Great. Well, first, I'd like to welcome Magical Pharmaceuticals, CEO Bill Seibold, CFO Marty Dreher, and CMO Dave Circle. Welcome to the Coleman Healthcare Conference. Maybe first, starting on the launch, can you give us an update of how it's progressing, some highlights from the last 12 months, and what investors should be looking for for the rest of the year?
Yeah, well, first of all, thanks for having us. It's always great to be at the conference. And, you know, it's always good when you have a conference like this to look back what's happened since the last time we were here. So when you look back over the last 12 months, it's been really quite a remarkable 12 months for us, transformational in many ways. We've continued to have a best-in-industry launch with RedsDifra over the last 12 months. We've seen that we are part of a market that is growing rapidly, and we're at the very beginning. We secured IP out to 2045, which is, again, allows us to think in the very long term about the evolution of the business. And because of the success that we've had, we've invested in a pipeline. So we now have over 10 things in the pipeline, and hopefully Dave can cover those. And so it was a very strong 25. And we've carried that momentum into 26. When you take a look at our first quarter, you know, Over 42,250 patients on ResDifera at the end of the first quarter, which, again, confirms our steadily adding patients. If you look back the last 12 months of launch, over $1.1 billion in sales, so already a blockbuster on the way to being a mega blockbuster. Market access is really exceptional. and, you know, penetration rate, we're still at a, if you look at the market that's growing from about 315 to 460,000 patients in a short period of time, we're still at about 10% penetration into that. So all very, very good prognosticators of the future. And when we look ahead towards the rest of the year, you know, it's really a focus on continued launch. Launch execution is really the key. The ability to perform with ResDifera really allows us to enact the rest of our strategy. So continued launch, new data readouts at meetings, new data generation initiatives so that we can continue to drive the science in the space. We'll have progress with the pipeline. Also, we continue to aggressively pursue new IP. So we would expect some additional IP around the F2F3 label that we got. And also, even in advance of a cirrhosis label, look for additional IP there. So, you know, stay tuned. But there's a lot that's going on with us. And I think, you know, 26 is shaping up to be a really, really strong year for us.
Great. Let's take a step back and go beyond 26. Can you give us some insight in your views on where Magical will be five years from now, putting everything into perspective, competition, market, and the company?
Yeah, look, I think that when I look across the industry and I look across even my career in the industry, you're hard-pressed to find an opportunity that is attractive as this. First of all, you have to start with the unmet need. This is a high unmet need disease. It's the number one cause of liver transplants for women in America, number two for men. soon to be number one. And it has been void of therapies forever. You know, over 23 programs had tried. They all failed. We were the first through. So you start with the market dynamics. You've got high met knee disease. You've got a healthy patient population. By that, I mean, by size. We talk about 315,000 in 2023 that were diagnosed in the practices that we were calling on. And in two years' time, that's grown to 460,000. So if you look at the prevalence number, people talk about millions. And if you take our 460 and say it's 10% diagnosis rate, you know, that gets you into that millions number right away. So you've got a market where there hadn't been a therapy, now there's a solution, and that provides in itself a good starting point. Then you look and you've got resdifera, which is, I like to describe it as the holy grail of profiles. once-a-day pill that's effective, safe, well-tolerated. That allows you to become this foundational therapy, which we can grow from. So we see that if you look ahead five years, treatment rates are going to go up because diagnosis rates have gone up. Penetration of ResDiffer, which is already a blockbuster, moves towards mega-blockbuster status. We have now over ten things in the pipeline, So we will have data readouts in the combinations, and, you know, we don't know which combination is going to be the one that is either adding even more efficacy to the whole population or to a subpopulation, but we have the tools now and the potential combos that can look for driving more efficacy. So we'll have readouts from that. And, you know, we've really put ourselves in a position, I think, to be looked at as not only the leading company in MASH, but somebody who has become a leading company in the industry because of what we've been able to do in this really growing market. So I think all of the – look, at the end of the day, we'll be a more valuable company. How much more valuable? I'm going to let you guys do your math on that. But all the prognosticators are exceptionally strong about this space.
Great. You mentioned the F2, F3 market of initially 315, grown to 460. Can you give a little bit more detail in terms of what drove the growth and your expectations from here?
You know, it's like any disease, the diagnosis rates tend to remain lower when you don't have a therapy. Because if I diagnose somebody, and these people, these patients tend to have multiple comorbidities and so what's the value of coding them for something else especially when there's no treatment so just by virtue of having a new therapy in the market it helps with diagnosis rates all of a sudden people are looking for it and then the professional societies start to write their guidelines which say you know on high suspicion you should be testing for mash and And then you have more of the diagnostics that are available, the NITs, whether they be liver stiffness measures or blood tests, et cetera, that become more ingrained. So you have all these things that help, and you have us as a company talking about it, and we've had competition come in the market. Really, I look at them more as an enabler rather than competition with Novo coming in, who've also created awareness, and you've got all the companies that have products in the pipeline. So it's this virtuous cycle, if you will, that because there's therapy and because there's more people talking about it, it just awareness lifts, and that's what we think has driven the 315 to 460. And, you know, we expect double-digit growth for the foreseeable future. I mean, this is a market that we truly believe is set up to grow for decades because it should mirror other large specialty markets that are all, you know, over $20 billion in annual sales with, you know, penetration rates that have continued to go up year after year for really tens of years. So we think this is going to be modeled after that.
Great. Continuing on commercial theme, you've, I believe your numbers are, you've reached 10,000 out of 14,000 approximately prescribers. Can you talk a little bit about the depth and breadth of prescribers today and what you expect on the forward?
Yeah, we, you know, 10,000, achieving 10,000 was the last, I think, number that we've provided. The reason being is that, you know, from my experience, getting over 10,000 prescribers is a real prognosticator for the future. You know, if you have that threat, it allows you to build the product that we're trying to build, which is a mega blockbuster. We've continued to add prescribers. You know, just to remind everyone, hepatologists and gastroenterologists were the initial focus. And in fourth quarter, we started with endocrinologists in a more concentrated way. So we're seeing scripts across all of these. You know, one of the things when you've got a new disease, when I say new disease, not a new disease, but a treatment for a disease so it gets you actually intervening with that disease, is it takes you time so that patients can be processed through the practice, and it takes a little time. So with the hepatologist, they were probably out first because it was a disease they were very familiar with. They had access to the NITs and the various tests. Gastroenterologists took them a little bit longer because they had to build their pathways. Sometimes they were adding staff, APPs, to help with the actual treatment, getting access to NITs, et cetera. And now with the endocrinologists, you know, they are essentially starting from where gastroenterology was two years ago. So they're going to go through that wiring of the system, if they will, for their own practice. So we're seeing pretty consistently across any of the specialties, you know, time corrected, so to speak, so when that specialty started. Similar behavior where they start with a patient, some patients, and then it grows over time. So we have established the breadth right now, which we think is necessary and can carry us a long way, and the focus more is on depth and having people just go deeper into their prescriber base. The good thing is that when we think about even the highest writers, they're nowhere near fully penetrated into their own practices, and patients are still being referred into those practices. So, you know, again, even on that front, we're at the very beginning.
Great. Maybe shifting gears a little bit to financials, you had mentioned on your quarterly call that gross to net was favorable compared to your expectations. Can you talk a little bit about, one, what's driving this, how that could impact the rest of 2026, and how to think about it for 27 and beyond?
Yeah, great. Thanks, Rob. As Bill said, you know, we are in excellent shape with respect to market access and growth to net in total. We take very seriously at the company and the team's done an excellent job managing growth to net to date. We also talked about in 2026 was the first time that we had our commercial contracting take effect in Q1. And the way the commercial contracting works, it remained in first-line access. We had improved utilization management criteria, et cetera. And we work really with the big three PBMs and establish those contracts. Thereafter, all the partner plans or downstream plans then will adopt the plans of the big three. And that takes some time. So what we said about growth to net going into 2026, that we did see some favorability in Q1, mainly because of the time of these downstreams coming on to the plan. So we saw some favorability there. And for the rest of 2027, then we believe that growth to net will be in that mid to high 30s range for the rest of the year, and Q1 was a little more favorable for everything I just mentioned. So we're in very good shape, excellent market access across the board. Now, going into 2027, 2025 to 2026 was really the big impact. That was our biggest step as we brought on the commercial contracting. In 2027, you will still see some impact on growth to net as we do Medicare contracting, et cetera, but the real big impact was in 2026 and we really haven't talked about specifics yet in 2027 but just know we're in great shape and have great access did you talk about sales too was that part of the question
I think you largely addressed it how is it impacting the rest of 26 and then 27 and beyond
let me just mention then just to reiterate that gross net we take very seriously And we also talked about it in the Q1 call, no change here for Q2, looking at Q2 in the rest of the year. We feel very good about consensus of what we discussed on the Q1 call. So we're in great shape for the rest of the year.
Let's shift to overall MASH landscape. WGOVI has been on the market for a few quarters. First, how are you seeing the impact of RISDIFRA of WGOVI on the market? And then second, there continues to be MASH data across other mechanisms, including later this year. How do you see the market continuing to evolve? Maybe I'll start, and then maybe, Dave, you want to cover the pipelines.
So it's been great having another product on the market. As I said, we think that Novo has really been helping to increase diagnosis and treatment, and we're the benefactor of that. So Wagovi is getting used, but certainly not to the detriment of Red Differ. You know, we've talked about steadily adding patients. We've steadily added patients since launch. We expect to continue to steadily add patients. And when they were, they've been approved and on the market since, you know, August, we've continued to steadily add patients through that. So no impact from a Red Differ perspective, but certainly helpful in driving the diagnosis rate and so forth. And, you know, I think their focus, they're tending to spend some time on primary care, which really is where the referral pool comes to the specialists that we call on. So it, from our perspective, works out well. The more people that are talking about it, the better. So I think that the other piece is that, you know, a large number of our patients are on a GLP-1 as well. So combination therapy, it's over 25% of patients are on. And when you look at patients that have been previously exposed to a GLP-1, it's, you know, 50%. We expect GLP-1s are going to become just a background therapy, right, kind of ubiquitous. I think people, most people we expect will have been on. And, you know, there's enough comorbidities that they can be really effective at that it leaves the combo for MASH for ResDifera. So that's how we see it, as a real enabler more than anything. And, you know, the other specialty markets that we've talked about, many of them, despite being, you know, over $20 billion markets, they have 10, 15, greater than 15 products that are on the market at one time. So this is clearly one of those specialty markets that can support multiple products. Part of our strategy is to have those multiple products within our portfolio with a combination strategy that hopefully we can talk about at some point. Dave, do you want to maybe comment on other stuff?
Yeah, other stuff, yeah. I think the statement that incretins are going to kind of be in the water is probably likely going to happen over time. But resdifera is still going to be the foundational therapy for MASH, just based on where we are in the life cycle, as Bill's already described. So the advantage that we have is we can take complementary mechanisms and add them to the foundational therapy and demonstrate either better efficacy either within the entire MASH population or within a subset of individuals. So a really good example of that is the PNPLA-3s RNA that we just enlicensed from Arrowhead. And so PNPLA-3 is a genetic driver of MASH and drives very poor outcomes for people who are homozygous for that mutation. And this isn't a rare problem. So it's about 30% or so of the MASH population who have this homozygous mutation. So the thesis is combining a PNPLA-3 sRNA with ResDifera will deliver even better efficacy for these folks who are at even higher risk. So the advantage that we have is that when you look across all of the mechanisms, you always want to think of ResDefra as the first product that patients are having something added to, and that's how we've thought about building our pipeline.
And then, Rob, I think you're talking about any other kind of competitive results as well. I mean, Dave, do you want to comment? Look, I don't think there's anything on the horizon that we think about too much. I think you have to remember profiles matter with a drug. And it is hard to beat the profile that we have. And it's also hard to beat the fact that we very quickly, I would say, the community has transitioned from clinical trial data to real-world evidence. And what we're hearing to a doctor or a prescriber is that ResDifera is performing extremely well in the real world. They're seeing that fibrosis counts are moving down, patients are doing well, and that is actually helping to spark additional prescribing. So, you know, that real-world profile, the first mover advantage that we have, the continued data generation that we're setting up, and just the system that we've wired, I think for anyone else, to replicate that, it's a tall order, and, you know, we are, the one thing we don't talk about that much, but really we should lead with, is we've got an exceptional team. We've got people that have launched some of the biggest products in the industry. They know what scale looks like. They know what it's like to interact with a specialty, how to provide high levels of service, et cetera. That isn't something that you can just pick up and replicate tomorrow. That has been careers of in-depth experience, knowledge, and know-how that we're applying to this situation. And that's what somebody else has to come in and try to compete against. And I don't care whether it's the biggest pharma company in the world or some small biotech company that's trying to dip their toe in the space. It is a tough job. And we... You've discussed previously,
you're preparing for profitability but also expecting an increase in OPEX this year. First, can you provide any views around how you're balancing continuing investment in the business while achieving that profitability? And then second, can you discuss when you might expect profitability?
Yes, at least the first part. We didn't indeed say in our first quarter call that we are preparing for profitability. And we also did say that our OPEX will continue to grow. We're building a mega blockbuster brand, and we're going to support what it takes to make sure that we're driving the top line. So our focus is, you know, gaining market share and continuing to drive the top line. Also, we've done a lot of BD in the last six to eight months, and we'll be growing out the R&D expenditure as well over time, although early on it's a lot of phase one work, so it's not that much in terms of incremental spend. But with the growth, as long as we support the growth of the top line the right way, which we anticipate, we see the rate of growth of net sales far outstrips the OPEX growth over time. So, again, that just sets us up nicely for profitability. It's inevitable with this business model. In 2026, we were very clear on the Q1 call that we do not expect to be profitable in 2026. Now, there may be quarters in the near term where we dip our toe into profitability and then are not profitable, so we can expect that. But for 2026, that's not our expectation. We really haven't commented beyond that. But again, you know, understanding the growth drivers of the top line and then the spend increases, you know, you will see a divergence of those curves soon.
Maybe two things, just to confirm that's full year 26, not profitability, as Marty said. The other thing, just as you think about, you know, spend and the pipeline. I'll take people back to, you know, 12 months ago when we were at this meeting pipeline. We had our two ongoing trials with ResDiffer in the pipeline, and we've done so at less than $300 million up front. and these are quality assets that we've added the reason we could do that is because the world still hasn't woken up we believe to mash being a attractive place to play and if the world has woken up they also realize that they've got to go through red differ so to speak i mean with just red differ is the foundational therapy we now have this pipeline that we're going to use in combo So if you've got a monotherapy, that is a big lift to say, how am I going to show more efficacy with a monotherapy over a combo therapy of a product that already works and was the first to be approved and has over 42,250 patients on, and the company has spent about $3 billion to get to this point, and, and, and. So, you know, we're doing this in a, as Marty said, we are all in for the commercial launch. We are all in for the pipeline, but we've also done so in an exceptionally disciplined way. Our pipeline we have built, as I said, very efficiently, and you can assume that when we do the clinical trials, we're going to have that same idea of efficiency, so we're not going to go out and run 10 phase three programs, right? We will set a high bar, and we'll have to find a place where either all patients have even more efficacy or a subpopulation. So, you know, this is, again, a unique moment that we are taking full advantage of, and it presented itself, we've identified it, and we've put the resource towards it.
Great. On that BD topic, as you mentioned, you've been very busy over the last 12 months. Can you discuss how investors should think about business development on the forward?
Yeah, I mean, look, we've done a lot. In 12 months, we've done a lot. Now, I don't expect the same pace going forward, but there are additional mechanisms that we may be interested in, and if we can find one or two of those, great, that's something that we would be interested in. But we feel like we have set the table really well. However, again, there's other mechanisms that we'd like to add. Again, you can also expect that it will be done in an efficient manner. One of the real cornerstones of our strategy has been we're not going to bet the company on a BD deal. We don't have to, and we're not going to. So anything we do will have to be on terms that are acceptable and favorable for us.
Shifting to F4C, I think you've commented publicly before that it could roughly double the size of the market. You obviously have an outcomes trial underway that could potentially give you full approval from F2 all the way to F4C. Can you discuss a little bit around what gives you confidence in Red's Differa's potential in that market?
Yeah, sure. So as you pointed out, we actually have two Phase III studies going on right now. We have Maestro-NASH, which is in the F2, F3 population, looking at progression to cirrhosis. So that was the study where the interim analysis got us approval, accelerated approval. And then the second study we have is a time-to-events, event-driven F4C study called Maestro Outcomes. So that study is ongoing and expected to deliver in 2027. So the reason why we're confident in F4 is because what we've already seen with the drug in an earlier study called Maestro-NAFLD1, where we had an open-label cohort of 122 people with F4C in that study. And we were able to look at a variety of measures in that population, most importantly looking at liver stiffness measurements and risk of clinically significant portal hypertension. So just by way of background, people who develop cirrhosis progress through cirrhosis to get to clinically significant portal hypertension, and when their portal pressures go up, it's when you start to see the decompensation events like ascites and variceal bleeding, et cetera. So patients have to move through that portal hypertension sort of milestone before they start to have decompensation events. And what we saw in those 122 patients is that we were able to move the people who had the highest risk of clinically significant portal hypertension into lower risk categories. So it shows us that we're having an effect of the drug on liver stiffness measurements and kind of this critical measure in people with F4. And so when you think about that and then you think about the ongoing outcomes trial, if you're able to pull patients back from clinically significant portal hypertension, you should also then see fewer events in those individuals because they're no longer having the key pathophysiologic finding in those patients. So that's really the foundation of our confidence in the trial. And the other thing I'll just point out is there is no good standard of care for F4, right? So there is no available effective therapy for patients with F4. So usually when, you know, you're going after a new disease where there's no good standard of care, you really do expect an effective drug to show through and show efficacy.
You recently presented some new data at Easel. Can you give investors a recap and overview of that?
So there were three pieces of data that we presented there. The first, coming back to the clinically significant portal hypertension discussion, we looked at those 122 patients in the open-label study and looked at a different measure of clinically significant portal hypertension called Anticipate NASH score. And the reason why we looked at this particular score is because it's sort of an orthogonal way of risk in the population compared to the other approach that we'd used in the past, which is called the Bovino criteria. And what we showed is that the results, when you use this different approach, different analytic approach, were very consistent with what we saw in the Bovino, with the Bovino data. So clear shift to lower risk categories and lower risk status in patients, you know, using this measure. The second presentation was on measures of CB risk and specifically looking at atherogenic lipids, changes produced by resmediram in the Maestro-NASH study. And so what we see with resmediram, and sometimes we miss talking about this because we talk so much about histology and liver fat and all that because obviously we're talking about a liver-directed drug, but resmediram has systemic effects also. So because THR beta, the thyroid hormone beta receptor, triggers many different downstream effects, what we see is reductions in LDL cholesterol, reductions in LP little a, which put together gives you reductions in ApoB of about 20%. And so why does that matter? Reducing ApoB is one of the best biomarkers for reducing cardiovascular outcomes. If you look across all the statins and PCSK9s and all the other new mechanism of drugs, it's ApoB lowering that actually leads to better outcomes for patients. So I think that was another crucial piece of evidence that we showed. And then we also had some real-world evidence that we also presented at the meeting.
We've talked a few times about the 10 programs and pipeline. Maybe briefly, rationale behind some of the mechanisms that are in the pipeline and any that you would highlight that you're particularly excited about.
Yeah, so I come back to what we were saying before. So, you know, we're treating ResDifera as the foundational therapy in MASH. So we treat it that way when we look at the competitive landscape and we treat it that way when we think about business development deals. So what we look at are complementary mechanisms, so GLP-1, DGAT-2, and PNPLA-3 are the three clinical assets that we have in the nearer term that I'll give you a little bit more detail on in a second. But in each of those cases, there's a scientific rationale for why that mechanism would give you at least additive effect with resmederon. And so if you talk about GLP-1, for example, we unlicensed from CSPC last year an Orphaglipron analog GLP-1, oral GLP-1. That should be able to be combined with the reason the rationale is that we saw that even a little bit of weight loss with resmediram produces better antifibrotic efficacy. So we can dial in a little bit of weight loss with this GLP-1, enhance resmediram's efficacy, and deliver a better efficacy profile for patients. So that new molecular entity is entering the clinic in June, so this month. So that will be a prototypical first-in-human study, and then phase two we anticipate next year. DGAT-2 was a molecule we had licensed from Pfizer. It inhibits the production of triglyceride droplets in the liver through inhibition of the incorporation of the last fatty acid into the triglyceride molecule. And so there's a very good rationale for preventing production of triglyceride droplets with the DGAT2 inhibitor and then burning the fat with THR beta. So we're both preventing the production and we're burning the fatty acids with two complementary mechanisms. So that compound will be going through a drug-drug interaction study with resmediram later this year, and then, again, anticipating a Phase II next year. And then PNPLA-3 is our latest addition. I've already touched on that, but that's a molecule that sort of is associated with lipid droplets in the liver and has been shown to, if you inhibit PNPLA-3 production, you can improve liver fat, and that's what they saw in their Phase I study. So, again, a good complementary mechanism for THR beta.
Great. And maybe in our last couple minutes, in closing, Bill, anything you would like to leave with investors, anything you think might be underappreciated about Madrigal today? I think there's actually quite a bit that's underappreciated. I think that sometimes you say, well, is this too good to be true of the market dynamics? Every now and then, you know, it is true.
And I think in this case it's a perfect example, as I started with, high unmet need, large population, low diagnosis rate great first asset it's a foundational therapy that we're going to combine everything that we've built and get even more efficacy somewhere done is we kind of have started with the end and worked back to say how do you truly create value in this space over time how do you ensure consistent top line growth for years and years and years and we have the right market opportunity, the right first asset, and we'll see about the right pipeline as things read out, but we've really taken a thoughtful approach to how do we become the leaders in this space and therefore serve as really kind of leaders in the entire industry, and that doesn't happen too often, but I think every proof point that we've put out there or said that this is what's going to happen, at least in the last three years, I'm coming up with my three-year anniversary, that we've hit each one. We've knocked down each bare thesis. And I can tell you, I'm more excited today than I was in September 23 when I joined because the opportunity has only gotten better.
Well, thank you, Bill, Marty, and Dave, for the time today. I really appreciate it.
Thanks for having me.