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Item 1. Business

Item 1. Business 
 References in this Annual Report on Form 10-K to Madrigal, the Company, we, our and us refer to Madrigal Pharmaceuticals, Inc. “Madrigal” is a registered trademark of Madrigal Pharmaceuticals, Inc. in the U.S. and/or other countries. Other trademarks or service marks appearing in this report may be trademarks or service marks of other owners. 
 Executive Overview 
 We are a clinical-stage biopharmaceutical company pursuing novel therapeutics for nonalcoholic steatohepatitis, or NASH, a liver disease with high unmet medical need. Our lead candidate, resmetirom, is a once-daily, oral, liver-directed thyroid hormone receptor-β (THR-β) agonist designed to target key underlying causes of NASH. 
 NASH Disease State Overview. NASH is a more advanced form of nonalcoholic fatty liver disease (NAFLD). NAFLD has become the most common liver disease in the United States and other developed countries and is characterized by an accumulation of fat in the liver with no other apparent causes. NASH can progress to cirrhosis or liver failure, require liver transplantation and can also result in liver cancer. NASH is the leading cause of liver transplants in the U.S. for women, and is expected to soon be the leading cause of liver transplants overall. Additionally, patients with NASH, especially those with more advanced metabolic risk factors (hypertension, concomitant type 2 diabetes), are at increased risk for adverse cardiovascular events and increased morbidity and mortality. Once patients progress to NASH with significant fibrosis (consistent with fibrosis stages 2 and 3), the risk of adverse liver outcomes increases substantially. 
 NASH is also known as “metabolic dysfunction-associated steatohepatitis (MASH)” following a change in disease nomenclature introduced by hepatology medical societies in 2023. 
 Our Patient Focus. Madrigal estimates that approximately 1.5 million patients have been diagnosed with NASH in the U.S., of which approximately 525,000 have NASH with significant fibrosis. Madrigal estimates that approximately 315,000 diagnosed patients with NASH with significant fibrosis are under the care of the liver specialist physicians Madrigal will be targeting during the planned launch of resmetirom following approval. 
 Our Clinical Development Program. Madrigal is currently conducting multiple Phase 3 clinical trials to evaluate the safety and efficacy of resmetirom for the treatment of NASH, including the pivotal MAESTRO-NASH biopsy study in patients with significant fibrosis, the MAESTRO-NASH Outcomes study in patients with NASH with compensated cirrhosis and the MAESTRO-NAFLD-1 safety study. Positive results from the pivotal MAESTRO-NASH biopsy study were published in the New England Journal of Medicine in February 2024. 
 Data from the 52-week first 1,000 patient portion of MAESTRO-NASH, together with data from MAESTRO-NAFLD-1, the open-label extension of the MAESTRO-NAFLD-1 study, Phase 2 and Phase 1 data, including safety parameters, formed the basis for Madrigal’s subpart H submission to the FDA for accelerated approval of resmetirom for treatment of NASH with liver fibrosis. 
 The following chart summarizes the status of our Phase 3 clinical development program for resmetirom: 
 
 Trial MAESTRO-NASH 
 Significant Fibrosis 
 MAESTRO-NAFLD-1 
 Safety 
 MAESTRO-NASH OUTCOMES 
 Compensated Cirrhosis 
 
 Study Design Evaluates NASH resolution and/or fibrosis improvement on liver biopsy and composite clinical events Evaluates safety & tolerability as measured by incidence of adverse events Event-driven trial evaluating progression to hepatic decompensation 
 Study Duration 52 weeks biopsy (completed); 54 months clinical outcomes 
 52 weeks (completed) ~36 months 
 Patient Enrollment ~1,750 patients (ongoing) 
 ~1,200 patients, including 200 with compensated cirrhosis 
 ~700 patients (recruiting) 

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 Key Developments 
 In February 2024, primary results from the MAESTRO-NASH study were published in the New England Journal of Medicine. 
 In September 2023, Madrigal announced we had commenced a public underwritten offering of common stock and pre-funded warrants to purchase common stock (the “Offering”). The Offering closed in October 2023. We received gross proceeds totaling $500.0 million. Our net proceeds were $472.0 million, after deducting fees and commissions. We intend to use the net proceeds from the Offering for our clinical and commercial activities in preparation for a potential launch of resmetirom in the U.S. and for general corporate purposes, including, without limitation, research and development expenditures, clinical trial expenditures, manufacture and supply of drug substance and drug products, potential acquisitions or licensing of new technologies, capital expenditures and working capital. 
 Also in September 2023, Madrigal announced our Board of Directors (the “Board”) appointed Bill Sibold as the President and Chief Executive Officer of the Company. In connection with this appointment, the size of the Board was increased to nine, and Mr. Sibold was also appointed a member of the Board. On Mr. Sibold’s start date, he assumed the duties and responsibilities of the Company’s principal executive officer from Paul Friedman, M.D., who previously served as the Chief Executive Officer since July of 2016. Dr. Friedman continues to serve on the Board as a director of the Company. 
 Additionally in September 2023, the U.S. Food and Drug Administration (the “FDA”) informed Madrigal that it accepted for review our New Drug Application (“NDA”) for resmetirom for the treatment of adult patients with NASH with liver fibrosis and granted a Priority Review designation. The FDA assigned a Prescription Drug User Fee Act (“PDUFA”) date of March 14, 2024, the target date by which the FDA intends to complete its review and take action on the NDA. The FDA noted in its September 2023 correspondence that it was not currently planning to hold an advisory committee meeting to discuss our application. 
 In April 2023, Madrigal announced that resmetirom received Breakthrough Therapy designation from the FDA for the treatment of patients with NASH with liver fibrosis. Breakthrough Therapy designation is a process intended to expedite the development and review of drugs for serious or life-threatening conditions. The criteria for breakthrough therapy designation require preliminary clinical evidence that demonstrates the drug may have substantial improvement on at least one clinically significant endpoint over available therapy, or over placebo if there is no available therapy. A drug that receives Breakthrough Therapy designation is eligible for more intensive guidance on an efficient drug development program and organizational commitment involving senior managers from FDA. 
 Also in April 2023, Madrigal announced that the outcomes portion of the Phase 3 MAESTRO-NASH biopsy trial completed enrollment. Enrollment of the MAESTRO-NASH study was closed at approximately 1,750 patients based on the enrollment target of the 54-month long-term clinical outcome portion of the study. 
 Clinical Trial Overview 
 MAESTRO-NASH TRIAL. In December 2022, Madrigal announced topline results from the pivotal Phase 3 MAESTRO-NASH biopsy study of resmetirom and the primary results were published in the New England Journal of Medicine in February 2024. Resmetirom achieved both primary endpoints with both daily oral doses, 80 mg and 100 mg, relative to placebo. 
 Patients meeting eligibility requirements for MAESTRO-NASH were randomized 1:1:1 to receive resmetirom 80 mg, resmetirom 100 mg, or placebo taken orally once daily. Baseline liver biopsy fibrosis scores included F3 (~60%), F2 (~35%), F1B (~5%) (primary analysis population) with 84% with NAS ≥5 based on independent primary glass slide reads of the entire study by two central pathologists. 
 A second biopsy was conducted after 52 weeks of treatment for assessment of the dual primary endpoints. The primary efficacy analysis assessed histological response at 52 weeks in 955 patients with biopsy-confirmed NASH with significant fibrosis (modified intent-to-treat (mITT) population) that excluded 11 ITT patients who had their Week 52 biopsy after Week 60 due to COVID-related reasons per regulatory guidelines. Patients without a second biopsy due to early study discontinuation or missing liver biopsy (~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. 
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 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) 
 
 NASH resolution (ballooning 0, inflammation 0,1 with ≥2-point reduction in NAS) and no worsening of fibrosis 
 25.9 
 <0.001 
 29.9 
 <0.001 
 9.7 
 
 ≥1-stage improvement in fibrosis with no worsening of NAS 
 24.2 
 <0.001 
 25.9 
 <0.001 
 14.2 
 
 Key Secondary Endpoint 
 
 LDL-C lowering (24 weeks) 
 -13.6 
 <0.001 
 -16.3 
 <0.001 
 0.1 
 

 All biopsies were read independently by two central pathologists. Each pathologist’s scores showed a similar statistically significant magnitude of response at both doses for both liver biopsy endpoints. 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. Other secondary liver biopsy endpoints that were achieved at both doses include ≥2 point reduction in NAS with no worsening of fibrosis, ≥2 point reduction in NAS with ≥1-stage improvement in fibrosis, NASH resolution (with ≥2 point reduction in NAS) with ≥1-stage improvement in fibrosis, and a 2-stage reduction in fibrosis without worsening of NAS. 
 Multiple secondary endpoints were achieved, including statistically significant reduction from baseline in liver enzymes (ALT, AST and GGT). Reductions in atherogenic lipids and lipoproteins, fibrosis biomarkers and imaging tests (MRI-PDFF, CAP and liver stiffness measures) were observed in resmetirom treatment arms as compared with placebo. MAESTRO-NASH included many biomarker and imaging assessments that may be used in real world clinical practice to identify appropriate patients for treatment and monitor response to resmetirom, if approved. 
 Safety 
 The frequency of serious adverse events (SAEs) was similar across treatment arms in the MAESTRO-NASH trial: 11%, 13% and 12% for the 80 mg, 100 mg, and placebo groups, respectively. The rate of study discontinuation for adverse events over the entire treatment period was low: 2.8%, 7.7% and 3.4 % for the 80 mg, 100 mg and placebo groups, respectively. SAEs occurred at expected rates based on the patient population. 
 Consistent with previous Phase 2 and Phase 3 data, the most common adverse events reported with greater frequency in the resmetirom groups versus placebo were an excess of generally mild and transient diarrhea at the beginning of therapy, in 27%, 33%, 16% in the 80 mg, 100 mg and placebo groups, respectively, and generally mild nausea that occurred at rates of 22%, 19% and 13% in the 80 mg, 100 mg and placebo arms, respectively. Approximately 50% of the diarrhea AEs were described as “worsening of preexisting diarrhea” or “intermittent/loose stool(s)”; no episodes of severe diarrhea were reported. The median duration of diarrhea was approximately 15-20 days, independent of resmetirom dose. 
 Study 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. Independent of thyroxine replacement status, resmetirom treatment reduced prohormone T4, as reflected by free thyroxine (FT4), by approximately 16-19% 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. 
 
 
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 MAESTRO-NASH Safety Summary (Primary Population) 
 
 no. (%) 
 Resmetirom 80 mg (n = 322) 
 Resmetirom 100 mg (n = 323) 
 Placebo (n = 321) 
 
 ≥1 AE 
 296 (91.9) 
 296 (91.6) 
 298 (92.8) 
 
 Grade 1 (mild) 
 73 (22.7) 
 66 (20.4) 
 77 (24.0) 
 
 Grade 2 (moderate) 
 180 (55.9) 
 183 (56.7) 
 169 (52.6) 
 
 ≥Grade 3 (severe) 
 43 (13.4) 
 47 (14.6) 
 52 (16.2) 
 
 ≥1 drug-related AEs 
 124 (38.5) 
 134 (41.5) 
 88 (27.4) 
 
 ≥1 serious AE 
 35 (10.9) 
 41 (12.7) 
 37 (11.5) 
 
 ≥1 drug-related serious AE 
 2 (0.6) 
 0 
 1 (0.3) 
 
 TEAEs leading to study discontinuation prior to Week 52 
 6 (1.9) 
 22 (6.8) 
 7 (2.2) 
 
 TEAEs leading to study discontinuation (entire treatment period) 
 9 (2.8) 
 25 (7.7) 
 11 (3.4) 
 
 Fatal AE* 
 1 (0.3) 
 2 (0.6) 
 1 (0.3) 
 
 3-pt MACE** (adjudicated) 
 1 (0.3) 
 1 (0.3) 
 1 (0.3) 
 
 Other cardiovascular event (adjudicated) 
 0 
 1 (0.3) 
 3 (0.9) 
 
 Common AEs (>10%) 
 
 Diarrhea 
 87 (27.0) 
 108 (33.4) 
 50 (15.6) 
 
 COVID-19 
 69 (21.4) 
 54 (16.7) 
 66 (20.6) 
 
 Nausea 
 71 (22.0) 
 61 (18.9) 
 40 (12.5) 
 
 Arthralgia 
 48 (14.9) 
 35 (10.8) 
 40 (12.5) 
 
 Back pain 
 35 (10.9) 
 27 (8.4) 
 38 (11.8) 
 
 Urinary tract infection 
 33 (10.2) 
 27 (8.4) 
 27 (8.4) 
 
 Fatigue 
 33 (10.3) 
 26 (8.0) 
 28 (8.7) 
 
 Pruritus 
 26 (8.1) 
 37 (11.5) 
 22 (6.9) 
 

 *None of the fatal AEs in the table were treatment-related AEs. 
 **Nonfatal stroke, nonfatal myocardial infarction, and cardiovascular death. 
 AE, adverse event; GI, gastrointestinal; MACE, major adverse cardiovascular event; TEAE, treatment emergent adverse event. 
 MAESTRO-NASH is an ongoing blinded Phase 3 clinical trial, and enrolled patients continue on therapy after the Week 52 liver biopsy for up to a total of 54 months to accrue hepatic clinical outcome events including histologic conversion to cirrhosis and hepatic decompensation events. 
 MAESTRO-NAFLD-1. In January 2022, Madrigal announced topline results from the Phase 3 MAESTRO-NAFLD-1 safety study of resmetirom. The MAESTRO-NAFLD-1 study was published in Nature Medicine in November 2023. Madrigal 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 study. 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 LDLc, apolipoprotein B and triglycerides. 
 A total of 972 patients were randomized in the double-blind arms of the MAESTRO-NAFLD-1 study: 969 patients were included in the safety population and 943 patients in a modified intent-to-treat population for evaluation of key secondary and other endpoints. Important inclusion criteria included the presence of three risk factors of metabolic syndrome, a level of liver fibrosis (measured by FibroScan) consistent with a range of stages of liver fibrosis, and >=8% liver fat (measured by MRI-PDFF). 
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 Adverse events observed in the MAESTRO-NAFLD-1 trial were generally mild to moderate in severity. The frequency of serious adverse events was similar across treatment arms and discontinuation for adverse events was low. 
 Consistent with published data, the most common adverse event reported with greater frequency in the resmetirom groups vs placebo was generally mild diarrhea or increased stool frequency at the beginning of therapy, which occurred in 9% and ~17% over the placebo rate in the 80 and 100 mg dose groups, respectively. 
 
 Resmetirom 
80 mg Resmetirom 
100 mg Placebo 
 Safety population (N=327) (N=324) (N=318) 
 At least one TEAE 289 (88.4) 279 (86.1) 260 (81.8) 
 At least one Serious TEAE 20 (6.1) 24 (7.4) 20 (6.3) 
 TEAE ≥ Grade 3 Severity 26 (8.0) 29 (9.0) 29 (9.1) 
 AE discontinuations from study All treatments combined, n=21; (2.17%) 

 
 Resmetirom 
80 mg Resmetirom 
100 mg Placebo 
 Maximum NCI CTCAE Severity Grade 
 Grade 1 99 (30.3) 99 (30.6) 92 (28.9) 
 Grade 2 164 (50.2) 151 (46.6) 139 (43.7) 
 AEs over 10% 
 Diarrhea 76 (23.2) 101 (31.2) 44 (13.8) 
 Nausea 38 (11.6) 59 (18.2) 25 (7.9) 

 AE (adverse event); TEAE (treatment emergent adverse event); NCI (National Cancer Institute); CTCAE (Common Terminology Criteria for Adverse Events) 
 The following hierarchically-controlled key secondary endpoints were reported for both the 80 and 100 mg resmetirom dose groups. Resmetirom provided significant reductions in liver fat as measured by MRI-PDFF and reduced atherogenic lipids, including LDLc, apolipoprotein B and triglycerides. Open-label arm data is reported in the far left column below and double-blind arm data are reported in the remaining columns below. Although both arms were randomized in MAESTRO-NAFLD-1, lipid reductions were numerically greater in the 100 mg open label treatment arm compared to the 100 mg double-blind arm, and we believe this is due to greater visit and dose interruptions experienced by open-label arm patients during the height of the COVID-19 pandemic, as patients in the open-label active 100 mg treatment arm were less impacted by COVID-related dose interruptions than double-blind patients. 
 
 Resmetirom 
100 mg OL Resmetirom 
80 mg p-value Resmetirom 100 
mg p-value Placebo 
 LDLc %CFB (SE) (Week 24) -21 (1.9) -12.7 (2.1) <.0001 -14.4 (2.1) <.0001 -1.7 (2.0) 
 ApoB %CFB (SE) (Week 24) -22 (1.5) -14.6 (1.5) <.0001 -16.6 (1.6) <.0001 -0.1 (1.5) 
 MRI-PDFF %CFB (Week 16) -49 % -41 % <.0001 -48 % <.0001 -6 % 
 Liver volume PDFF correction %CFB -60 % 
 MRI-PDFF %CFB (Week 52) -53 % -43 % <.0001 -48 % <.0001 -8 % 
 Liver volume PDFF correction %CFB -61 % 
 Triglycerides baseline >150 mg/dL, CFB (SE) -65 (8.3) -55.6 (8.6) NA -59 (6.5) NA -6.9 (16.1) 
 Triglycerides baseline >150 mg/dL (geomean) %CFB (95% CI) -25 (3.1) -19.5 (-27.0 to -11.1) =.0005 -21.5 (-28.0 to -14.3) <.0001 -2.1 (-10.6 to 7.4) 

 CFB (change from baseline); SE (standard error); APOB (Apolipoprotein B); MRI-PDFF (magnetic resonance imaging proton density fat-fraction); CI (confidence interval); OL, open label non-cirrhotic arm randomized concurrently with double-blind arms 
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 MAESTRO-NASH OUTCOMES. In August 2022, we announced initiation of MAESTRO-NASH OUTCOMES, a Phase 3, double-blind, randomized, placebo-controlled study that will noninvasively measure progression to liver decompensation events in approximately 700 patients with compensated NASH cirrhosis. 
 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 <12 to ≥15 due to progression of NASH cirrhosis. Key inclusion criteria are well-compensated NASH cirrhosis (Child-Pugh A) and presence of three metabolic risk factors (metabolic syndrome). Patients will be randomized 3:1 in a blinded manner to receive 80 mg resmetirom or matching placebo, given orally once daily. The study duration is expected to be two to three years for accrual of the required number of composite clinical outcome events. 
 A positive outcome is expected to support the full approval of resmetirom for noncirrhotic NASH, potentially accelerating the timeline to full approval. In addition, this study has the potential to support an additional indication for resmetirom in patients with compensated NASH cirrhosis. 
 RESMETIROM PHASE 2 CLINICAL TRIAL in NASH. The Company successfully completed its Phase 2 clinical trial in NASH in 2018. In this clinical trial, resmetirom demonstrated statistical significance in the primary endpoint (p<0.0001), the relative reduction of liver fat compared with baseline on magnetic resonance imaging-estimated proton density fat fraction, or MRI-PDFF, at 12-weeks which was reported in December 2017, and statistically significant results in multiple 36-week endpoints, including key secondary endpoints, reduction and resolution of NASH on liver biopsy as set forth in the table below, which was reported in May 2018. This clinical trial was published in the Lancet in 2019. 
 Lead Product Candidate—Resmetirom 
 Resmetirom is a once-daily, oral, liver-directed THR-β agonist designed to target key underlying causes of NASH. Resmetirom was discovered at Hoffmann-La Roche, or Roche, in Nutley, New Jersey, by utilizing a novel functional assay that, unlike a simple receptor binding assay, assessed the functional activity of compounds which interacted with thyroid hormone receptors. In a published study by Madrigal and Roche in the Journal of Medicinal Chemistry using this functional assay, resmetirom was shown to be highly selective for the THR-ß receptor, with almost no effect on THR-α, unlike other compounds purported in published studies to be ß -selective based on binding affinity, but which were shown to equally activate THR-α and THR-ß in the novel functional assay. We believe that the ß-selectivity and liver-targeting properties of resmetirom are critically important for resmetirom’s beneficial metabolic actions in the liver, and enable avoidance of safety issues associated with THR-α activation by thyroid hormone and/or less selective THR-ß agonists in tissues such as heart and bone. 
 Resmetirom is the only investigational medication for the treatment of NASH that has achieved two primary endpoints that FDA proposed as reasonably likely to predict clinical benefit in a Phase 3 trial: NASH resolution with no worsening of fibrosis and fibrosis reduction with no worsening of NAFLD activity score (NAS). 
 Our Strategy 
 Our goal is to become a leading biopharmaceutical company developing and commercializing innovative medications for the treatment of NASH. To achieve our goal, we plan to: 
 • Obtain regulatory approval of resmetirom in NASH. The resmetirom pivotal Phase 3 trial is the only Phase 3 trial in NASH to achieve both primary endpoints that FDA proposed as reasonably likely to predict clinical benefit: NASH resolution with no worsening of fibrosis and fibrosis reduction with no worsening of NAFLD activity score. Resmetirom received Breakthrough Therapy designation from the FDA and is under review to become the first medicine approved to treat patients with NASH with liver fibrosis. The FDA granted resmetirom Priority Review and assigned a Prescription Drug User Fee Act (PDUFA) date of March 14, 2024, the target date by which FDA intends to complete its review. 
 • Deliver on the U.S. launch of the first-to-market medicine for NASH. We intend to launch resmetirom in the U.S. for patients who have NASH with significant fibrosis (consistent with fibrosis stages 2 and 3). To support the launch, we have established a full capability commercial organization including marketing, sales and market access expertise. Patients with NASH with significant fibrosis are primarily managed by a concentrated group of NASH specialists in the United States. We believe this will enable us to execute on a specialty launch of resmetirom in an efficient, targeted manner. Resmetirom’s product profile as a liver-directed, once-daily, oral therapy, as well as its first-to-market position, provide meaningful points of differentiation in the NASH competitive landscape. 
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 • Expand our commitment to NASH. We intend to maximize the full value of resmetirom by broadening its indication. We are conducting a Phase 3 outcomes trial in patients with compensated cirrhosis. A positive outcome is expected to support the full approval of resmetirom for noncirrhotic NASH and an additional indication for resmetirom in patients with compensated NASH cirrhosis. We believe this outcomes data would be generated in advance of future competitors. In addition, we are evaluating the opportunity for resmetirom outside of the U.S. Furthermore, we expect to build on resmetirom's strong foundation through internal as well as external efforts, including accessing external innovation. 
 Target Indications 
 Nonalcoholic Steatohepatitis 
 Overview and Market Opportunity 
 NASH is a is a more advanced form of nonalcoholic fatty liver disease (NAFLD). Reported estimates state that 3-5% of adults have NASH, but the substantial majority of patients are undiagnosed. NASH is a leading cause of liver-related mortality and an increasing burden on healthcare systems globally. Additionally, patients with NASH, especially those with more advanced metabolic risk factors (hypertension, concomitant type 2 diabetes), are at increased risk for adverse cardiovascular events and increased morbidity and mortality. Once patients progress to NASH with significant fibrosis (consistent with fibrosis stages 2 and 3), the risk of adverse liver outcomes increases dramatically. NASH is rapidly becoming the leading cause of liver transplantation in the U.S. 
 Madrigal estimates that approximately 1.5 million patients have been diagnosed with NASH in the U.S., of which approximately 525,000 have NASH with significant fibrosis. Madrigal estimates that approximately 315,000 diagnosed patients with NASH with significant fibrosis are under the care of the liver specialist physicians Madrigal will be targeting during the planned launch of resmetirom following approval. 
 Other NASH Disease State Characteristics 
 
 
 In addition to the accumulation of fat in the liver, NASH is characterized by inflammation and cellular damage with or without fibrosis, the first stage of liver scarring, which may ultimately progress to cirrhosis. Within NASH cirrhosis, patients can be categorized as being compensated or decompensated. NASH with compensated cirrhosis is characterized by liver scarring / damage that reduces the ability to process blood supplied to the liver, though patients generally remain asymptomatic with normal liver function. NASH patients with compensated cirrhosis are on the cusp of negative consequences associated with end-stage liver disease such as portal hypertension, esophageal varices, ascites, liver cancer and liver failure. The progression rate from compensated cirrhosis to decompensation, HCC, or death is ~20% over two years. 
 NASH is strongly associated with cardiovascular disease, or CVD, and the most common cause of death in NASH patients is CVD. Progression to cirrhosis and other late-stage complications can occur within five to ten years after an initial NASH diagnosis. NASH patients with type-2 diabetes have a heightened risk of NASH disease progression. Once the disease advances beyond NASH to such life-threatening conditions as liver cancer and liver failure, then liver transplantation is the only treatment alternative. 
 NASH is the leading cause of liver transplants for women in the U.S. and is expected to soon be the leading cause of liver transplants overall. Given the extremely limited availability of organ donors and high transplant costs, NASH patients who require transplantation will place a significant economic burden on the healthcare system. As such, there is a significant unmet medical need for approved treatments for NASH. 
 Resmetirom Commercial Strategy 
 We intend to launch resmetirom as a specialty medication for patients with NASH with significant fibrosis (consistent with fibrosis stages 2 and 3) treated by liver specialist physicians. 
 We have conducted quantitative and qualitative market research studies and secondary data analytics to inform the commercial strategy for resmetirom. These studies and analytics evaluated the size of the market opportunity for 
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 resmetirom as well as physician, patient and payer perspectives on unmet needs in NASH patient care and the resmetirom product profile. 
 Based on published epidemiology data and an analysis of medical claims using ICD-10 disease diagnosis codes, Madrigal estimates that approximately 1.5 million patients have been diagnosed with NASH in the U.S., of which approximately 525,000 have NASH with significant fibrosis. Madrigal estimates that approximately 315,000 diagnosed patients with NASH with significant fibrosis are under the care of the liver specialist physicians Madrigal will be targeting during the planned launch of resmetirom following approval. Over time, as disease awareness improves and disease prevalence increases, we expect the number of identified NASH patients with significant fibrosis eligible for treatment could grow. 
 Madrigal’s launch plan for resmetirom includes a focus on educating physicians about the role of noninvasive tests for identifying patients who may be appropriate for resmetirom treatment, which have been reflected in published guidance documents from multiple medical societies. 
 To evaluate the potential value and cost effectiveness of resmetirom as a treatment for NASH patients with significant fibrosis, we initiated a series of health economics outcomes research studies and published a preliminary cost-effectiveness model (Javanbakht, Pharmacoecon Open, 2022) using data from the Phase 2 study of resmetirom. The cost-effectiveness model publication found that resmetirom is a potentially cost-effective treatment option for NASH patients with significant liver fibrosis based on an analysis performed from a U.S. commercial payer perspective. 
 In the U.S., the Institute for Clinical and Economic Review (“ICER”) performs value assessments of prescription drugs, medical tests, devices, and health system delivery innovations. Payers frequently review ICER reports when making coverage decisions about new therapies. In October 2022, ICER announced plans to perform a value assessment of resmetirom and obeticholic acid for the treatment of NASH. We engaged in the assessment process by responding to data requests from ICER and providing public comment on ICER’s cost-effectiveness modeling methods. In May 2023, a “Final Evidence Report” was released with ICER’s assessment of resmetirom cost-effectiveness. Threshold analyses were conducted by ICER to calculate the annual price needed to meet commonly accepted cost-effectiveness thresholds for quality-adjusted life years (QALY) gained. ICER analyses suggested resmetirom would achieve common thresholds for cost-effectiveness if priced between $39,600 – $50,100 per year assuming that short-term effects on liver fibrosis translate into longer-term reductions in cirrhosis. The cost-effectiveness threshold analyses included in ICER’s Final Evidence Report are one input we will consider as we develop the pricing strategy for resmetirom. Other inputs include primary market research with payers and our health economics outcomes research. We plan to finalize and announce any U.S. pricing of resmetirom following approval. 
 Our commercial strategy in the U.S. includes a focus on access to therapy. We will distribute resmetirom through a specialty pharmacy network and, to support patient access and affordability, we will provide patient support services including reimbursement programs and educational support to help appropriate patients initiate and remain adherent to resmetirom therapy. 
 Based on market research and an assessment of the potential market opportunity for therapies to treat NASH with significant fibrosis, we have developed a commercial strategy for the potential launch of resmetirom that focuses on educating approximately 14,000 NASH specialist healthcare providers (hepatologists, gastroenterologists, a small number of endocrinologists and the associated advanced practice providers) in clinics that already treat NASH patients with significant fibrosis. Patient marketing initiatives include unbranded NASH disease education resources prior to potential approval of resmetirom, which will be followed by branded product advertising post-approval. 
 We intend to commercialize resmetirom alone in the U.S. and are evaluating strategic options for commercializing resmetirom in ex-U.S. territories. 
 Resmetirom in NASH Clinical Development Program 
 Our Clinical Development Program. Madrigal is currently conducting multiple Phase 3 clinical trials to evaluate the safety and efficacy of resmetirom for the treatment of NASH: 
 • The pivotal MAESTRO-NASH (Significant Fibrosis) study includes a 52-week biopsy assessment to support accelerated approval and an ongoing 54-month outcomes study designed to generate confirmatory data that, if positive, will help verify resmetirom’s clinical benefit and support full approval. Positive topline results from the study were reported in December 2022 the primary results were published in the New England Journal of Medicine in February 2024. 
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 • MAESTRO-NASH Outcomes (Compensated Cirrhosis) evaluates progression to liver decompensation events in patients with compensated NASH cirrhosis treated with resmetirom versus placebo. A positive outcome is expected to support the full approval of resmetirom for noncirrhotic NASH and expand the eligible patient population for resmetirom with an additional indication in patients with compensated NASH cirrhosis. 
 • The MAESTRO-NAFLD-1 (Safety) study was designed to noninvasively evaluate the safety and tolerability of resmetirom and provide a larger safety database to support regulatory benefit-risk assessment. Positive topline results from the study were reported in January 2022 and the primary publication appeared in Nature Medicine . MAESTRO-NAFLD-OLE, an open-label active treatment extension of MAESTRO-NAFLD-1, is ongoing to collect additional safety data in patients with noncirrhotic NASH and patients with compensated NASH cirrhosis. 
 
 
 The Company completed a Phase 2 clinical trial in NASH in 2018. This clinical trial was published in the Lancet . 
 Data from the 52-week first 1,000 patient portion of MAESTRO-NASH, together with data from MAESTRO-NAFLD-1, MAESTRO-NAFLD-OLE, Phase 2 and Phase 1 data, including safety parameters, formed the basis for Madrigal’s subpart H submission to FDA for accelerated approval of resmetirom for treatment of NASH with liver fibrosis. 
 Collaborations 
 VIA Pharmaceuticals, Inc., or VIA, entered into a research, development and commercialization agreement, or the Roche Agreement, with Roche, on December 18, 2008. 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, dated September 14, 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 will hold exclusive worldwide rights for all potential indications. 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 resmetirom and any derivative products, subject to certain reductions. In 2011, we commenced Phase 1 clinical trials and subsequently paid Roche a related milestone payment. In October 2016, we commenced a Phase 2 study in NASH and subsequently paid Roche a related milestone payment. In 2019, we commenced a Phase 3 study in NASH and subsequently paid Roche a $2.0 million related milestone payment. The remaining milestone payment obligations under the Roche Agreement total $8.0 million, of which $5.0 million is tied to regulatory approval in the United States and $3.0 million is tied to regulatory approval in a major market country in Europe, in each case for resmetirom or any derivative product. Except as described above, we have not achieved any additional product development or regulatory milestones under the Roche Agreement and, as of the filing date of this Form 10-K, have generated no net sales of products developed from resmetirom. 
 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. The Roche Agreement will expire, unless earlier terminated pursuant to other provisions of the 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. 
 Competition 
 The development and commercialization of new drugs is highly competitive. We will face competition with respect to all product candidates we may develop or commercialize in the future from pharmaceutical and biotechnology companies worldwide. The key factors affecting the success of any approved product will be its efficacy, safety profile, drug interactions, method of administration, pricing, reimbursement and level of promotional activity relative to those of competing drugs. 
 Our potential competitors include companies with substantially greater financial, technical, and personnel resources than us. In addition, our competitors may have significantly greater commercial infrastructures. Our ability to compete successfully will depend largely on our ability to leverage our collective experience in drug discovery, development and commercialization to: 
 • discover and develop medicines that are differentiated from other products in the market, 
 • obtain patent and/or proprietary protection for our products and technologies; 
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 • obtain required regulatory approvals; 
 • commercialize our drugs, if approved; and 
 • attract and retain high-quality research, development and commercial personnel. 
 
 
 There are currently no therapeutic products approved and marketed for the treatment of NASH in North America and Europe. There are numerous drugs in development for the treatment of NASH by companies ranging in size from pre-public biotech companies to large pharma organizations that have product candidates in clinical development for the treatment of NASH. While no company has reported positive topline Phase 3 data like Madrigal, we are aware of several companies with investigational NASH medications in active Phase 3 testing, including Novo Nordisk, Inventiva and Akero. 
 Glucagon-like peptide 1 (GLP-1) agonists and dual GLP-1/glucose-dependent insulinotropic polypeptide (GIP) agonists are being studied for the treatment of NASH in Phase 2 and Phase 3 trials. As of the date of this filing, there have been no successful Phase 3 trials evaluating a GLP-1 agonist or dual GLP-1/GIP agonist for the treatment of NASH. 
 Madrigal believes that resmetirom’s product profile and expected first-to-market advantage provide meaningful points of differentiation in the NASH competitive landscape. 
 Commercial Organization 
 Madrigal has established a commercial leadership team with expertise in launching pharmaceutical products. As of the date of this filing, Madrigal has built out a field sales team and product launch capabilities in anticipation of potential accelerated approval in the U.S. for resmetirom. 
 Research and Development 
 Since our inception, we have focused significant resources on our research and development activities. Costs incurred in performing research and development activities include internal costs (including salaries and stock-based compensation); costs for clinical trial consultants, contract research organizations, clinical sites, and other external services; drug manufacturing and supply costs; milestone payments under licensing agreements; other costs of conducting studies including the costs of materials and supplies; the costs associated with seeking regulatory approval; and other costs associated with the Company’s preclinical and clinical programs. Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” of this Annual Report on Form 10-K for a discussion of our research and development expenses incurred during the last three fiscal years. 
 Manufacturing 
 We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We currently rely, and expect to rely, on third-party contract manufacturers, or CMOs, for all required starting materials, active pharmaceutical ingredients (API) and finished product for the manufacture of any product candidates that we may develop for larger-scale preclinical and clinical testing, as well as for commercial quantities of any drug candidates that are approved. We do not have long-term supply agreements for any API of our product candidates and regularly obtain supplies and services related to our product candidates from CMO’s on a purchase order basis. We currently have a single source for API and finished product for resmetirom and are developing a second source for API. We plan to continue to rely on CMOs for API, finished product, packaging, storage, and distribution for both clinical supplies and any of our product candidates that receive health authority approval. 
 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 also rely on trade secrets, know-how, continuing technological innovation and licensing opportunities to develop and maintain our competitive position. 
 Our success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our current and future product candidates, technology and know-how, to operate without infringing on the proprietary rights of others, and to prevent others from infringing our proprietary rights. 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 important to the development of our business. 
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 As of December 31, 2023, we own or co-own: seven United States and 44 foreign issued patents; nine United States and 70 foreign pending patent applications; and two international patent applications filed under the Patent Cooperation Treaty. Each of these patents and applications relates to resmetirom, including composition-of-matter, certain polymorph forms, methods of making resmetirom, its use in the treatment of key disease indications, or other THR beta analogs and uses thereof. Our current patent portfolio covers the United States and certain other jurisdictions worldwide. The two international patent applications can be used as the basis for multiple additional patent applications worldwide. In addition, pursuant to the Roche Agreement, Roche granted us an exclusive license to certain United States and foreign patents and patent applications owned by Roche and Roche know-how relating to resmetirom. 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 2037, excluding any patent term extensions or equivalents thereof that might be available following the grant of marketing authorizations. We have pending patent applications for resmetirom that, if issued, would be expected to expire in the United States and in countries outside of the United States between 2033 and 2044, excluding any patent term adjustment that might be available following the grant of the patent. We have a pending patent application for other THR beta analogs that, if issued, would be expected to expire in the United States and in countries outside of the United States in 2043, excluding any patent term adjustment that might be available following the grant of the patent. 
 Our trademarks are protected under the common law and/or by registration in the United States and other countries. We seek to protect our proprietary processes, in part, by confidentiality agreements and invention assignment agreements with our personnel, including consultants and commercial partners. These agreements are designed to protect our proprietary information. 
 Government Regulation 
 Government Regulation and Product Approval 
 Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, monitoring and reporting, promotion, advertising, distribution, marketing and export and import of drug products such as those we are developing. A new drug must be approved by the FDA through the new drug application, or NDA, process before it may be legally marketed in the United States, and must be approved by foreign regulatory authorities via various analogous procedures before it can be marketed in the applicable country. The animal and other non-clinical data and the results of human clinical trials performed under an Investigational New Drug application, or IND, and under similar foreign applications will become part of the NDA. 
 United States Drug Development Process 
 In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state and local statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable United States requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. 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, or 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. Any agency or judicial enforcement action could have a material adverse effect on us. The process required by the FDA before a drug or biologic 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, or 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; 
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 • approval by an institutional review board, or 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, or 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, or 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 studies required by the FDA. 
 
 
 Once a pharmaceutical candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies, to assess the initial safety and quality profile of the product. Animal studies must be performed in compliance with federal regulations and requirements, including, as applicable, GLP and the Animal Welfare Act. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND. 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. A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If during this 30-day period the FDA does not raise any concerns or issues that must be addressed prior to the commencement of clinical trials or does not impose a clinical hold, the IND becomes effective 30 days following the FDA’s receipt of the IND and the clinical trial proposed in the IND may begin. Clinical holds also may be imposed by the FDA at any time before or during studies 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. They must be conducted under protocols detailing the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and progress reports detailing the results of the clinical trials must be submitted at least annually. In addition, timely safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse reactions, any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol, or animal test results that suggest a significant risk to human subjects. An IRB at each institution participating in the clinical trial must review and approve each protocol before a clinical trial commences at that institution and must also approve the consent form that must be provided to each trial subject or his or her legal representative, monitor the study until completed and otherwise comply with IRB regulations. Foreign studies conducted under an IND must meet the same requirements that apply to studies being conducted in the U.S. Data from a foreign study not conducted under an IND may be submitted in support of an NDA if the study was conducted in accordance with GCP and the FDA is able to validate the data. 
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 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 generally designed to evaluate the safety, dosage tolerance, absorption, metabolism, distribution and excretion of the product candidate in humans, and, if possible, to gain early evidence of effectiveness. 
 • Phase 2: This phase involves studies in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases and to determine dosage tolerance and optimal dosage. 
 • Phase 3: This phase involves trials undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical study sites. These studies are intended to establish the overall risk-benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product approval and product labeling. 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. 
 
 
 The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. In some cases, clinical trials are also monitored by an independent group of qualified experts organized by the trial sponsor. These groups are often referred to as data monitoring committees. This group typically provides recommendations to the trial sponsor for whether or not a trial may move forward at designated check points. These decisions are based on the data monitoring committee’s independent review of data from the ongoing trial. Phase 1, Phase 2, and Phase 3 testing may not be completed successfully within any specified period, if at all. Further, success in either preclinical studies or early-stage clinical trials does not assure success in later-stage clinical trials. In general, sponsors of most interventional clinical trials that are not Phase 1, are required to submit certain clinical trial information for inclusion in the public clinical trial registry and results data bank maintained by the National Institutes of Health, which are publicly available at http://clinicaltrials.gov. Sponsors are generally also obligated to disclose the results of these clinical trials after completion. Competitors and others may use this publicly-available information to gain knowledge regarding the design and progress of our development programs. 
 During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may be prior to submission of an IND, at the end of Phase 2, and before an NDA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and FDA to reach agreement on the next phase of development. Sponsors typically use the end of Phase 2 meeting to discuss their Phase 2 clinical results and present their plans for the pivotal Phase 3 clinical trial that they believe will support approval of the new drug. 
 Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing and assuring the identity, strength, quality and purity of the final drug. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. 
 United States Review and Approval Processes 
 The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product for a specific indication. The submission of an NDA is subject to the payment of user fees under the Prescription Drug User Fee Act, or PDUFA, as amended; a waiver of such fees may be obtained under certain limited circumstances. The sponsor under an approved NDA is also subject to annual program user fees. Program fees are assessed for each approved prescription drug product identified in an approved application, with up to five program fees per application. These fees are typically modified annually. The FDA conducts a preliminary review of a submitted NDA within 60 days from receipt to ensure that the application is sufficiently complete for substantive review before it accepts the application for filing. The FDA may 
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 request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA’s PDUFA performance goals generally provide for action on an NDA within 10 months of the 60-day filing date. That deadline can be extended under certain circumstances, including by the FDA’s requests for additional information. The targeted action date can also be shortened to within 6 months of the 60-day filing date for products that are granted priority review designation because they are intended to treat serious or life-threatening conditions and demonstrate the potential to address unmet medical needs. 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. In addition, the FDA often will conduct a bioresearch monitoring inspection of the clinical trial sites involved in conducting pivotal studies to ensure data integrity and compliance with applicable GCP requirements. The FDA may refer the NDA to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. The approval process is lengthy and often difficult, and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data and information. Even if such data and information are submitted, the FDA may ultimately decide that the NDA does not satisfy the regulatory criteria for approval. Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than we interpret the same data. 
 At the end of the review period, the FDA may issue an approval letter following satisfactory completion of all aspects of the review process, or the FDA may issue a complete response letter, or CRL, which generally outlines the deficiencies in the submission and may require additional clinical or other data or impose other conditions that must be met in order to secure final approval of the NDA. If and when deficiencies outlined in a CRL have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA may issue an approval letter. The FDA’s PDUFA review goal is to review such resubmissions within two or six months of receipt, depending on the type of information included. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval and deny approval of a resubmitted NDA. 
 NDAs receive either standard or priority review. An application for a drug that treats a serious condition and, if approved, would provide a significant improvement in the safety or effectiveness of the treatment, prevention or diagnosis of disease may qualify for priority review. Priority review for an NDA for a new molecular entity means the FDA will review the NDA within six months from the date that the NDA is accepted for filing by FDA. The FDA has ten months in which to complete its initial review of a standard new molecular entity NDA. The FDA does not always meet its goal dates and in certain circumstances, the goal date may be extended. Priority review does not change the standard for approval, but may expedite the approval process. 
 Product candidates may qualify for review and approval under the 21 CFR Part 314, Subpart H accelerated approval pathway if the candidates are intended to treat a serious or life-threatening condition, provide meaningful therapeutic benefit over existing treatments, and demonstrate an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or on an intermediate clinical endpoint. 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. As a condition of accelerated approval, the FDA requires that a sponsor of a drug receiving accelerated approval perform confirmatory adequate and well-controlled post-marketing clinical trials. Approval of a product may be withdrawn if these trials fail to verify clinical benefit or do not demonstrate sufficient clinical benefit to justify the risks associated with the product. Accelerated approval does not change the standards for approval. All promotional materials for drug candidates approved under the accelerated approval pathway are subject to prior review by the FDA. If a sponsor fails to conduct any required post-approval trial with “due diligence,” the FDA may withdraw approval of the product. 
 Further, on December 29, 2022, Congress enacted the Consolidated Appropriations Act of 2023, which included the Food and Drug Omnibus Reform Act (FDORA). Under FDORA, the FDA must specify the conditions for any post-approval studies by the date of the accelerated approval and the agency has flexibility in setting forth such conditions, which may include enrollment targets, study protocol and milestones – including the target date of study completion. The FDA may also require, as appropriate, that certain post-approval studies be underway prior to accelerated approval or within a specified time from the date of approval. Accelerated approval sponsors must submit progress reports every six months on required post-approval trials. 
 An approval letter authorizes commercial marketing of the product candidate with specific prescribing information for specific indications. If a product receives regulatory approval, the approval may be further limited to specific diseases, 
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 dosages or patient populations, or the indications for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor to conduct additional (i.e., Phase 4) testing which involves clinical trials designed to further assess a drug’s safety and effectiveness after NDA approval, and may require testing and surveillance programs to monitor the safety of approved products which have been commercialized. 
 The Food and Drug Administration Safety and Innovation Act, or FDASIA, which was enacted in 2012, made permanent the Pediatric Research Equity Act, or PREA, which requires a sponsor to conduct pediatric studies for most drug and biologic applications and supplements to applications, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, such original NDAs and supplements thereto must contain a pediatric assessment unless the sponsor has received a deferral or waiver. 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 sponsor or FDA may request a deferral of pediatric studies for some or all of the pediatric subpopulations. A deferral may be granted for several reasons, including a finding that the drug or biologic is ready for approval for use in adults before pediatric studies are complete or that additional safety or effectiveness data needs to be collected before the pediatric studies begin. The FDA may send a non-compliance letter to any sponsor that fails to submit the required assessment, maintain a current deferral or submit a request for approval of a pediatric formulation. 
 Patent Term Restoration and Regulatory Exclusivities 
 Depending upon the timing, duration and specifics of FDA approval of our product candidates, some of our United States patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act. The Hatch-Waxman Act permits a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND, and the submission date of an NDA, plus the time between the submission date of an NDA and the approval of that application, except that the period is reduced by any time during which the applicant failed to exercise due diligence. Only one patent applicable to an approved drug is eligible for the extension, and the extension must be applied for prior to expiration of the patent and within 60 days of approval. The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. 
 The Hatch-Waxman Act also provides periods of regulatory exclusivity for products that would serve as a reference listed drug, or RLD, for an abbreviated new drug application, or ANDA, or application submitted under section 505(b)(2) of the FDCA, or 505(b)(2) application. If a product is a new chemical entity, or NCE—generally meaning that the active moiety has never before been approved in any drug—there is a period of five years from the product’s approval during which the FDA may not accept for filing any ANDA or 505(b)(2) application for a drug with the same active moiety. An ANDA or 505(b)(2) application may be submitted after four years, however, if the sponsor of the application makes a “Paragraph IV” certification. 
 A product that is not an NCE may qualify for a three-year period of exclusivity if the NDA or supplement to an approved NDA contains new clinical data (other than bioavailability studies), derived from studies conducted by or for the sponsor, that were necessary for approval. 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. 
 Once the FDA accepts for filing an ANDA or 505(b)(2) application containing a Paragraph IV certification, the applicant must within 20 days provide notice to the RLD NDA holder and patent owner that the application has been submitted and provide the factual and legal basis for the applicant’s assertion that the patent is invalid or not infringed. If the NDA holder or patent owner files suit against the ANDA or 505(b)(2) applicant for patent infringement within 45 days of receiving the Paragraph IV notice, the FDA is prohibited from approving the ANDA or 505(b)(2) application for a period of 30 months or the resolution of the underlying suit, whichever is earlier. If the RLD has NCE exclusivity and the notice is given and suit filed during the fifth year of exclusivity, the regulatory stay extends until seven and a half years after the RLD approval. The FDA may approve the proposed product before the expiration of the regulatory stay if a court finds the patent invalid or not infringed or if the court shortens the period because the parties have failed to cooperate in expediting the litigation. 
 Pediatric exclusivity is another type of marketing exclusivity available in the United States. The FDASIA made permanent the Best Pharmaceuticals for Children Act, or BPCA, which provides for an additional six months of marketing 
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 exclusivity if a sponsor conducts clinical trials in children in response to a written request from the FDA, or a Written Request. If the Written Request does not include studies in neonates, the FDA is required to include its rationale for not requesting those studies. The FDA may request studies on approved or unapproved indications in separate Written Requests. The issuance of a Written Request does not require the sponsor to undertake the described studies. 
 Expedited Programs 
 The FDA maintains several programs to facilitate and expedite the development and review of drug applications that are intended for the treatment of a serious or life-threatening disease or condition that meet certain other criteria, including Fast Track Designation, Breakthrough Designation, Priority Review (discussed above in United States Review and Approval Processes), and the Accelerated Approval pathway (discussed above in United States Review and Approval Processes). 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. The FDA must determine if the drug candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request. Under the Fast Track Designation program, the FDA may grant fast track designation for a product candidate if it is intended to treat a serious or life-threatening condition and nonclinical or clinical data demonstrate the potential to address an unmet medical need. Features of Fast Track Designation include more frequent interactions with the review team, and the possibility of rolling review. 
 Under the Breakthrough Designation Program, FDA may grant a drug Breakthrough Therapy Designation if it is intended to treat a serious condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement on a clinically significant endpoint over available therapies. Features of Breakthrough Therapy Designation include intensive guidance on an efficient drug development program, an organizational commitment by the agency involving senior managers in a proactive, cross-disciplinary review of the drug application, and the possibility of rolling review. 
 Post-Approval Requirements 
 Once an approval is granted, products are subject to continuing regulation by the FDA. The FDA may withdraw the approval if, among other things, compliance with regulatory standards is not maintained or if safety or efficacy problems occur after the product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on product marketing or even withdrawal of approval for the product application. If new safety issues are identified following approval, the FDA may require the NDA sponsor to take certain measures, such as revising the approved labeling to reflect the new safety information, conducting post-market studies or clinical trials to assess the new safety information, and/or implementing or changing a REMS program to mitigate newly-identified risks. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further FDA review and approval. Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws and regulations. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. 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. Future inspections by the FDA and other regulatory agencies may identify compliance issues at the facilities of our contract manufacturers that may disrupt production or distribution, or require substantial resources to correct. 
 Any drug products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements. The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. 
 From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations and guidance are often revised or interpreted by the agency in ways that may significantly 
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 affect our business and our products. It is impossible to predict whether further legislative changes will be enacted, or FDA regulations, guidance or interpretations changed or what the impact of such changes, if any, may be. 
 Foreign Regulation 
 In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we must obtain approval by the comparable regulatory authorities of foreign countries or economic areas, such as the European Union, before we may commence clinical trials or market products in those countries or areas. 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. 
 Under EU regulatory systems, a company may submit marketing authorization applications either under a centralized or decentralized procedure. The centralized procedure, which is compulsory for medicinal products produced by biotechnology or those medicinal products containing new active substances for specific indications such as the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, viral diseases and designated orphan medicines, and optional for other medicines which are highly innovative. Under the centralized procedure, a marketing application is submitted to the EMA where it will be evaluated by the Committee for Medicinal Products for Human Use and a favorable opinion typically results in the grant by the European Commission of a single marketing authorization that is valid for all EU member states within 67 days of receipt of the opinion. The initial marketing authorization is valid for five years, but once renewed is usually valid for an unlimited period, unless the Competent Authority decides, on justified grounds relating to pharmacovigilance (e.g. exposure of an insufficient number of patients to the medicinal product concerned), to mandate one additional five-year renewal. The decentralized procedure provides for approval by one or more “concerned” member states based on an assessment of an application performed by one member state, known as the “reference” member state. Under the decentralized approval procedure, an applicant submits an application, or dossier, and related materials to the reference member state and concerned member states. The reference member state prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application. Within 90 days of receiving the reference member state’s assessment report, each concerned member state must decide whether to approve the assessment report and related materials. If a member state does not recognize the marketing authorization, the disputed points are eventually referred to the European Commission, whose decision is binding on all member states. In addition to the centralized procedure and the decentralized procedure, it may also be possible to obtain a marketing authorization for one single EU Member State through a national procedure. Under a mutual recognition procedure, a national marketing authorization granted by one EU Member State may be recognized by one or more other EU Member States resulting in harmonized marketing authorizations in those EU Member States. 
 When conducting clinical trials in the EU, we must adhere to the provisions of the EU Clinical Trials Directive and the laws and regulations of the EU Member States implementing them. These provisions require, among other things, that the prior authorization of an Ethics Committee and the submission and approval of a clinical trial authorization application be obtained in each Member State before commencing a clinical trial in that Member State. On January 31, 2022, the EU Clinical Trials Regulation (EU) No 536/2014 (Clinical Trials Regulation) came into effect. The Clinical Trials Regulation applies to clinical trials in all countries of the European Economic Area (EEA, i.e., the EU Member States plus Iceland, Norway and Liechtenstein). The Clinical Trials Regulation allows investigators to start and conduct a clinical trial in accordance with the Clinical Trials Directive during a transitional period of one year after the application date (i.e., January 31, 2022). Clinical trials authorized under the Clinical Trials Directive before January 31, 2023 can continue to be conducted under the Clinical Trials Directive until January 31, 2025. An application to transition ongoing trials from the current Clinical Trials Directive to the new Clinical Trials Regulation will need to be submitted and authorized in time before the end of the transitional period. The EU Clinical Trials Regulation introduces a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU, including a new coordinated procedure for authorization of clinical trials that is similar to the mutual recognition procedure for marketing authorization of medicinal products, and increased obligations on sponsors to publish clinical trial results. 
 As in the United States, it may be possible in foreign countries to obtain a period of market and/or data exclusivity that would have the effect of postponing the entry into the marketplace of a competitor’s generic product. For example, in the EU, if any of our products receive marketing approval in the European Economic Area, or EEA, which is comprised of the 27 member states of the EU plus Norway, Iceland and Liechtenstein, we expect that we will benefit from eight years of data exclusivity and an additional two years of marketing exclusivity. An additional one-year extension of marketing exclusivity is possible if during the data exclusivity period we obtain an authorization for one or more new therapeutic indications that is deemed to bring a significant clinical benefit compared to existing therapies. The data exclusivity period begins on the date of the product’s first marketing authorization in the EU and prevents biosimilars from relying on the holder of the marketing authorization for the reference biological medicine’s pharmacological, toxicological and clinical data for a period of eight years. After eight years, a biosimilar product application may be submitted and the sponsoring 
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 companies may rely on the marketing authorization holder’s data. However, a biosimilar medicine cannot launch until 2 years later (or a total of ten years after the first marketing authorization in the EU of the innovator product), or 3 years later (or a total of eleven years after the first marketing authorization in the EU of the innovator product) if the marketing authorization holder obtains marketing authorization for a new indication with significant clinical benefit within the eight year data exclusivity period. In April 2023, the European Commission published a proposal to reform the regulatory data protection system in the EU. In the proposal, the ‘baseline’ of eight years of data exclusivity would be brought back to six years. Additional years of exclusivity can be obtained, but under requirements that are perceived to be more difficult to meet than the current requirements. This proposal is not final yet and it is uncertain if the proposal will be adopted in its current form, and if so, when the revised legislation would enter into force. 
 As in the United States, a sponsor may apply for designation of a product as an orphan drug for the treatment of a specific indication in the EU before the application for marketing authorization is made. Orphan drugs in Europe enjoy economic and marketing benefits, including up to ten years of market exclusivity for the approved indication unless another applicant can show that its product is safer, more effective or otherwise clinically superior to the orphan-designated product. In 2023, the European Commission published a proposal that intends to reduce the orphan market exclusivity period. However, it is currently uncertain if the proposal will be adopted in its current form and it is uncertain if and when the revised legislation would enter into force. 
 Coverage and Reimbursement 
 Significant uncertainty exists regarding the coverage and reimbursement status of products approved by the FDA and other government authorities. In the United States, sales of any products for which we may receive regulatory approval for commercial sale will depend in significant part on the availability and adequacy of coverage and reimbursement from third-party payors. Third-party payors include federal and state government authorities, managed care providers, private health insurers and other organizations. Decisions regarding the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. One third-party payor’s decision to cover a product does not ensure that other payors will also provide coverage for the product. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate that the payor will pay for the product. Third-party payors may limit coverage to specific products on an approved list which might not include all of the FDA-approved products for a particular indication. Moreover, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. 
 Third-party payors are increasingly challenging the prices charged for, examining the medical necessity of, and assessing the cost-effectiveness of medical products and services, in addition to their safety and efficacy. Our drug candidates may not be considered medically necessary or cost-effective. 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. A decision by a third-party payor not to cover a product could reduce physician ordering and patient demand for the product. 
 The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for a product for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. 
 In addition, sales of our products in other countries are also dependent, in large part, on complex coverage and reimbursement mechanisms and programs in those countries. In some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country. For example, the EU provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. 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. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the EU do not follow price structures of the United States and generally tend to be significantly lower. 
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 U.S. Healthcare Reform 
 The U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. For example, the Patient Protection and Affordable Care Act, as amended the ACA, contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales for branded prescription drugs to federal health care programs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals. 
 The Inflation Reduction Act of 2022, or IRA, among other things, establishes Medicare Part B and Part D inflation rebate schemes. Failure to timely pay a Part B or Part D inflation rebate is subject to a civil monetary penalty. The IRA also creates a drug price negotiation program under which the prices for Medicare units of certain high Medicare spend drugs and biologics without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price, starting in 2026. Failure to comply with requirements under the drug price negotiation program is subject to an excise tax and/or a civil monetary penalty. The IRA further makes changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and a change in manufacturer liability on account of a new discount program which could negatively affect the profitability of our product candidates. Failure to pay a discount under this new program will be subject to a civil monetary penalty. Congress continues to examine various policy proposals that may result in pressure on the prices of prescription drugs in the government health benefit programs. The IRA or other legislative changes could impact the market conditions for our product candidate. 
 It is likely that federal and state legislatures and health agencies will continue to focus on additional health care reform measures in the future that will impose additional constraints on prices and reimbursements for our marketed products. In addition, an emphasis on cost containment measures in the United States has increased and we expect will continue to increase the pressure on pharmaceutical pricing. There have been several Congressional inquiries and proposed and enacted federal and state legislation and regulatory initiatives designed to, among other things, bring more transparency to product pricing, evaluate the relationship between pricing and manufacturer patient programs, and reform government healthcare program reimbursement methodologies for drug products. Individual states in the U.S. have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including by requiring pharmaceutical manufacturers to report to state agencies when they introduce new drugs to market with prices over a certain threshold, or when they increase the price of a drug over a certain threshold. 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. 
 It is possible that the above-mentioned measures, as currently enacted or may be amended in the future, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, and new payment methodologies and additional downward pressure on coverage and payment and the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of additional cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our approved product or products. We cannot be sure whether additional legislative changes will be enacted in the U.S. or outside of the U.S., or whether regulatory changes, guidance or interpretations will be changed, or what the impact of such changes on our product candidates, if any, may be. 
 Pharmaceutical Price Reporting 
 
 
 A number of government pricing programs create certain price reporting obligations. Under the Medicaid Drug Rebate program, a participating manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by the state Medicaid program as a condition of having federal funds being made available for drugs under Medicaid and Medicare Part B. Those rebates are based on pricing data reported by the manufacturer on a monthly and quarterly basis to CMS. These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the U.S. in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions. 
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 The ACA (addressed further above in the section on “-- U.S. Healthcare Reform”) made significant changes to the Medicaid Drug Rebate Program, and CMS issued a final regulation to implement the changes to the Medicaid Drug Rebate Program under the ACA. CMS also issued a final regulation that modified prior Medicaid Drug Rebate Program regulations to permit reporting multiple best price figures with regard to value based purchasing arrangements; and provide definitions for “line extension,” “new formulation,” and related terms, with the practical effect of expanding the scope of drugs considered to be line extensions that are subject to an alternative rebate formula. 
 Federal law requires that a manufacturer also participate in the 340B Drug Pricing program in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B. The 340B program requires participating manufacturers to agree to charge no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs to a specified “covered entities,” including community health centers and other entities that receive certain federal grants, as well as hospitals that serve a disproportionate share of low-income patients. The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program. 
 Further, the IRA establishes a Medicare Part D inflation rebate schemes (the first rebate period is in fourth quarter 2022 through third quarter 2023) and a drug price negotiation program, with the first negotiated prices to take effect in 2026. It also makes several changes to the Medicare Part D benefit, including the creation of a new manufacturer discount program in place of the current coverage gap discount program (beginning in 2025). 
 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. Under this program, the manufacturer is obligated to make its covered drugs available for procurement on an FSS contract and charge a price to the Big Four agencies that is no higher than the Federal Ceiling Price (“FCP”), which is a price calculated pursuant to a statutory formula. The FCP is derived from a calculated price point called the “non-federal average manufacturer price” (“Non FAMP”), which the manufacturer calculates and reports to the VA on a quarterly and annual basis. Pursuant to applicable law, knowing provision of false information in connection with a Non FAMP filing can subject a manufacturer to significant penalties for each item of false information. 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. The rebates are calculated as the difference between the annual Non FAMP and FCP for the calendar year that the product was dispensed. 
 Human Capital 
 As of February 22, 2024, we had 376 full-time employees, including 99 engaged in research, development, and regulatory activities, and 277 in executive, commercial, general and administrative functions, and multiple part-time consultants. 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 competitive salaries and bonuses, opportunities for equity ownership in the Company, and an employment package that is designed to promote well-being across all aspects of their lives, including health care, disability, retirement investment options and paid time off. 
 General Information 
 We were incorporated in Delaware in September 2011. Our principal executive offices are located at 200 Barr Harbor Drive, Suite 200, West Conshohocken, PA 19428. Our Internet website address is www.madrigalpharma.com. No portion of our website is incorporated by reference into this Annual Report on Form 10-K. 
 We advise you to read this Annual Report on Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our definitive proxy statement, which will be filed with the SEC in connection with our 2024 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. You may obtain copies of these reports after the date of this annual report directly from us or from the SEC at its website at www.sec.gov. We make our periodic and current reports available on our internet website, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. 
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MADRIGAL PHARMACEUTICALS, INC. 10-K

Item 1. Business
