What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-05 compared with 2021-05-06 · 65 added, 32 removed, 133 unchanged (42% of the section changed)

48 unchanged sentences

The total anticipated enrollment is approximately 2,000 patients, and will include up to 15% high risk F1 fibrosis stage NASH patients whose efficacy responses will be evaluated as exploratory endpoints.

On December 18, 2019 the Company announced it had opened for enrollment MAESTRO-NAFLD-1,

double-blind, placebo-controlled Phase 3 clinical study originally targeting enrollment of 700 patients with biopsy-confirmed or presumed NASH recruited from sites in the U.S.

Key endpoints are safety, including safety biomarkers, LDL cholesterol, lipid biomarkers, and fibrosis biomarkers.

Except for serial liver biopsies, the study protocol is similar to the MAESTRO-NASH study with resmetirom doses of 80 mg or 100 mg or placebo and includes key secondary lipid, MRI-PDFF

and NASH biomarker endpoints.

Enrollment objectives for this study have been exceeded, with approximately 1,200 patients enrolled overall.

On June 30, 2021 we announced achievement of target enrollment of patients to support the planned Subpart H (Accelerated Approval of New Drugs for Serious or Life-Threatening Illnesses) submission to the US Food and Drug Administration (FDA).

On December 18, 2019 the Company

announced it had opened for enrollment MAESTRO-NAFLD-1,

non-invasive,

multi-center, double-blind, placebo-controlled Phase 3 clinical study of patients with biopsy-confirmed or presumed NASH recruited from sites in the U.S.

Key endpoints are safety, including safety biomarkers.

Secondary endpoints include LDL cholesterol, lipid biomarkers, MRI-PDFF,

NASH and fibrosis biomarkers.

Except for serial liver biopsies, the study protocol is similar to the MAESTRO-NASH study with resmetirom doses of 80 mg or 100 mg or placebo.

In October 2020, we completed enrollment of the double-blind, placebo-controlled arms of the study.

Enrollment objectives for this study have been exceeded, with approximately 1,300 patients enrolled overall.

The MAESTRO-NAFLD-1

study will help support the adequacy of the safety database at the time of NDA submission for subpart H approval for treatment of NASH in patients with F2 or F3 fibrosis (MAESTRO-NASH, NASH resolution surrogate endpoint).

On July 13, 2021 we announced first patient dosed in a planned 52-week

open label active treatment extension study of MAESTRO-NAFLD-1,

named MAESTRO-NAFLD-Open Label Extension (OLE).

The OLE study allows patients who complete MAESTRO-NAFLD-1

to consent to 52 weeks of active treatment with resmetirom, making this treatment available to both patients who were assigned to placebo in MAESTRO-NAFLD-1

and patients who were on resmetirom in MAESTRO-NAFLD-1.

Pandemic Effects on Madrigal

4 unchanged sentences

pandemic had no material adverse impact on our operating results, MAESTRO-NAFLD-1

study or liquidity for the period ended March, 31 2021 and year ended December 31, 2020, but it did introduce clinical trial and operational risks and uncertainties that are both general in nature and relate specifically to our MAESTRO-NASH study.

study or liquidity for the period ended June 30, 2021 and year ended December 31, 2020, but it did introduce clinical trial and operational risks and uncertainties that are both general in nature and relate specifically to our MAESTRO-NASH study.

These risks and uncertainties, which are beyond our control, are summarized in the section entitled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K

26 unchanged sentences

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, benefits and stock-based compensation expenses for non-R&D employees, management costs, costs associated with obtaining and maintaining our patent portfolio, professional fees for accounting, auditing, consulting and legal services, liability insurance, and allocated overhead expenses.

We expect that our general and administrative expenses may increase in the future as we advance our clinical and preclinical development programs for resmetirom and expand our operating activities, including substantially expanding our workforce for commercial hires, maintaining and expanding our patent portfolio, incurring additional costs associated with being a public company and maintaining compliance with exchange listing and SEC requirements.

General and administrative expenses consist primarily of salaries, benefits and stock-based compensation expenses for non-R&D

employees, management costs, costs associated with obtaining and maintaining our patent portfolio, professional fees for accounting, auditing, consulting and legal services, liability insurance, and allocated overhead expenses.

We expect that our general and administrative expenses may increase in the future as we advance our clinical and preclinical development programs for resmetirom and expand our operating activities, including substantially expanding our workforce for commercial hires, and maintaining and expanding our patent portfolio.

We expect these potential increases will likely include management and personnel costs, legal fees, accounting fees, directors’ and officers’ liability insurance premiums and expenses associated with investor relations.

5 unchanged sentences

Actual results may differ materially from these estimates under different assumptions or conditions.

There have been no material changes in our critical accounting policies and significant judgments and estimates during the three months ended March 31, 2021, as compared to those disclosed in our Annual Report on Form 10-K

There have been no material changes in our critical accounting policies and significant judgments and estimates during the six months ended June 30, 2021, as compared to those disclosed in our Annual Report on Form 10-K

for the fiscal year ended December 31, 2020 filed with the SEC on February 25, 2021.

Results of Operations

Three months Ended March 31, 2021 and 2020

The following table provides comparative unaudited results of operations for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended

Three months Ended June 30, 2021 and 2020

The following table provides comparative unaudited results of operations for the three months ended June 30, 2021 and 2020 (in thousands):

Three Months Ended June 30,

Increase / (Decrease)

Research and development Expenses

2 unchanged sentences

Other (income)

We had no revenue for the three months ended March 31, 2021 and 2020.

We had no revenue for the three months ended June 30, 2021 and 2020.

Research and Development Expenses

Our research and development expenses were $45.8 million for the three months ended March 31, 2021, compared to $33.4 million in the corresponding period in 2020.

Our research and development expenses were $51.6 million for the three months ended June 30, 2021, compared to $44.7 million in the corresponding period in 2020.

Research and development expenses increased by $6.9 million in the 2021 period due primarily to the additional activities related to the Phase 3 clinical trials, and an increase in head count.

1 unchanged sentence

General and Administrative Expenses

Our general and administrative expenses were $7.2 million for the three months ended March 31, 2021, compared to $4.6 million in the corresponding period in 2020.

General and administrative expenses increased by $2.6 million in the 2021 period due primarily to increases in commercial preparation activities, including a corresponding increase in head count.

Our general and administrative expenses were $10.1 million for the three months ended June 30, 2021, compared to $5.6 million in the corresponding period in 2020.

General and administrative expenses increased by $4.5 million in the 2021 period due primarily to increases in commercial preparation activities, including a corresponding increase in head count, and an increase in stock compensation expense.

We believe our general and administrative expenses may increase over time as we advance our clinical and preclinical development programs for resmetirom and expand our operating activities, which will likely result in an increase in our headcount, consulting services, and related overhead needed to support those efforts.

Interest Income

Our net interest income was $0.2 million for the three months ended March 31, 2021, compared to $1.9 million in the corresponding period in 2020.

The decrease in interest income was due primarily to a lower average principal balance in our investment account in 2021 and decreased interest rates.

Our net interest income was $0.1 million for the three months ended June 30, 2021, compared to $1.2 million in the corresponding period in 2020.

The decrease in interest income was due primarily to decreased interest rates over the period.

Six months Ended June 30, 2021 and 2020

The following table provides comparative unaudited results of operations for the six months ended June 30, 2021 and 2020 (in thousands):

Six Months Ended June 30,

Increase / (Decrease)

Research and development Expenses

General and administrative Expenses

Interest (Income)

Other (income)

We had no revenue for the six months ended June 30, 2021 and 2020.

Research and Development Expenses

Our research and development expenses were $97.4 million for the six months ended June 30, 2021, compared to $78.1 million in the corresponding period in 2020.

Research and development expenses increased by $19.3 million in the 2021 period due primarily to the additional activities related to the Phase 3 clinical trials, an increase in head count, and an increase in stock compensation expense.

We expect our research and development expenses to increase over time as we advance our clinical and preclinical development programs for resmetirom.

General and Administrative Expenses

Our general and administrative expenses were $17.3 million for the six months ended June 30, 2021, compared to $10.2 million in the corresponding period in 2020.

General and administrative expenses increased by $7.1 million in the 2021 period due primarily to increases in commercial preparation activities, including a corresponding increase in head count, and an increase in stock compensation expense.

We believe our general and administrative expenses may increase over time as we advance our clinical and preclinical development programs for resmetirom, which will likely result in an increase in our headcount, commercially related activities, consulting services, and related overhead needed to support those efforts.

Interest Income

Our net interest income was $0.3 million for the six months ended June 30, 2021, compared to $3.1 million in the corresponding period in 2020.

The decrease in interest income was due primarily to decreased interest rates over the period.

Liquidity and Capital Resources

Since inception, we have incurred significant net losses and we have funded our operations primarily through the issuance of shares of our capital stock.

Our most significant use of capital pertains to salaries and benefits for our employees, including clinical, scientific, operational, commercial, financial and management personnel, and external research and development expenses, such as clinical trials and preclinical activity related to our product candidates.

As of March 31, 2021, we had cash, cash equivalents and marketable securities totaling $307.2 million compared to $284.1 million as of December 31, 2020, with the increase attributable to net proceeds of $66.6 million (reflecting $1.4 million in commissions plus other transaction expenses) raised from the sale of 550,803 shares under our at-the-market

Our most significant use of capital pertains to salaries and benefits for our employees, including clinical, scientific,

operational, commercial, financial and management personnel, and external research and development expenses, such as clinical trials and preclinical activity related to our product candidates.

As of June 30, 2021, we had cash, cash equivalents and marketable securities totaling $323.8 million compared to $284.1 million as of December 31, 2020, with the increase attributable to net proceeds of $130.2 million (reflecting $2.4 million in commissions plus other transaction expenses) raised from the sale of 1,087,126 shares under our at-the-market

sales agreement, partially offset by funding of operations.

4 unchanged sentences

We anticipate continuing to incur operating losses for the foreseeable future.

While our rate of cash usage will likely increase in the future, in particular to support our product development and clinical trial efforts, we believe our available cash resources as of March 31, 2021 will be sufficient to fund our operations past one year from the issuance of the financial statements contained herein, and this outlook takes into account circumstances that are currently reasonably foreseeable in connection with the COVID-19

While our rate of cash usage will likely increase in the future, in particular to support our product development and clinical trial efforts, we believe our available cash resources as of June 30, 2021 will be sufficient to fund our operations past one year from the issuance of the financial statements contained herein, and this outlook takes into account circumstances that are currently reasonably foreseeable in connection with the COVID-19

For a description of COVID-19

4 unchanged sentences

We regularly consider fundraising opportunities and may decide, from time to time, to raise capital based on various factors, including market conditions and our plans of operation.

This includes, but is not limited to, the use of a at-the-market

sales agreement entered into in November of 2020, with Cowen and Company, LLC.

This includes, but is not limited to, the use of the $200 million at-the-market

sales agreement.

Additional capital may not be available on terms acceptable to us, or at all.

2 unchanged sentences

The following table provides a summary of our net cash flow activity (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash used in operating activities

2 unchanged sentences

Net (decrease) increase in cash and cash equivalents

Net cash used in operating activities was $43.4 million for the three months ended March 31, 2021, compared to $30.5 million for the corresponding period in 2020.

Net cash used in operating activities was $90.3 million for the six months ended June 30, 2021, compared to $54.8 million for the corresponding period in 2020.

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.

Net cash used in investing activities was $33.5 million for the three months ended March 31, 2021, compared to $50.5 million provided for the corresponding period in 2020.

Net cash used in investing activities for the three months ended March 31, 2021 consisted of $93.7 million of purchases of marketable securities for our investment portfolio, partially offset by $60.3 million from sales and maturities of marketable securities.

Net cash provided by investing activities for the three months ended March 31, 2020 consisted of $109.4 million from sales and maturities of marketable securities, partially offset by $58.6 million of purchases of marketable securities for our investment portfolio and $0.3 million of purchases of property and equipment.

Net cash provided by financing activities was $67.1 million for the three months ended March 31, 2021, which consisted of $66.6 million from net proceeds from issuances of stock under our ATM and $0.5 million from the exercise of stock options.

There were no financing activities for the corresponding period in 2020.

Net cash used in investing activities was $60.8 million for the six months ended June 30, 2021, compared to $69.8 million provided for the corresponding period in 2020.

Net cash used in investing activities for the six months ended June 30, 2021 consisted of $224.1 million of purchases of marketable securities for our investment portfolio, partially offset by $163.3 million from sales and maturities of marketable securities.

Net cash provided by investing activities for the six months ended June 30, 2020 consisted of $224.0 million from sales and maturities of marketable securities, partially offset by $153.9 million of purchases of marketable securities for our investment portfolio and $0.3 million of purchases of property and equipment.

Net cash provided by financing activities was $130.6 million for the six months ended June 30, 2021, which consisted of $130.2 million from net proceeds from issuances of stock under our ATM and proceeds from the exercise of stock options.

Financing activities for the corresponding period in 2020 consisted of proceeds from the exercise of stock options.

Contractual Obligations and Commitments

No significant changes to contractual obligations and commitments occurred during the three months ended March 31, 2021, as compared to those disclosed in our Annual Report on Form 10-K

No significant changes to contractual obligations and commitments occurred during the six months ended June 30, 2021, as compared to those disclosed in our Annual Report on Form 10-K

for the fiscal year ended December 31, 2020 filed with the SEC on February 25, 2021.

2 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 2. Management’s Discussion and Analysis