What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 116 added, 80 removed, 287 unchanged (41% of the section changed)

17 unchanged sentences

Lease liability

m liabilities

Total long term liabilities

Total liabilities

1 unchanged sentence

Preferred stock, par value $ 0.0001 per share authorized:

5,000,000 shares at March 31, 2021 and December 31, 2020;

1,969,797 shares issued and outstanding at March 31, 2021 and December 31, 2020

5,000,000 shares at June 30, 2021 and December 31,

1,969,797 shares issued and outstanding at June 30, 2021 and December 31, 2020

Common stock, par value $ 0.0001 per share authorized:

200,000,000 at March 31, 2021 and December 31, 2020;

16,063,199 and 15,508,146 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

200,000,000 at June 30, 2021 and December 31, 2020;

16,599,522 and 15,508,146 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in-capital

7 unchanged sentences

in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Total revenues

12 unchanged sentences

in thousands)

Three Months Ended March 31,

Three Months Ended

Six Months Ended June 30,

Other comprehensive income (loss):

13 unchanged sentences

Compensation expense related to stock options for services

Unrealized loss on marketable securities

Unrealized loss on marketable

Balance at March 31, 2021

Issuance of common shares in equity offering, excluding to related parties, net of transaction costs

Compensation expense related to stock options for services

Unrealized gain on marketable

Balance at June 30, 2021

Balance at December 31, 2019

Compensation expense related to stock options for services

Unrealized gain on marketable securities

Unrealized gain on marketable

Balance at March 31, 2020

See accompanying notes to condensed consolidated financial statements.

Exercise of common stock options

Compensation expense related to stock options for services

Unrealized gain on marketabl e

Balance at June 30, 2020

ee accompanying notes to condensed consolidated financial statements.

MADRIGAL PHARMACEUTICALS, INC.

1 unchanged sentence

in thousands)

Three Months Ended

Six Months Ended June 30,

Cash flows from operating activities:

15 unchanged sentences

Proceeds from issuances of stock, excluding related parties, net of transaction costs

Proceeds from the exercise of common stock options, net of transaction costs

Proceeds from the exercise of common stock options

Net cash provided by financing activities

2 unchanged sentences

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information:

Obtaining a right-of-use

asset in exchange for a lease liability

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

Organization, Business, and Basis of Presentation

rganization and Business

Organization and Business

Madrigal Pharmaceuticals, Inc.

10 unchanged sentences

However, we believe that the disclosures included in these financial statements are adequate to make the information presented not misleading.

The unaudited condensed financial statements, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of such interim results.

The unaudited condensed consolidated financial statements, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of such interim results.

The interim results are not necessarily indicative of the results that we will have for the full year ending December 31, 2021 or any subsequent period.

These unaudited condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2020.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2020.

Summary of Significant Accounting Policies

22 unchanged sentences

To determine whether an other-than-temporary impairment exists, the Company considers whether it intends to sell the debt security and, if the Company does not intend to sell the debt security, it considers available evidence to assess whether it is more likely than not that it will be required to sell the security before the recovery of its amortized cost basis.

During the three months ended March 31, 2021 and 2020, the Company determined it did not have any securities that were other-than-temporarily impaired.

During the six months ended June 30, 2021 and 2020, the Company determined it did not have any securities that were other-than-temporarily impaired.

Marketable securities are stated at fair value, including accrued interest, with their unrealized gains and losses included as a component of accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity.

1 unchanged sentence

Realized gains and losses are determined on the specific identification method.

During the three months ended March 31, 2021 and 2020, the Company did not have any realized gains or losses on marketable securities.

months ended June 30, 2021 and 2020, the Company did not have any realized gains or losses on marketable securities.

Fair Value of Financial Instruments

10 unchanged sentences

These inputs include reported trades of and broker-dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs.

As of March 31, 2021, the Company’s financial assets valued based on Level 1 inputs consisted of cash and cash equivalents in a money market fund, its financial assets valued based on Level 2 inputs consisted of high-grade corporate and government agency bonds and commercial paper, and it had no financial assets valued based on Level 3 inputs.

During the three months ended March 31, 2021 and 2020, the Company did not have any transfers of financial assets between Levels 1 and 2.

As of March 31, 2021 and December 31, 2020, the Company did not have any financial liabilities that were recorded at fair value on a recurring basis on the balance sheet.

As of June 30, 2021, the Company’s financial assets valued based on Level 1 inputs consisted of cash and cash equivalents in a money market fund, its financial assets valued based on Level 2 inputs consisted of high-grade corporate and government agency bonds and commercial paper, and it had no financial assets valued based on Level 3 inputs.

During the six months ended June 30, 2021 and 2020, the Company did not have any transfers of financial assets between Levels 1 and 2.

As of June 30, 2021 and December 31, 2020, the Company did not have any financial liabilities that were recorded at fair value on a recurring basis on the balance sheet.

Research and Development Costs

34 unchanged sentences

Diluted net loss per common share is computed using the weighted average number of common shares outstanding and the weighted average dilutive potential common shares outstanding using the treasury stock method.

However, for the three months ended March 31, 2021 and 2020, diluted net loss per share is the same as basic net loss per share because the inclusion of weighted average shares of unvested restricted common stock, common stock issuable upon the exercise of stock options, and common stock issuable upon the conversion of preferred stock would be anti-dilutive.

However, for the six months ended June 30, 2021 and 2020, diluted net loss per share is the same as basic net loss per share because the inclusion of weighted average shares of unvested restricted common stock, common stock issuable upon the exercise of stock options, and common stock issuable upon the conversion of preferred stock would be anti-dilutive.

The following table summarizes outstanding securities not included in the computation of diluted net loss per common share, as their inclusion would be anti-dilutive:

Three Months Ended March 31,

Six Months Ended June 30,

Common stock options

2 unchanged sentences

Liquidity and Uncertainties

The Company is subject to risks common to development stage companies in the biopharmaceutical industry including, but not limited to, uncertainty of product development and commercialization, dependence on key personnel, uncertainty of market acceptance of products and product reimbursement, product liability, uncertain protection of proprietary technology, potential inability to raise additional financing necessary for development and commercialization, and compliance with the U.S.

The Company is subject to

risks common to development stage companies in the biopharmaceutical industry including, but not limited to, uncertainty of product development and commercialization, dependence on key personnel, uncertainty of market acceptance of products and product reimbursement, product liability, uncertain protection of proprietary technology, potential inability to raise additional financing necessary for development and commercialization, and compliance with the U.S.

Food and Drug Administration and other government regulations.

The Company has incurred losses since inception, including approximately $ 52.5 million for the three months ended March 31, 2021, resulting in an accumulated deficit of approximately $ 478.0 million as of March 31, 2021.

The Company has incurred losses since inception, including approximately $ 114.2 million for the six months ended June 30, 2021, resulting in an accumulated deficit of approximately $ 539.7 million as of June 30, 2021.

Management expects to incur losses for the foreseeable future.

To date, the Company has funded its operations primarily through proceeds from sales of the Company’s common and Series A Convertible Preferred Stock.

The Company believes that its cash, cash equivalents and marketable securities at March 31, 2021 will be sufficient to fund operations past one year from the issuance of these financial statements.

To date, the Company has funded its operations primarily through proceeds from sales of the Company’s capital stock.

The Company believes that its cash, cash equivalents and marketable securities at June 30, 2021 will be sufficient to fund operations past one year from the issuance of these financial statements.

To meet its future capital needs, the Company intends to raise additional capital through debt or equity financings, collaborations, partnerships or other strategic transactions.

4 unchanged sentences

A summary of cash, cash equivalents and available-for-sale

marketable securities held by the Company as of March 31, 2021 and December 31, 2020 is as follows (in thousands):

March 31, 2021

marketable securities held by the Company as of June 30, 2021 and December 31, 2020 is as follows (in thousands):

June 30, 2021

Cash and cash equivalents:

1 unchanged sentence

Money market funds (Level 1)

Corporate debt securities due within 3 months of date of purchase

Total cash and cash equivalents

1 unchanged sentence

Corporate debt securities due within 1 year of date of purchase (Level 2)

government and government sponsored entities due within 1 year of date of purchase (Level 2)

government and government sponsored entities due within 1 year of

of purchase (Level 2)

Corporate debt securities due within 1 to 2 years of date of purchase (Level

7 unchanged sentences

Corporate debt securities due within 1 year of date of purchase (Level 2)

government and government sponsored entities due within 1 year of date of purchase (Level 2)

Corporate debt securities due within 1 to 2 years of date of purchase (Level 2)

Corporate debt securities due within 1 to 2 years of date of purchase

Total cash, cash equivalents and marketable securities

Accrued Liabilities

Accrued liabilities as of March 31, 2021 and December 31, 2020 consisted of the following (in thousands):

Accrued liabilities as of June 30, 2021 and December 31, 2020 consisted of the following (in thousands):

Contract research organization costs

4 unchanged sentences

Stockholders’ Equity

Each common stockholder is entitled to one vote for each share of common stock held.

The common stock will vote together with all other classes and series of stock of the Company as a single class on all actions to be taken by the Company’s stockholders.

Each share of common stock is entitled to receive dividends, as and when declared by the Company’s board of directors.

Each common stockholder generally is entitled to one

vote for each share of common stock held, subject to limitations as may be established for certain other classes and series of stock of the Company from time to time.

Each share of common stock is entitled to receive dividends, as and when declared by the

Company’s board of directors.

The Company has never declared cash dividends on its common stock and does not expect to do so in the foreseeable future.

Preferred Stock

The Series A Preferred Stock has a par value of $ 0.0001 per share and is convertible into shares of the common stock at a one -to-one

The Series A Preferred Stock

has a par value of $ 0.0001 per share and is convertible into shares of the common stock at a one

ratio, subject to adjustment as provided in the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, that the Company filed with the Secretary of State of the State of Delaware on June 21, 2017 (the “Series A Certificate”).

4 unchanged sentences

basis) in the net assets of the Company.

Shares of the Series A Preferred Stock will generally have no voting rights, except as required by law.

Shares of the Series A Preferred Stock will generally have no

voting rights, except as required by law.

Shares of the Series A Preferred Stock will be entitled to receive dividends before shares of any other class or series of capital stock of the Company (other than dividends in the form of the Common Stock) equal to the dividend payable on each share of the Common Stock, on an as-converted

1 unchanged sentence

Issuance Sales Agreement

In November 2020, the Company entered into an at-the-market

sales agreement (the “2020 Sales Agreement”), with Cowen and Company, LLC (“Cowen”), pursuant to which the Company may, from time to time, issue and sell shares of its common stock.

The Company is not obligated to make any sales of its common stock under the 2020 Sales Agreement.

Any shares sold will be sold pursuant to the effective shelf registration statement on Form S-3,

(the “Registration Statement”), and the prospectus supplement to the Registration Statement.

The Sales Agreement authorizes an aggregate offering of up to $ 200 million in shares of our common stock, from time to time, at the Company’s option, through Cowen as its sales agent.

Sales of common stock through Cowen may be made by any method that is deemed an “at-the-market”

offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including by means of ordinary brokers’ transactions at market prices, in block transactions or as otherwise agreed by the Company and Cowen.

In November 2020, the Company

entered into an

at-the-market

sales agreement (the “2020 Sales Agreement”), with Cowen and Company, LLC (“Cowen”), pursuant to which the Company could, from time to time, issue and sell shares of its common stock.

The 2020 Sales Agreement authorized an aggregate offering of up to $

200 million in shares of our common stock, at the Company’s option, through Cowen as its sales agent.

Sales of common stock through Cowen could be made by any method that is deemed an

“at-the-market”

30, 2021, 1,126,733 shares had been sold under the 2020 Sales Agreement for an aggregate of approximately $ 137.4 million in gross proceeds, with net proceeds to the Company of approximately $ 134.6 million after deducting commissions and other transaction costs.

Of those shares sold, 1,087,126 were sold in

2021, and 39,607 were sold in

2021, the Company filed with the SEC and had declared effective a new shelf registration statement on Form S-3

and, in connection therewith, entered into a new at-the-market

sales agreement (the “2021 Sales Agreement”) with Cowen.

The terms of the 2021 Sales Agreement are substantially the same as the 2020 Sales Agreement.

The 2021 Sales Agreement authorizes an aggregate offering of up to $ 200

million in shares of our common stock, from time to time, at the Company’s option, through Cowen as its sales agent.

The 2021 Sales Agreement supersedes the 2020 Sales Agreement.

Subject to the terms and conditions of the 2021 Sales Agreement, Cowen will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the common stock based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose).

The 2020 Sales Agreement may be terminated by the Company at any time upon 10 days’ notice.

As of March 31 2021, 590,410 shares have been sold under the 2020 Sales Agreement for an aggregate of approximately $ 72.8 million in gross proceeds.

Net proceeds to the Company were approximately $ 71.0 million after deducting commissions and other transaction costs.

Of those shares sold, 550,803 were sold in the first quarter of 2021, and 39,607 were sold in 2020.

Approximately $ 127.2 million remained reserved under the Company’s shelf registration statement and the applicable prospectus supplement for possible future issuance under the 2020 Sales Agreement.

As of June 30, 2021, $ 200

million remained reserved and unsold under the 2021 Sales Agreement and the

Company’s related prospectus sup p

Stock-based Compensation

The 2015 Stock Plan, as amended, is our primary plan through which equity based grants are awarded.

The 2015 Stock Plan, as

is our primary plan through which equity based grants are awarded.

We ceased making new awards under the 2006 Stock Plan upon adoption of the 2015 Stock Plan.

The 2015 Stock Plan provides for the grant of incentive stock options, non-statutory

The 2015 Stock Plan provides for the grant of incentive stock options,

non-statutory

stock options, restricted stock and other stock-based compensation awards to employees, officers, directors, and consultants of the Company.

The administration of the 2015 Stock Plan is under the general supervision of the Compensation Committee of the Board of Directors.

The terms of stock options awarded under the 2015 Stock Plan, in general, are determined by the Compensation Committee, provided the exercise price per share generally shall not be set at less than the fair market value of a share of the common stock on the date of grant and the term shall not be greater than ten years from the date the option is granted.

As of March 31, 2021, the Company had options outstanding to purchase 2,193,915 shares of its common stock, which includes options outstanding under its 2006 Stock Plan.

As of March 31, 2021, 575,782 shares were available for future issuance.

The following table summarizes stock option activity during the three months ended March 31, 2021:

ten years from the date the option is granted.

As of June 30, 2021, the Company had options outstanding to purchase

2,268,787 shares of its common stock, which includes options outstanding under its 2006 Stock Plan.

As of June 30, 2021,

1,700,910 shares were

available for future issuance.

The following table summarizes stock option activity during the six months ended June 30, 2021:

exercise price

2 unchanged sentences

Options exercised

Outstanding at March 31, 2021

Exercisable at March 31, 2021

The total cash received by the Company as a result of stock option exercises was $ 0.5 million and $ 0 million, respectively, for the three months ended March 31, 2021 and 2020.

The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the three months ended March 31, 2021 and 2020 were $ 85.17 and $ 68.71 , respectively.

Options cancelled

Outstanding at June 30, 2021

Exercisable at June 30, 2021

The total cash received by the Company as a result of stock option exercises was $ 0.5 million and $ 0.1 million, respectively, for the six months ended June 30, 2021 and 2020.

The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the six months ended June 30, 2021 and 2020 were $ 78.34 and $ 64.74 , respectively .

Stock-Based Compensation Expense

Stock-based compensation expense during the three months ended March 31, 2021 and 2020 was as follows (in thousands):

Three Months Ended March 31,

Stock-based compensation expense during the six months ended June 30, 2021 and 2020 was as follows (in thousands):

Three Months Ended

Six Months Ended

Stock-based compensation expense by type of award:

5 unchanged sentences

Total stock-based compensation expense included in net loss

Unrecognized stock-based compensation expense on stock options as of March 31, 2021 was $ 61.1 million with a weighted average remaining period of 3.05 years.

Unrecognized stock-based compensation expense on stock options as of June 30, 2021 was $ 56.7 million with a weighted average remaining period of 2.95 years.

Commitments and Contingencies

The Company has a Research, Development and Commercialization Agreement with Hoffmann-La

The Company has a Research, Development and Commercialization Agreement with

Roche (“Roche”) which grants the Company a sole and exclusive license to develop, use, sell, offer for sale and import any Licensed Product as defined by the agreement.

The agreement requires future milestone payments to Roche.

Remaining milestones under the agreement total $ 8 million and are earned by achieving specified objectives related to future regulatory approval in the United States and Europe of a product developed from resmetirom.

Remaining milestones under the agreement total $

8 million and are earned by achieving specified objectives related to future regulatory approval in the United States and Europe of a product developed from resmetirom.

A single-digit royalty payment range is based on net sales of products developed from resmetirom, subject to certain reductions.

The Company has not achieved any additional product development or regulatory milestones and had no Licensed Product sales for the three months ended March 31, 2021 and 2020.

The Company has not achieved any additional product development or regulatory milestones and had

no Licensed Product sales for the six months ended June 30, 2021 and 2020.

The Company has entered into customary contractual arrangements and letters of intent in support of its Phase 3 clinical trials.

Subsequent Event

Since the end of the first quarter, through May 4

, 2021, the Company has sold 521,426 shares under the 2020 Sales Agreement (described in Note 6) for an aggregate of approximately $ 62.6 million in gross proceeds.

Net proceeds to the Company were approximately $ 61.9 million after deducting commissions and other transaction costs.

Approximately $ 64.6 million remained reserved under the Company’s shelf registration statement and the applicable prospectus supplement for possible future issuance under the 2020 Sales Agreement.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form

This Quarterly Report on Form 10-Q

includes forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are based on our beliefs and assumptions and on information currently available to us, but are subject to factors beyond our control.

2 unchanged sentences

include all statements that are not historical facts;

and can be identified by terms such as “allow,” “anticipates,” “be,” “believes,” “continue,” “could,” “demonstrates,” ”design,” “estimates,” “expects,” “forecasts,” “future,” “hopeful,” “goal,” “intends,” “may,” “might,” “plans,” “potential,” “predicts,” ”predictive,” “projects,” “seeks,” “should,” “will,” “will achieve,” “would” or similar expressions and the negatives of those terms.

and can be identified by terms such as “allow,” “anticipates,” “be,” “believes,” “continue,” “could,” “demonstrates,” ”design,” “estimates,” “expects,” “forecasts,” “future,” “hopeful,” “inform,” “goal,” “intends,” “may,” “might,” “plans,” “potential,” “predicts,” ”predictive,” “projects,” “seeks,” “should,” “will,” “will achieve,” “would” or similar expressions and the negatives of those terms.

In particular, forward-looking statements contained in or incorporated by reference to this Quarterly Report relate to, among other things,

1 unchanged sentence

Our possible or assumed future results of operations and expenses, business strategies and plans, capital needs and financing plans, market trends, competitive position, industry environment and potential growth opportunities,

Our clinical trials, research and development activities, and the timing and results associated with the future development of our lead product candidate,

Our clinical trials, research and development activities, and the timing and results associated with the future development of our lead product candidate, MGL-3196

(resmetirom), including sector leadership,

The timing and completion of projected 2021 clinical milestone events, including enrollment, top-line data and open label projections,

Our primary and secondary study endpoints for resmetirom, and the potential for achieving such endpoints and projections, including

non-alcoholic

The timing and completion of projected 2021 and 2022 clinical milestone events, including enrollment, top-line

data and open label projections,

Our primary and secondary study endpoints for resmetirom, and the potential for achieving such endpoints and projections, including non-alcoholic

steatohepatitis (“NASH”) resolution, safety, fibrosis treatment, cardiovascular effects and lipid treatment with resmetirom,

1 unchanged sentence

The predictive power of resmetirom liver fat reduction on NASH resolution with fibrosis reduction or improvement, and potential NASH or NAFLD patient risk profile benefits with resmetirom,

The predictive power of liver fibrosis reduction with resmetirom using non-invasive

tests and the predictive power of non-invasive

tests generally, including for purposes of recruiting and conducting a NASH clinical trial,

Market demand for and acceptance of our products,

9 unchanged sentences

enrollment uncertainties, generally and in relation to COVID-19

quarantine, shelter-in-place

shelter-in-place

and social distancing measures and individual precautionary measures that may be implemented or continued for an uncertain period of time;

10 unchanged sentences

for the year ended December 31, 2020, filed with the SEC on February 25, 2021, as well as in our other filings with the SEC.

You should read this Quarterly Report, and the other documents that we file or have filed with the SEC, with the understanding that our actual future results may be materially different from the results expressed or implied by these forward-looking statements.

You should read the 2020 Annual Report on Form 10-K,

this Quarterly Report, and the other documents that we file or have filed with the SEC, with the understanding that our actual future results may be materially different from the results expressed

or implied by these forward-looking statements.

Moreover, we operate in an evolving environment.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements