEs that were self-limited and did not lead to study discontinuation.

Okay. Great. Well, we'll look forward to more color there. And then just one on the new MAESTRO-NASH outcome study. Can you talk a little bit more about the level of regulatory engagement here if you were putting down their plans for the study? And then can you comment at all on the potential timelines, the data, and the estimated cost for this additional study?

I can comment on some of this. So the FDA really was last year, publicly commented on what they call the parallel path for full approval in non-cirrhotic NASH, where they showed a study design in non-cirrhotic NASH. It's very similar to the liver biopsy portion of MAESTRO-NASH with a baseline biopsy and then a follow-up liver biopsy after a year or two, a year and half. And that would be a completed study and then they showed a parallel study outcome study for clinical benefit in an early NASH cirrhosis cohort and commented that those two studies would support - positive outcomes from those two studies would support a full approval for non-cirrhotic NASH and that it would have the additional benefit of also a potential for approval in cirrhotic in early cirrhotic NASH. And so we followed up with them with an inquiry and solicited advice and then had a direct meeting to discuss the strategy and the potential protocol and that we plan to initiate in the next few months. And the cost of the study is consistent with what you would expect for a 700-patient study that would go on for 2 to 3 years. It's has non-invasive imaging and biomarkers. But otherwise, it's a fairly simple design. And so really not as expensive as some other studies like the early portion of the MAESTRO-NASH study. And it does impact the numbers of patients that need to be enrolled in the MAESTRO-NASH study for the long-term 54-month readout. So the total costs, we haven't absolutely calculated, but we think that there are some cost offsets from the study for the total program.

Alex…

I mean yes, I mean, just - again, just to reinforce what Becky is saying, the details of the study are less onerous in terms of the biopsy work, et cetera. So overall, the costs are more modest compared to the early portion of the MAESTRO-NASH study, but we won't go into specifics, obviously, the details of the totality of the study costs. That's just not something we will do.

But just Thomas, just to emphasize one thing. We had said we would enroll up to 2,000 people in the NASH 54-week biopsy study. And we won't go that far. I think Becky alluded to that, but we don't have to recruit as many patients there now that we have this second study to start in a couple of months.

And this study should...

And this study should end well before the current outcome study that's ongoing in MAESTRO-NASH.

Okay. Understood. And just one last question on MAESTRO-NASH outcomes. Are you planning to take forward one dose arm, the 100-milligram dose or two dose arms into the study?

The dosing of this patient population is - it is something that is under consideration in the final details of the protocol. But I will note that in the ongoing NASH cirrhosis cohort, the well compensated NASH cirrhosis cohort where we enrolled more than 180 patients. The starting dose is 80 milligrams in that population, and there are patients who then receive 100 milligrams. So this design, as I said, is under discussion, but we have precedent from our ongoing NASH cirrhosis open-label cohort.

Okay. Got it. Thanks for taking the questions, appreciate it.

Our next question comes from Jan Ong with JMP Securities. Your line is open.

Hey, good morning. Thanks for taking the question. I was hoping you could just remind us of your reading methodology for biopsies in the Phase 2 study and how you're doing it in MAESTRO-NASH, please?

So we haven't discussed the entire detail of the biopsy review. And as you know, there has been a lot of recent theories about practices for biopsy review, none of which are, by the way, validated. We are using two central readers, the same two central readers that read our Phase 2 biopsy and had consistent results between the two readers. And we believe we have a good methodology to gain agreement on the final outcome of the study based on these two central readers, both, yes to say the bottom line. Just to again mention how this has played out in the past. The same two central readers read our Phase 2. There was a primary central reader, and then there was a second reader who read the entire Phase 2 study. We showed their results at an oral presentation a couple of years ago at EASL, Dr. Rohit Loomba, presented their data. And we showed an excellent correlation between the determination of NASH resolution between the two readers who were both blinded and they were blinded to each other's scoring. And subsequently, and every component of NASH fibrosis reduction - reduction inflammation and steatosis was greater in patients with a PDFF response, which was one of the highlights of our Phase 2. Subsequently, we had this approach validated and will be another one of our presentations in EASL from PathAI, where they also read the full Phase 2 biopsy study using artificial intelligence and got the same result as the two biopsy readers. So we believe between that precedent and what we're doing now that we have a very good plan to get a convincing read of the liver biopsy study in MAESTRO-NASH.

That's helpful. Thanks, Becky. And one more, if I may. You discussed the expansion in the cirrhotic population, can you give us some thoughts about how you're thinking about that commercial opportunity versus the earlier stage NASH that was the earlier primary target?

Remy, do you want to handle that one?

Sure thing, Paul. So when you think about commercial opportunities, there's probably three things, generally speaking, you got to think about. One, the addressable patient population, to unmet need, three, what your competitive set looks like. So when you look at NASH with compensated cirrhosis, the prevalence of the disease, if you look at STs publication that we all seem to look at, is around 2 million is the prevalence, 2 million people in the U.S. today, probably rising to 3.5 by the end of this decade. Now we've got to balance that by saying, hey, listen, most of these patients are not identified right now because there's really nothing to do with them. But as NASH drugs enter the market, that diagnosis rate should go up. So overall, the addressable patient population could be quite large. Unmet need, we've talked to both payers and the NASH specialists, I mean these patients are on the cusp of very bad things. I mean, to point out the obvious, liver transplant death, hospitalization. So there is a high unmet need. When you look at the pipeline, it's pretty smart, especially compared to NASH fibrosis. So when you put it all together, I mean, we're quite bullish about the commercial potential for resmetirom, assuming it gains an indication for NASH with compensated cirrhosis.

Perfect. Thanks again for taking the questions.

Our next question comes from Yasmeen Rahimi with Piper Sandler. Your line is open.

Good morning, to you. A few questions for you. Maybe the first place to start off is, are you seeing some improvements in event rates in your open-label cirrhosis cohort that motivated you to wanting to run this parallel design studies. If you could kindly comment on that? And then I have a second question.

So I don't think we mentioned event rates in our ongoing open-label cirrhosis cohort because there is no placebo control group in that study. But we will say that the patient population has done very well, and the safety has been excellent. But I think it's always important if you're going to talk about event rates to have a relevant control group in the study.

So one thing I would add to that is you - over the time that we've treated the population, statistically you would expect to see some hepatic decompensation events.

Which - I mean, in other words, what he's saying is that the rate is extremely low to non-existent in the study so far. But again, we will defer to having a placebo-controlled study to measure the event rate. I don't know Dr. Harrison, if you want to comment at all on this topic.

Yeah. I mean I think you hit on all the right points. Yasmeen, I mean we're just - we don't have a placebo control, but what we can say is the event rate is incredibly low, but that's not necessarily inconsistent with the disease state. I mean these events take time to accumulate. So I just - I don't think that's necessarily the reason for pushing into this trial. I think it's more to align with the FDA around the parallel trial design, so that we don't have to wait forever for the NASH - MAESTRO-NASH trial to read an outcome. We can move forward with a non-invasive assessment of these well-compensated cirrhotics to try to get to an endpoint quicker. And so I think that's the reason for doing it.

Thank you team for the detailed answer. And then I acknowledge that the FibroScan and MRE measurements were in the MAESTRO-NAFL study as an earlier patient population and maybe didn't reach steatosis based on all the reasons you outlined. But are you able to comment on whether those two non-invasive biomarkers tend to really remarkable differences at least in the cirrhosis cohort. I think investors might struggle with why - what evidence do we have for all the data that's going to be presented on its anti-fibrotic activity given that those two measures, unfortunately did not hit steatosis. And I appreciate any color you can give us. And thank you for taking the questions.

Well, I mean I don't mind starting there, Becky, if you would like. I mean…

Go ahead.

So first of all, I mean, what you - what was mentioned is that in a responder analysis, I think there is statistical significance. There is a difference. And remember that there is significant coefficient variance in FibroScan from 1 point to 0.2 in the same patient over time. So to be able to have a responder analysis where we're actually showing a significant difference, I think, is significant even in this milder disease state population of MAESTRO-NAFLD-1. As far as looking at other biomarkers, I think MRE is more specific. It picks up more accurately the amount of collagen that's in the liver. And if you look at those scans that were abnormal, defined as like greater than 2.9, there was a nice reduction in MRE elastography. So I think - I don't know from an investor perspective, I'm not sure what you would take from that, as a clinician, I get - that's very, very positive data. So I'll just stop there, but I think it's looking very good.

Yes. One of the things that I would add is in the evaluation of an improvement in fibrosis in the Phase 3 NASH biopsy study. The way that's done is a responder analysis. Ergo we have statistical significance for a responder analysis even in this earlier population.

Yeah. I just also think that one of the things that we were setting up was trying to understand the value of these biomarkers and how that's to analyze them. And to Paul's comment, when resmetirom is approved as a therapy, the clinicians are not going to be looking at the average response on FibroScan or MRE, they're going to be looking at an individual patient. And so it may well be that a responder analysis for these tests is a more important way and a better way to do the analysis.

Got it. Thank you, team for the detailed answers.

Our next question comes from Andrea Tan with Goldman Sachs. Your line is open.

Hey, everyone. Thanks for taking the question. Remy, maybe just one for you. I would love to hear you speak more on the market dynamics that you've been learning from this additional work, anything new or different than what you were previously thinking? Thanks, again.

Yes, Andrea, is your question relative to just NASH overall or NASH cirrhotic population specifically?

NASH, overall.

Yeah. So Andrea, I think key things that we can talk about that we probably haven't in the past is considering NASH is a nascent therapeutic area, the question is are patients actually being identified. So we've done that sort of work looking at patient claims data, insurance claims data. And quite surprisingly, we found that about 1 million people may have already been identified and coded with ICD-10 code for NASH. And that's pretty exciting for therapies coming to market because they would - one can expect a pool of patients that physicians can actively determine if the drug that's approved is right for them. So it doesn't take away our responsibility to continue to educate the market, but it's a good finding that we've had as of late.

And Remy, let me - this is Dr. Harrison. Let me just add to that. So just to provide a little bit more color on the progression of the prevalence of more significant NASH, NASH with F2 or greater fibrosis. I published two papers, two prevalence papers, one in gastro in 2011 and one in J hepatology in 2021. So over that decade of difference, we've seen a rise in moderate to severe fibrosis of from like 1.9% to 6% in a cohort of patients. So we're beginning to see in real life play out what's happened in the modeling of disease progression and prevalence over time. And so on top of diagnosing more and beginning to spread the disease awareness news, we're seeing an increase in the prevalence of more disease as well.

So all in all, Andrea, I think this market is ready for NASH therapies. We're excited to be the lead horse at this point. If current timelines hit, resmetirom could be on the market 2 to 3 years ahead of any other products. So when you think about it all, I mean, again, we have to look at MAESTRO-NASH data, we expect it to be positive. If resmetirom is the first drug to the market, it could be the backbone of NASH treatment, considering it has a 2 to 3 years lead. So it's an exciting place to be.

Perfect. Remy, maybe just one follow-up to what you were just saying, how are you guys thinking about potential combination therapies at this point?

Maybe Dr. Harrison or Becky will want to elaborate on this. At this point, we are excited about the program, the way it's shaping up, the data that is shaping up. We see significant commercial potential for resmetirom as monotherapy. So no worries there. But I think as we look at some of the emerging data, we find that resmetirom actually provides additional efficacy or it works even better in patients that are on background therapy for type 2 diabetes. So in a way, that data is already pointing to beneficial effect of resmetirom on top of type 2 diabetes therapies. But maybe Dr. Harrison or Becky, do you want to elaborate further on that when it comes to the combo question?

Yeah, I would just simply say that we have been doing combos. I mean these are patients, NASH patients are on many, many drugs. More than half of them are diabetic, as Remy alluded to. And a significant fraction are taking drugs such as SGLT2 inhibitors or GLPs that cause some degree of weight loss. So they're on the stable background therapy that allows us to look at whether resmetirom has an enhanced effect in combination with those drugs. So those are some of the things that we will be - we've talked about a little bit in the past with our open-label study, but we'll also be talking about it from the MAESTRO-NAFL data set. Stephen, did you want to add any comments to that?

Well, just to say that, look, we understand that one size doesn't necessarily fit all. And ultimately, we want to get at as many patients as we can with this disease. And where we're able to combine therapies, we think there is a role, in my opinion, for a THR beta like Madrigal resmetirom to be a backbone drug. But it doesn't mean we can't continue to look at synergistic benefit. And to me, the ideal NASH drug is one that's oral, it's well tolerated, it's safe. It can be given for the long haul. And not only does it have histopathologic benefit on NASH resolution and fibrosis improvement, but you also get after the extrahepatic manifestations of disease, the atherogenic lipids, the glycemic control, the lipotoxic fat, and all those are critically important. So where we're able to leverage the benefit of resmetirom targeting the majority of what I just mentioned and augment that a little bit, as Becky mentioned, with potentially diabetic therapy that are - we've already shown synergistic effects with relative to some of the outcomes we're looking for. I think that's important. It doesn't mean that there aren't other combinations that might work well together, but just taking it one step at a time. First, figure out how effective your drug is, how effective is resmetirom, we'll know that from the data that we're generating in MAESTRO-NAFLD-1, MAESTRO-NASH and MAESTRO-NASH outcomes as well as open-label extension of the MAESTRO-NAFLD-1 trial. Huge amounts of data being generated to really get at what is the foundational answer, what can resmetirom do by itself and then begin to look at iterative steps to improve.

Thanks, everyone.

Thank you. Our last question from Liisa Bayko with Evercore ISI. Your line is open.

Hi. Thanks for taking my question. Trials before I've looked at co-primary endpoints very similar to what you're looking at. Why the change now? Is there anything in the - that you've observed in the NAFL to MAESTRO-NAFLD-1 study that makes you more or less confident around NASH resolution and fibrosis? And then do you expect these - I guess, you're going to have alignment between FDA and EMA and any power changes? How does it affect powering and whatnot that you have kind of now two shots on goal?

Yes. So I think one of the kind of little confusing words is the word co-primary versus dual primary. A co-primary means you have to make both primary endpoints. This is not what this is. Obviously, we are going to evaluate the percentage of patients that achieve both fibrosis reduction in NASH resolution, but that's not the endpoint. So this is dual primaries. And if either endpoint is achieved - private endpoint is achieved, then there is an opportunity to submit for approval. We made a decision on including this endpoint quite a while ago when we believe based on our data and from the Phase 2 data and from the continuing data that we've seen that resmetirom is lowering fibrosis biomarkers. We know in biomarkers and fibrosis on biopsy. And we've discussed many times that the Phase 2 study was not powered, there weren't a sufficient number of patients to observe the fibrosis endpoint. There was an increase in fibrosis responders, particularly actually on both AI technologies. And so we believe that the fibrosis endpoint will be achieved in the Phase 3, and this gives us an opportunity to evaluate both endpoints.

So Liisa, what I would just add is while we're not going to get into details of our SAP, we have gained statistical power by virtue of committing to the second outcome study, which makes the alpha situation for having a second primary pretty much a wash. So it's entirely logical to move fibrosis up into a primary endpoint slot based on the power that we've gained by virtue of doing the second study.

Okay. And then just a commercial question for Remy. I think investors have been asking a lot about sort of the kind of fusion of the obesity market, with the NASH market and kind of the rising use of GLP-1s and interest there? And can you maybe talk about how these markets may kind of overlap? Or what increase use of GLP-1 and any influence of that on the opportunity for resmetirom and NASH? Thanks.

Yeah. Yeah, I think the answer is similar to the sort of question and the answer we gave around combo therapies. So with the current sort of treatment paradigm for type 2 diabetes and obesity, when we talk to the treaters, there's very high unmet need. So I mean it's one of those things, physicians are actively waiting for NASH-specific drugs, drugs that work in the liver that are approved by the FDA. So are patients going to be on background therapy for type 2 diabetes and obesity by the time resmetirom launches? The answer is yes. But the attractiveness, the commercial potential is not diminished by any of that. And also remember, I mean, NASH as far as unmet need and patients the size of the population, I mean, it's going to support multiple drugs. And we really got to think about different solutions for different patients, but being a lead horse, being the first to market in a high unmet need market across the continuum of NASH seems like as far as our Phase 3 trials. It's a good place to be.

So what I would add to that is we have a significant number of patients who are on stable doses of SGLT2s and GLP-1s in the MAESTRO-NASH study, which means that on biopsy after being on the drug for six months or more that they still had NASH. So we have to see ultimately what those drugs show in their own Phase 3 studies. But that doesn't, in any way, go against what Remy just said about the commercial opportunity in any event.

Excellent. Thank you so much.

Thank you. I would now like to turn the call back over to Dr. Friedman for closing remarks.

Okay. Thanks. I want to first thank Dr. Harrison for spending some time with us today. This is a pivotal time for Madrigal, and I'm pleased with the progress that we've made. Our clinical development program continues to advance with the multiple data presentations at EASL, followed by top line results for the biopsy study in the fourth quarter. The new outcomes trial we announced today further strengthens the program, we think both clinically and commercially. And we're in a strong financial position for the road ahead. So I want to thank all of you for tuning in today, and we look forward to seeing many of you in London for the EASL meeting.

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