Good morning, and thank you for standing by. Welcome to the Madrigal Pharmaceuticals Third Quarter 2025 Earnings Conference Call. As a reminder, today's conference call is being recorded. I'd now like to introduce Ms. Tina Ventura, Chief Investor Relations Officer. Please go ahead.

Thanks, Marvin. Good morning, everyone, and thank you for joining us to discuss Madrigal's third quarter 2025 earnings. We issued a press release this morning and posted a slide deck that accompanies this webcast on the Investor Relations section of our website. On the call with me today is Bill Sibold, Chief Executive Officer; Dave Soergel, Chief Medical Officer; and Mardi Dier, Chief Financial Officer. They will provide prepared remarks, and then we'll take your questions. Please note on Slide 2, we will be making certain forward-looking statements today. We refer you to our SEC filings for a discussion of the risks that may cause actual results to differ from the forward-looking statements. With that, I will now turn the call over to Bill.

Thanks, Tina. Good morning, and thanks for joining us. We have delivered another excellent quarter as we continue to execute on our strategic priorities. We're maximizing the value of Rezdiffra and building our pipeline, which sets us up for continued value creation. Rezdiffra is quickly becoming one of the most successful specialty launches in the industry with sales now annualizing at greater than $1 billion in only its sixth quarter of launch. More than 29,500 patients are being treated with Rezdiffra and more than 10,000 healthcare providers have prescribed it. We've made great progress on our 2026 payer contracting strategy for first-line access. Our new U.S. Rezdiffra patent was listed in the orange book. It extends Rezdiffra's value into 2045. And we're expanding globally with our launch in Germany following European approval. On the pipeline front, we're advancing our Phase III MAESTRO-NASH outcomes trial in F4c, where we could once again be first to market this time for compensated MASH cirrhosis. We look forward to sharing more from our F4c open-label cohort at AASLD later this week. We're executing on our Rezdiffra combination strategy, where we completed the transaction of our new oral GLP-1, and we continue to evaluate opportunities to add additional assets to our pipeline through business development. So today, we'll focus on our 2 key priorities, our top line and our pipeline. Starting with Rezdiffra's third quarter performance on Slide 4, we delivered net sales of $287 million, up 35% quarter-over-quarter. The significant demand we're generating is driven by the positive response to Rezdiffra from prescribers and patients and the strong execution by our team. As shown on Slide 5, we ended the third quarter with more than 29,500 patients on Rezdiffra, up from more than 23,000 patients at the end of the second quarter. This number represents patients actively on therapy accounting for any discontinuations. As we've discussed since the beginning of our launch, we've been steadily adding patients each quarter, and we expect that to continue going forward. It's incredibly gratifying to see Rezdiffra already making a meaningful difference for so many patients. But what's most exciting is that we've only just begun. More than 90% of our 315,000 target population remains untreated. That leaves tremendous room for growth driven by Rezdiffra's highly differentiated profile and our clear first-mover advantage. Moving to Slide 6 and our continued progress on physician penetration. As I've said before, building a strong prescriber base early in the launch is one of the best indicators of long-term success. That's why the pace of adoption has been so encouraging. This quarter, we hit another launch milestone, more than 10,000 prescribers. This breadth achieved this quickly is at the high end of the benchmarks we track, and it reflects the work we've done to wire the system. Looking ahead, our focus will increasingly shift to depth. This metric is already tracking at the high end of best-in-class launches. We're also continuing to enhance our targeting. While our efforts have mostly centered on hepatologists and gastroenterologists, we're seeing growing interest from endocrinologists. These are specialists with a deep expertise in metabolic health who are interested in Rezdiffra's mechanism and its potential in MASH. In response, we've expanded our field team to further target this group. These efforts substantially started in the fourth quarter. On Slide 7, let's take a look at how we see the MASH market evolving. We see clear parallels between MASH and other large chronic disease markets like IBD, rheumatoid arthritis, and psoriasis. Each of these evolved into multibillion-dollar categories through continuous innovation driven by new mechanisms and tailored treatment regimens that address diverse patient needs. We believe MASH will follow that same path. Today, this market is still in its early stages, essentially where those categories were 2 decades ago, but with one important difference: Rezdiffra's profile. As an effective liver-directed well-tolerated oral medicine, it far surpasses that of the other first-to-market products in those diseases. We believe this gives us a durable advantage and a unique opportunity to lead and shape the market's evolution, first with Rezdiffra and next with the pipeline we are building. So, we welcome new entrants to this evolving market. Wegovy's recent approval in MASH adds momentum to a market that's just starting to take shape. As seen on Slide 8, our focus remains on the 315,000 diagnosed patients with moderate to advanced fibrosis. Novo is targeting a much larger population, which will raise awareness and drive more screening, diagnosis, and treatment. As a reminder, GLP-1s aren't new. They have been available for over a decade and are already used to treat the metabolic comorbidities that oftentimes accompany MASH. As we've reported, about 50% of Rezdiffra patients are currently on or have previously been on a GLP-1. We also understand the limitations of GLP-1 monotherapy in MASH. Few patients reach and sustain a therapeutic dose and tolerability remains a real challenge. Real-world data show that 70% of obese patients discontinue within 1 year. New data to be presented at AASLD show similar discontinuation rates in patients with MASLD. So, looking ahead, we expect Rezdiffra to benefit in 2 ways: as first-line therapy in a market that will expand and from the high real-world discontinuation rates of GLP-1s. We're in a strong position and are confident in Rezdiffra's growth potential going forward. As we've already mentioned, it's Rezdiffra's best-in-class profile that gives us such strong confidence as summarized on Slide 9. It is a liver-directed medicine that delivers consistent efficacy across F2/F3 fibrosis, BMI, genetic makeup in patient subtypes, including those with type 2 diabetes who comprise approximately 60% of the MASH population. It's also simple to use. It's a once-daily, well-tolerated pill with no titration requirements. That simplicity matters to providers, to patients, and ultimately to adherence. We continue to see strong adherence consistent with other well-tolerated oral therapies. The seriousness of MASH and Rezdiffra's compelling profile continue to resonate with payers. Our objective is to provide first-line access to patients, preserving treatment choice for patients and providers, and we're pleased to share an update on Slide 10. We're making great progress with our payer negotiations for 2026, which to date have resulted in contracts for broad first-line access, no step edit requirements and improvements in utilization management criteria that are better aligned with clinical practice. Overall, the dialogue has been collaborative and productive and discussions are progressing really well. Payers understand the seriousness of the disease, the unique clinical value of Rezdiffra, and the importance of access and choice for patients and providers. We've already achieved favorable outcomes with several national payers, while continuing constructive dialogue with others. We're encouraged by the progress and expect contracts to be finalized by the end of the year, covering the vast majority of commercial lives. Gross to net management remains a core component of our strategy and guides how we approach payer contracting. We started contracting in April of this year. And as we've said, it wasn't everywhere and wasn't all at once. In fact, through the third quarter, contracting had a minimal impact on gross to net, reflecting our disciplined approach. Now that we expect to have payer contracts finalized in the fourth quarter for either an immediate or a January 1 implementation, we expect the fourth quarter gross to net to be at the midpoint of the 20% to 30% range we had previously discussed. Starting in the first quarter and continuing throughout 2026, we expect our gross to net impact to be in the high 30% range, which is consistent with other innovative multibillion-dollar specialty medicines. So objectively, we're in a great position. We are executing on one of the most successful specialty launches in the industry, with less than 10% of our target market treated, the growth opportunity ahead is substantial. We have taken a thoughtful approach to contracting, which provides for outstanding patient access and durable long-term growth. In short, this strategy paves our path to peak sales. Beyond the U.S., we are expanding access to Rezdiffra as shown on Slide 11. We're taking a focused country-by-country approach in Europe and launched in Germany at the end of September. Just like in the U.S., the team is wiring the system for a first-in-disease launch. This requires educating physicians on the risks of MASH and the urgency to treat. We are also driving change in clinical practice to develop processes for patient identification, diagnosis, and use of noninvasive tests. This work happens practice by practice to help develop the infrastructure for sustained adoption. The team is off to a great start, and we anticipate our efforts will start to make an impact in 2026. Now I'll turn it to Dave to discuss the second pillar of our strategy, expanding our pipeline to extend our leadership and build long-term value. Dave?

Thanks, Bill. It's an incredibly exciting time to be at Madrigal. Over the past 6 months, I've had the opportunity to work closely with this exceptional team. And the more I dug into our programs, the more energized I've become about what we're building. We're not just advancing a pipeline, we're laying the foundation to transform how MASH is treated. As shown on Slide 12, we already have a robust clinical program for Rezdiffra. Our Phase III MAESTRO-NASH outcomes trial in compensated NASH cirrhosis or F4c is expected to read out in 2027. Positive results could make Rezdiffra the first approved therapy for F4c and support full approval in F2/F3. Our ongoing Phase III MAESTRO-NASH trial in F2/F3 MASH is expected to read out in 2028 and would also support full FDA approval. Beyond Rezdiffra, we're building a pipeline through our business development efforts. To date, we've added an oral GLP-1 now called MGL-2086, which we intend to develop in combination with resmetirom to deliver a best-in-disease, well-tolerated oral combination. As we think about how to build our pipeline further, we're looking for mechanisms that fit scientifically, strategically, and commercially, those with complementary biology and combination potential. Continued success in treating patients will come from combining mechanisms and tailoring treatment regimens to specific risk factors, much like what we've seen in other chronic complex diseases. With Rezdiffra's patent protection into 2045, we can be thoughtful and disciplined and build the right kind of pipeline that will define the future of MASH care. The combination of our oral GLP-1 and THR beta agonist is a great example of this approach to building the pipeline. For MAESTRO-NASH, we know that even a modest amount of weight loss enhances resmetirom's efficacy. So unlike incretin monotherapies that strive for double-digit weight loss, we've seen that as little as 5% weight loss can enhance Rezdiffra's efficacy in MASH. This will allow us to dose escalate the MGL-2086 component of the combination with the goal of optimizing both efficacy and tolerability in a once-daily oral pill. It is also important to note that with the combination, patients would be on an effective dose of resmetirom on day 1 as the MGL-2086 dose is being adjusted in contrast to injectable incretin monotherapies that require a lengthy titration period. On Slide 13, we see how these mechanisms could work well together. GLP-1 works from the outside in, improving systemic metabolism, insulin sensitivity, and weight loss. Rezdiffra works from the inside out, reversing hypothyroidism in the liver, restoring mitochondrial function, and increasing fat processing through beta-oxidation. The combined mechanisms lead to lower levels of inflammation and inhibition of stellate cell activation and downstream fibrosis. By combining these complementary mechanisms, we expect to see greater reductions in both liver fat and fibrosis. We plan to start a Phase I trial for MGL-2086 in the first half of next year. Next, let's move to our Phase III MAESTRO-NASH outcomes trial in compensated MASH cirrhosis or F4c on Slide 14. People living with F4c MASH today have no effective treatment options that prevent progression of their disease to decompensated cirrhosis. Our 2-year open-label extension data presented at EASL earlier this year demonstrates sustained efficacy of Rezdiffra in this population and supports our confidence in the ongoing MAESTRO-NASH outcomes trial. Knee liver stiffness decreased by 6.7 kilopascals at 2 years, a statistically significant reduction from baseline. More than half the patients achieved at least a 25% reduction in liver stiffness, a level tied to improved outcomes. And 65% of patients with clinically significant portal hypertension or CSPH, at baseline moved to a lower risk category by year 2. CSPH is a key driver of the most severe outcomes of cirrhosis and marks the tipping point into decompensated disease. Improvement in CSPH suggests Rezdiffra could delay or even prevent life-threatening complications. We'll be presenting new data from this 2-year open-label F4c cohort at AASLD later this week, as noted on Slide 15. And what I'm really excited about is that this data shows promising efficacy in even the most advanced F4c patients who are on the cusp of progressing to liver decompensation. This is the first time any data will be shown in such a severe population, which gives us additional confidence in our outcomes trial. Also at AASLD from our Phase III MAESTRO NAFLD-1 trial, we'll highlight how F2/F3 patients progress when Rezdiffra treatment is interrupted, demonstrating the importance of staying on therapy. We'll also share multiple posters that examine early real-world experience with Rezdiffra and the burden of uncontrolled MASH across health systems. In total, MASH will have 15 abstracts, including 2 oral presentations and 2 posters of distinction. With that, I'll hand over to Mardi.

Yes. Thank you, Dave. Turning to Slide 16 and a summary of our financials. Third quarter 2025 net sales totaled $287.3 million, up 35% from the second quarter of 2025. This was another strong demand quarter. As Bill mentioned, we're making great progress with our contracting discussions for continued broad first-line access to Rezdiffra in 2026, with no step-through requirements and improved utilization management criteria. As a reminder, there are several components to gross to net, including commercial rebates, government rebates, co-pay assistance costs, and channel distribution costs. Across the board, the team has done an exceptional job managing these dynamics, and we're seeing minimal impact through the third quarter of this year. As certain contracts take effect in the fourth quarter, we anticipate a step-up in the gross to net impact to the midpoint of our 20% to 30% range, resulting in a full year average near the low end of that range, a great outcome for 2025. Looking ahead to 2026, we expect the full effect of our payer agreements to begin January 1, bringing our total gross to net impact into the high 30% range, consistent with specialty medicine analogs. As noted, we are confident that we will continue to steadily add Rezdiffra patients, and we expect robust net sales growth for Rezdiffra in 2026 and beyond. R&D expenses for the third quarter of 2025 were $174 million compared to $68.7 million in the third quarter of 2024. The increase was primarily due to the one-time $117 million expense associated with the global licensing agreement for MGL-2086. This was expensed in the third quarter and will impact fourth quarter cash flows. SG&A expenses for the third quarter of 2025 were $209.1 million compared to $107.6 million in the third quarter of 2024. The increase primarily reflects the annualization of higher commercial investment to support the Rezdiffra launch. Looking ahead, we expect fourth quarter R&D expenses to be modestly higher than third quarter levels, excluding the third quarter one-time expense for our oral GLP-1 and expect fourth quarter SG&A expenses to continue to increase quarter-over-quarter as we continue to support the launch of Rezdiffra. Turning to our balance sheet. We ended the third quarter of 2025 with $1.1 billion in cash, cash equivalents, restricted cash, and marketable securities. The increase reflects the $350 million initial term loan under our senior secured credit facility, a portion of which was used to repay all outstanding obligations under the Hercules loan facility, offset by the funding of operations. With this strong cash position, we continue to be well resourced to support the ongoing launch of Rezdiffra and advance multiple pipeline programs. With that, on Slide 17, let me briefly recap our third quarter progress where we remain focused on our top line and our pipeline. We are driving strong performance in our sixth quarter of our launch with Rezdiffra now annualizing over $1 billion in net sales and expect continued strong growth in 2026 and beyond. More than 29,500 patients are on therapy, and we expect to continue to steadily add patients going forward. We've reached another major launch milestone with greater than 10,000 prescribers. Our payer discussions are progressing very well, and we expect continued strong access for patients in 2026, and we're working to further expand our pipeline to solidify our leadership in F2 to F4c MASH. And now I'll turn the call back over to Tina and open up the Q&A session.

Thanks, Mardi. Let's move into the Q&A portion of the call. Marvin, please go ahead and provide instructions for the Q&A session.

Our first question comes from the line of Yasmeen Rahimi of Piper Sandler.

Congrats to a great quarter. Team, with AASLD right around the corner, would love to learn sort of how this 2-year data, especially the NIT-driven responses could further derisk MAESTRO-NASH outcome, which is reading out in 2028? And also maybe also some color on what visibility do you guys get in terms of that it's on track based on event rates to come in at that time point? And I'll jump back in the queue.

Yes. Thanks for the call. And look, we're really, really excited about AASLD. I'll tell you, we're just coming off of the ACG meeting in Phoenix. I guess it was just last week. And what a difference a year makes when you think about the progress that we've made with the gastroenterologists. I mean a year ago, people didn't know about NITs. They were still putting their pathways in place. And now we're seeing that Rezdiffra has really moved to being the foundational therapy standard of care with that audience and a lot of positive feedback. So, we're headed into the Super Bowl this week with AASLD. We're really excited about it. We have a lot going on. But maybe, Dave, do you want to provide a little bit of context around some of the data and so forth?

Yes. I think your question, yes, had to do with the data that we're reading out at AASLD and how it reflects on MAESTRO outcomes. Is that correct?

That's correct.

Okay. Great. Yes. So, as we presented at EASL and as we showed in the presentation, we have an open-label cohort of individuals from the MAESTRO NAFLD study where we've been able to show sustained efficacy of Rezdiffra in this cohort, both on liver stiffness and on a variety of biomarkers, including LFTs and so forth. So, at AASLD, we're looking more deeply into this cohort and examining some of the more severe patients within this cohort and understanding whether Rezdiffra's efficacy in this group as well. And what we see is really exciting and gives us a lot of confidence about, about MAESTRO outcomes. And so the reason why this is important is because when you think about MAESTRO outcomes and you think about this open-label cohort, the patient populations are really very similar. So, the baseline characteristics are similar. And so when we see efficacy in the open-label group, it gives us evidence and a lot of confidence that the outcomes trial will end up being positive as well.

Our next question comes from the line of Jay Olson of Oppenheimer.

Congrats on the quarter. Can you talk about the pros and cons of combining resmetirom with MGL-2086 versus some other oral GLP-1 like orforglipron? And then any other potential mechanisms beyond GLP-1 that might be synergistic with resmetirom?

Jay, thanks for the question. Just for clarification as well, our oral GLP-1 is an orforglipron derivative. So, we were very, very specific in the criteria that we had for selecting an oral GLP-1, and we wanted to be in an orforglipron derivative. But maybe, Dave, do you want to talk a little bit about it and a little bit about the future mechanisms and just how we're thinking in general about potential combinations?

Yes. So, I mean first, the GLP-1 mechanism and why one would combine resmetirom with the GLP-1. So, what we know from MAESTRO-NASH from the 52-week experience in MAESTRO-NASH is just a little bit of weight loss enhances resmetirom's efficacy. So, we see better antifibrotic effects with resmetirom in people who lose as little as 5% of their body weight. So, it's a natural sort of extension of that to consider combining with the GLP-1 that can produce a bit of weight loss, have some metabolic benefits and enhance resmetirom's efficacy in a fixed-dose combination. So that's the rationale for combining with the GLP-1. But your point is a great one. There are other mechanisms that may also be attractive to combine resmetirom with. And there are multiple pathways in this very complex disease of MASH that lead to hepatic steatosis, fibrosis, and ultimately poor outcomes in patients. So, as we've said before, we're looking at pretty much every mechanism of action to potentially combine with resmetirom where there's a good scientific rationale for it and where we believe that the combined efficacy is going to be an advantage to patients. So, we're casting the net wide, and we're looking for the best opportunities.

Yes, Jay, and just also a little context as well here. With the IP to 2045, that gives us time to really thoughtfully think about building this pipeline. We're not in a rush just to try to fix a problem of a pending patent cliff. We can thoughtfully think about building a franchise that's durable because starting with the 2045 IP for Rezdiffra. Thanks for the question.

Our next question comes from the line of Michael DiFiore of Evercore ISI.

Congrats on the continued progress. Just 2 quick ones for me. In light of the recent M&A in the space, I would love to get your thoughts on Madrigal's future competitive positioning and market access once large pharma inevitably bundles their MASH assets, if approved. And the second question I have is just any thoughts on Sagimet's plans for testing denifanstat with Rezdiffra. I realize your priority is focusing on the combination therapy with your own GLP-1, but would Madrigal be open in principle to combinations such as this? Or is this just too early at this stage?

Thank you for the question, Mike. To start, we are not aware of what Sagimet is planning as we haven't had any discussions with them. Therefore, we can't comment on potential combinations or their viability. The recent mergers and acquisitions validate the MASH market for us. We've noted developments in areas like IBD, RA, and psoriasis indicating a market exists and represents an attractive opportunity. Companies showcasing market potential seem to spur investments in innovation and new products, which we believe will also occur in MASH, where we aim to take the lead. The actions of major pharmaceutical companies pursuing FGF21 reinforce this view, and we're optimistic because it suggests increased focus on this area, ultimately resulting in more diagnoses and treatments. Given Rezdiffra's profile, we believe we are in a favorable position. In formulating our market access strategy, we adopted a long-term perspective that began when we announced the product's approval, extending toward 2045 when Rezdiffra’s intellectual property expires. We anticipate building our pipeline with additional products entering the market. Thus, our approach has been carefully planned to maximize value for Rezdiffra and our future franchise. As for F4c, we're enthusiastic about the data we've collected and are confident about our outcomes in the MAESTRO-NASH study, which we expect to read out in 2027. Since this is an event-driven study, we look forward to its results. From a competitive standpoint, we believe our data will position us as leaders not only in F2 and F3 but also as we move from F2 to F4c. Our strategy is carefully considered, focusing on long-term growth, pipeline development, and community engagement. To be clear, our aim is not short-term leadership but sustained long-term leadership in the MASH market.

Our next question comes from the line of Akash Tewari of Jefferies.

We are receiving feedback that Rezdiffra's adherence rate is significantly higher than the 40% to 60% range your team mentioned for drugs in this category, likely exceeding 80%. Can you confirm this? Additionally, how should we view Rezdiffra's net pricing? I know you've mentioned that GLP-1 products are experiencing mid-single-digit net price declines annually. Is this also the case for Rezdiffra, or can we expect stable net pricing when you reach the high 30s gross to net range next year?

Thank you for the question, Akash. Regarding adherence, we previously stated that the one-year adherence rate for well-tolerated oral medications is in the 60% to 70% range. This assessment remains unchanged. Currently, only a limited number of patients have reached the one-year mark, similar to those for well-tolerated orals. We've received highly positive feedback from many clinicians treating patients who are demonstrating strong adherence, which is encouraging and aligns with our expectations based on the product's profile. As for gross to net expectations, looking ahead, we anticipate that gross to net will only trend downward. After 2026, we will no longer experience the 0 to contracting effect. We are preparing for contracting as we approach 2027 Medicare, and there is some existing Medicare coverage for 2026. Therefore, a future decline in gross to net is expected, as is typical. However, the transition from 0 to contracting as we enter 2026 presents a unique situation. We're optimistic about our position. Our strategy aims for broad first-line access without step edits and enhanced utilization management criteria, which we are successfully implementing. We are very excited about where we are heading into 2026. In my experience, I believe we are in an outstanding position for a product of this nature at this stage of its launch. In fact, I would argue that we have the best market access criteria I've seen compared to any previous launches I’ve been involved with.

Our next question comes from the line of Thomas Smith of Leerink Partners.

And let me add my congrats on the really strong quarter. Another one on coverage. I appreciate the high-level comments here on the payer contracting efforts, I think everyone saw the recent Aetna formulary coverage decision. Could you just comment specifically on that and the potential impact of noncovered decisions? And then any comments on kind of where you are with respect to the contracting for commercial lives next year? Is there an explicit goal or expectation for what percent of commercial lives you think will continue to have that broad first-line access to Rezdiffra for 2026?

Yes. Thanks, Tom. Maybe I'll start there. Look, we're expecting broad commercial life coverage. So, we feel really good about that at this point. As it relates to Aetna, let me start with Rezdiffra wasn't on formulary in 2025, and it's not again in 2026. So that is really no change. So, we don't expect to see a meaningful impact here. It will be available through prior authorization or medical exception. And so that's not a practical change in access for patients. And our Madrigal patient support team are really experts at helping patients navigate and helping practices navigate through that. So yes, no change, no effect.

Our next question comes from the line of Andrea Newkirk of Goldman Sachs.

Bill, recognizing it's still early here, but just curious if you've observed any signs of Novo's marketing campaign broadening the pool of addressable patients to date. Do you still believe that 315,000 patients is the accurate number for Rezdiffra's target population? And then, Mardi, if I can just ask quickly, just in the context of the successful launch that you've seen to date, how are you thinking about the path to profitability from here?

Thanks, Andrea. This is the first quarter we’ve had Novo on the market, and we have been steadily adding patients. By all accounts, we had an outstanding quarter. Three months in, we haven't observed much yet. They seem to be working on educating primary care physicians and encouraging diagnoses, which we believe benefits patients in the market. We are beginning to hear some anecdotal reports from practices about an increase in referrals, but it's still too early to determine if there will be notable growth as the year progresses. We'll conduct a more thorough analysis and report real growth rates later. Regarding the 315,000 diagnosed patients among the 14,000 targeted prescribers, it's important to remember that some patients on Rezdiffra are newly diagnosed and not included in that number. The current diagnosis rate remains relatively low, initially around 10%, indicating there are more patients to reach. We’re excited about having another party contributing to increasing diagnoses, as it has not been a primary focus for us. However, with a partner needing millions of diagnosed patients, it ultimately supports our efforts. That's why we mentioned that the 315,000 is our base, along with the increased diagnoses and patients who may switch to us due to challenges with a new competitor. It’s still early to quantify these developments, but we see signs of additional growth. We have limited information on Novo’s activities, but they are clearly present and starting to drive more diagnoses.

Great. Yes, go ahead. Thanks, Andrea, for the question about the path to profitability. Our focus right now and into 2026 is on driving our top line and building out our pipeline, as Dave described. That will be our focus going forward. It doesn't mean that profitability won't happen at some point, but we are concentrating on the top line, enhancing our R&D, and continuing to strengthen our leadership in MASH.

Our next question comes from the line of Andy Chen of Wolfe Research.

It's Emma on for Andy. Rezdiffra uptake has been strong so far, and you mentioned the strong 60% to 70% adherence rate. I know it's still very early days in the launch, but I guess how do these dynamics inform your view of the drug's chronic use potential and just steady-state demand over the long term?

Thank you, Emma. I believe this is where we excel. We have a once-a-day pill that is well tolerated, and some feedback indicates very high adherence rates. Therefore, we are confident that this can serve as a long-term chronic therapy. This is one of the most exciting aspects of Rezdiffra. Compared to other categories that have grown into multibillion-dollar sectors, the initial profiles of launching products were often problematic. They were not oral medications and had tolerability and sometimes safety concerns. We feel we possess what I consider a highly advantageous profile, which is where we excel in this category. Ultimately, profiles are crucial. This product is specifically designed for chronic use, so we feel very positive about it.

Can I just add on one thing? The other part that also, of course, matters is sustained efficacy. And I think what we're showing at AASLD gives us a lot of confidence in the sustained efficacy of resmetirom in this group. And in fact, what we show in the F2/F3 population is that if you come off of therapy, you have reversion of your disease, which is, of course, a big challenge. So, I think those 2 facets, both the efficacy, sustained efficacy and the sustained tolerability are 2 big.

Our next question comes from the line of Ritu Baral of TD Cowen.

I wanted to ask, well, 1.5 questions. One on this growth forward given the 2 strategies, Bill, that you outlined, one, sales force expansion and marketing to the endocrinologists. But at the same time, you mentioned that you want depth in the going-forward marketing strategy. So, can you help us reconcile the 2 and what sort of metrics and current targets for depth that you hope to report and how GLP-1s figure into all this? And this is a very quick e-mail that we've been getting from clients. We're having a problem sort of stretching the patient numbers with the revenue numbers. Are there any elements to either stocking or Europe or some other aspect of those numbers that need to be addressed in our models to reconcile everything reported this morning?

For the quarter, U.S. demand was the main factor driving our success, unrelated to inventory or Europe. Regarding future growth and our expansion into endocrinology, we have the capability to manage multiple initiatives simultaneously. We need to keep planning for the future, as we have significant IP opportunities ahead. We're assessing where to focus our efforts and where to explore new possibilities. Over the past decade, we have been monitoring a range of successful specialty product launches, and we've performed well on several metrics. In terms of breadth, we're doing great, but it's also essential to deepen our prescribing base. We currently have over 10,000 prescribers, which is a good starting point, and now we aim to engage more deeply with core physicians such as gastroenterologists and hepatologists. We've also identified additional endocrinologists interested in learning about Rezdiffra, warranting a dedicated team to pursue this opportunity. Although the number of additional physicians is small, it's manageable with focused effort. It's noteworthy that even in the presence of GLP-1s, prescribers still see a need for Rezdiffra, indicating that GLP-1s aren’t the complete solution for MASH. We believe there's potential here, but we must recognize that many endocrinologists are not yet familiar with NITs, which means it will take time for them to catch up to where gastroenterologists and hepatologists are currently positioned. Nevertheless, we believe this focus is worth the investment of our resources for future growth.

Our next question comes from the line of Jon Wolleben with Citizens.

Bill, wondering if you could comment a little bit as we look down the road at expected GLP price erosion how that might affect access and payer decisions for Rezdiffra?

Thanks, Jon. Looking back at our comments from the January call, we anticipated being in the high 30% range, despite the rapid erosion of gross to net for GLP-1s. We believe we are well positioned for the future, though gross to net tends to decline over time. It's important to start with the issue we're addressing, which is the high cost of this disease. ICER recently reviewed several products and has highlighted Rezdiffra as a cost-effective option that mitigates the significant expenses associated with untreated conditions. It's clear that payers recognize the gravity of this expensive disease, and the system is beginning to understand it as well. There will always be products with varying price points within this category. We've observed considerable variability in prices for IBD, RA, and psoriasis medications. However, multiple treatments are necessary, as different mechanisms are required to tackle the issue effectively. Our independent third-party analysis from ICER has demonstrated the cost-effectiveness of Rezdiffra on two occasions now.

Our next question comes from the line of Prakhar Agrawal of Cantor Fitzgerald.

And congrats on another strong quarter. So, appreciate the clarity on the gross to net for 4Q and 2026. But maybe if you can talk about your expectations for 4Q growth and comfort around 2026 consensus estimates with this set? And maybe second question, what percentage of Rezdiffra volume currently is Medicare? And how are you thinking about the implications of semaglutide IRA pricing decision on the long-term prospects for that channel?

Great. So let me give you the quick answer on what the distribution is. We're anticipating it's 50% to 55% commercial, 30% to 35% Medicare, and then about 10% Medicaid and other. Remember, we're currently at less than 10% penetration, so that's going to evolve a little bit over time, but we're staying in that range for now. Maybe, Mardi, would you like to discuss Q4?

Yes, absolutely. Hi, Prakhar, thank you for your question. We have experienced a strong fourth quarter in 2025 so far, and we anticipate that our patient additions will continue, which is a key driver for our business. We don't expect any changes in this regard. We entered the third quarter with a very high revenue base driven by patient demand, and there was some favorable movement in our gross to net figures, particularly during this high demand quarter from an inventory perspective. We are in a solid position. However, as we head into the fourth quarter, we need to consider that there are fewer selling days, and we will start to see the impact of commercial rebating in the fourth quarter. Thus, we expect to be at the midpoint of the 20% to 30% range. Overall, we anticipate high single-digit growth quarter-over-quarter going into the fourth quarter, but it should still be a very strong quarter. Additionally, we are on track for a revenue run rate exceeding $1 billion, which is fantastic.

And Prakhar, maybe just one comment there as well. I think more and more the measure turns to patients and patients being treated. And as you can see, we are doing really, really great in our steadily adding patients, and that's something that is going to, we've said, remain to be steadily adding in the future and feel really, really great. Again, where we are, it's less than 10% penetration. There's a ton of patients that are out there that still need to be treated, and that represents a great opportunity for us.

Yes. I wanted to return to 2026 as Prakhar mentioned. Everything Bill just talked about regarding the steady addition of patients will continue into 2026. We anticipate robust net sales growth that year. However, consider the phasing. The impact of the gross to net changes will begin in January, right at the year's start, leading to an increase from the contracting, and we expect to be in the high 30s. Additionally, we will experience the usual Q1 effect. Thus, you'll notice some of this trend in 2026. Overall, we expect strong growth heading into 2026.

Our next question comes from the line of Srikripa Devarakonda of Truist Securities.

Congratulations on the quarter. Could you discuss the anticipated timeline for the EU launch and how that might contribute to growth in 2026? I understand that EU launches typically require time. Additionally, does the reported SG&A include the sales force in Europe? Should we expect a slight increase in SG&A over the coming months to account for the sales force operating in Europe?

Sure, I'll address the SG&A question first and then discuss the EU launch. The SG&A for our expansion in Germany is reflected in our SG&A expenses, and you will continue to see that. As we expand country by country, we plan to be very disciplined and aim for a positive contribution metric over a 2 to 3-year period for each country. Therefore, spending will increase in Europe, but we are cautious with each nation's rollout. Regarding the EU launch, we are starting in the third quarter, but we are primarily testing the channel, which we expect to generate only a minimal amount of revenue for 2025. We anticipate seeing some impact in 2026. The significant sales growth we project for 2026 will largely come from the U.S. as we add more patients. The situation in Europe will unfold more slowly as we need to build and configure the systems in each country, starting with Germany next year. It will contribute, but not substantially.

Yes, I think that's a really great comment. It is Germany right now, and we're really excited. First of all, we've hired an outstanding team there. The team is great. The feedback we're getting is that MASH needs to be treated. It's prevalent, very similar to the U.S. in that sense, but it takes time. You have to wire the system. It's practice by practice, prescriber by prescriber. We're taking all the steps in the usual next countries to look at as well. We've started putting teams in place that are evaluating the market and our launch strategy there. Again, we have an absolutely high-quality team in place. We feel really good about the long-term prospects, but we also know there's a lot of wiring to do and we have to navigate the reimbursement process in each country, which takes time, but we have a great team to do that.

Our next question comes from the line of Kaveri Pohlman of Clear Street.

Congrats on the progress. Are there any systemic differences or challenges in insurance approval rates for Rezdiffra depending on whether the prescription comes from an endocrinologist versus a hepatologist or gastroenterologist? And maybe just like a connected question to that. Besides the clinical data that you showed on Slide 14, is there any real-world evidence that you have collected or showing that Rezdiffra can prevent or delay the progression of F4 cirrhosis perhaps based on the feedback from its current use by physicians? In other words, is there like any evidence leading to the preference of Rezdiffra or GLP-1s in F2/ F3 MASH patient?

Yes, thank you for the question. To start, we're observing a growing amount of real-world evidence becoming available. Some of this will be showcased at AASLD this week and into next week. We anticipate that as more patients reach the 1-year mark and beyond, there will be additional insights. Anecdotally, we're receiving very positive feedback. When launching a product, the outcome in the real world is always uncertain despite having clinical data. So far, the anecdotal feedback from prescribers has been remarkably strong; they are noticing improvements in liver fat, fibrosis, and various other factors like LSTs and lipids. We are very enthusiastic about the emerging real-world evidence. We have also conducted analyses using claims databases, and there’s more information to come, but early signs are extremely promising. Regarding your first question, the specifics about utilization management criteria and who can prescribe vary from payer to payer. Generally, it involves specialists, particularly hepatologists and gastroenterologists, and in some instances, endocrinologists may also be included. Typically, a prescription requires either a specialist or consultation with one. However, this is not a consistent barrier across all plans. Our main focus currently is on specialists, as we believe Rezdiffra should be prescribed by them. Over time, this may evolve, but given the severity of the disease, we want specialists to gain experience with Rezdiffra in treating these patients before extending its use beyond that. We communicate this clearly to payers, and it is our intention.

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

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