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What changed in MADRIGAL PHARMACEUTICALS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MADRIGAL PHARMACEUTICALS, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+649 added−553 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-26)

Top changes in MADRIGAL PHARMACEUTICALS, INC.'s 2025 10-K

649 paragraphs added · 553 removed · 395 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

131 edited+86 added−45 removed205 unchanged
Biggest changeA positive outcome in this trial is also expected to support the full approval of Rezdiffra for noncirrhotic MASH, and expand the eligible patient population for Rezdiffra with an additional indication in patients with compensated MASH cirrhosis. 2024 Highlights We experienced a transformational year in 2024, highlighted by the following key events: • In March 2024, we announced that the FDA granted accelerated approval of Rezdiffra in conjunction with diet and exercise for the treatment of adults with noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis).
Biggest changeA positive outcome from this trial is expected to support the full approval of Rezdiffra in the United States for moderate to advanced liver fibrosis (F2 to F3 fibrosis) and an additional indication for Rezdiffra in patients with F4c, which we believe could double Rezdiffra’s commercial opportunity.
In addition, in August 2023, we entered into a Commercial Supply Agreement (the “UPM Supply Agreement”) with UPM Pharmaceuticals, Inc. (“UPM”) for the primary commercial supply of Rezdiffra tablets in the United States. Pursuant to the UPM Supply Agreement, we must purchase a specified percentage of our annual requirements for Rezdiffra from UPM at volume-driven prices.
In addition, in August 2023, we entered into a Commercial Supply Agreement (the “UPM Agreement”) with UPM Pharmaceuticals, Inc. (“UPM”) for the primary commercial supply of Rezdiffra tablets in the United States. Pursuant to the UPM Agreement, we must purchase a specified percentage of our annual requirements for Rezdiffra from UPM at volume-driven prices.
Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance, or other reasons. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP.
Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns, non-compliance or other reasons. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP.
In addition, in November 2013, the CMS issued guidance to the issuers of qualified health plans sold through the ACA’s marketplaces encouraging such plans to reject patient cost-sharing support from third parties and indicating that the CMS intends to monitor the provision of such support and may take regulatory action to limit it in the future.
In addition, in November 2013, CMS issued guidance to the issuers of qualified health plans sold through the ACA’s marketplaces encouraging such plans to reject patient cost-sharing support from third parties and indicating that CMS intends to monitor the provision of such support and may take regulatory action to limit it in the future.
HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates in some cases, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • The Physician Payments Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) imposed new annual reporting requirements for certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, for certain payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members; and • Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party-payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to drug pricing and payments and other transfers of value 24 Table of Contents to physicians and other healthcare providers and restrict marketing practices or require disclosure of marketing expenditures and pricing information; state and local laws that require the registration of pharmaceutical sales representatives; state and foreign laws that govern the privacy and security of health information in some circumstances.
HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates in some cases, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • The Physician Payments Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) imposed new annual reporting requirements for certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, for certain payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members; and • Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party-payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to drug pricing and payments and other transfers of value to physicians and other healthcare providers and restrict marketing practices or require disclosure of marketing expenditures and pricing information; state and local laws that require the registration of pharmaceutical sales representatives; state and foreign laws that govern the privacy and security of health information in some circumstances.
Finally, in order to be eligible to have its products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by the Department of Veterans Affairs (“VA”), Department of Defense (“DoD”), Public Health Service, and Coast Guard (the “Big Four agencies”) and certain federal grantees, a manufacturer is required to participate in the VA Federal Supply Schedule (“FSS”) pricing program, established under Section 603 of the Veterans Health Care Act of 1992.
In order to be eligible to have its products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by the Department of Veterans Affairs (“VA”), Department of Defense (“DoD”), Public Health Service, and Coast Guard (the “Big Four Agencies”) and certain federal grantees, a manufacturer is required to participate in the VA Federal Supply Schedule (“FSS”) pricing program, established under Section 603 of the Veterans Health Care Act of 1992.
Under the Roche Agreement, Roche exclusively licensed certain patent rights and know-how relating to resmetirom in exchange for consideration consisting of an upfront payment, milestone payments and single-digit royalty payments based on net sales of Rezdiffra and any derivative products of resmetirom, subject to certain reductions.
Under the Roche Agreement, Roche exclusively licensed certain patent rights and know-how relating to resmetirom in exchange for consideration consisting of an upfront payment, milestone payments and tiered single-digit royalty payments based on net sales of Rezdiffra and any derivative products of resmetirom, subject to certain reductions.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies, some in accordance with the FDA’s current Good Laboratory Practices (“GLP”), the Animal Welfare Act administered and enforced by the United States Department of Agriculture and other applicable regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an institutional review board (“IRB”) before each clinical trial may be initiated at each clinical site; • performance of adequate and well-controlled human clinical trials under protocols submitted to the FDA and reviewed and approved by each IRB, conducted in accordance with federal regulations and according to Good Clinical Practices (“GCP”) to establish the safety and efficacy of the proposed drug for its intended use; • preparation and submission to the FDA of an NDA (and the FDA’s acceptance for filing of the NDA); • completion of registration batches and validation of the manufacturing process to show ability to consistently produce quality batches of product; • satisfactory completion of an FDA Advisory Committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current good manufacturing practice (“cGMP”) to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCP and the integrity of the clinical data; • payment of user fees and procurement of FDA approval of the NDA; • FDA review and approval of the NDA; and • compliance with any post-approval requirements, including, as applicable, REMS and post-approval trials required by the FDA.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies, some in accordance with the FDA’s current Good Laboratory Practices (“GLP”), the Animal Welfare Act administered and enforced by the United States Department of Agriculture and other applicable regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an institutional review board (“IRB”) before each clinical trial may be initiated at each clinical site; • performance of adequate and well-controlled human clinical trials under protocols submitted to the FDA and reviewed and approved by each IRB, conducted in accordance with federal regulations and according to GCP to establish the safety and efficacy of the proposed drug for its intended use; • preparation and submission to the FDA of an NDA (and the FDA’s acceptance for filing of the NDA); • completion of registration batches and validation of the manufacturing process to show ability to consistently produce quality batches of product; 15 Table of Contents • satisfactory completion of an FDA Advisory Committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current good manufacturing practice (“cGMP”) to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCP and the integrity of the clinical data; • payment of user fees and procurement of FDA approval of the NDA; • FDA review and approval of the NDA; and • compliance with any post-approval requirements, including, as applicable, REMS and post-approval trials required by the FDA.
In the United States, these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency and patient data privacy and security laws and regulations, including but not limited to those described below. • The federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing any remuneration (including any kickback, bride or 23 Table of Contents certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward or in return for, either the referral of an individual for, or the purchase order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid.
In the United States, these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency and patient data privacy and security laws and regulations, including but not limited to those described below. • The federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing any remuneration (including any kickback, bride or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward or in return for, either the referral of an individual for, or the purchase order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid.
The CMS subsequently issued a rule requiring individual market qualified health plans to accept third-party premium and cost-sharing payments from certain government-related entities.
CMS subsequently issued a rule requiring individual market qualified health plans to accept third-party premium and cost-sharing payments from certain government-related entities.
The government may also assert that a claim including items or services resulting from a violation of the federal Anti-Kickback statute constitutes a false or fraudulent claim under federal civil monetary penalties laws; • The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) imposes criminal and civil liability for knowingly and willfully executing a scheme or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services.
The government may also assert that a claim including items or services resulting from a violation of the federal Anti-Kickback statute constitutes a false or fraudulent claim under federal civil monetary penalties laws; • The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) imposes criminal and civil liability for knowingly and willfully executing a scheme or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or 26 Table of Contents payment for healthcare benefits, items or services.
If our operations are found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight and reporting obligations if 25 Table of Contents we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.
If our operations are found to be in violation of any of these laws or any other related governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight and reporting obligations if we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations.
These requirements include compliance with EU cGMP standards when manufacturing medicinal products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical ingredients into the EU. • The marketing and promotion of authorized products, including industry-sponsored continuing medical education and advertising directed toward the prescribers of products and/or the general public, are strictly regulated in the EU.
These requirements include compliance with EU GMP standards when manufacturing medicinal products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical ingredients into the EU. • The marketing and promotion of authorized products, including industry-sponsored continuing medical education and advertising directed toward the prescribers of products and/or the general public, are strictly regulated in the EU.
Intellectual Property We will be able to protect our technology and products from unauthorized use by third parties only to the extent we are covered by valid and enforceable patents or such knowledge is effectively maintained as trade secrets. Patents and other proprietary rights are thus an essential element of our business.
We will be able to protect our technology and products from unauthorized use by third parties only to the extent we are covered by valid and enforceable patents or such knowledge is effectively maintained as trade secrets. Patents and other proprietary rights are thus an essential element of our business.
In addition, we may use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC. These disclosures will be included on our website under the “Investors & Media” section. 27 Table of Contents
In addition, we may use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC. These disclosures will be included on our website under the “Investors & Media” section. 30 Table of Contents
On May 17, 2022, the U.S. District Court for the District of Columbia granted the Pharmaceutical Research and Manufacturers of America's (PhRMA) motion for summary judgement invalidating the Accumulator Rule. We cannot predict how the implementation of and any further changes to this rule will affect our business.
On May 17, 2022, the U.S. District Court for the District of Columbia granted the Pharmaceutical Research and Manufacturers of America’s (PhRMA) motion for summary judgment invalidating the Accumulator Rule. We cannot predict how the implementation of and any further changes to this rule will affect our business.
Data following 52 weeks of treatment with 80 or 100 mg of resmetirom daily showed improved liver chemistry tests, a reduction in vibration-controlled transient elastography ("VCTE") in a responder analysis and a statistically significant reduction in liver volume by an average of approximately 20%.
Data following 52 weeks of treatment with 80 or 100 mg of resmetirom daily showed improved liver chemistry tests, a reduction in vibration-controlled transient elastography (“VCTE”) in a responder analysis and a statistically significant reduction in liver volume by an average of approximately 20%.
Pursuant to the Roche Agreement, we must use commercially reasonable efforts to conduct clinical and commercial development programs for products containing resmetirom. If we determine not to pursue the development or commercialization of resmetirom in certain jurisdictions, Roche may terminate the license for such territories.
Pursuant to the Roche Agreement, we agreed to use commercially reasonable efforts to conduct clinical and commercial development programs for products containing resmetirom. If we determine not to pursue the development or commercialization of resmetirom in certain jurisdictions, Roche may terminate the license for such territories.
The primary endpoint of MAESTRO-NASH OUTCOMES is the incidence of composite liver-related outcome events, including all-cause mortality, liver transplant, hepatic decompensation (ascites, hepatic encephalopathy, gastroesophageal variceal hemorrhage) and confirmed increase of Model for End-Stage Liver Disease (MELD) score from A positive outcome is expected to support the full approval of Rezdiffra for noncirrhotic MASH, potentially accelerating the timeline to full approval.
The primary endpoint of MAESTRO-NASH OUTCOMES is the incidence of composite liver-related outcome events, including all-cause mortality, liver transplant, hepatic decompensation (ascites, hepatic encephalopathy, gastroesophageal variceal hemorrhage) and confirmed increase of Model for End-Stage Liver Disease (MELD) score from A positive outcome is expected to support the full approval of Rezdiffra for noncirrhotic MASH in the United States, potentially accelerating the timeline to full approval.
In addition, there are 60 investigational therapies being evaluated in Phase 2 clinical trials in MASH. We believe that Rezdiffra’s product profile and first-to-market advantage provide meaningful points of differentiation in the MASH competitive landscape.
In addition, there are 51 investigational therapies being evaluated in Phase 2 clinical trials in MASH. We believe that Rezdiffra’s product profile and first-to-market advantage provide meaningful points of differentiation in the MASH competitive landscape.
These sanctions could include, among other things, the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters and other types of enforcement-related letters, requesting product recalls, product seizures, changes to the conditions surrounding marketing approval such as labeling changes or changes to a Risk Evaluation and Mitigations Strategies (“REMS”) program, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, debarment, restitution, disgorgement of profits or civil or criminal investigations and penalties.
These sanctions could include, among other things, the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, FDA Form 483, untitled letters, warning letters and other types of enforcement-related letters, requesting product recalls, product seizures, changes to the conditions surrounding marketing approval such as labeling changes or changes to a Risk Evaluation and Mitigations Strategies (“REMS”) program, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, debarment, restitution, disgorgement of profits or civil or criminal investigations and penalties.
Item 1. Business Executive Overview We are a biopharmaceutical company focused on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (“MASH”), a serious liver disease with high unmet medical need that can lead to cirrhosis, liver failure and premature mortality. MASH was previously known as nonalcoholic steatohepatitis (“NASH”).
Item 1. Business Overview We are a biopharmaceutical company focused on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (“MASH”), a serious liver disease with high unmet medical need that can lead to cirrhosis, liver failure, liver cancer, need for liver transplantation and premature mortality. MASH was previously known as nonalcoholic steatohepatitis (“NASH”).
Independent of thyroxine replacement status, resmetirom treatment reduced prohormone T4, as reflected by free thyroxine (FT4), by approximately 16% to 19% with no effect on thyroid-stimulating hormone (TSH) or the active thyroid hormone, free triiodothyronine (FT3). Relative to placebo, resmetirom treated patients did not show increases in fractures or fracture risk scores.
Independent of thyroxine replacement status, resmetirom treatment reduced prohormone T4, as reflected by free thyroxine (FT4), with no effect on thyroid-stimulating hormone (TSH) or the active thyroid hormone, free triiodothyronine (FT3). Relative to placebo, resmetirom-treated patients did not show increases in fractures or fracture risk scores.
The sponsor will also include a protocol detailing, among other things, the objectives of the clinical trial, the parameters to be 14 Table of Contents used in monitoring safety and the effectiveness criteria to be evaluated, if the trial lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted.
The sponsor will also include a protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated, if the trial lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted.
The centralized procedure provides for the grant of a single marketing authorization by the EC that is valid throughout the EU and in the additional countries of the European Economic Area (Iceland, Lichtenstein and Norway) (“EEA”).
The centralized procedure provides for the grant of a single marketing authorization by the EC that is valid throughout the EU and in the additional countries of the European Economic Area (Iceland, Liechtenstein and Norway) (“EEA”).
If third-party payors do not consider a product to 21 Table of Contents be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit.
If third-party payors do not consider a product to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit.
MAESTRO-NASH OUTCOMES Trial In October 2024, we announced that we completed enrollment of MAESTRO-NASH OUTCOMES, a Phase 3, double-blind, randomized, placebo-controlled trial that will noninvasively measure progression to liver decompensation events in 845 patients with compensated MASH cirrhosis, exceeding our initial enrollment target.
MAESTRO-NASH OUTCOMES Trial In October 2024, we announced that we completed enrollment of MAESTRO-NASH OUTCOMES, a Phase 3, double-blind, randomized, placebo-controlled trial that is designed to noninvasively measure progression to liver decompensation events in 845 patients with compensated MASH cirrhosis, exceeding our initial enrollment target.
A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.
An EU Member State may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.
For example, the EU CTR implements a coordinated procedure for authorization of clinical trials (through a centralized EU portal known as the Clinical Trials Information System) that is similar to the mutual recognition procedure for marketing authorization of medicinal products, and includes obligations on sponsors to publish clinical trial results.
For example, the EU CTR 21 Table of Contents implements a coordinated procedure for authorization of clinical trials (through a centralized EU portal known as the Clinical Trials Information System) that is similar to the mutual recognition procedure for marketing authorization of medicinal products, and includes obligations on sponsors to publish clinical trial results.
Positive confirmatory outcomes data from this trial is expected to verify a clinical benefit and support the full approval of Rezdiffra in noncirrhotic MASH.
Positive confirmatory outcomes data from this trial is expected to verify a clinical benefit and support the full approval of Rezdiffra in noncirrhotic MASH in the United States.
Our ability to compete successfully will depend largely on our ability to leverage our collective experience in drug development and commercialization to: 11 Table of Contents • develop medicines that are differentiated from other products in the market; • obtain patent or proprietary protection for our products and technologies; • obtain required regulatory approvals; • commercialize our drugs, if approved; and • attract and retain high-quality research, development and commercial personnel.
Our ability to compete successfully will depend largely on our ability to leverage our collective experience in drug development and commercialization to: • develop medicines that are differentiated from other products in the market; • obtain patent or proprietary protection for our products and technologies; • obtain required regulatory approvals; • commercialize our drugs, if approved; and • attract and retain high-quality research, development and commercial personnel.
In December 2024, we entered into a Resmetirom Commercial Supply Agreement (the “Evonik Supply Agreement”) with Evonik Corporation (“Evonik”). Pursuant to the Evonik Supply Agreement, Evonik has agreed to manufacture and supply resmetirom, the API in Rezdiffra, in commercial quantities. We have agreed to provide Evonik with a forecast of our purchases on a rolling basis.
In December 2024, we entered into a Resmetirom Commercial Supply Agreement (the “Evonik Agreement”) with Evonik Corporation (“Evonik”). Pursuant to the Evonik Agreement, Evonik has agreed to manufacture and supply resmetirom, the API in Rezdiffra, in commercial quantities. We have agreed to provide Evonik with a forecast of our 13 Table of Contents purchases on a rolling basis.
A single UK-wide marketing authorization will be granted by the MHRA for all novel medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK.
A single UK-wide marketing authorization is granted by the MHRA for all novel medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK.
Implementation of this change and new safe harbors for point-of-sale reductions in price for prescription pharmaceutical products and PBM service fees are currently under review by the current United States presidential administration and may be amended or repealed.
Implementation of this change and new safe 24 Table of Contents harbors for point-of-sale reductions in price for prescription pharmaceutical products and PBM service fees are currently under review by the current United States presidential administration and may be amended or repealed.
If healthcare policies or reforms intended to curb healthcare costs are adopted, the prices that we charge for any approved product may be limited, our commercial opportunity may be limited and/or our revenues from sales of our product and any future products, if approved, may be negatively impacted.
If healthcare policies or reforms intended to curb healthcare costs are 25 Table of Contents adopted, the prices that we charge for any approved product may be limited, our commercial opportunity may be limited and/or our revenues from sales of our product and any future products, if approved, may be negatively impacted.
Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. We rely, and expect to continue to rely, on third parties for the production of 18 Table of Contents clinical and commercial quantities of our product candidates.
Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. We rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities of our product candidates.
In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with Healthcare Professionals.
In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the PhRMA Code on Interactions with Healthcare Professionals.
The required assessment must assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product has been assessed to be safe and effective.
The required assessment must assess the safety 18 Table of Contents and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product has been assessed to be safe and effective.
Patients without a second biopsy due to early trial discontinuation or missing liver biopsy (approximately 17% across treatment arms) were included and considered as non-responders in the primary efficacy analyses (mITT). The compliance to treatment was high and minimally impacted by COVID-19 pandemic restrictions.
Patients without a second biopsy due to early trial discontinuation or missing liver biopsy (approximately 17% across treatment arms) were included and considered as non- 9 Table of Contents responders in the primary efficacy analyses (mITT). The compliance to treatment was high and minimally impacted by COVID-19 pandemic restrictions.
The FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity. Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured.
The FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended 17 Table of Contents use and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity. Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured.
The approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from place to place, and the time may be longer or shorter than that required for FDA approval.
The approval process and 20 Table of Contents requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from place to place, and the time may be longer or shorter than that required for FDA approval.
This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the UK despite its departure from the EU. 20 Table of Contents Payments made to physicians or other healthcare professionals in certain EU Member States must be publicly disclosed.
This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the UK despite its departure from the EU. Payments made to physicians or other healthcare professionals in certain EU Member States must be publicly disclosed.
The FDA's accelerated approval and Rezdiffra's approved prescribing information were supported by results from our Phase 3 MAESTRO-NASH trial and additional safety data from the Phase 3 MAESTRO-NAFLD-1 and MAESTRO-NAFLD-OLE extensions trials, each of which was 52-weeks in duration.
The FDA’s accelerated approval and the EC’s CMA, as well as Rezdiffra’s approved prescribing information, were supported by results from our Phase 3 MAESTRO-NASH trial and additional safety data from the Phase 3 MAESTRO-NAFLD-1 and MAESTRO-NAFLD-OLE extensions trials, each of which was 52 weeks in duration.
Under the Fast Track Designation program, the sponsor of a new drug candidate may request that the FDA designate the drug candidate for a specific indication as a fast track drug concurrent with, or after, the filing of the IND for the drug candidate.
Under the Fast Track Designation program, the sponsor of a new drug candidate may request that the FDA 19 Table of Contents designate the drug candidate for a specific indication as a fast track drug concurrent with, or after, the filing of the IND for the drug candidate.
Following this, 19 Table of Contents additional marketing authorizations can be sought from other EU Member States in a procedure whereby the countries concerned recognize the validity of the original, national marketing authorization.
Following this, additional marketing authorizations can be sought from other EU Member States in a procedure whereby the countries concerned recognize the validity of the original, national marketing authorization.
In particular, please read our definitive proxy statement, which will be filed with the SEC in connection with our 2025 annual meeting of stockholders, our quarterly reports on Form 10-Q and any current reports on Form 8-K that we may file from time to time.
In particular, please read our definitive proxy statement, which will be filed with the SEC in connection with our 2026 annual meeting of stockholders, our quarterly reports on Form 10-Q and any current reports on 29 Table of Contents Form 8-K that we may file from time to time.
Our success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our current product and future product candidates, technology and know-how, our ability to freely operate without infringing on the proprietary rights of others and our ability to establish proprietary rights and prevent others from infringing our proprietary rights.
Intellectual Property Our success will depend in part on our ability to obtain and maintain patent and other proprietary protection for Rezdiffra and any current or future product candidates, technology and know-how, our ability to freely operate without infringing on the proprietary rights of others and our ability to establish proprietary rights and prevent others from infringing our proprietary rights.
See the section titled “—Clinical Trial Overview” in this Annual Report for additional information on our clinical trials for Rezdiffra. In connection with the FDA's accelerated approval, we have agreed to certain post-marketing commitments, including completing our MAESTRO-NASH trial to demonstrate a clinical benefit of Rezdiffra on composite endpoints.
See the section titled “—Clinical Trial Overview” in this Annual Report for additional information on our clinical trials for resmetirom. In connection with Rezdiffra’s approvals, we have agreed to certain post-marketing commitments, including completing our MAESTRO-NASH trial to demonstrate a clinical benefit of Rezdiffra on composite endpoints.
We have adopted a Corporate Code of Conduct and Ethics and written charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.
We have adopted a Corporate Code of Conduct and Ethics, Corporate Governance Guidelines and written charters for our Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Science and Technology Committee.
The UK formally left the EU on January 31, 2020. As a result of the Northern Ireland protocol, following the UK leaving the EU, the EMA remained responsible for approving novel medicines for supply in Northern Ireland under the EU centralized procedure, and a separate authorization was required to supply the same medicine in Great Britain (England, Wales and Scotland).
As a result of the Northern Ireland protocol, following the UK leaving the EU, the EMA remained responsible for approving novel medicines for supply in Northern Ireland under the EU centralized procedure, and a separate authorization was required to supply the same medicine in Great Britain (England, Wales and Scotland).
Patients enrolled in the MAESTRO-NASH trial have continued on therapy after the initial 52-week treatment period for up to 54 months to accrue and measure hepatic clinical outcome events, including progression to cirrhosis on biopsy and hepatic decompensation events, as well as all-cause mortality.
Patients enrolled in the MAESTRO-NASH trial have continued on therapy after the initial 52-week treatment period for up to 54 months to accrue and measure hepatic clinical outcome events, including progression to cirrhosis on biopsy and hepatic decompensation events, as well as all-cause mortality. We expect outcomes data from this trial in 2028.
Following 52 weeks of treatment in the MAESTRO-NASH trial, both 100 mg and 80 mg doses of Rezdiffra demonstrated statistically significant improvement compared to placebo on two primary endpoints: MASH resolution (including a reduction in the NAFLD activity score by ≥ 2 points) with no worsening of fibrosis, and an improvement in fibrosis by at least one stage with no worsening of the NAFLD activity score.
Following 52 weeks of treatment in the MAESTRO-NASH trial, both 100 mg and 80 mg doses of 7 Table of Contents Rezdiffra demonstrated statistically significant improvement compared to placebo on two primary endpoints: MASH resolution (including a reduction in the non-alcoholic fatty liver disease (“NAFLD”) activity score by ≥ 2 points) with no worsening of fibrosis, and an improvement in fibrosis by at least one stage with no worsening of the NAFLD activity score.
In most cases, the FDA requires two adequate and well controlled Phase 3 clinical trials to demonstrate the efficacy of the product candidate, although a single Phase 3 clinical trial with other confirmatory evidence may be sufficient in certain instances.
Generally, the FDA requires two adequate 16 Table of Contents and well controlled Phase 3 clinical trials to demonstrate the efficacy of the product candidate, although a single Phase 3 clinical trial with other confirmatory evidence may be sufficient in certain instances.
The MAESTRO-NAFLD-1 trial was published in Nature Medicine in November 2023. We reported that resmetirom demonstrated statistical significance for primary and key secondary endpoints summarized below from the double-blind placebo-controlled 969-patient portion of the trial.
MAESTRO-NAFLD-1 Trial In January 2022, we announced topline results from the Phase 3 MAESTRO-NAFLD-1 safety trial of resmetirom. The MAESTRO-NAFLD-1 trial was published in Nature Medicine in November 2023. We reported that resmetirom demonstrated statistical significance for primary and key secondary endpoints summarized below from the double-blind placebo-controlled 969-patient portion of the trial.
No portion of our website is incorporated by reference into this Annual Report. We advise you to read this Annual Report in conjunction with other reports and documents that we file from time to time with the U.S. Securities and Exchange Commission (“SEC”).
No portion of our website is incorporated by reference into this Annual Report. We advise you to read this Annual Report in conjunction with other reports and documents that we file from time to time with the SEC.
These endpoints indicated that resmetirom (1) was well-tolerated at 80 and 100 mg in patients treated for 52 weeks, (2) provided significant and clinically relevant reductions in liver fat as measured by MRI-PDFF and (3) significantly reduced atherogenic lipids, including low-density lipoprotein cholesterol (“LDLc”), apolipoprotein B and triglycerides.
These endpoints indicated that resmetirom (i) was well-tolerated at 80 and 100 mg in patients treated for 52 weeks, (ii) provided significant and clinically relevant reductions in liver fat as measured by magnetic resonance imaging proton density fat fraction (MRI-PDFF) and (iii) significantly reduced atherogenic lipids, including low-density lipoprotein cholesterol (“LDLc”), apolipoprotein B and triglycerides.
Under Section 703 of the National Defense Authorization Act for FY 2008, the manufacturer is required to pay quarterly rebates to DoD on utilization of its innovator products that are dispensed through DoD’s Tricare network pharmacies to Tricare beneficiaries.
The FSS contract also contains extensive disclosure and certification requirements. Under Section 703 of the National Defense Authorization Act for FY 2008, the manufacturer is required to pay quarterly rebates to DoD on utilization of its innovator products that are dispensed through DoD’s Tricare network pharmacies to Tricare beneficiaries.
It is possible that changes in insurer policies regarding co-pay coupons and/or the introduction and enactment of new legislation or regulatory action could restrict or otherwise negatively affect these patient support programs, which could result in fewer patients using affected products, and therefore could have a material adverse effect on our sales, business and financial condition.
It is possible that changes in insurer policies regarding co-pay coupons and/or the introduction and enactment of new legislation or regulatory action could restrict or otherwise negatively affect these patient support programs, which could result in fewer patients using affected products, and therefore could have a material adverse effect on our sales, business and financial condition. 27 Table of Contents Third party patient assistance programs that receive financial support from companies have become the subject of enhanced government and regulatory scrutiny.
Under the EU regulatory systems, a company may submit an MAA either under the centralized procedure or one of the national procedures, depending on the type of product.
Under the EU regulatory systems, a company may submit a marketing authorization application (“MAA”) either under the centralized procedure or one of the national procedures, depending on the type of product.
In addition to the accumulation of fat in the liver, MASH is characterized by inflammation and cellular damage with or without fibrosis, which may ultimately progress to cirrhosis. Within MASH cirrhosis, patients can be categorized as being compensated or decompensated.
MASH is also an independent driver of cardiovascular disease, which is the leading cause of mortality for patients. In addition to the accumulation of fat in the liver, MASH is characterized by inflammation and cellular damage with or without fibrosis, which may ultimately progress to cirrhosis. Within MASH cirrhosis, patients can be categorized as being compensated or decompensated.
The Roche Agreement will expire, unless earlier terminated pursuant to other provisions of the Roche Agreement, on the last to occur of (i) the expiration of the last valid claim of a licensed patent covering the manufacture, use or sale of products containing resmetirom or (ii) ten years after the first sale of a product containing resmetirom.
Our obligation to pay royalties based on net sales of resmetirom in a given country will expire, unless earlier terminated pursuant to other provisions of the Roche Agreement, on the last to occur of (i) the expiration of the last valid claim of a licensed patent covering the manufacture, use or sale of products containing resmetirom in a given country, or (ii) ten years after the first sale of a product containing resmetirom in such country.
In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that is thought to predict clinical benefit, such as how a patient feels, functions, or survives, but is not itself a measure of clinical benefit.
In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that is thought to predict clinical benefit, such as how a patient feels, functions, or survives, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints.
We believe that our future success will be shaped by our continued ability to attract and retain highly skilled employees. We 26 Table of Contents provide our employees with a competitive total rewards package inclusive of salaries, bonuses and equity ownership.
We also retain consultants on an as-needed basis. We believe that our future success will be shaped by our continued ability to attract and retain highly skilled employees. We provide our employees with a competitive total rewards package inclusive of salaries, bonuses and equity ownership.
A positive outcome is expected to support the full approval of Rezdiffra for noncirrhotic MASH and expand the eligible patient population for Rezdiffra with an additional indication in patients with compensated MASH cirrhosis.
A positive outcome is expected to support the full approval of Rezdiffra for noncirrhotic MASH in the United States and expand the eligible patient population for Rezdiffra with an additional indication in patients with compensated MASH cirrhosis. This event-driven trial is expected to deliver results in 2027.
Pursuant to the terms of the Roche Agreement, we, as successor-in-interest to VIA, assumed control of all development and commercialization of resmetirom and hold exclusive worldwide rights for all potential indications.
We subsequently assumed all of VIA’s rights in, to and under, and all of VIA’s obligations under, the Roche Agreement pursuant to an asset purchase agreement in September 2011. Pursuant to the terms of the Roche Agreement, we, as successor-in-interest to VIA, assumed control of all development and commercialization of resmetirom and hold exclusive worldwide rights for all potential indications.
In that instance, the exclusivity period does not preclude filing or review of an ANDA or 505(b)(2) application; rather, the FDA is precluded from granting final approval to the ANDA or 505(b)(2) 17 Table of Contents application until three years after approval of the RLD.
In that instance, the exclusivity period does not preclude filing or review of an ANDA or 505(b)(2) application; rather, the FDA is precluded from granting final approval to the ANDA or 505(b)(2) application until three years after approval of the RLD. Additionally, the exclusivity applies only to the conditions of approval that required submission of the clinical data.
MASH is expected to become the leading cause of liver transplantation in the United States and is already the leading cause of liver transplantation among women in the United States. Our medication, Rezdiffra (resmetirom), is a once-daily, oral, liver-directed thyroid hormone receptor (“THR-β”) agonist designed to target key underlying causes of MASH.
MASH is the leading cause of liver transplantation in women, the second leading cause of all liver transplantation in the United States and the fastest-growing indication for liver transplantation in Europe. Our medication, Rezdiffra (resmetirom), is a once-daily, oral, liver-directed thyroid hormone receptor beta (“THR-β”) agonist designed to target key underlying causes of MASH.
Importantly, due to the limited availability of donor organs and the comorbidities associated with MASH, 7 Table of Contents patients with MASH who are put on the transplant list are at much lower odds of actually getting transplanted relative to those with liver disease driven by other causes.
Importantly, due to the limited availability of donor organs and the comorbidities associated with MASH, patients with MASH who are put on the transplant list are at much lower odds of actually getting transplanted relative to those with liver disease driven by other causes. As such, Rezdiffra addresses a significant unmet medical need for patients with MASH.
The effects of the IRA on our business and the healthcare industry in general is not yet known. On December 2, 2020, the HHS published a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through PBMs, unless the price reduction is required by law.
On December 2, 2020, the HHS published a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through PBMs, unless the price reduction is required by law.
We also intend to employ European sales and marketing personnel on a country-by-country basis. Clinical Trial Overview Set forth below is a summary of our clinical trial programs for Rezdiffra: • The pivotal MAESTRO-NASH (moderate to advanced fibrosis) trial evaluated daily oral doses of resmetirom at 80 mg and 100 mg doses.
Clinical Trial Overview Set forth below is a summary of our clinical trial programs for Rezdiffra: • The pivotal MAESTRO-NASH (moderate to advanced fibrosis) trial evaluated daily oral doses of resmetirom at 80 mg and 100 mg doses.
The median duration of diarrhea was approximately 15to 20 days, independent of resmetirom dose. 9 Table of Contents Trial data indicated resmetirom treatment had no effect on heart rate or body weight and was not associated with arrhythmias. Blood pressure appeared slightly reduced among resmetirom-treated patients. Sex hormones were unchanged from baseline.
Trial data indicated resmetirom treatment had no effect on heart rate or body weight and was not associated with arrhythmias. Blood pressure appeared slightly reduced among resmetirom-treated patients. Sex hormones were unchanged from baseline.
The animal and 13 Table of Contents other non-clinical data and the results of human clinical trials performed under an Investigational New Drug application (“IND”) and under similar foreign applications will become part of the NDA.
The animal and other non-clinical data and the results of human clinical trials performed under an IND and under similar foreign applications will become part of the NDA.
MAESTRO-NAFLD-OLE, an open-label active treatment extension of MAESTRO-NAFLD-1, is ongoing to collect additional data in patients with noncirrhotic MASH and patients with compensated MASH cirrhosis. • MAESTRO-NASH OUTCOMES (Compensated Cirrhosis) is ongoing to evaluate progression to liver decompensation events in patients with compensated MASH cirrhosis treated with resmetirom versus placebo.
MAESTRO-NAFLD-OLE, an open-label active treatment extension of MAESTRO-NAFLD-1, is ongoing to collect additional data in patients with noncirrhotic MASH and patients with compensated MASH cirrhosis.
Human clinical trials are typically conducted in three sequential phases: • Phase 1: The product candidate is initially introduced into humans. Phase 1 clinical trials are typically conducted in healthy human subjects, but in some situations are conducted in patients with the target disease or condition.
Phase 1 clinical trials are typically conducted in healthy human subjects, but in some situations are conducted in patients with the target disease or condition.
We seek to protect our proprietary position by, among other methods, filing United States and foreign patent applications related to our proprietary technology, and maintaining the confidentiality of inventions and improvements that are material to the development of our business.
We seek to protect our proprietary position by, among other methods, filing United States and foreign patent applications related to our proprietary technology, and maintaining the confidentiality of inventions and improvements that are material to the development of our business. We also rely on trade secrets, know-how, continuing technological innovation and licensing opportunities to develop and maintain our competitive position.
Rezdiffra for Patients with MASH Rezdiffra is our first and only approved product. Rezdiffra received accelerated approval on March 14, 2024 in conjunction with diet and exercise for the treatment of adults with noncirrhotic MASH with moderate to advanced liver 6 Table of Contents fibrosis (consistent with stages F2 to F3 fibrosis).
Rezdiffra received accelerated approval from the FDA in March 2024 in conjunction with diet and exercise for the treatment of adults with noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis).
Competition The development and commercialization of new drugs in MASH is highly competitive. We will face competition with respect to all product candidates we have developed or may develop or commercialize in the future from pharmaceutical and biotechnology companies worldwide.
We will face competition with respect to Rezdiffra and all product candidates we may develop or commercialize in the future from pharmaceutical and biotechnology companies worldwide.
The Roche Agreement imposes various diligence, milestone payment, royalty payment, insurance, indemnification, and other obligations on us. Issued patents directed to resmetirom have statutory expiration dates between 2026 and 2038, excluding any patent term extensions or equivalents thereof that might be available following the grant of marketing authorizations.
Issued patents directed to resmetirom have statutory expiration dates between 2026 and 2045, excluding any patent term extensions or equivalents thereof that might be available following the grant of marketing authorizations.
These data from this open label active treatment arm continue to support the rationale for our MAESTRO-NASH OUTCOMES trial evaluating Rezdiffra in patients with compensated MASH cirrhosis.
In November 2025, we announced additional positive data from this cohort examining patients with more advanced compensated MASH cirrhosis (those with a platelet count of These data from this open label active treatment arm continue to support the rationale for our MAESTRO-NASH OUTCOMES trial evaluating Rezdiffra in patients with compensated MASH cirrhosis.
Dual Primary Endpoints (52 Weeks) and Key Secondary Endpoint (24 weeks) Primary Endpoint Resmetirom 80 mg (n=316) p-value Resmetirom 100 mg (n=321) p-value Placebo (n=318) MASH resolution (ballooning 0, inflammation 0,1 with ≥2-point reduction in NAS) and no worsening of fibrosis 25.9 29.9 9.7 ≥1-stage improvement in fibrosis with no worsening of NAS 24.2 25.9 14.2 Key Secondary Endpoint LDL-C lowering (24 weeks) -13.6 -16.3 0.1 All biopsies were read independently by two central pathologists.
Dual Primary Endpoints (52 Weeks) and Key Secondary Endpoint (24 Weeks) Primary Endpoint Resmetirom 80 mg (n=316) p-value Resmetirom 100 mg (n=321) p-value Placebo (n=318) MASH resolution (ballooning 0, inflammation 0,1 with ≥2-point reduction in NAS) and no worsening of fibrosis 25.9 29.9 9.7 ≥1-stage improvement in fibrosis with no worsening of NAS 24.2 25.9 14.2 Key Secondary Endpoint LDL-C lowering (24 weeks) -13.6 -16.3 0.1 Biopsy endpoints were achieved independent of baseline fibrosis stage or diabetes status, including similar statistical significance and magnitude of effect at both doses in subgroups of F2, F3 and F2/F3 patients.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

187 edited+115 added−68 removed325 unchanged
Biggest changeAny failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with our privacy, confidentiality, data security or similar obligations to third parties, or any data security incidents or other security breaches that result in the unauthorized access, release or transfer of sensitive information, including personally identifiable information, may result in: governmental investigations, litigation, regulatory enforcement actions, fines, sanctions or other penalties, injunctive relief requiring costly compliance measures, required 62 Table of Contents notification and credit monitoring, public statements against us, third parties to lose trust in us, or claims by third parties asserting that we have breached our privacy, confidentiality, data security or similar obligations, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.
Biggest changeAny failure or perceived failure by us or the third-party collaborators, service providers or consultants whom we rely to comply with our privacy, confidentiality, data security or similar obligations may result in: governmental investigations, litigation, claims, regulatory enforcement actions, fines, sanctions or other penalties, injunctive relief requiring costly compliance measures, required notification and credit monitoring, public statements against us, or third parties to lose trust in us, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.
Failure to successfully develop future product candidates for any of these reasons may materially adversely affect our business, financial condition, results of operations and prospects and the value of our common stock. If we fail to develop and commercialize other product candidates, we may be unable to grow our business.
Failure to successfully develop future product candidates for any of these reasons may materially adversely affect our business, financial condition, results of operations and prospects and the value of our common stock. If we fail to successfully develop and commercialize our other product candidates, we may be unable to grow our business.
Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.
Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.
The market price of our common stock could be impacted due to a variety of factors, including global market or financial developments; prevailing macroeconomic conditions, including potential recession or economic downturns; U.S. market events (including the potential for unusual market trading activity following external short interest developments or social media activity); the outbreak of war or hostilities; MASH therapeutic company developments or FDA developments, regardless of whether occurring generally or specifically as to our clinical trials and development programs; industry-wide events and the following events or developments: • the losses we may incur, including increased losses resulting from costs associated with increases in our clinical trial activity; • our cash position and rate of expenditures; • our ability to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • product revenue; • regulatory decisions, including our ability to receive full regulatory approval for Rezdiffra and our ability to receive regulatory approval for any future product candidates; • changes in laws or regulations applicable to Rezdiffra and any other future product candidates, including but not limited to clinical trial requirements for approvals; • our ability to successfully commercialize Rezdiffra and any other future product candidates, if approved; 57 Table of Contents • developments in patent or other proprietary rights owned or licensed by us, our collaborative partners or our competitors; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • the progress and results of our clinical trials; • public or regulatory concern as to the safety and efficacy of MASH products developed by us or others or public safety generally; • publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; • introduction of new products or services offered by us or our competitors, or the release or publication of clinical trial results from competing product candidates; • changes in the market valuations of similar companies; • our ability to obtain coverage and adequate reimbursement of Rezdiffra and any future product candidates, if approved; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly operating results; • announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators or other strategic partners; • our ability to obtain adequate product supply for any approved drug product or inability to do so at acceptable prices; • changes to the structure of healthcare payment systems; • our ability to establish collaborations, if needed; • additions or departures of key scientific or management personnel; • litigation; • issuances of debt or equity securities; • sales of our common stock by us or our stockholders in the future or the perception that such sales may occur; • trading volume of our common stock; • changes in accounting practices; • effectiveness of our internal controls; and • other events or factors, many of which are beyond our control.
The market price of our common stock could be impacted due to a variety of factors, including global market or financial developments; prevailing macroeconomic conditions, including potential recession or economic downturns; U.S. market events (including the potential for unusual market trading activity following external short interest developments or social media activity); the outbreak of war or hostilities; MASH therapeutic company developments or FDA developments, regardless of whether occurring generally or specifically as to our clinical trials and development programs; industry-wide events and the following events or developments: • the losses we may incur, including increased losses resulting from costs associated with increases in our clinical trial activity; • our cash position and rate of expenditures; • our ability to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • product revenue; • regulatory decisions, including our ability to receive full regulatory approval for Rezdiffra and our ability to receive regulatory approval for any future product candidates; • changes in laws or regulations applicable to Rezdiffra and any other future product candidates, including but not limited to clinical trial requirements for approvals; • our ability to successfully commercialize Rezdiffra and any other future product candidates, if approved; • developments in patent or other proprietary rights owned or licensed by us, our collaborative partners or our competitors; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • the progress and results of our clinical trials; • public or regulatory concern as to the safety and efficacy of MASH products developed by us or others or public safety generally; 62 Table of Contents • publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; • introduction of new products or services offered by us or our competitors, or the release or publication of clinical trial results from competing product candidates; • changes in the market valuations of similar companies; • our ability to obtain coverage and adequate reimbursement of Rezdiffra and any future product candidates, if approved; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly operating results; • announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators or other strategic partners; • our ability to obtain adequate product supply for any approved drug product or inability to do so at acceptable prices; • changes to the structure of healthcare payment systems; • our ability to establish collaborations, if needed; • additions or departures of key scientific or management personnel; • litigation; • issuances of debt or equity securities; • sales of our common stock by us or our stockholders in the future or the perception that such sales may occur; • trading volume of our common stock; • changes in accounting practices; • effectiveness of our internal controls; and • other events or factors, many of which are beyond our control.
In such an event, competitors might be able to enter the market earlier than would otherwise have been the case; • patent applications may not result in any patents being issued; • patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • we and our licensor(s) may not have been the first to make the inventions covered by pending patent applications or issued patents; • we and our licensor(s) may not have been the first to file patent applications for our product or product candidates or the compositions developed, or for their uses; • others may independently develop identical, similar or alternative products or compositions and uses thereof; • we and our licensor(s)’ disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability; • others may design around our owned and licensed patent claims to produce competitive products which fall outside of the scope of the patents; • others may identify prior art or other bases which could invalidate our or our licensor(s)’ patents; • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where us and our licensor(s) do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in major commercial markets; 52 Table of Contents • there may be significant pressure on the United States government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and • countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop and market competing products.
In such an event, competitors might be able to enter the market earlier than would otherwise have been the case; • patent applications may not result in any patents being issued; • patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • we and our licensor(s) may not have been the first to make the inventions covered by pending patent applications or issued patents; • we and our licensor(s) may not have been the first to file patent applications for our product or product candidates or the compositions developed, or for their uses; • others may independently develop identical, similar or alternative products or compositions and uses thereof; • we and our licensor(s)’ disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability; • others may design around our owned and licensed patent claims to produce competitive products which fall outside of the scope of the patents; • others may identify prior art or other bases which could invalidate our or our licensor(s)’ patents; • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where us and our licensor(s) do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in major commercial markets; • there may be significant pressure on the United States government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and 57 Table of Contents • countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop and market competing products.
A number of events, including but are not limited to any of the following, could delay or impede completely the completion of our ongoing and planned clinical trials and negatively affect our ability to obtain regulatory approval for, and to market and sell, a particular product candidate: • conditions imposed on us by the FDA or other regulatory authorities regarding the scope or design of our clinical trials; • insufficient supply of our product candidates or other materials necessary to conduct and complete our clinical trials; • slow enrollment and retention rate of subjects in our clinical trials; • challenges in identifying or recruiting sufficient trial sites or investigators for clinical trials; and • serious and unexpected drug-related side effects related to the product candidate being tested.
A number of events, including but are not limited to any of the following, could delay or impede completely the completion of our ongoing and planned clinical trials and negatively affect our ability to obtain regulatory approval for, and to market and sell, a particular product candidate: • conditions imposed on us by the FDA, the EMA or other regulatory authorities regarding the scope or design of our clinical trials; • insufficient supply of our product candidates or other materials necessary to conduct and complete our clinical trials; • slow enrollment and retention rate of subjects in our clinical trials; • challenges in identifying or recruiting sufficient trial sites or investigators for clinical trials; and • serious and unexpected drug-related side effects related to the product candidate being tested.
In order to successfully develop products, we must, among other things: • identify potential product candidates; • submit for and receive regulatory approval to perform clinical trials; • conduct appropriate preclinical and clinical trials, including confirmatory clinical trials, according to good laboratory practices and good clinical practices and disease-specific expectations of the FDA and other regulatory bodies; • select and recruit clinical investigators and subjects for our clinical trials; • obtain and correctly interpret data establishing adequate safety of our product candidates and demonstrating with statistical significance that our product candidates are effective for their proposed indications, as indicated by the achievement of specified endpoints; • receive regulatory approvals for marketing; • manufacture the product candidates according to cGMP and other applicable standards and regulations.
In order to successfully develop products, we must, among other things: • identify potential product candidates; • submit for and receive regulatory approval to perform clinical trials; • conduct appropriate preclinical and clinical trials, including confirmatory clinical trials, according to good laboratory practices and GCP and disease-specific expectations of the FDA and other regulatory bodies; • select and recruit clinical investigators and subjects for our clinical trials; • obtain and correctly interpret data establishing adequate safety of our product candidates and demonstrating with statistical significance that our product candidates are effective for their proposed indications, as indicated by the achievement of specified endpoints; • receive regulatory approvals for marketing; • manufacture the product candidates according to cGMP and other applicable standards and regulations.
If we fail to comply with the regulatory requirements of the FDA and other applicable domestic and foreign regulatory authorities, or previously unknown problems with Rezdiffra, manufacturer, or manufacturing process are discovered, we could be subject to administrative or judicially imposed sanctions, including: • restrictions on marketing or manufacturing of Rezdiffra; • withdrawal of Rezdiffra from the market; • holds on clinical trials; • warning letters or untitled letters; • civil or criminal penalties; • fines; • injunctions; • product seizures or detentions; • pressure to initiate voluntary product recalls; • suspension or withdrawal of regulatory approvals; and • refusal to approve supplements to approved applications.
If we fail to comply with the regulatory requirements of the FDA, the EMA and other applicable domestic and foreign regulatory authorities, or previously unknown problems with Rezdiffra, manufacturer, or manufacturing process are discovered, we could be subject to administrative or judicially imposed sanctions, including: • restrictions on marketing or manufacturing of Rezdiffra; • withdrawal of Rezdiffra from the market; • holds on clinical trials; • warning letters or untitled letters; • civil or criminal penalties; • fines; • injunctions; • product seizures or detentions; • pressure to initiate voluntary product recalls; • suspension or withdrawal of regulatory approvals; and • refusal to approve supplements to approved applications.
Among other things, our Charter and Bylaws: • provide for a classified board of directors with three classes; • permit our board of directors to issue certain shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change in our control); • provide that the authorized number of directors may be changed only by resolution of the board of directors; • provide that our board of directors or any individual director may only be removed with cause and by the affirmative vote of the holders of at least 80% of the voting power of all of our then-outstanding shares of capital stock entitled to vote at an election of directors, voting together as a single class; • provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled only by the affirmative vote of a majority of directors then in office, even if less than a quorum; • require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; • provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice; • do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); • provide that special meetings of our stockholders may be called only by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; and • provide that the Court of Chancery of the State of Delaware (or, in the event that the Delaware Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) is the sole and exclusive forum for the any stockholder to bring: (i) any derivative action or proceeding brought on our behalf; (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders; (iii) any action or proceeding asserting a claim against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provision of the Delaware General Corporation Law, our Charter or our Bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over any indispensable parties.
Among other things, our Charter and Bylaws: • provide for a classified board of directors with three classes; • permit our board of directors to issue certain shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change in our control); • provide that the authorized number of directors may be changed only by resolution of the board of directors; • provide that our board of directors or any individual director may only be removed with cause and by the affirmative vote of the holders of at least 80% of the voting power of all of our then-outstanding shares of capital stock entitled to vote at an election of directors, voting together as a single class; 63 Table of Contents • provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled only by the affirmative vote of a majority of directors then in office, even if less than a quorum; • require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; • provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice; • do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); • provide that special meetings of our stockholders may be called only by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; and • provide that the Court of Chancery of the State of Delaware (or, in the event that the Delaware Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) is the sole and exclusive forum for the any stockholder to bring: (i) any derivative action or proceeding brought on our behalf; (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders; (iii) any action or proceeding asserting a claim against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provision of the Delaware General Corporation Law, our Charter or our Bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over any indispensable parties.
The ability of the FDA to operate, including to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors and otherwise review regulatory submissions can be affected by a variety of factors, including government budget and funding levels; ability to hire and retain key personnel and accept the payment of user fees; and statutory, regulatory, and policy changes, including as a result of shifting policy priorities of the current presidential administration and political appointees tasked to oversee the agency, among other factors.
The ability of the FDA to operate, including to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors and otherwise review regulatory submissions can be affected by a variety of factors, including government budget and funding levels; ability to hire and retain key personnel and accept the payment of user fees; and statutory, regulatory, leadership and policy changes, including as a result of shifting policy priorities of the current presidential administration and political appointees tasked to oversee the agency, among other factors.
A key component to our corporate strategy is to expand the target patient population for Rezdiffra. We have fully enrolled our Phase 3 MAESTRO-NASH OUTCOMES trial. In this trial, we are evaluating progression to liver decompensation events in patients with compensated MASH cirrhosis treated with Rezdiffra versus placebo.
A key component to our corporate strategy is to expand the target patient population for Rezdiffra. We have fully enrolled our Phase 3 MAESTRO-NASH OUTCOMES trial. In this trial, we are evaluating progression to liver decompensation events in patients with compensated MASH cirrhosis (F4c) treated with Rezdiffra versus placebo.
Risks Related to Our Dependence on Third Parties If the third parties on which we rely for the conduct of our clinical trials and results do not perform our clinical trial activities in accordance with GCP and related regulatory requirements, we may be unable to obtain regulatory approval for our product candidates or commercialize our products.
Risks Related to Our Dependence on Third Parties If the third parties on which we rely for the conduct of our clinical trials and results do not perform our clinical trial activities in accordance with our agreements, GCP and related regulatory requirements, we may be unable to obtain regulatory approval for our product candidates or commercialize our products.
The Loan Agreement includes customary events of default, including payment defaults, breaches of covenants following any applicable cure period, the occurrence of certain events that could reasonably be expected to have a “material adverse effect” as set forth in the Loan Agreement and cross acceleration.
The Loan Agreement includes customary events of default, including payment defaults, breaches of covenants following any applicable cure period, the occurrence of certain events that could reasonably be expected to have a “material adverse effect” as set forth in the Financing Agreement and cross acceleration.
If we inadvertently fail to comply with foreign regulatory requirements governing human clinical trials and marketing approval for drugs, we could be prevented from selling our drug candidates in foreign markets, which may adversely affect our operating results and financial condition.
If we inadvertently fail to comply with foreign regulatory requirements governing human clinical trials and marketing approval for drugs, we could be prevented from selling our drug candidates in such foreign markets, which may adversely affect our operating results and financial condition.
The commercial success of Rezdiffra will depend on the degree of market acceptance by physicians, patients, third-party payors and others in the health care community. Despite receiving FDA approval of Rezdiffra, our product may not gain, or over time may not retain, market acceptance by physicians, patients, third-party payors or others in the health care community.
The commercial success of Rezdiffra will depend on the degree of market acceptance by physicians, patients, third-party payors and others in the health care community. Despite receiving FDA and EC approval of Rezdiffra, our product may not gain, or over time may not retain, market acceptance by physicians, patients, third-party payors or others in the health care community.
Our ability to successfully commercialize Rezdiffra and any additional products will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
Our ability to successfully commercialize Rezdiffra and any additional products in the future will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements. Third parties may not complete activities on schedule or may not conduct our clinical trials in accordance with regulatory or GCP requirements or the respective trial plans and protocols.
Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements. Third parties may not complete activities on schedule or may not conduct our clinical trials in accordance with regulatory or GCP requirements, our agreements or the respective trial plans and protocols.
As a result, we currently rely, and expect to rely on third-party manufacturers to supply our product candidates for our clinical trials as well as our commercial supply of Rezdiffra. Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured our product candidates or products ourselves.
As a result, we currently rely, and expect to rely on third-party manufacturers to supply our product candidates for our clinical trials as well as our commercial supply of Rezdiffra. Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured Rezdiffra or our product candidates ourselves.
Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • manufacturing delays if our third-party manufacturers give greater priority to the supply of other products over Rezdiffra or any other future product candidates or otherwise do not satisfactorily perform according to the terms of the agreement between us; • limitations on supply availability resulting from capacity and scheduling constraints of third-parties, or as a result of economic or political developments, including the ongoing conflicts in Ukraine and the Middle East and global economic instability; • the possible breach of manufacturing agreements by third-parties because of factors beyond our control; • the possible termination or non-renewal of the manufacturing agreements by a third-party, at a time that is costly or inconvenient to us; and 42 Table of Contents • the possible misappropriation of our proprietary information, including our trade secrets and know-how.
Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • manufacturing delays if our third-party manufacturers give greater priority to the supply of other products over Rezdiffra or any other future product candidates or otherwise do not satisfactorily perform according to the terms of the agreement between us; • limitations on supply availability resulting from capacity and scheduling constraints of third-parties, or as a result of economic or political developments, including the ongoing conflicts in Ukraine and the Middle East and global economic instability; • the possible breach of manufacturing agreements by third-parties because of factors beyond our control; • the possible termination or non-renewal of the manufacturing agreements by a third-party, at a time that is costly or inconvenient to us; and • the possible misappropriation of our proprietary information, including our trade secrets and know-how.
Despite our recent launch of Rezdiffra in the United States, we expect to continue to incur operating losses as we: • support our sales and marketing efforts for Rezdiffra in the United States; • fulfill our post-marketing commitments and clinical trials of Rezdiffra, as required by the FDA; • initiate or continue clinical trials of any future product candidates; • seek to acquire or in-license additional product candidates; 43 Table of Contents • seek regulatory approvals and, if approved, commercialize Rezdiffra in foreign markets; • add operational, financial and management information systems and personnel, including personnel to support commercialization of Rezdiffra and product candidate development and to help us comply with our obligations as a public company; hire and retain additional personnel, such as clinical, quality control, scientific, commercial and administrative personnel; • maintain, expand and protect our intellectual property portfolio; and • add equipment and physical infrastructure to support our research and development.
Despite our recent launch of Rezdiffra in the United States and Germany, we expect to continue to incur operating losses as we: • support our sales and marketing efforts for Rezdiffra; • fulfill our post-marketing commitments and clinical trials of Rezdiffra, as required by the FDA; • initiate or continue clinical trials of any future product candidates; • seek to acquire or in-license additional product candidates; 48 Table of Contents • seek regulatory approvals and, if approved, commercialize Rezdiffra in foreign markets; • add operational, financial and management information systems and personnel, including personnel to support commercialization of Rezdiffra and product candidate development and to help us comply with our obligations as a public company; hire and retain additional personnel, such as clinical, quality control, scientific, commercial and administrative personnel; • maintain, expand and protect our intellectual property portfolio; and • add equipment and physical infrastructure to support our research and development.
In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding clinical trial design, safety and efficacy.
In order to market any products outside of the United States and EU, we must establish and comply with numerous and varying regulatory requirements of other countries regarding clinical trial design, safety and efficacy.
We may be unable to recruit such personnel on a timely basis, if at all, which would negatively impact our development and commercialization programs. 39 Table of Contents Our employees, contractors, vendors and partners may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading laws, which could cause significant liability for us and harm our reputation.
We may be unable to recruit such personnel on a timely basis, if at all, which would negatively impact our development and commercialization programs. 45 Table of Contents Our employees, contractors, vendors and partners may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading laws, which could cause significant liability for us and harm our reputation.
Rezdiffra was the first product approved by the FDA for the treatment of MASH. Accordingly, we must educate healthcare providers and patients on the risks of MASH and the potential clinical benefits and appropriate use of Rezdiffra.
Rezdiffra was the first product approved by the FDA and EC for the treatment of MASH. Accordingly, we must educate healthcare providers and patients on the risks of MASH and the potential clinical benefits and appropriate use of Rezdiffra.
Our ability to generate revenue and achieve profitability depends on our ability to successfully obtain and maintain the regulatory approvals necessary to commercialize our products, including our commercialization of Rezdiffra in the United States.
Our ability to generate revenue and achieve profitability depends on our ability to successfully obtain and maintain the regulatory approvals necessary to commercialize our products, including our commercialization of Rezdiffra in the United States and EU.
If the topline data that we report differ from actual results or are interpreted differently once additional data are disclosed at a later date, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our drug candidates, our business, operating results, prospects, or financial condition may be harmed or our stock price may decline.
If the interim, topline or preliminary data that we report differ from actual results or are interpreted differently once additional data are disclosed at a later date, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our drug candidates, our business, operating results, prospects, or financial condition may be harmed or our stock price may decline.
We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of Rezdiffra or any future product candidates, and we lack the resources and the capabilities to do so.
We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of Rezdiffra or any product candidates, and we lack the resources and the capabilities to do so.
The pricing of pharmaceutical products has come under increasing scrutiny as part of a global trend toward healthcare cost containment. Resulting changes in healthcare law and policy, including recently enacted changes to Medicare, may impact our business in ways that we cannot currently predict, which could have a material adverse effect on our business and financial condition.
The pricing of pharmaceutical products has come under increasing scrutiny as part of a global trend toward healthcare cost containment. Resulting changes in healthcare law and policy, including changes to Medicare, may impact our business in ways that we cannot currently predict, which could have a material adverse effect on our business and financial condition.
Any claims of patent infringement asserted by third parties would be time consuming and could likely: • result in costly litigation; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing resmetirom for MASH or our other product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; or 54 Table of Contents • require us to enter into royalty or licensing agreements.
Any claims of patent infringement asserted by third parties would be time consuming and could likely: • result in costly litigation; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing resmetirom for MASH or our other product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; or • require us to enter into royalty or licensing agreements.
Without appropriation of additional funding to federal agencies, our business operations related to our product development activities for the U.S. market could be impacted. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Without appropriation of necessary funding to federal agencies, our business operations related to our product development activities for the U.S. market could be impacted. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Based on a Schedule 13D/A filed with the SEC on March 25, 2024, 667, L.P. and Baker Brothers Life Sciences, L.P., funds affiliated with Baker Bros. Advisors LP (“Baker Bros.”), reported an ownership interest in (i) Madrigal common stock and (ii) other Madrigal securities with limitations on conversion or exercise to common stock.
Based on a Schedule 13D/A filed with the SEC on March 25, 2024 and subsequent filings with the SEC, 667, L.P. and Baker Brothers Life Sciences, L.P., funds affiliated with Baker Bros. Advisors LP (“Baker Bros.”), reported an ownership interest in (i) Madrigal common stock and (ii) other Madrigal securities with limitations on conversion or exercise to common stock.
The use of specialty pharmacies involves certain risks, including, but not limited to, risks that these specialty pharmacies: • may not serve a significant portion of our expected patient population; • may not provide us accurate or timely information regarding their inventories, the number of patients using Rezdiffra or complaints about Rezdiffra; • reduce their efforts or discontinue to sell or support Rezdiffra, particularly if competing therapies enter the marketplace; • do not devote the resources necessary to sell Rezdiffra or support patients; • are be unable to satisfy financial obligations to us or others; or • will cease operations.
The use of specialty pharmacies involves certain risks, including, but not limited to, risks that these specialty pharmacies: • may not serve a significant portion of our expected patient population; 39 Table of Contents • may not provide us accurate or timely information regarding their inventories, the number of patients using Rezdiffra or complaints about Rezdiffra; • reduce their efforts or discontinue to sell or support Rezdiffra, particularly if competing therapies enter the marketplace; • do not devote the resources necessary to sell Rezdiffra or support patients; • are be unable to satisfy financial obligations to us or others; or • will cease operations.
If such limitations did not exist, Baker Bros. would be deemed to beneficially own 7,050,177 shares of our common stock (which includes 1,969,797 shares of common stock issuable upon the conversion of our Series A Convertible Preferred Stock and 400,000 shares of common stock issuable upon the conversion of our Series B Convertible Preferred Stock, each of which are common stock equivalents with no voting rights, that are convertible into shares of common stock on a 1-for-1 basis only to the extent that after giving effect to such conversion the holders thereof and their affiliates and any persons who are members of a Section 13(d) group with such holders or their affiliates would beneficially own (in the aggregate, for purposes of Rule 13d-3 under the Exchange Act) no more than 4.99% of the outstanding common stock.
If such limitations did not exist, Baker Bros. would be deemed to beneficially own 7,219,498 shares of our common stock (which includes 1,969,797 shares of common stock issuable upon the conversion of our Series A Convertible Preferred Stock and 400,000 shares of common stock issuable upon the conversion of our Series B Convertible Preferred Stock, each of which are common stock equivalents with no voting rights, that are convertible into shares of common stock on a 1-for-1 basis only to the extent that after giving effect to such conversion the holders thereof and their affiliates and any persons who are members of a Section 13(d) group with such holders or their affiliates would beneficially own (in the aggregate, for purposes of Rule 13d-3 under the Exchange Act) no more than 4.99% of the outstanding common stock.
Entering into strategic transactions involves a number of operational risks, including: 40 Table of Contents • failure to achieve expected synergies; • the possibility that our acquired technologies, products and product candidates may not be clinically or commercially successful; • difficulty and expense of assimilating the operations, technology and personnel of any acquisition; • the inability to maintain any acquired company’s relationship with key third parties, such as alliance partners; and • diversion of our management’s attention from our core business.
Entering into strategic transactions involves a number of operational risks, including: • failure to achieve expected synergies; • the possibility that our acquired technologies, products and product candidates may not be clinically or commercially successful; • difficulty and expense of assimilating the operations, technology and personnel of any acquisition; • the inability to maintain any acquired company’s relationship with key third parties, such as alliance partners; and • diversion of our management’s attention from our core business.
If we suffer losses as we have in the past, investors may not receive any return on their investment and may lose their entire investment. 44 Table of Contents We may need to raise additional capital to fund our operations, but we face uncertainties with respect to our ability to access capital.
If we suffer losses as we have in the past, investors may not receive any return on their investment and may lose their entire investment. 49 Table of Contents We may need to raise additional capital to fund our operations, but we face uncertainties with respect to our ability to access capital.
The pre-funded warrants are only exercisable to the extent that, after giving effect to such exercise, the holders thereof, 60 Table of Contents together with their affiliates and any members of a Section 13(d) group with such holders, would beneficially own, for purposes of Rule 13d-3 under the Exchange Act, no more than 9.99% of the outstanding shares of our common stock (the “Maximum Percentage”).
The pre-funded warrants are only exercisable to the extent that, after giving effect to such exercise, the holders thereof, together with their affiliates and any members of a Section 13(d) group with such holders, would beneficially own, for purposes of Rule 13d-3 under the Exchange Act, no more than 9.99% of the outstanding shares of our common stock (the “Maximum Percentage”).
A positive outcome is expected to support the full approval of Rezdiffra for noncirrhotic MASH and also expand the eligible patient population for Rezdiffra with an additional indication in patients with compensated MASH cirrhosis. We cannot guarantee positive results in this trial.
A positive outcome is expected to support the full approval of Rezdiffra for noncirrhotic MASH in the U.S. and also expand the eligible patient population for Rezdiffra with an additional indication in patients with compensated MASH cirrhosis. We cannot guarantee positive results in this trial.
We anticipate continuing to incur significant costs associated with seeking full approval of Rezdiffra in the United States and the commercialization of Rezdiffra, and even if another product candidate we may develop is approved for commercial sale, we anticipate incurring significant costs associated the commercialization of any such approved product candidate.
We anticipate continuing to incur significant costs associated with seeking full approval of Rezdiffra in the United States and European Union and the commercialization of Rezdiffra, and even if another product candidate we may develop is approved for commercial sale, we anticipate incurring significant costs associated the commercialization of any such approved product candidate.
The continuing efforts of the government, insurance companies, managed care organizations and other payers of healthcare services to contain or reduce costs of healthcare may adversely affect: • the demand for any of our product candidates, if approved; • the ability to set a price that we believe is fair for any of our product candidates, if approved; • our ability to generate revenues and achieve or maintain profitability; • the level of taxes that we are required to pay; and • the availability of capital.
The continuing efforts of the government, insurance companies, managed care organizations and other payers of healthcare services to contain or reduce costs of healthcare may adversely affect: • the demand for any of our product candidates, if approved; • the ability to set a price that we believe is fair for any of our product candidates, if approved; • our ability to generate revenues and achieve or maintain profitability; 34 Table of Contents • the level of taxes that we are required to pay; and • the availability of capital.
Even though we received FDA accelerated approval for Rezdiffra, the manufacturing, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, sampling, and record keeping related to our product will remain subject to extensive regulatory requirements.
Even though we received FDA accelerated approval and EC CMA for Rezdiffra, the manufacturing, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, sampling, and record keeping related to our product will remain subject to extensive regulatory requirements.
We expect to continue to expand our development and commercialization capabilities, and as a result, we may encounter challenges in managing our growth, which could disrupt our operations. We are in the process of expanding our commercial operations in Europe for Rezdiffra, if approved, and are seeking to expand our development pipeline.
We expect to continue to expand our development and commercialization capabilities, and as a result, we may encounter challenges in managing our growth, which could disrupt our operations. We are in the process of expanding our commercial operations in Europe for Rezdiffra and are seeking to continue to expand our development pipeline.
If any of these events occur, our ability to sell Rezdiffra may be impaired, and we may incur substantial additional expense to comply with regulatory requirements, which could adversely affect our business, financial condition and results of operations. 32 Table of Contents Rezdiffra could develop unexpected safety or efficacy concerns, which would likely have a material adverse effect on us.
If any of these events occur, our ability to sell Rezdiffra may be impaired, and we may incur substantial additional expense to comply with regulatory requirements, which could adversely affect our business, financial condition and results of operations. Rezdiffra could develop unexpected safety or efficacy concerns, which would likely have a material adverse effect on us.
While Rezdiffra has been approved by the FDA for the treatment of noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis), it has not been approved in any other jurisdiction for this indication or for any other indication.
While Rezdiffra has been approved by the FDA and EC for the treatment of noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis), it has not been approved in any other jurisdiction for this indication or for any other indication.
These and other provisions in our Charter and Bylaws and under Delaware law could make it more difficult for stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, and could delay or impede a merger, tender offer or proxy 59 Table of Contents contest involving our company.
These and other provisions in our charter and bylaws and under Delaware law could make it more difficult for stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, and could delay or impede a merger, tender offer or proxy contest involving our company.
Our failure to comply with the covenants or other terms of the Loan Agreement, including as a result of events beyond our control, could result in a default under the Loan Agreement that could materially and adversely affect our business.
Our failure to comply with the covenants or other terms of the Financing Agreement, including as a result of events beyond our control, could result in a default under the Financing Agreement that could materially and adversely affect our business.
Anti-takeover provisions in our restated certificate of incorporation (our “Charter”), our Restated Bylaws (our “Bylaws”) and under Delaware law could make an acquisition of our company, which may be beneficial to our 58 Table of Contents stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management, which may depress the trading price of our common stock.
Anti-takeover provisions in our restated certificate of incorporation (our “Charter”), our Restated Bylaws (our “Bylaws”) and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management, which may depress the trading price of our common stock.
For certain commercial prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States.
For certain commercial prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA and regulators in other territories of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States or other territories, respectively.
Some of these laws are new or ambiguous as to what is required to comply with their requirements, and we could be subject to penalties if it is determined that we have failed to comply with an applicable legal requirement. 48 Table of Contents We are subject to anti-corruption laws and trade control laws, as well as other laws governing our operations.
Some of these laws are new or ambiguous as to what is required to comply with their requirements, and we could be subject to penalties if it is determined that we have failed to comply with an applicable legal requirement. We are subject to anti-corruption laws and trade control laws, as well as other laws governing our operations.
To the extent that any incident, disruption or security breach results in a loss of or damage to our data or applications or other data or applications relating to our technology, product or product candidates, or inappropriate disclosure of confidential or proprietary information, we could incur liabilities and the further development of and regulatory approval efforts for our product candidates or commercialization of our product could be delayed.
To the extent that any cybersecurity incident, disruption or data breach results in a loss of or damage to our data or applications or other data or applications relating to our technology, product or product candidates, or inappropriate disclosure of confidential, personal or proprietary information, we could incur liabilities and the further development of and regulatory approval efforts for our product candidates or commercialization of our product could be delayed.
The amount and timing of any expenditure needed to fund our operations will depend on numerous factors, including: • the costs associated with commercializing Rezdiffra in the United States; • the type, number, scope, progress, expansion costs, results of and timing of our ongoing and future clinical trials or the need for additional clinical trials; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • the timing and costs of maintaining marketing approvals for Rezdiffra in the United States; • our ability to receive marketing approval for Rezdiffra in Europe; • the number of other product candidates that we may pursue and such product candidates' development requirements; • the timing of obtaining regulatory approval for any potential future product candidates; • the costs and timing of obtaining or maintaining manufacturing for Rezdiffra; • the costs and timing of building and maintaining our commercial infrastructure; • the terms and timing of establishing and maintaining collaborations, license agreements and other strategic transactions; • our headcount growth and associated costs as we expand our research and development efforts, increase our office space and establish a commercial infrastructure; • costs associated with any new product candidates that we may develop, in-license or acquire; • the effect of competing technological and market developments; and • the ongoing costs of operating as a public company.
The amount and timing of any expenditure needed to fund our operations will depend on numerous factors, including: • the costs associated with commercializing Rezdiffra; • the type, number, scope, progress, expansion costs, results of and timing of our ongoing and future clinical trials or the need for additional clinical trials; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • the timing and costs of maintaining marketing approvals for Rezdiffra in the United States and European Union; • the number of other product candidates that we may pursue and such product candidate’s development requirements; • the timing of obtaining regulatory approval for any potential future product candidates; • the costs and timing of obtaining or maintaining manufacturing for Rezdiffra; • the costs and timing of building and maintaining our commercial infrastructure; • the terms and timing of establishing and maintaining collaborations, license agreements and other strategic transactions; • our headcount growth and associated costs as we expand our research and development efforts, increase our office space and establish a commercial infrastructure; • costs associated with any new product candidates that we may develop, in-license or acquire; • the effect of competing technological and market developments; and • the ongoing costs of operating as a public company.
We can provide no assurance that our patent applications or those of our licensors will result in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technologies, nor can 51 Table of Contents we provide any assurance that the patents issued will not be infringed, designed around or invalidated by third parties.
We can provide no assurance that our patent applications or those of our licensors will result in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technologies, nor can we provide any assurance that the patents issued will not be infringed, designed around or invalidated by third parties.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. 55 Table of Contents We may not be successful in obtaining or maintaining necessary rights to our product and product candidates through acquisitions and in-licenses.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. We may not be successful in obtaining or maintaining necessary rights to our product and product candidates through acquisitions and in-licenses.
Similarly, if we are relying on a collaborator to indemnify us and the collaborator is denied insurance coverage or the 41 Table of Contents indemnification obligation exceeds the applicable insurance coverage, and if the collaborator does not have other assets available to indemnify us, our business, financial condition and results of operations could be adversely affected.
Similarly, if we are relying on a collaborator to indemnify us and the collaborator is denied insurance coverage or the indemnification obligation exceeds the applicable insurance coverage, and if the collaborator does not have other assets available to indemnify us, our business, financial condition and results of operations could be adversely affected.
Changes to the ACA, to the Medicare or Medicaid programs, or to the ability of the federal government to negotiate or otherwise affect drug prices, or other federal legislation regarding healthcare access, financing or legislation in individual states, could affect our business, financial condition, results of operations and prospects and the value of our common stock.
Changes to the ACA, to the Medicare or Medicaid programs, or to the ability of the federal government to negotiate or otherwise affect drug prices, or other federal 51 Table of Contents legislation regarding healthcare access, financing or legislation in individual states, could affect our business, financial condition, results of operations and prospects and the value of our common stock.
Likewise, even an investigation by US or foreign authorities of potential violations of the FCPA other anti-corruption laws or Trade Control laws could have an adverse impact on our reputation, business, financial condition, results of operations and prospects and the value of our common stock.
Likewise, even an investigation by US or foreign authorities of potential violations of the FCPA other anti-corruption laws or Trade Control Laws could have an 53 Table of Contents adverse impact on our reputation, business, financial condition, results of operations and prospects and the value of our common stock.
Any of the foregoing circumstances could negatively impact Rezdiffra's market acceptance and would likely materially adversely affect our business. We operate in a highly competitive and changing environment, and if we are unable to adapt to our environment, we may be unable to compete successfully.
Any of the foregoing circumstances could negatively impact Rezdiffra’s market acceptance and would likely materially adversely affect our business. 37 Table of Contents We operate in a highly competitive and changing environment, and if we are unable to adapt to our environment, we may be unable to compete successfully.
In the event of a liquidation, Hercules would be repaid all outstanding principal and interest prior to distribution of assets to unsecured creditors, and the holders of our common stock would receive a portion of any liquidation proceeds only if all of our creditors then existing, including Hercules, were first repaid in full.
In the event of a liquidation, the Lenders would be repaid all outstanding principal and interest prior to distribution of assets to unsecured creditors, and the holders of our common stock would receive a portion of any liquidation proceeds only if all of our creditors then existing were first repaid in full.
We may be required to repay the outstanding indebtedness under the Loan Agreement if an event of default occurs under the Loan Agreement or, if applicable, any future debt facility.
We may be required to repay the outstanding indebtedness under the Financing Agreement if an event of default occurs under the Financing Agreement or, if applicable, any future debt facility.
We may not be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under the Term Loans. Furthermore, our future working capital, borrowings or equity financing could be unavailable to repay or refinance the amounts outstanding under the Term Loans.
We may not be able to generate sufficient cash flow or sales to pay the principal and interest under the Term Loans. Furthermore, our future working capital, borrowings or equity financing could be unavailable to repay or refinance the amounts outstanding under the Term Loans.
In connection with our and our independent registered public accounting firm’s evaluations of our internal control over financial reporting, we may need to upgrade systems, including information technology, implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff.
In connection with our and our independent registered public accounting firm’s evaluations of our internal control over financial reporting, we may need to upgrade systems, including information 68 Table of Contents technology, implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff.
Further, on February 10, 2021, the federal government’s support for overturning the ACA was withdrawn. It is unclear how the Supreme Court ruling, other such litigation and the healthcare reform measures of the 46 Table of Contents Biden Administration will impact the ACA.
Further, on February 10, 2021, the federal government’s support for overturning the ACA was withdrawn. It is unclear how the Supreme Court ruling, other such litigation and the healthcare reform measures of the Biden Administration will impact the ACA.
For applications that receive priority review, the FDA's marketing application review goal is shortened to six months, as opposed to ten months under standard review. Designation as a breakthrough therapy or priority review product is within the discretion of the regulatory agency.
For applications that receive priority 44 Table of Contents review, the FDA’s marketing application review goal is shortened to six months, as opposed to ten months under standard review. Designation as a breakthrough therapy or priority review product is within the discretion of the regulatory agency.
In addition, success in early clinical trials does not mean that later clinical trials will be successful, because later-stage clinical trials may be conducted in broader patient populations and involve different study designs. Furthermore, our ongoing and future trials will need to demonstrate sufficient safety and efficacy in large 36 Table of Contents patient populations for approval by regulatory authorities.
In addition, success in early clinical trials does not mean that later clinical trials will be successful, because later-stage clinical trials may be conducted in broader patient populations and involve different study designs. Furthermore, our ongoing and future trials will need to demonstrate sufficient safety and efficacy in large patient populations for approval by regulatory authorities.
Advisors LP beneficially owned (for SEC reporting purposes) 9.99% of our common stock and maintained an ownership interest in up to 7,050,177 shares of our common stock subject to exercise or conversion limits such as the Beneficial Ownership Limitation and the Maximum Percentage (the “Baker Bros. Holdings”), as described in the preceding paragraph.
Advisors LP beneficially owned (for SEC reporting purposes) 9.99% of our common stock and maintained an ownership interest in up to 7,219,498 shares of our common stock subject to exercise or conversion limits such as the Beneficial Ownership Limitation and the Maximum Percentage (the “Baker Bros. Holdings”), as described in the preceding paragraph.
These specialty pharmacies account for all of our revenue. A specialty pharmacy is a pharmacy that specializes in the dispensing of medications for complex or chronic conditions that often require a high level of patient education and ongoing management.
These specialty pharmacies account for substantially all of our revenue in the U.S. A specialty pharmacy is a pharmacy that specializes in the dispensing of medications for complex or chronic conditions that often require a high level of patient education and ongoing management.
We may be unable to acquire or in-license any compositions, methods of use, processes, or other third party intellectual property rights from third parties that we identify as necessary for our product or product candidates.
We may be unable to acquire or in-license any compositions, methods of use, processes, or other third party intellectual property rights from third parties that 60 Table of Contents we identify as necessary for our product or product candidates.
Stockholder activism, the current political environment and regulatory reform may lead to changes in regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. We expect to continue to incur substantial costs to comply with the rules and regulations applicable to public companies.
Stockholder activism, the current political environment and regulatory reform may lead to changes in regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. 66 Table of Contents We expect to continue to incur substantial costs to comply with the rules and regulations applicable to public companies.
Our MAESTRO-NASH trial is ongoing as a 54-month outcomes trial designed to generate confirmatory outcomes data that, if positive, is expected to verify a clinical benefit and support the full approval of Rezdiffra.
Our MAESTRO-NASH trial is ongoing as a 54-month outcomes trial designed to generate confirmatory outcomes data that, if positive, is expected to verify a clinical benefit and support the full approval of Rezdiffra in the U.S.
Positive data from our MAESTRO-NASH OUTCOMES trial is expected to support the full approval of Rezdiffra in noncirrhotic MASH and support approval for patients with compensated cirrhosis, expanding the eligible patient population.
Positive data from our MAESTRO-NASH OUTCOMES trial is expected to support the full approval of Rezdiffra in noncirrhotic MASH in the U.S. and support approval for patients with compensated cirrhosis (F4c), expanding the eligible patient population for Rezdiffra.
Even though we have begun to generate revenues from the sale of Rezdiffra, we may not be able to achieve or maintain long-term sustainable profitability unless Rezdiffra is fully approved in the United States and is approved in other jurisdictions or for additional indications or our future product candidates are approved.
Even though we generate revenues from the sale of Rezdiffra, we may not be able to achieve or maintain long-term sustainable profitability unless Rezdiffra is fully approved in the United States and European Union and is approved in other jurisdictions or for additional indications or our future product candidates are approved.
In addition, other states have proposed and/or passed legislation that regulates the privacy and/or security of certain specific types of information. For example, a small number of states have passed laws that regulate biometric data specifically.
In addition, other states have proposed and/or passed legislation that regulates the privacy and/or security of certain specific types of information. For example, a small number of states, including Texas and Illinois, have passed laws that regulate biometric data specifically.
Without such limitations on conversion or exercise, Baker Bros. total ownership would represent 26% of our total outstanding shares of common stock as of December 31, 2024 on a fully exercised or as-converted to common stock basis.
Without such limitations on conversion or exercise, Baker Bros. total ownership would represent approximately 26% of our total outstanding shares of common stock as of December 31, 2025 on a fully exercised or as-converted to common stock basis.
These other product candidates may require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and/or applicable foreign regulatory authorities.
These product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and/or applicable foreign regulatory authorities.
These generic equivalents, which must meet the same quality standards as branded pharmaceuticals, would 34 Table of Contents be significantly less costly than our product to bring to market, and companies that produce generic equivalents are generally able to offer their products at lower prices.
These generic equivalents, which must meet the same quality standards as branded pharmaceuticals, would be significantly less costly than our product to bring to market, and companies that produce generic equivalents are generally able to offer their products at lower prices.
If a court were to find such exclusive forum provision to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
If a court were to find such exclusive forum provision 64 Table of Contents to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
Product liability claims may be brought against us or our partners by participants enrolled in our clinical trials, patients, healthcare providers or others 35 Table of Contents using, administering or selling any approved product. If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities.
Product liability claims may be brought against us or our partners by participants enrolled in our clinical trials, patients, healthcare providers or others using, administering or selling any approved product. If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities.
Any patent-related legal action against us claiming damages and seeking to enjoin commercial activities relating to our product and product candidates or processes could subject us to potential liability for damages and require us to obtain a license to continue to manufacture or market resmetirom or our other product candidates.
Any patent-related legal action against us claiming damages and seeking to enjoin commercial activities relating to our 59 Table of Contents product and product candidates or processes could subject us to potential liability for damages and require us to obtain a license to continue to manufacture or market resmetirom or our other product candidates.
If Rezdiffra does not achieve and maintain an adequate level of acceptance, it is likely that we will not generate significant revenue or become profitable.
If Rezdiffra does not achieve and maintain an adequate level of acceptance, it is likely that we will not generate significant revenue or become 32 Table of Contents profitable.
We could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner 49 Table of Contents that is not authorized or permitted by HIPAA.
We could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.
There are also states that are specifically regulating health information. For example, Washington’s My Health My Data Act, which became effective on March 31, 2024, regulates the collection and sharing of health information and has a private right of action, which further increases the relevant compliance risk. Connecticut and Nevada have also passed similar laws regulating consumer health data.
For example, Washington’s My Health My Data Act, which became effective on March 31, 2024, regulates the collection and sharing of health information and has a private right of action, which further increases the relevant compliance risk. Connecticut and Nevada have also passed similar laws regulating consumer health data.
We believe that the commercial success of Rezdiffra depends on many factors, including the following: • our ability to effectively educate healthcare providers and patients on the risks of MASH and the potential clinical benefits of Rezdiffra, the first FDA-approved treatment in MASH; • the efficacy, cost, approved use, and side-effect profile of Rezdiffra relative to competitive treatment regimens for the treatment of MASH; • Rezdiffra may compete with the off-label use of currently marketed products and other therapies in development that may in the future obtain approval for MASH; • the effectiveness of our commercial strategy for the marketing of Rezdiffra, including our pricing strategy and the effectiveness of our efforts to obtain adequate third-party reimbursements; • developing, maintaining and successfully monitoring commercial manufacturing arrangements for Rezdiffra with third-party manufacturers to ensure they meet our standards and those of regulatory authorities, including the FDA, which extensively regulate and monitor pharmaceutical manufacturing facilities; • our ability to negotiate and enter into any additional commercial, supply and distribution contracts to support commercialization efforts, and to hire and manage additional qualified personnel; • our ability to meet the demand for commercial supplies of Rezdiffra at acceptable costs; • the acceptance of Rezdiffra by physicians, patients and third-party payors; • our ability to remain compliant with laws and regulations that apply to us and our commercial activities; • the actual market-size, ability to identify targeted patients and the demographics of patients eligible for Rezdiffra, which may be different than what we currently expect; • the occurrence of any side effects, adverse reactions or misuse, or any unfavorable publicity in these areas; • our ability to obtain, maintain or enforce our patents and other intellectual property rights; and • the effect of recent or potential health care legislation in the United States.
We believe that the commercial success of Rezdiffra depends on many factors, including the following: • our ability to effectively educate healthcare providers and patients on the risks of MASH and the potential clinical benefits of Rezdiffra; • the efficacy, cost, approved use, and side-effect profile of Rezdiffra relative to competitive treatment regimens for the treatment of MASH; • Rezdiffra may compete with the off-label use of currently marketed products and other therapies in development that may in the future obtain approval for MASH; • the effectiveness of our commercial strategy for the marketing of Rezdiffra, including our pricing strategy and the effectiveness of our efforts to obtain and maintain adequate third-party reimbursements; • developing, maintaining and successfully monitoring commercial manufacturing arrangements for Rezdiffra with third-party manufacturers to ensure they meet our standards and those of regulatory authorities, including the FDA, which extensively regulate and monitor pharmaceutical manufacturing facilities; • our ability to negotiate and enter into any additional commercial, supply and distribution contracts to support commercialization efforts, and to hire and manage additional qualified personnel; • our ability to meet the demand for commercial supplies of Rezdiffra at acceptable costs; • the acceptance of Rezdiffra by physicians, patients and third-party payors; • our ability to remain compliant with laws and regulations that apply to us and our commercial, promotional and medical activities; • the actual market-size, ability to identify targeted patients and the demographics of patients eligible for Rezdiffra, which may be different than what we currently expect; • the occurrence of any side effects, adverse reactions or misuse, or any unfavorable publicity in these areas; • our ability to obtain, maintain or enforce our patents and other intellectual property rights; and • the effect of recent or potential health care legislation in the United States. 31 Table of Contents While we believe that Rezdiffra has a commercially competitive profile, we cannot accurately predict the amount of revenue that would be generated from the sale of Rezdiffra.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CIO provides regular briefings to our senior management team on cybersecurity matters, including threats, events and program enhancements. Board Oversight While our board of directors has overall responsibility for risk oversight, our Audit Committee oversees cybersecurity risk matters.
Biggest changeBoard Oversight Our Board of Directors has overall responsibility for risk oversight, and the Audit Committee oversees cybersecurity-related risk. The Audit Committee receives reports quarterly, and otherwise as needed, from the CISO and CIO and reviews cybersecurity matters with management, including our cybersecurity risk profile and the steps taken to monitor and mitigate cybersecurity risks.
To date, there have not been any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect our company, including our business strategy, results of operations or financial condition.
Accordingly, we may not be able to timely detect threats or anticipate and implement adequate security measures. 71 Table of Contents To date, there have not been any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
Our CIO has more than 25 years of experience as an IT professional overseeing and supporting IT operations in the biopharmaceutical industry, including several years of experience in cybersecurity . The members of the IT Security and Risk Committee also have expertise in cybersecurity.
Governance Management Oversight Overall responsibility for our information technology and cybersecurity functions resides with our CIO. Our CIO has more than 25 years of experience as an information technology ("IT") professional overseeing and supporting IT operations in the biopharmaceutical industry, including several years of experience in cybersecurity.
We also collect and assess cybersecurity audit reports and other supporting documentation when available and include appropriate security terms in our contracts where applicable as part of our oversight of third-party providers. Process for Assessing, Identifying and Managing Material Risks from Cybersecurity Threats In the event of a cybersecurity incident, we maintain an incident response program.
We also include appropriate security terms in contracts with third-party service providers, where applicable. Process for Assessing, Identifying and Managing Material Risks from Cybersecurity Threats We maintain written information security policies, including an incident response program that outlines processes for identifying, assessing, escalating, and responding to cybersecurity incidents.
Pursuant to the program and its escalation protocols, designated personnel are responsible for assessing the severity of an incident and associated threat; containing the threat; remediating the threat, including recovery of data and access to systems; analyzing any reporting obligations associated with the incident and performing post-incident analysis.
Designated personnel are responsible for assessing the severity of an incident and associated threat; containing the threat; remediating the threat, including recovery of data and access to systems; and evaluating any applicable legal or regulatory reporting obligations. Our incident response program also provides for post-incident review. We maintain 24/7 security monitoring through a managed detection and response (“MDR”) provider.
While we believe we maintain an effective cybersecurity program, the techniques used to infiltrate IT systems continue to evolve. Accordingly, we may not be able to timely detect threats or anticipate and implement adequate security measures. We also maintain cybersecurity insurance providing coverage for certain costs related to cybersecurity-related incidents that impact our systems, networks and technology.
While we believe we maintain an effective cybersecurity program, the techniques used to infiltrate IT systems continue to evolve.
Cybersecurity Program Given the importance of cybersecurity to our business, we maintain a cybersecurity program to support the effectiveness of our systems and our preparedness for information security risks. This program includes a number of administrative, physical, and technical safeguards. We have conducted and continue to conduct evaluations of our cybersecurity program through periodic external audits and penetration tests.
We therefore maintain a cybersecurity program designed to 70 Table of Contents support the resilience of our information systems and help prepare for evolving information security risks. Our program includes administrative, physical, and technical safeguards and is informed by industry frameworks, including the National Institute of Standards and Technology Cybersecurity Framework.
Removed
We also require cybersecurity trainings when onboarding new employees, contractors and other workforce members, as well as annual cybersecurity awareness training for our employees, contractors and other workforce members. Our program is based on industry frameworks, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) to strengthen our program effectiveness and reduce cybersecurity risks.
Added
Cybersecurity Program We rely on a combination of internally-managed systems and third-party technology environments to support our research, clinical, commercial, and corporate operations. As our business has grown, these systems have become increasingly important to our ability to operate effectively.
Removed
We use a risk-based approach with respect to our use and oversight of third-party service providers, tailoring processes according to the nature and sensitivity of the data accessed, processed, or stored by such third-party service provider and performing additional risk screenings and procedures, as appropriate.
Added
We periodically evaluate aspects of our cybersecurity program through risk-based external assessments. We assess cybersecurity risks as part of our broader risk-management processes and consider potential impacts on our operations, financial results and reputation. Cybersecurity training is required when onboarding new employees, and we also provide annual cybersecurity awareness training for employees.
Removed
We use a number of means to assess cyber risks related to our third-party service providers, including collecting vendor questionnaires and conducting due diligence in connection with onboarding new vendors.
Added
We use a risk-based approach with respect to our evaluation and oversight of third-party service providers that takes into account whether such service providers access, process or store our information or support key business operations. Our due diligence activities may include security questionnaires, reviews of available audit reports and other supporting documentation.
Removed
We have relationships with a number of third-party service providers to assist with cybersecurity monitoring, containment and remediation efforts.
Added
We recently expanded our cybersecurity capabilities by adding contracted personnel dedicated to security operations and incident response. These personnel operate under the direction of our Cybersecurity and Chief Information Security Officer ("CISO") within the cybersecurity program overseen by our Chief Information Officer ("CIO"), and work alongside our MDR provider and other third-party specialists.
Removed
Governance Management Oversight Our controls and processes employed to assess, identify and manage material risks from cybersecurity threats are implemented and overseen by our Information Technology (“IT”) Security and Risk Committee, which consists of our Chief Information Officer (“CIO”) and internal and third-party cybersecurity professionals.
Added
Our CISO has over 25 years of experience in IT and security, including more than a decade in the pharmaceutical sector focused on protecting intellectual property and proprietary data.
Removed
The IT Security and Risk Committee is responsible for the day-to-day management of our cybersecurity program, including the prevention, detection, investigation, response to, and recovery from cybersecurity threats and incidents, and is regularly engaged to help ensure that the cybersecurity program functions effectively in the face of evolving cybersecurity threats.
Added
Our CISO is responsible for the development and execution of our cybersecurity strategy and for overseeing the day-to-day operation of our cybersecurity program, which is carried out by a combination of internal and contracted cybersecurity resources supporting security operations and incident response.
Removed
The Audit Committee is responsible for reviewing, discussing with management and overseeing our data privacy, information technology and security and cybersecurity risk exposures, including: (i) the potential impact of those exposures on the Company’s business, financial results, operations and reputation; (ii) the programs and steps implemented by management to monitor and mitigate any exposures; (iii) our information governance and cybersecurity 65 Table of Contents policies and programs and (iv) major legislative and regulatory developments that could materially impact our data privacy and cybersecurity risk exposure.
Added
In this role, the CISO, together with the CIO, oversees our processes for the prevention, detection, mitigation, and remediation of cybersecurity incidents through established policies, procedures, and reporting mechanisms, and provides regular updates to senior management and the Audit Committee of our Board of Directors (the "Audit Committee"), which oversees cybersecurity-related risk.
Removed
On a quarterly basis, our General Counsel, Chief Financial Officer (“CFO”) and CIO report to the Audit Committee on information technology and cybersecurity matters, including, as appropriate, key risks, a detailed threat assessment relating to information technology risks, as applicable, the potential impact of those exposures on our business, financial results, operations and reputation, the programs and steps implemented by management to monitor and mitigate exposures and any major legal developments that could significantly impact our cybersecurity risk exposure.
Added
Cybersecurity Risks We assess cybersecurity risks as part of our broader risk-management processes and consider potential impacts on our operations, financial results, and reputation. We also maintain cybersecurity insurance providing coverage for certain costs related to cybersecurity incidents that impact our systems, networks and technology.
Removed
Cybersecurity Risks Our cybersecurity risk management processes are integrated into our overall Enterprise Risk Management (“ERM”) process. As part of our ERM process, department leaders identify, assess and evaluate risks impacting our operations across our organization, including those risks related to cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties As of December 31, 2024, we leased our approximately 29,415 square-foot corporate headquarters facility located in West Conshohocken, Pennsylvania. Our lease contains extension rights beyond the scheduled lease expiration date of November 30, 2026. We continue to evaluate our facility requirements and believe that appropriate space will be available to accommodate our future needs. Item 3.
Biggest changeItem 2. Properties As of December 31, 2025, we leased approximately 44,347 square-feet of facilities located in West Conshohocken, Pennsylvania, our corporate headquarters. These leases contain extension rights beyond the scheduled lease expiration dates of November 2026 and June 2031, respectively. We lease additional office space in Waltham, Massachusetts.
Legal Proceedings We currently are not a party to any material legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 66 Table of Contents PART II
We continue to evaluate our facility requirements and believe that appropriate space will be available to accommodate our future needs. Item 3. Legal Proceedings We currently are not a party to any material legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 72 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities. Market Information Our common stock trades on the Nasdaq Stock Market under the symbol “MDGL.” Holders As of December 31, 2024, there were approximately 23 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on the Nasdaq Stock Market under the symbol “MDGL.” Holders As of December 31, 2025, there were approximately 12 holders of record of our common stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered equity during the period covered by this Annual Report. Unregistered Sales of Securities During the year ended December 31, 2024, we did not issue or sell any unregistered securities.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered equity during the period covered by this Annual Report. Unregistered Sales of Securities During the year ended December 31, 2025, we did not issue or sell any unregistered securities.
This graph assumes the investment of $100 on December 31, 2019 in our common stock, the Nasdaq Biotechnology Index and the Nasdaq Composite Index and assumes the reinvestment of dividends, if any. 67 Table of Contents The comparisons shown in the graph below are based upon historical data.
This graph assumes the investment of $100 on December 31, 2020 in our common stock, the Nasdaq Biotechnology Index and the Nasdaq Composite Index and assumes the reinvestment of dividends, if any. 73 Table of Contents The comparisons shown in the graph below are based upon historical data.
Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between December 31, 2019 and December 31, 2024, with the cumulative total return of (a) the Nasdaq Biotechnology Index and (b) the Nasdaq Composite Index, over the same period.
Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between December 31, 2020 and December 31, 2025, with the cumulative total return of (a) the Nasdaq Biotechnology Index and (b) the Nasdaq Composite Index, over the same period.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Discussion of Results of Operations The following table provides comparative results of operations for the years ended December 31, 2024, 2023 and 2022 (in thousands): Year Ended December 31, 2024 vs 2023 2023 vs 2022 2024 2023 2022 $ % $ % Product revenue, net $ 180,133 $ — $ — $ 180,133 100 % $ — — % Operating expenses: Cost of sales 6,233 — — 6,233 100 % — — % Research and development 236,718 272,350 245,441 (35,632) (13) % 26,909 11 % Selling, general and administrative 435,057 108,146 48,130 326,911 302 % 60,016 125 % Total operating expenses 678,008 380,496 293,571 297,512 78 % 86,925 30 % Loss from operations (497,875) (380,496) (293,571) (117,379) 31 % (86,925) 30 % Interest income 46,654 19,578 2,185 27,076 138 % 17,393 796 % Interest expense (14,671) (12,712) (3,964) (1,959) 15 % (8,748) 221 % Net loss $ (465,892) $ (373,630) $ (295,350) $ (92,262) 25 % $ (78,280) 27 % Revenue We began selling Rezdiffra in April 2024.
Biggest changeResults of Operations Discussion of Results of Operations The following table provides comparative results of operations for the years ended December 31, 2025, 2024 and 2023 (in thousands): Year Ended December 31, 2025 vs 2024 2024 vs 2023 2025 2024 2023 $ % $ % Product revenue, net $ 958,403 $ 180,133 $ — $ 778,270 432 % $ 180,133 * Operating expenses: Cost of sales 56,148 6,233 — 49,915 801 % 6,233 * Research and development 388,525 236,718 272,350 151,807 64 % (35,632) (13) % Selling, general and administrative 813,827 435,057 108,146 378,770 87 % 326,911 302 % Total operating expenses 1,258,500 678,008 380,496 580,492 86 % 297,512 78 % Loss from operations (300,097) (497,875) (380,496) 197,778 (40) % (117,379) 31 % Interest income 37,364 46,654 19,578 (9,290) (20) % 27,076 138 % Interest expense (22,309) (14,671) (12,712) (7,638) 52 % (1,959) 15 % Loss on extinguishment of debt (2,779) — — (2,779) * — * Other expense, net (463) — — (463) * — * Net loss $ (288,284) $ (465,892) $ (373,630) $ 177,608 (38) % $ (92,262) 25 % *Indicates the percentage change period over period is not meaningful due to zero amount in the prior period. 78 Table of Contents Revenue We recorded $958.4 million of product revenue, net for the year ended December 31, 2025, compared to $180.1 million in the corresponding period in 2024.
Completion dates and costs for our clinical development programs as well as our research program can vary significantly for any future product candidate and are difficult to predict. As a result, we cannot estimate with any degree of certainty the costs we will incur in connection with the development of product candidates at this point in time.
Completion dates and costs for our clinical development programs as well as our research program can vary significantly for any future product candidate and are difficult to predict. As a result, we cannot estimate with any degree of certainty the costs we will incur in connection with the development of product candidates at this time.
Investing Activities Net cash used in investing activities was $274.4 million for the year ended December 31, 2024 and consisted primarily of $1,131.2 million of purchases of marketable securities for our investment portfolio, partially offset by $863.3 million from sales and maturities of marketable securities from our investment portfolio.
Net cash used in investing activities was $274.4 million for the year ended December 31, 2024 and consisted primarily of $1,131.2 million of purchases of marketable securities for our investment portfolio, partially offset by $863.3 million of sales and maturities of marketable securities.
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements which have been prepared in accordance with generally accepted accounting principles in the United States.
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements which have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
The judgements and estimates involved in determining variable consideration are reviewed each reporting period, as all are subject to adjustments as new information becomes available. We recognize revenue in accordance with ASC Topic 606 - Revenue from Contracts with Customers.
The judgments and estimates involved in determining variable consideration are reviewed each reporting period, as all are subject to adjustments as new information becomes available. We recognize revenue in accordance with ASC Topic 606 - Revenue from Contracts with Customers ("ASC 606").
A holder of 2024 Pre-Funded Warrants may increase or decrease this percentage, but not in excess of 19.99% , by providing at least 61 days prior notice to us. 2023 Public Offering On September 28, 2023, we entered into an Underwriting Agreement with Goldman Sachs & Co.
A holder of 2024 Pre-Funded Warrants may increase or decrease this percentage, but not in excess of 19.99% , by providing at least 61 days prior notice to us. 81 Table of Contents 2023 Public Offering On September 28, 2023, we entered into an Underwriting Agreement with Goldman Sachs & Co.
Actual results may differ materially from these estimates under different assumptions or conditions. Revenue Recognition Our accounting policy over revenue recognition has a significant impact on our financial results and involves substantial judgement and estimation.
Actual results may differ materially from these estimates under different assumptions or conditions. Revenue Recognition Our accounting policy over revenue recognition has a significant impact on our financial results and involves substantial judgment and estimation.
We expect cost of sales to increase in the future, as manufacturing costs incurred prior to regulatory approval were expensed to research and development rather than capitalized as inventory, as approval was considered uncertain. 69 Table of Contents Research and Development Expenses Research and development expenses primarily consist of costs associated with our research activities, including the clinical development of our product candidates.
We expect cost of sales to increase in the future, as manufacturing costs incurred prior to regulatory approval were expensed to research and development rather than capitalized as inventory, as approval was considered uncertain. Research and Development Expenses Research and development expenses primarily consist of costs associated with our research activities, including the clinical development of our product candidates.
As a result of planned expenditures to commercialize Rezdiffra, expand our commercial operations to Europe (subject to receipt of regulatory approval), continue research and development activities, manage and grow our intellectual property portfolio, engage in potential business development transactions and costs associated with general corporate activities, we expect to incur additional operating losses.
As a result of planned expenditures to commercialize Rezdiffra, expand our commercial operations in Europe, continue research and development activities, manage and grow our intellectual property portfolio and engage in potential business development transactions and costs associated with general corporate activities, we expect to incur additional operating losses.
If adequate funds are not available, or if the terms of potential funding sources 73 Table of Contents are unfavorable, this could have a material adverse effect on our business, results of operations and financial condition.
If adequate funds are not available, or if the terms of potential funding sources are unfavorable, this could have a material adverse effect on our business, results of operations and financial condition.
Comparison of the Years Ended December 31, 2023 and 2022 For discussion of our 2023 results and a comparison with 2022 results please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 that was filed with the SEC on February 28, 2024.
Comparison of the Years Ended December 31, 2024 and 2023 For discussion of our 2024 results and a comparison with 2023 results, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 that was filed with the SEC on February 26, 2025.
A holder of 75 Table of Contents Pre-Funded Warrants may increase or decrease this percentage, but not in excess of 19.99%, by providing at least 61 days prior notice to us.
A holder of 2023 Pre-Funded Warrants may increase or decrease this percentage, but not in excess of 19.99%, by providing at least 61 days prior notice to us.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto contained elsewhere in this Annual Report on Form 10-K (this “Annual Report”). This discussion contains forward-looking statements that involve risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto contained elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties.
Revenue is recognized at a point in time when the customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Revenue is recognized at the point in time when the customer obtains control of promised goods or services in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.
Accruals are established for gross to net deductions and actual amounts incurred are offset against applicable accruals. We reflect these accruals as either a reduction in the related account receivable from the customer or as an accrued liability, depending on the means by which the deduction is settled.
Accruals are established for gross to net deductions and actual amounts incurred are offset against applicable accruals. We reflect these accruals as either a reduction in the related account receivable from the customer or as a current 77 Table of Contents liability, depending on the means by which the deduction is settled.
Our research and development expenses consist primarily of: • salaries and related expense, including stock-based compensation; • external expenses paid to clinical trial sites, contract research organizations, laboratories, database software and consultants that conduct clinical trials; • expenses related to development and the production of non-clinical and clinical trial supplies, including fees paid to contract manufacturers; • expenses related to preclinical studies; • expenses related to compliance with drug development regulatory requirements; and • other allocated expenses, which include direct and allocated expenses for depreciation of equipment and other supplies.
Our research and development expenses consist primarily of: • salaries and related expense, including stock-based compensation; • external expenses paid to clinical trial sites, contract research organizations, laboratories, database software and consultants that conduct clinical trials; • expenses related to development and the production of non-clinical and clinical trial supplies, including fees paid to contract manufacturers; • expenses related to preclinical activities; • expenses related to compliance with drug development regulatory requirements; • other allocated expenses, which include direct and allocated expenses for depreciation of equipment and other supplies; and • certain upfront and milestone payments payable pursuant to our license agreements.
The 2023 Pre-Funded Warrants are exercisable at any time after the date of issuance. A holder of 2023 Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise.
A holder of 2023 Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise.
Selling, General and Administrative Expense Our selling, general and administrative expenses were $435.1 million for the year ended December 31, 2024 compared to $108.1 million for the year ended December 31, 2023.
Selling, General and Administrative Expense Our selling, general and administrative expenses were $813.8 million for the year ended December 31, 2025 compared to $435.1 million for the year ended December 31, 2024.
The 2024 Pre-Funded Warrants are exercisable at any time afte r the date of issuance. A holder of 2024 Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise.
A holder of 2024 Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise.
Executive Overview We are a biopharmaceutical company focused on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (“MASH”), a serious liver disease with high unmet medical need that can lead to cirrhosis, liver failure and premature mortality.
Executive Overview We are a biopharmaceutical company focused on delivering novel therapeutics for MASH, a serious liver disease with high unmet medical need that can lead to cirrhosis, liver failure, liver cancer, need for liver transplantation and premature mortality.
To meet future long-term liquidity requirements, as well as maintain compliance with certain of our Loan Facility covenants, we may need to raise additional capital to fund our operations through equity or debt financings, collaborations, partnerships or other strategic transactions. Additional capital, if needed, may not be available on terms acceptable to us, or at all.
To meet future long-term liquidity requirements, we may need to raise additional capital to fund our operations through equity or debt financings, collaborations, partnerships or other strategic transactions. Additional capital, if needed, may not be available on terms acceptable to us, or at all.
The increase in interest income was due primarily to higher principal balances and interest rates in 2024. Interest Expense Our interest expense was $14.7 million for the year ended December 31, 2024, compared to $12.7 million for the year ended December 31, 2023.
The decrease in interest income was due primarily to higher principal balances and interest rates in 2024. Interest Expense Our interest expense was $22.3 million for the year ended December 31, 2025, compared to $14.7 million for the year ended December 31, 2024.
The 2023 Offering closed on October 3, 2023. The gross proceeds of the 2023 Offering was $500.0 million , and we received net proceeds, after deducting the underwriting discount and commissions and other estimated offering expenses payable by us, of approximately $472.0 million .
The 2023 Offering closed on October 3, 2023. The gross proceeds of the 2023 Offering was $500.0 million , and we received net proceeds, after deducting the underwriting discount and commissions and other estimated offering expenses payable by us, of approximately $472.0 million . The 2023 Pre-Funded Warrants are exercisable at any time after the date of issuance.
MASH is expected to become the leading cause of liver transplantation in the United States and is already the leading cause of liver transplantation among women in the United States. Our medication, Rezdiffra (resmetirom), is a once-daily, oral, liver-directed THR-β agonist designed to target key underlying causes of MASH.
MASH is the leading cause of liver transplantation in women, the second leading cause of all liver transplantation in the United States and the fastest-growing indication for liver transplantation in Europe. Our medication, Rezdiffra (resmetirom), is a once-daily, oral, liver-directed THR-β agonist designed to target key underlying causes of MASH.
Our ability to reduce operating losses and begin to generate positive cash flow from operations depends on our ability to successfully commercialize Rezdiffra and achieve positive results from our post-approval trials in order to obtain full approval of Rezdiffra in the United States and potentially expand the eligible patient population.
Our ability to reduce operating losses and begin to generate positive cash flow from operations depends on a number of factors, including our ability to continue to successfully commercialize Rezdiffra, achieve positive results from our post-approval trials in order to obtain full approval of Rezdiffra in the United States and the European Union, expand the eligible patient population for Rezdiffra and successfully develop and receive regulatory approval for additional therapies.
Our future long-term liquidity requirements will be substantial and will depend on many factors, including our ability to effectively commercialize Rezdiffra, our decisions regarding future geographic expansion, the conduct of any future preclinical studies and clinical trials and our entry into any strategic transactions.
Our future long-term liquidity requirements will be substantial and will depend on many factors, including our ability to effectively commercialize Rezdiffra, our decisions regarding future geographic expansion, the conduct of any future preclinical studies and clinical trials, our entry into any strategic transactions, our ability to maintain compliance with the liquidity covenant in the Financing Agreement and potential milestone payments payable pursuant to our license agreements.
Financial Overview We have incurred losses since inception resulting in an accumulated deficit of $1,802.2 million as of December 31, 2024. Prior to generating product revenue from sales of Rezdiffra beginning in April 2024, we financed our operations primarily through public and private offerings of our equity securities and through our loan facility (“Loan Facility”) with Hercules Capital, Inc. (“Hercules”).
Financial Overview We have incurred losses since inception, resulting in an accumulated deficit of $2,090.5 million as of December 31, 2025. Prior to generating product revenue from sales of Rezdiffra beginning in April 2024, we financed our operations primarily through public and private offerings of our equity securities and through our credit facilities.
Sales deductions are based on management’s estimates that involve a substantial degree of judgment. Prompt Pay : Customers receive a prompt pay discount for payments made within a contractually agreed number of days before the due date. The discounts are accounted for as a reduction of the transaction price and recorded as a contra receivable.
Sales deductions are based on management’s estimates that involve a substantial degree of judgment. Prompt Pay : Customers receive a prompt pay discount for payments made within a contractually agreed number of days before the due date. Returns : We record allowances for product returns as a reduction of revenue at the time product sales are recorded.
The 2024 Offering closed on March 21, 2024. The net proceeds of the 2024 Offering, after deducting the underwriting discount and commissions and other estimated offering expenses payable by us, were approximately $659.9 million .
The 2024 Offering closed on March 21, 2024. The net proceeds of the 2024 Offering after deducting the underwriting discount and commissions and other estimated offering expenses payable by us, were approximately $659.9 million . The 2024 Pre-Funded Warrants are exercisable at any time afte r the date of issuance.
Net cash used in investing activities was $502.5 million for the year ended December 31, 2023 and consisted primarily of $834.4 million of purchases of marketable securities for our investment portfolio, partially offset by $333.4 million from sales and maturities of marketable securities.
Investing Activities Net cash provided by investing activities was $32.3 million for the year ended December 31, 2025 and consisted primarily of $1,083.3 million from sales and maturities of marketable securities from our investment portfolio, partially offset by $1,047.5 million of purchases of marketable securities for our investment portfolio.
Selling, general and administrative expenses increased by $326.9 million in 2024 due primarily to increases for commercial launch activities for Rezdiffra, including a corresponding increase in headcount, and an increase in stock compensation expense. Interest Income Our interest income was $46.7 million for the year ended December 31, 2024 compared to $19.6 million for the year ended December 31, 2023.
Selling, general and administrative expenses increased by $378.8 million in 2025 primarily due to an increase in commercial activities for Rezdiffra, including a corresponding increase in headcount to support our commercialization efforts. Interest Income Our interest income was $37.4 million for the year ended December 31, 2025 compared to $46.7 million for the year ended December 31, 2024.
We expect that our selling, general and administrative expenses will increase in the future as we expand our operating activities, continue commercialization efforts, including extending operations into new geographies (if approved), maintain and expand our patent portfolio and incur additional costs associated with being a public company and maintaining compliance with exchange listing and SEC requirements.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries, benefits and stock-based compensation expenses for employees, management costs, costs associated with commercial activities, costs associated with obtaining and maintaining our patent portfolio, commercial and marketing activities, professional fees for accounting, auditing, consulting and legal services, and allocated overhead expenses. 76 Table of Contents We expect that our selling, general and administrative expenses will increase in the future as we expand our operating activities, continue commercialization efforts, including extending operations into new geographies (if approved), maintain and expand our patent portfolio and incur additional costs associated with being a public company and maintaining compliance with exchange listing and SEC requirements.
The increase in interest expense was primarily the result of a higher average outstanding principal balance during the period under the Loan Facility with Hercules.
The increase in interest expense was primarily the result of a higher average outstanding principal balance during the period after entering into the Financing Agreement.
The customer charges us for the difference between what it pays to us for the product and the selling price to the qualified healthcare providers, with the difference recorded as a contra receivable. Co-Payment Assistance : Co-payment assistance programs are offered to eligible end-users as price concessions and are recorded as accrued liabilities and a reduction of the transaction price.
The customer charges us for the difference between what it pays to us for the product and the selling price to the qualified healthcare providers. Co-Payment Assistance : Co-payment assistance programs are offered to eligible end-users as price concessions. We use a third-party to administer the co-payment program for pharmacy benefit claims.
As of December 31, 2024, the outstanding principal under the Loan Facility was $115.0 million. The interest rate as of December 31, 2024 was 9.95%. As of December 31, 2024, we were in compliance with all loan covenants and provisions. March 2024 Public Offering On March 18, 2024, we entered into an Underwriting Agreement with Goldman Sachs & Co.
As of December 31, 2025, we were in compliance with all loan covenants and provisions. 2024 Public Offering In March 2024, we entered into an Underwriting Agreement with Goldman Sachs & Co.
Net cash provided by financing activities was $595.1 million for the year ended December 31, 2023 and consisted primarily of $472.0 million in proceeds from our 2023 Offering, in addition to $65.0 million in borrowings under the Loan Facility, $34.0 million from proceeds from the exercise of common stock options, and $24.5 million from sales of our common stock under the 2021 Sales Agreement, partially offset by $0.4 million of loan issuance costs.
Financing Activities Net cash provided by financing activities was $256.0 million for the year ended December 31, 2025 and consisted primarily of $350.0 million in proceeds from the Initial Term Loan under the Financing Agreement, in addition to $38.1 million from proceeds from the exercise of common stock options, partially offset by a repayment of $121.7 million under the Hercules Loan Facility and $10.4 million of debt issuance costs .
Interest Income Interest income consists primarily of interest and dividend income earned on cash equivalents and marketable securities. Interest Expense 70 Table of Contents Interest expense consists primarily of interest accrued on principal balances under the Loan Facility with Hercules.
Interest Income Interest income consists primarily of interest and dividend income earned on cash equivalents and marketable securities. Interest Expense Interest expense consists primarily of interest accrued on principal balances outstanding under our Financing Agreement.
Returns : We record allowances for product returns as a reduction of revenue at the time product sales are recorded. Product returns are estimated based on forecasted sales and historical and industry data. Returns are permitted in accordance with the return goods policy defined within each customer agreement. A returns reserve is recorded as an accrued liability.
Product returns are estimated based on forecasted sales and historical and industry data. Returns are permitted in accordance with the return goods policy defined within each customer agreement.
Cash Flows The following table summarizes our net cash flow activity (in thousands): Year Ended December 31, 2024 2023 2022 Net cash used in operating activities $ (455,572) $ (324,230) $ (224,857) Net cash provided by (used in) investing activities (274,386) (502,520) 206,686 Net cash provided by financing activities 735,062 595,116 313,451 Net increase (decrease) in cash and cash equivalents $ 5,104 $ (231,634) $ 295,280 Operating Activities Net cash used in operating activities was $455.6 million, $324.2 million, and $224.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Cash Flows The following table summarizes our net cash flow activity (in thousands): Year Ended December 31, 2025 2024 2023 Net cash used in operating activities $ (189,553) $ (455,572) $ (324,230) Net cash provided by (used in) investing activities $ 32,320 $ (274,386) $ (502,520) Net cash provided by financing activities $ 255,984 $ 735,062 $ 595,116 Operating Activities Net cash used in operating activities was $189.6 million for the year ended December 31, 2025.
The use of cash in these periods resulted primarily from our losses from operations, as adjusted for non-cash charges for stock-based compensation, and changes in our working capital accounts.
The use of cash resulted primarily from our loss from operations, driven by commercialization efforts and business development transactions, partially offset by cash receipts from sales of Rezdiffra, as adjusted for non-cash charges for stock-based compensation, and changes in our working capital accounts.
Rezdiffra was launched for sale in the United States in April 2024. As described in the “Critical Accounting Policies and Estimates” section below, revenue is recorded net of variable consideration, which includes prompt pay discounts, service fees, returns, chargebacks, government rebates and co-payment assistance.
As described in the “Critical 75 Table of Contents Accounting Policies and Estimates” section below, revenue is recorded net of variable consideration, which includes prompt pay discounts, service fees, returns, chargebacks, rebates and co-payment assistance. Cost of Sales Cost of sales includes the cost of manufacturing and distribution of inventory related to sales of Rezdiffra, including royalties payable to Roche.
We analyze our inventory levels quarterly and write down inventory subject to expiry, in excess of expected requirements, or that has a cost basis in excess of its expected net realizable value. These write downs are charged to cost of sales in the accompanying Consolidated Statements of Income.
We periodically review our inventory for factors that could impact the future recoverability and realization of future sales, which requires estimates and judgments. We analyze our inventory levels quarterly and write down inventory subject to expiry, in excess of expected requirements or that has a cost basis in excess of its expected net realizable value.
We capitalize inventory costs when future commercial sale in the ordinary course of business is probable.
These write downs are charged to cost of sales in the accompanying Consolidated Statements of Operations. We capitalize inventory costs when future commercial sale in the ordinary course of business is probable.
For the year ended December 31, 2024, we recorded $6.2 million of cost of sales. 72 Table of Contents Research and Development Expense The following represents our research and development expenses for the years ended December 31, 2024, 2023 and 2022 (in thousands): Year Ended December 31, 2024 vs 2023 2023 vs 2022 2024 2023 2022 $ % $ % Personnel and Internal Expense $ 73,418 $ 56,824 $ 39,121 $ 16,594 29 % $ 17,703 45 % External Expense 163,300 215,526 206,320 (52,226) (24) % 9,206 4 % Total $ 236,718 $ 272,350 $ 245,441 $ (35,632) (13 %) $ 26,909 11 % Our research and development expenses were $236.7 million for the year ended December 31, 2024 compared to $272.4 million for the year ended December 31, 2023.
Research and Development Expense The following represents our research and development expenses for the years ended December 31, 2025, 2024 and 2023 (in thousands): Year Ended December 31, 2025 vs 2024 2024 vs 2023 2025 2024 2023 $ % $ % Personnel and Internal Expense $ 73,283 $ 73,418 $ 56,824 $ (135) — % $ 16,594 29 % External Expense 315,242 163,300 215,526 151,942 93 % (52,226) (24) % Total $ 388,525 $ 236,718 $ 272,350 $ 151,807 64 % $ (35,632) (13) % Our research and development expenses were $388.5 million for the year ended December 31, 2025 compared to $236.7 million for the year ended December 31, 2024.
As a result of the Fifth Lease Amendment, an incremental $1.6 million right-of-use asset and lease liabilities were recorded during the year ended December 31, 2023.
In August 2023, we entered into the Fifth Amendment to the Office Lease (the “Fifth Lease Amendment”) pursuant to which the term of the Office Lease was extended through November 2026. As a result of the Fifth Lease Amendment, an incremental $1.6 million right-of-use asset and lease liability were recorded during the year ended December 31, 2023.
Key Components of Our Operating Results Product Revenue, Net In March 2024, the FDA approved Rezdiffra for the treatment of noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). Rezdiffra is a once-daily, oral, liver-directed, THR-ß agonist designed to target key underlying causes of MASH.
Key Components of Our Operating Results Product Revenue, Net In March 2024, the FDA approved Rezdiffra for the treatment of noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). We began generating revenue from sales of Rezdiffra in the United States in April 2024. In addition, we launched Rezdiffra in Germany in September 2025.
We have no obligation to sell any common stock and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement pursuant to its terms. Loan Facility In May 2022 we entered into the $250.0 million Loan Facility with Hercules.
We have no obligation to sell any common stock and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement pursuant to its terms. We did not make any sales under the Sales Agreement during the year ended December 31, 2025.
In March 2024, Rezdiffra became the first and only therapy approved by the U.S. Food and Drug Administration (the “FDA”) for patients with MASH and was commercially available in the United States beginning in April 2024.
In March 2024, Rezdiffra became the first therapy approved by the FDA for patients with MASH and was commercially available in the United States beginning in April 2024. Following receipt of CMA from the EC, we launched Rezdiffra in Germany in September 2025.
At-the-Market Sales Agreement In May 2023, we entered into Amendment No. 1 (the “Sales Agreement Amendment”) to our prior sales agreement (the “2021 Sales Agreement”) with Cowen and Company, LLC, an affiliate of TD Securities (USA) LLC (“Cowen”), which was subsequently terminated in May 2024 when we entered into a Sales Agreement (the “2024 Sales Agreement”) with Cowen, replacing and superseding the 2021 Sales Agreement, as amended by the Sales Agreement Amendment.
At-the-Market Sales Agreement In May 2024, we entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC, an affiliate of TD Securities (USA) LLC (“Cowen”), replacing and superseding our prior sales agreement. We are authorized to issue and sell up to $300.0 million of shares of our common stock under the Sales Agreement.
Until we are able to generate sufficient revenue from Rezdiffra and any other approved products, we anticipate that we will continue to incur significant losses.
We began receiving revenue from sales of Rezdiffra following the receipt of accelerated FDA approval in March 2024 and CMA from the EC in August 2025. Until we are able to generate sufficient revenue from Rezdiffra and any other future approved products, we anticipate that we will continue to incur losses.
Financing Activities Net cash provided by financing activities was $735.1 million for the year ended December 31, 2024 and consisted primarily of $659.9 million in proceeds from the 2024 Offering, in addition to $76.9 million from proceeds from the exercise of common stock options.
Net cash provided by financing activities was $735.1 million for the year ended December 31, 2024 and consisted primarily of $659.9 million in proceeds from the 2024 Offering, in addition to $76.9 million from proceeds from the exercise of common stock options. 82 Table of Contents Contractual Obligations and Commercial Commitments In 2019, we entered into an operating lease for office space in certain premises located in West Conshohocken, Pennsylvania (the “Office Lease”), which was further amended by four amendments entered into from 2019 to May 2023.
Our 71 Table of Contents estimate for rebates is based on statutory discount rates, expected utilization or an estimated number of patients on treatment, as applicable. Inventory Inventory, which consists of work in process and finished goods, is stated at the lower of cost or estimated net realizable value, using actual cost, based on a first-in, first-out method.
Inventory Inventory, which consists of work in process and finished goods, is stated at the lower of cost or estimated net realizable value, using actual cost, based on a first-in, first-out method. The balance sheet classification of inventory as current or non-current is determined by whether it will be consumed within our normal operating cycle.
The Roche Agreement grants us a sole and exclusive license to develop, use, sell, offer for sale and import any Licensed Product, as defined in the Roche Agreement. We received FDA approval for Rezdiffra in March 2024. A tiered single-digit royalty is payable to Roche on net sales of Rezdiffra, subject to certain reductions.
We received FDA approval for Rezdiffra in March 2024 and EC approval for Rezdiffra in August 2025. A tiered single-digit royalty is payable to Roche on net sales of Rezdiffra, subject to certain reductions. In July 2025, we entered into the CSPC License Agreement with CSPC for MGL-2086 (formerly known as SYH2086), an oral small molecule GLP-1 receptor agonist.
The lease for the additional office space under the Eighth Lease Amendment and Ninth Lease Amendment commenced in November 2024 and resulted in an incremental $0.2 million right-of-use asset and lease liability recorded. In May 2022 we entered into the $250.0 million Loan Facility. As of December 31, 2024, we had drawn $115.0 million under the Loan Facility.
In 2024, we entered into the Sixth Seventh, Eighth, and Ninth Amendments to the Office Lease, leasing additional office space available in the same premises under the Office Lease, which resulted in an incremental $1.3 million right-of-use asset and lease liability recorded. In April 2025, we entered into an operating lease for additional office space in West Conshohocken, Pennsylvania.
For the year ended December 31, 2024, we recorded $180.1 million of product revenue, net. Cost of Sales Cost of sales were incurred as a result of sales of Rezdiffra.
For the year ended December 31, 2025, we recorded $56.1 million of cost of sales compared to $6.2 million in the corresponding period in 2024.
As of December 31, 2024, $300.0 million remained reserved and available for sale under the 2024 Sales Agreement and our related prospectus supplement.
As of December 31, 2025, $300.0 million remained available for sale under the Sales Agreement and our related prospectus supplement. Credit Facilities Hercules Loan Facility In May 2022 we entered into the $250.0 million Hercules Loan Facility. Interest on the Hercules Loan Facility was the greater of (i) the prime rate plus 2.45% and (ii) 8.25%.
Liquidity and Capital Resources Since inception, we have incurred significant net losses and we have funded our operations primarily through proceeds from sales of our capital stock and debt financings.
Liquidity and Capital Resources As of December 31, 2025, we had cash, cash equivalents, restricted cash and marketable securities totaling $988.6 million compared to $931.3 million as of December 31, 2024. We have historically funded our operations primarily through proceeds from sales of our capital stock and debt financings.
Rezdiffra is indicated in conjunction with diet and exercise for the treatment of adults with noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). See “Part I, Item 1. Business” for a summary of our commercial and clinical activities.
Rezdiffra was the first medication approved by both the FDA and EC for the treatment of adults with noncirrhotic MASH with moderate to advanced liver fibrosis (F2 to F3 fibrosis).
We have entered into customary contractual arrangements in support of the Phase 3 clinical trials as well as manufacturing costs of Rezdiffra. Recent Accounting Pronouncements Refer to Note 2, “Summary of Significant Accounting Policies,” in the accompanying notes to the consolidated financial statements for a discussion of recent accounting pronouncements.
As of December 31, 2025, we had approximately $268.3 million of obligations under these agreements related to active pharmaceutical ingredient, which is expected to be paid through 2029. Recent Accounting Pronouncements Refer to Note 2 “Summary of Significant Accounting Policies” in the accompanying notes to the consolidated financial statements for a discussion of recent accounting pronouncements. 83 Table of Contents
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Cost of Sales Cost of sales includes the cost of manufacturing and distribution of inventory related to sales of Rezdiffra.
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We are also evaluating Rezdiffra in patients with compensated MASH cirrhosis (consistent with F4c fibrosis) in our MAESTRO-NASH OUTCOMES trial, that, if successful, could expand the eligible patient population for Rezdiffra. In addition, we are advancing a focused pipeline to lead the evolution of MASH treatment for patients for decades to come.
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Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries, benefits and stock-based compensation expenses for employees, management costs, costs associated with obtaining and maintaining our patent portfolio, commercial and marketing activities, corporate insurance, professional fees for accounting, auditing, consulting and legal services, and allocated overhead expenses.
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Through our business development efforts, we have acquired rights to MGL-2086, an oral GLP-1 receptor agonist, ervogastat, an oral DGAT2 inhibitor, six siRNA programs and additional preclinical MASH candidates. We plan to evaluate these candidates with the goal of delivering best-in-disease therapies for the treatment of MASH.
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We use a third-party to administer the co-payment program for pharmacy benefit claims. Rebates : We are subject to discount obligations under government programs, including Medicaid and Medicare.
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As we continue to build our pipeline, we will evaluate mechanisms that fit scientifically, strategically and commercially to enhance our leading position in MASH care. See “Part I, Item 1. Business” for a summary of our commercial and clinical activities.
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Reserves for rebates are recorded in the same period the related product revenue is recognized, resulting in a reduction of product revenues and a current liability that is included in accrued expenses on the consolidated balance sheet.
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We also accrued interest on loans outstanding under our loan facility (the “Hercules Loan Facility”) with Hercules until the Hercules Loan Facility was repaid in full and terminated in July 2025.
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The balance sheet classification of inventory as current or non-current is determined by whether it will be consumed within our normal operating cycle. We periodically review our inventory for factors that could impact the future recoverability and realization of future sales, which requires estimates and judgements.
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Rebates : Our rebates include amounts paid to Medicaid, Medicare, certain commercial payors and other rebate programs. Reserves for rebates are recorded in the same period the related product revenue is recognized. Our estimate for rebates is based on statutory or contractual discount rates, expected utilization or an estimated number of patients on treatment, as applicable.
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Research and development expenses decreased by $35.6 million in 2024 primarily due to a reduction in clinical trial expense and the change in accounting for inventory costs following FDA approval of Rezdiffra in March 2024, partially offset by increases in headcount.
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The increase was primary driven by overall increased demand for Rezdiffra in 2025, as well as a full year of commercialization of Rezdiffra in 2025 compared to nine months in 2024 following FDA approval in March 2024. Cost of Sales Cost of sales were incurred as a result of sales of Rezdiffra.
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As of December 31, 2024, we had cash, cash equivalents, restricted cash and marketable securities totaling $931.3 million compared to $634.1 million as of December 31, 2023, with this increase attributable to our 2024 public offering, where we received net proceeds of approximately $659.9 million.
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The increase was primary driven by overall increased demand for Rezdiffra in 2025, as well as a full year of commercialization of Rezdiffra in 2025 compared to nine months in 2024 following FDA approval in March 2024.
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We are authorized to issue and sell up to $300.0 million in shares of our common stock under the 2024 Sales Agreement. We sold no shares during the year ended December 31, 2024 under either the 2021 Sales Agreement, as amended by the Sales Agreement Amendment, or the 2024 Sales Agreement.
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Research and development expenses increased by $151.8 million in 2025 primarily due to business development transactions, including $120.0 million upfront expense under the CSPC License Agreement and $50.0 million under the Pfizer License Agreement, partially offset by a reduction in expenses related to clinical trials.
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Since the entry into the Sales Agreement Amendment in May 2023, we sold 98,101 shares in total under the 2021 Sales Agreement, as amended by the Sales Agreement Amendment, for an aggregate of $25.2 million in gross proceeds, with net proceeds to us of approximately $24.5 million after deducting commissions and other transaction costs.
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In July 2025, we entered into a senior secured credit 79 Table of Contents facility that provides up to $500.0 million. See Note 8 “Long Term Debt” to the consolidated financial statements included in this Annual Report for additional details.
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All shares were sold pursuant to our effective Registration Statement and the prospectus supplement relating thereto. In total, we sold 1,334,044 shares of Common Stock having an aggregate offering price of $225.1 million pursuant to the 2021 Sales Agreement, as amended by the Sales Agreement Amendment.
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The Hercules Loan Facility included an end-of-term charge of 5.35% of the aggregate principal amount, which was accounted for in the loan discount. On July 17, 2025, we used the proceeds received from the Financing Agreement to repay all outstanding obligations under the Hercules Loan Facility, totaling $121.7 million, and upon such repayment, terminated the Hercules Loan Facility.
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Under the terms of the Loan Facility, the first $50.0 million tranche (“Tranche 1”) was drawn at closing. On February 3, 2023, we entered into the First Amendment (the “First Amendment”) to the Loan Facility (as amended, the “Amended Loan Facility”). Under the Amended Loan Facility, $65.0 million was drawn in 2023 under the second tranche (“Tranche 2”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe do not believe inflation has had a material effect on our business, financial condition or results of operations during the years ended December 31, 2024, 2023 or 2022. Should global inflation increase in the future, we expect increases in clinical trial, selling, labor and other operating costs.
Biggest changeEffects of Inflation Inflation generally may affect us by increasing our cost of labor, clinical trial costs and manufacturing costs. We do not believe inflation, including as a result of recent changes in tariff policy, has had a material effect on our business, financial condition or results of operations during the years ended December 31, 2025, 2024 or 2023.
We do not believe that we have any material exposure to interest rate risk given the current principal amount of the loan. Capital Market Risk Although we receive product revenues from sales of Rezdiffra, we may in the future depend on funds raised through other sources. One potential source of funding is through equity offerings.
Capital Market Risk Although we receive product revenues from sales of Rezdiffra, we may in the future depend on funds raised through other sources. One potential source of funding is through equity offerings. Our ability to raise funds in this manner depends upon, among other things, capital market forces affecting our stock price.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk Our exposure to market risk is confined to our cash, cash equivalents and marketable securities. We regularly review our investments and monitor the financial markets.
Investment Portfolio We are exposed to market risk with respect to our cash, cash equivalents and marketable securities. We regularly review our investments and monitor the financial markets.
We do not believe that we have any material exposure to interest rate risk or changes in credit ratings arising from our investments. In May 2022, we entered into a Loan Facility that has an interest rate that is linked to the prime rate.
We do not believe that we have any material exposure to interest rate risk or changes in credit ratings arising from our investments. Foreign Exchange Exposure As we expand our operations into Europe, we are exposed to risks related to changes in foreign currency exchange rates, primarily between the U.S. dollar, euro and Swiss franc.
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases of our product. Our inability or failure to do so could adversely affect our business, financial condition and results of operations. 77 Table of Contents Item 8. Financial Statements and Supplementary Data.
Should global inflation increase in the future, we expect increases in clinical trial, selling, labor and other operating costs. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases of our product.
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Our ability to raise funds in this manner depends upon, among other things, capital market forces affecting our stock price. Effects of Inflation Inflation generally may affect us by increasing our cost of labor, clinical trial costs and manufacturing costs.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk Financing Agreement As of December 31, 2025, our primary exposure to interest rate risk was associated with our variable rate borrowings under the Financing Agreement.
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The information required by this Item 8 is included in our Financial Statements and Supplementary Data set forth in Item 15 of Part IV of this Annual Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.
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Any outstanding principal on the Term Loans will bear interest at a rate per annum on the basis of a 360-day year equal to the sum of (i) the three-month forward-looking term secured overnight financing rate administered by the Federal Reserve Bank of New York (subject to a 1.0% per annum floor) plus (ii) 4.75%.
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See Note 8 “Long Term Debt” to the consolidated financial statements included in this Annual Report. Interest rates are sensitive to a variety of factors, including changes in fiscal and monetary policies, geopolitical events, changes in global economic conditions and other factors beyond our control.
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As of December 31, 2025, the interest rate associated with the $350.0 million of borrowings outstanding under the Financing Agreement was 8.75%. For the year ended December 31, 2025, the effect of a hypothetical 100 basis point increase or decrease in the interest rate would have changed our interest expense under the Financing Agreement by approximately $1.6 million.
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The majority of our expenses are generally denominated in the currencies in which they are incurred, which is primarily the U.S. dollar.
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As we endeavor to expand our presence in international markets, to the extent we are required to enter into agreements denominated in a currency other than the U.S. dollar, results of operations and cash flows may increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign currency exchange rates.
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To date, we have not entered into any hedging arrangements with respect to foreign currency risk. As our international operations grow, we will continue to reassess our approach to manage our risk relating to fluctuations in currency rates.
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Our inability or failure to do so could adversely affect our business, financial condition and results of operations.

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