Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Madrigal Pharmaceuticals Inc (MDGL, Financial) reported $14.6 million in net sales for the second quarter, indicating a strong launch for Rezdiffra.
- More than 2,000 patients are currently on Rezdiffra, showing significant uptake.
- Over 50% of commercial lives now have coverage for Rezdiffra, with 95% of these not requiring biopsies.
- Medicaid coverage for Rezdiffra is in place across all 50 states, and Medicare coverage is expected to begin on January 1, 2025.
- Madrigal Pharmaceuticals Inc (MDGL) plans to launch Rezdiffra in Europe following an expected EMA decision next year, expanding their market reach.
Negative Points
- The company is still in the early stages of the Rezdiffra launch, with a lot of work remaining to fully wire the system.
- SG&A expenses increased significantly to $105.4 million in Q2 2024 from $17.8 million in Q2 2023, reflecting the scale-up of commercial operations.
- R&D expenses also rose to $71.1 million in Q2 2024 from $68.6 million in Q2 2023, indicating high ongoing costs.
- There are still some commercial plans requiring biopsies for Rezdiffra coverage, which could limit patient access.
- The gross-to-net ratio is expected to be choppy quarter to quarter, particularly early in the launch, which could affect financial predictability.
Q & A Highlights
Q: Could you elaborate and maybe quantify a little bit more within that $14.6 million of net revenues? How much of that was due to underlying patient demand and prescriptions being delayed versus how much of that was related to initial inventory and stocking?
A: The $14.6 million in net sales is mostly demand for this quarter. We expect inventory to run between two to four weeks for Rezdiffra, as is typical for a specialty medicine. We are at the beginning stages of our launch, about one-third of the way through wiring the system, and we expect to steadily add both patients and prescribers as we move forward.
Q: Given the focus on the launch cadence, can you provide an update on patient numbers exiting July? What proportion are on unpaid drug?
A: We are not providing month-to-month progression details. We are steadily adding patients and prescribers, and this trend continued through July. There was very little free drug this quarter, but we expect more free drug in the future as more patients utilize our services.
Q: There is an inflection implied by consensus on Rezdiffra revenues next year. Do you feel like there will be a significant acceleration on launch trajectory next year once access is properly in line, or is your base case that launch will be more gradual?
A: We have to wire the system, which takes time when launching a first-in-disease product. This is about a 12-month process, and we are about a third of the way through. By the end of this period, we expect to have reimbursement in place and physician practices more comfortable with writing prescriptions, leading to more patients moving through practices efficiently.
Q: Can you remind me based on your market research among the 350,000 patients, what percentage of them are GLP-1 experienced?
A: We are seeing more patients exposed to GLP-1, with 14% of patients in our clinical trial on GLP-1. However, the timing of exposure varies. We haven't seen any payers requiring a step-through GLP-1.
Q: You mentioned faster uptake with hepatologists versus gastroenterologists. Can you give more color on the latest trends with gastroenterologists?
A: Hepatologists are adopting more quickly due to their expertise with the disease. Gastroenterologists are working through their practice dynamics and are at different stages of processing patients. We are steadily adding new prescribers and patients, with gastroenterologists being a key prescriber group.
Q: Are you fully committed to commercializing Rezdiffra in Europe on your own, or are you considering partnerships?
A: We are fully committed to commercializing Rezdiffra in Europe on our own. We have a team experienced in global product launches and will be focused and targeted in our approach, likely starting with Germany.
Q: Can you give us a view on patient start forms at the end of the quarter and more color on gross-to-net?
A: We are not providing updates on patient start forms, only on patients on drug at the end of the quarter. Gross-to-net was favorable versus expectations due to lower use of our co-pay assistance program. We expect gross-to-net to be choppy, particularly early in the launch.
Q: Can you talk about access to imaging technologies for diagnosis and if that is consistent with prior authorization requirements?
A: We are not seeing access to NITs as problematic. Requirements vary but include imaging and blood tests. We are in a good place with NITs, and the big concern about biopsy requirements has not materialized, with less than 5% requiring biopsies.
Q: You indicated the time to fill was coming in faster than the original expectations. Are we to assume that it's between 30 to 60 days at this point?
A: We are closer to 30 days than 60 days. This acceleration is due to deliberate patient selection and payer recognition of unmet need. As we scale up, the quality of prescriptions may vary, but we are directionally closer to 30 days.
Q: Can you comment on the strategy and timing of communicating directly with patients, especially in a disease like NASH where patients may not be symptomatic?
A: We are starting direct-to-patient efforts soon. Educating and activating the 315,000 diagnosed patients is important for better treatment and access to Rezdiffra. These efforts will help patients learn more about the disease and the product.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
