What changed in this filing

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Item 1. Financial Statements

2022-05-09 compared with 2021-11-04 · 129 added, 159 removed, 270 unchanged (52% of the section changed)

3 unchanged sentences

in thousands, except share and per share amounts)

September 30,

Current assets:

16 unchanged sentences

Preferred stock, par value $ 0.0001 per share authorized:

5,000,000 shares at

September 30, 2021 and December 31, 2020;

1,969,797 shares issued and

outstanding at September 30, 2021 and December 31, 2020

5,000,000 shares at March 31, 2022 and December 31, 2021;

1,969,797 shares issued and outstanding at March 31, 2022 and December 31, 2021

Common stock, par value $ 0.0001 per share authorized:

200,000,000 at September

30, 2021 and December 31, 2020;

16,860,211 and 15,508,146 shares issued and

outstanding at September 30, 2021 and December 31, 2020, respectively

200,000,000 at March 31, 2022 and December 31, 2021;

17,103,395 and 17,103,395 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in-capital

7 unchanged sentences

in thousands, except share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Total revenues

12 unchanged sentences

in thousands)

Three Months Ended

September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Other comprehensive income (loss):

5 unchanged sentences

in thousands, except share and per share amounts)

Preferred stock

comprehensive

1 unchanged sentence

stockholders’

Preferred stock

Balance at December 31, 2021

offering, excluding to related parties, net

of transaction costs

Exercise of common stock options

Compensation expense related to stock

options for services

Unrealized loss on marketable securities

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 loss on marketable securities

Balance at June 30, 2021

Issuance of common shares in equity

offering, excluding to related parties, net

of transaction costs

Exercise of common stock options

Compensation expense related to stock

options for services

Unrealized loss on marketable securities

Balance at September 30, 2021

Balance at December 31, 2019

Compensation expense related to stock

options for services

Compensation expense related to stock options for services

Unrealized gain on marketable securities

Balance at March 31, 2022

Exercise of common stock options

Compensation expense related to stock

options for services

Unrealized gain on marketable securities

Balance at June 30, 2020

Exercise of common stock options

Compensation expense related to stock

options for services

Balance at December 31, 2020

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

Sale of common shares to related parties and exercise of common stock options, net of transaction costs

Compensation expense related to stock options for services

Unrealized loss on marketable securities

Balance at September 30, 2020

Balance at March 31, 2021

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

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

Proceeds from the sale of related party stock and exercise of common stock options, net of transaction costs

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.

4 unchanged sentences

Madrigal Pharmaceuticals, Inc.

(the “Company” or “Madrigal”) is a clinical-stage pharmaceutical company developing novel, high-quality, small-

molecule drugs addressing major unmet needs in cardiovascular, metabolic, and liver diseases.

The Company’s lead compound, MGL-3196 (resmetirom), is being advanced for non-alcoholic

steatohepatitis (“NASH”), a liver disease that commonly affects people with metabolic diseases such as obesity and diabetes, and non-alcoholic fatty liver disease (“NAFLD”).

(the “Company” or “Madrigal”) is a clinical-stage pharmaceutical company developing novel, high-quality, small-molecule drugs addressing major unmet needs in cardiovascular, metabolic, and liver diseases.

The Company’s lead compound, resmetirom, is being advanced for non-alcoholic

steatohepatitis (“NASH”), a liver disease that commonly affects people with metabolic diseases such as obesity and diabetes, and non-alcoholic

fatty liver disease (“NAFLD”).

The Company initiated two Phase 3 studies of resmetirom in NASH in 2019 that are ongoing.

The Company previously completed Phase 2 studies of resmetirom in NASH in May of 2018 and Heterozygous Familial Hypercholesterolemia (“HeFH”) in February of 2018.

The Company announced results from the Phase 3 MAESTRO-NAFLD-1

safety study of resmetirom in 2022.

Basis of Presentation

Certain information and footnote disclosures normally included in

financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted.

Accordingly, the unaudited condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete annual financial statements.

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The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Company maintains its cash in bank accounts, the balance of which, at times, exceeds Federal Deposit Insurance Corporation insured limits.

The Company maintains its cash in bank accounts, the balance of which, at times, exceeds Federal Deposit Insurance Corporation insured limits.

The primary objective of the Company’s investment activities is to preserve its capital for the purpose of funding operations and the Company does not enter into investments for trading or speculative purposes.

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

During the three months ended March 31, 2022 and 2021, 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 nine months ended September 30, 2021 and 2020, the Company did not have any realized gains or losses on marketable securities.

During the three months ended March 31, 2022 and 2021, 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 September 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 nine months ended September 30, 2021 and 2020, the Company did not have any transfers of financial assets between Levels 1 and 2.

As of September 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.

As of March 31, 2022, 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, 2022 and 2021, the Company did not have any transfers of financial assets between Levels 1 and 2.

As of March 31, 2022 and December 31, 2021, 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

Research and development costs are expensed as incurred.

Research and development costs are comprised of costs incurred in performing research and development activities, including internal costs (including stock-based

compensation), costs for consultants, milestone payments under licensing agreements, and other costs associated with the Company’s preclinical and clinical programs.

In particular, the Company has conducted safety studies in animals, optimized and implemented the manufacturing of our drug, and conducted Phase 1-3

Research and development costs are comprised of costs incurred in performing research and development activities, including internal costs (including stock-based compensation), costs for consultants, milestone payments under licensing agreements, and other costs associated with the Company’s preclinical and clinical programs.

In particular, the Company has conducted safety studies in animals, optimized and implemented the manufacturing of our drug, and

conducted Phase 1-3

clinical trials, all of which are considered research and development expenditures.

6 unchanged sentences

The Company uses the Black-Scholes option pricing model to determine the grant date fair value as management believes it is the most appropriate valuation method for its option grants.

The Black-Scholes model requires inputs for risk-free

interest rate, dividend yield, volatility and expected lives of the options.

The Black-Scholes model requires inputs for risk-free interest rate, dividend yield, volatility and expected lives of the options.

The expected lives for options granted represent the period of time that options granted are expected to be outstanding.

1 unchanged sentence

Expected volatility is based upon an industry estimate or blended rate including the Company’s historical trading activity.

The risk-free

rate for periods within the expected life of the option is based on the U.S.

The risk-free rate for periods within the expected life of the option is based on the U.S.

Treasury yield curve in effect at the time of the grant.

The Company estimates the forfeiture rate based on historical data.

This analysis is re-evaluated at least annually and the forfeiture rate is adjusted as necessary.

This analysis is re-evaluated

at least annually and the forfeiture rate is adjusted as necessary.

Certain of the employee stock options granted by the Company are structured to qualify as incentive stock options (“ISOs”).

2 unchanged sentences

The Company does not record tax benefits related to ISOs unless and until a disqualifying disposition is reported.

In the event of a

disqualifying disposition, the entire tax benefit is recorded as a reduction of income tax expense.

The Company has not recognized any income tax benefit for its share-based compensation arrangements due to the fact that the Company does not believe it is more likely than not it will realize the related

deferred tax assets.

In the event of a disqualifying disposition, the entire tax benefit is recorded as a reduction of income tax expense.

The Company uses the asset and liability method to account for income taxes.

Deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse.

The Company currently maintains

a 100 % valuation allowance on its deferred tax assets.

The Company currently maintains a 100 % valuation allowance on its deferred tax assets.

Comprehensive Loss

4 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 nine months ended September 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:

Nine Months Ended September 30,

However, for the three months ended March 21, 2022 and 2021, 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,

Common stock options

4 unchanged sentences

Food and Drug Administration and other government regulations.

The Company has incurred losses since inception, including approximately $ 177.3 million for the nine months ended September 30, 2021, resulting in an accumulated deficit of approximately $ 602.8 million as of September 30, 2021.

The Company has incurred losses since inception, including approximately $ 57.5 million for the three months ended March 31, 2022, resulting in an accumulated deficit of approximately $ 724.8 million as of March 31, 2022.

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 capital stock.

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

The Company believes that its cash, cash equivalents and marketable securities at March 31, 2022 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 September 30, 2021 and December 31, 2020 is as follows (in thousands):

September 30, 2021

marketable securities held by the Company as of March 31, 2022 and December 31, 2021 is as follows (in thousands):

March 31, 2022

Cash and cash equivalents:

17 unchanged sentences

Accrued Liabilities

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

September 30,

Accrued liabilities as of March 31, 2022 and December 31, 2021 consisted of the following (in thousands):

Contract research organization costs

4 unchanged sentences

Stockholders’ Equity

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 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.

1 unchanged sentence

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

, 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”).

The Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”) has a par value of $0.0001 per share and is convertible into shares of the Common Stock at a

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”).

The terms of the Series A Preferred Stock are set forth in the Series A Certificate.

Each share of the Series A Preferred Stock is convertible into shares of Common Stock following notice that may be given at the holder’s option.

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, after the satisfaction in full of the debts of the Company and the payment of any liquidation preference owed to the holders of shares of capital stock of the Company ranking prior to the Series A Preferred Stock upon liquidation, the holders of the Series A Preferred Stock shall participate pari passu with the holders of the Common Stock (on an as-if-converted-to-Common-Stock

Upon any liquidation, dissolution or winding-up

of the Company, whether voluntary or involuntary, after the satisfaction in full of the debts of the Company and the payment of any liquidation preference owed to the holders of shares of capital stock of the Company ranking prior to the Series A Preferred Stock upon liquidation, the holders of the Series A Preferred Stock shall participate pari passu with the holders of the Common Stock (on an as-if-converted-to-Common-Stock

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

At-The-Market

Issuance Sales

Issuance Sales Agreement

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

5 unchanged sentences

Under the 2020 Sales Agreement the Company sold 1,126,733 shares for an aggregate of approximately $ 137.4 million in gross proceeds, with net proceeds to the Company of approximately $ 134.8 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 2020.

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

Of those shares sold, 1,087,126 were sold in 2021.

In June 2021, the Company filed with the U.S.

Securities and Exchange Commission (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

4 unchanged sentences

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).

As of September 30, 2021, 260,164 shares had been sold under the 2021 Sales Agreement for an aggregate of approximately $ 21.5 million in gross proceeds, with net proceeds to the Company of approximately $ 20.9 million after deducting commissions and other transaction costs.

As of September 30, 2021, $ 178.5 million remained reserved and available for sale under the 2021 Sales Agreement and the Company’s related prospectus supplement.

As of March 31, 2022, 497,043 shares had been sold under the 2021 Sales Agreement for an aggregate of approximately $ 40.8 million in gross proceeds, with net proceeds to the Company of approximately $ 39.8 million after deducting commissions and other transaction costs.

All of those shares were sold in 2021.

As of March 31, 2022, $ 159.2 million remained reserved and available for sale under the 2021 Sales Agreement and the Company’s related prospectus supplement.

Stock-based Compensation

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

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 Company’s 2015 Stock Plan, as amended, is our primary equity incentive compensation plan through which equity based grants are awarded.

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.

Effective June 17, 2021, the 2015 Stock Plan was amended by stockholder vote to,

among other things, increase the number of authorized shares by 1,200,000.

As of September 30, 2021, the Company had options outstanding to purchase 2,254,629 shares of its common stock, which includes options outstanding under its 2006 Stock Plan.

As of September 30, 2021, 1,714,543 shares were available for future issuance.

The following table summarizes stock option activity during the nine months ended September 30, 2021:

exercise price

ten years from the date the option is granted.

As of March 31, 2022, the Company had options outstanding to purchase 2,878,399 shares of its common stock, which includes options outstanding under its prior incentive compensation plan, the 2006 Stock Plan.

As of March 31, 2022,

1,084,468 shares were available for future issuance under the 2015 Stock Plan.

The following table summarizes stock option activity during the three months ended March 31, 2022:

average exercise

Outstanding at January 1, 2022

Options granted

Options exercised

Options cancelled

Outstanding at September 30, 2021

Exercisable at September 30, 2021

The total cash received by

the Company as a result of stock option exercises was $ 0.5 million and $ 0.5 million, respectively, for the nine months ended September 30, 2021 and 2020.

The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the nine

months ended September 30, 2021 and 2020 were $ 75.71 and $ 65.65 , respectively.

Outstanding at March 31, 2022

Exercisable at March 31, 2022

The total cash received by the Company as a result of stock option exercises was $ 0 million and $ 0.5 million, respectively, for the three months ended March 31, 2022 and 2021.

The total intrinsic value of options exercised was $ 0 million and $ 0.1 million, respectively,

for the three months ended March 31, 2022 and 2021.

The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the three months ended March 31, 2022 and 2021 were $ 59.63 and $ 85.17 , respectively.

Stock-Based Compensation Expense

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

Three Months Ended

September 30,

Stock-based compensation expense during the three months ended March 31, 2022 and 2021 was as follows (in thousands):

Ended March 31,

Stock-based compensation expense by type of award:

Stock options

Restricted stock

Total stock-based compensation expense

3 unchanged sentences

Total stock-based compensation expense included in net loss

Unrecognized stock-based compensation expense on stock options as of September 30, 2021 was $ 52.6 million with a weighted average remaining period of 2.85 years.

Unrecognized stock-based compensation expense on stock options as of March 31, 2022 was $ 74.2 million with a weighted average remaining period of 3.16 years.

Commitments and Contingencies

2 unchanged sentences

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.

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 nine months ended September 30, 2021 and 2020.

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

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

Furthermore, a tiered single-digit royalty is payable on net sales of resmetirom or a product 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, 2022 and 2021.

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

Subsequent Event

Since the end of the third quarter through November 2, 2021, the Company sold 236,879 shares under the 2021 Sales Agreement (described in Note 6) for an aggregate of approximately $ 19.4 million in gross proceeds.

Net proceeds to the Company were approximately $ 19.0 million after deducting commissions and other transaction costs.

After giving effect to such sales as of November 2, 2021, approximately $ 159.2 million remained reserved and available for sale under the 2021 Sales Agreement and the

Company’s related prospectus supplement.

In May 2022 the Company entered into a $ 250 million term loan facility with Hercules Capital, Inc.

(“Hercules”).

Under the terms of the loan agreement, $ 50 million was drawn at closing.

The Company may also draw an additional $ 125 million in two separate tranches upon achievement of resmetirom clinical and regulatory milestones.

An additional $ 75 million may be drawn by the Company, subject to the approval of Hercules.

The loan facility has a floor interest rate of 7.45 % and adjusts with future changes in the prime rate, subject to the floor rate.

The loan bears initial

interest at a rate of 7.95 %.

The Company will pay interest-only for a period of 30 months, which may be extended to 60 months upon the achievement of certain milestones .

The loan matures in May 2026 and may be extended an additional year upon the achievement of certain milestones.

Additional details of the loan agreement will be filed with the Securities and Exchange Commission on a Current Report on Form 8-K.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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.

Forward-looking statements:

This Quarterly Report on Form

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 Forward-looking statements:

reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events;

include all statements that are not historical facts;

and can be identified by terms such as “allow,” “anticipates,” “appear,” “be,” “believes,” “continue,” “could,” “demonstrates,” ”design,” “estimates,” “expects,” “forecasts,” “future,” “help,” “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.

and can be identified by terms such as “achieve,” “allow,” “anticipates,” “appear,” “be,” “believes,” “can,” “continue,” “could,” “demonstrates,” ”design,” “estimates,” “expects,” “expectation,” “forecasts,” “future,” “goal,” “help,” “hopeful,” “inform,” “goal,” “intends,” “may,” “might,” “on track,” “planned,” “planning,” “plans,” “positions,” “potential,” “powers,” “predicts,” ”predictive,” “projects,” “seeks,” “should,” “will,” “will be,” “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,

Anticipated or estimated future results, including the risks and uncertainties associated with our future operating performance and financial position,

Our possible or assumed future results of operations and expenses, business strategies and plans (including ex-U.S.

launch/partnering 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, MGL-3196

(resmetirom), including sector leadership,

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

Our possible or assumed future results of operations and expenses, business strategies and plans (including

launch/partnering plans), capital needs and financing plans, including incurrence of indebtedness and compliance with debt covenants under the Loan and Security Agreement (the “Loan Agreement”) with Hercules Capital, Inc., as agent and lender (“Hercules”), market trends, competitive position, industry environment and potential growth opportunities,

Our ability to delay certain research activities and related clinical expenses as necessary,

Our clinical trials, including the anticipated timing of disclosure, presentations of data from, or outcomes from our trials,

Research and development activities, and the timing and results associated with the future development of our lead product candidate, resmetirom (formerly known as

including projected market size and sector leadership,

The timing and completion of projected 2022 clinical milestone events, including enrollment, additional studies,

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

Plans, objectives and timing for making a Subpart H (Accelerated Approval of New Drugs for Serious or Life-Threatening Illnesses) submission to FDA,

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,

Optimal dosing levels for resmetirom and projections regarding potential NASH or nonalcoholic fatty liver disease (“NAFLD”) patient benefits with resmetirom,

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,

Optimal dosing levels for resmetirom and projections regarding potential NASH or nonalcoholic fatty liver disease (“NAFLD”) and potential patient benefits with resmetirom, including future NASH resolution, safety, fibrosis treatment, cardiovascular effects, lipid treatment and/or biomarker effects with resmetirom,

The potential efficacy and safety of resmetirom for

non-cirrhotic

NASH patients and cirrhotic NASH patients,

Increases in cash operating expenses, including as we expand our resmetirom clinical development program and our commercial development program;

launch/partnering plans,

The predictive power of resmetirom liver fat reduction, as measured by

tests, on NASH resolution and/or fibrosis reduction or improvement, and potential NASH or NAFLD patient risk profile benefits with resmetirom,

The predictive power of liver fat, volume or fibrosis reduction with resmetirom using

The predictive power of

tests generally, including for purposes of diagnosing NASH, monitoring patient response to resmetirom, or recruiting and conducting a NASH clinical trial,

Market demand for and acceptance of our products,

1 unchanged sentence

Obtaining and maintaining regulatory approvals, including, but not limited to, potential regulatory delays or rejections,

Risks associated with meeting the objectives of our clinical studies, including, but not limited to our ability to achieve enrollment objectives concerning patient numbers (including an adequate safety database) and/or timing for our studies, any delays or failures in enrollment, the occurrence of adverse safety events, and the risks of successfully conducting trials that are substantially larger than our past trials,

Risks related to our ability to accomplish our business development objectives and realize the anticipated benefit of any such transactions, and

Risks associated with meeting the objectives of our clinical studies, including, but not limited to our ability to achieve enrollment objectives concerning patient numbers (including an adequate safety database), outcomes objectives and/or timing objectives for our studies, any delays or failures in enrollment, the occurrence of adverse safety events, and the risks of successfully conducting trials that are substantially larger, and have patients with different disease states, than our past trials,

Risks related to the effects of resmetirom’s mechanism of action and our ability to accomplish our business and business development objectives and realize the anticipated benefit of any such transactions, and

Assumptions underlying any of the foregoing.

We caution you that the foregoing list may not include all of the forward-looking statements made in this Quarterly Report.

Although management presently believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct and you should be aware that actual results could differ materially from those contained in the forward-looking

Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to:

our clinical development of resmetirom;

enrollment uncertainties, generally and in relation to COVID-19

enrollment and trial conclusion uncertainties, generally and in relation to COVID-19

shelter-in-place

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

our potential inability to raise sufficient capital to fund our ongoing operations as currently planned or to obtain financings on terms similar to those we have arranged in the past;

our ability to service our indebtedness and otherwise comply with our debt covenants;

outcomes or trends from competitive studies;

future topline data timing or results;

the risks of achieving potential benefits in studies that includes substantially more patients than our prior studies;

the risks of achieving potential benefits in studies that includes substantially more patients, and patients with different disease states, than our prior studies;

the timing and outcomes of clinical studies of resmetirom;

5 unchanged sentences

We specifically discuss these risks and uncertainties in greater detail in the section appearing in Part I, Item 1A of our Annual Report on Form 10-K

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.

for the year ended December 31, 2021, filed with the SEC on February 25, 2022, as updated by the risk factors discussed in Part II, Item 1A of this Quarterly Report on Form 10-Q,

as well as in our other filings with the SEC.

You should read the 2021 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.

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.

New risks and uncertainties emerge from time to time and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual future results to be materially different from those expressed or implied by any forward-looking statements.

Except as required by applicable law or the rules of the NASDAQ Stock Market, or NASDAQ, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking

statements, even if new information becomes available in the future.

We qualify all of our forward-looking statements by these cautionary statements.

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