What changed in this filing

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Item 1. Financial Statements

2024-05-07 compared with 2023-11-06 · 257 added, 224 removed, 306 unchanged (61% of the section changed)

3 unchanged sentences

in thousands, except share and per share amounts)

September 30,

2024 December 31,

Current assets:

4 unchanged sentences

Property and equipment, net 1,742 1,553

Intangible assets, net

Right-of-use asset 1,586 1,713

Total assets $ 1,082,280 $ 640,547

Liabilities and Stockholders’ Equity

11 unchanged sentences

Preferred stock, par value $ 0.0001 per share authorized:

5,000,000 shares at September 30, 2023 and December 31, 2022;

2,369,797 and 2,369,797 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

5,000,000 shares at March 31, 2024 and December 31, 2023;

2,369,797 and 2,369,797 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Common stock, par value $ 0.0001 per share authorized:

200,000,000 at September 30, 2023 and December 31, 2022;

18,494,192 and 18,102,523 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

200,000,000 at March 31, 2024 and December 31, 2023;

20,684,663 and 19,875,427 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Additional paid-in-capital 2,334,760 1,741,153

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss) ( 172 ) 468

Accumulated deficit ( 1,483,831 ) ( 1,336,290 )

5 unchanged sentences

in thousands, except share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Total revenues $ — $ —

1 unchanged sentence

Research and development 71,237 62,154

General and administrative

Selling, general and administrative 80,800 16,182

Total operating expenses 152,037 78,336

2 unchanged sentences

Interest expense ( 3,838 ) ( 2,336 )

Net loss $ ( 147,541 ) $ ( 76,896 )

Net loss per common share:

5 unchanged sentences

in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Other comprehensive income (loss):

Unrealized loss on available-for-sale

Three Months Ended March 31,

Net Loss $ ( 147,541 ) $ ( 76,896 )

Other comprehensive loss:

Unrealized loss on available-for-sale securities ( 640 ) ( 54 )

Comprehensive loss $ ( 148,181 ) $ ( 76,950 )

3 unchanged sentences

in thousands, except share and per share amounts)

Capital Accumulated

comprehensive

1 unchanged sentence

stockholders’

Preferred stock

Preferred stock Common stock

Shares Amount Shares Amount

Balance at December 31, 2023 2,369,797 $ — 19,875,427 $ 2 $ 1,741,153 $ 468 $ ( 1,336,290 ) $ 405,333

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

Compensation expense related to stock options for services

Issuance of common shares and sale of warrants in equity offerings, excluding to related parties, net of transaction costs — — 750,000 — 311,560 — — 311,560

Sale of warrants to related parties in equity offerings, exercise of common stock options, and restricted stock vesting, net of transaction costs — — 59,236 — 262,145 — — 262,145

Stock-based compensation expense related to equity-classified awards — — — — 19,902 — — 19,902

Unrealized loss on marketable securities — — — — — ( 640 ) — ( 640 )

Hercules warrant

Net loss — — — — — — ( 147,541 ) ( 147,541 )

Balance at March 31, 2024 2,369,797 $ — 20,684,663 $ 2 $ 2,334,760 $ ( 172 ) $ ( 1,483,831 ) $ 850,759

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

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

Compensation expense related to stock options for services

Unrealized loss on marketable securities

Hercules warrant

Balance at June 30, 2023

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

Balance at December 31, 2022 2,369,797 $ — 18,102,523 $ 2 $ 1,160,079 $ ( 32 ) $ ( 962,660 ) $ 197,389

Sale of common shares to related parties and exercise of common stock options, net of transaction costs — — 180,551 — 17,903 — — 17,903

Compensation expense related to stock options for services

Stock-based compensation expense related to equity-classified awards — — — — 11,250 — — 11,250

Unrealized loss on marketable securities — — — — — ( 54 ) — ( 54 )

Hercules warrant — — — — 544 — — 544

Balance at September 30, 2023

Balance at December 31, 2021

Compensation expense related to stock options for services

Unrealized loss on marketable securities

Net loss — — — — — — ( 76,896 ) ( 76,896 )

Balance at March 31, 2023 2,369,797 $ — 18,283,074 $ 2 $ 1,189,776 $ ( 86 ) $ ( 1,039,556 ) $ 150,136

Compensation expense related to stock options for services

Unrealized loss on marketable securities

Hercules warrant

Balance at June 30, 2022

Compensation expense related to stock options for services

Unrealized loss on marketable securities

Balance at September 30, 2022

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net loss $ ( 147,541 ) $ ( 76,896 )

Adjustments to reconcile net loss to net cash used in operating activities:

15 unchanged sentences

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

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

Proceeds from related parties - warrants, exercise of common stock options, net of transaction costs 262,145 17,903

Proceeds from issuance of loan payable — 35,000

1 unchanged sentence

Net cash provided by financing activities 573,706 52,690

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Net increase (decrease) in cash, cash equivalents, and restricted cash 522,602 ( 218,241 )

Cash, cash equivalents, and restricted cash at beginning of period 99,915 331,549

Cash, cash equivalents, and restricted cash at end of period $ 622,517 $ 113,308

Supplemental disclosure of cash flow information:

Obtaining a right-of-use

asset in exchange for a lease liability

Intangible assets in accounts payable at the end of the period

See accompanying notes to condensed consolidated financial statements.

4 unchanged sentences

Madrigal Pharmaceuticals, Inc.

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

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

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

fatty liver disease (“NAFLD”).

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

The Company announced certain topline results from the MAESTRO-NAFLD-1

safety study of resmetirom in January 2022 and the MAESTRO-NASH study in December 2022.

In August 2022, Madrigal initiated a third study, MAESTRO-NASH-OUTCOMES.

(the “Company” or “Madrigal”) is a biopharmaceutical company dedicated to transforming care for patients with nonalcoholic steatohepatitis (“NASH”), a serious liver disease that can lead to cirrhosis, liver failure and premature mortality.

The Company's medication, Rezdiffra (resmetirom), is a once-daily, oral, liver-directed THR-β agonist designed to target key underlying causes of NASH.

In March 2024, Rezdiffra became the first and only FDA-approved therapy for patients with NASH.

Rezdiffra is indicated in conjunction with diet and exercise for the treatment of adults with noncirrhotic NASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis).

Basis of Presentation

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The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries.

All significant intercompany balances have been eliminated in consolidation.

All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

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Since these securities are available to fund current operations, they are classified as current assets on the consolidated balance sheets.

The Company adjusts the cost of available-for-sale

debt securities for amortization of premiums and accretion of discounts to maturity.

The Company adjusts the cost of available-for-sale debt securities for amortization of premiums and accretion of discounts to maturity.

The Company includes such amortization and accretion as a component of interest income, net.

Realized gains and losses and declines in value, if any, that the Company judges to be the result of impairment or as a result of recognizing an allowance for credit losses on available-for-sale

securities are reported as a component of interest income.

Realized gains and losses and declines in value, if any, that the Company judges to be the result of impairment or as a result of recognizing an allowance for credit losses on available-for-sale securities are reported as a component of interest income.

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

During the nine months ended September 30, 2023 and 2022, the Company determined it did no

t have any securities that were other-than-temporarily impaired.

During the three months ended March 31, 2024 and 2023, the Company determined it did not have any securities that were other-than-temporarily impaired.

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

1 unchanged sentence

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

During the nine months ended September 30, 2023 and 2022, the Company did not have any realized gains or losses on marketable securities.

During the three months ended March 31, 2024 and 2023, the Company did no t have any realized gains or losses on marketable securities.

Fair Value of Financial Instruments

10 unchanged sentences

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

As of September 30, 2023, the Company’s financial assets valued based on Level 1 inputs consisted of cash and cash equivalents in a money market fund, its financial assets valued based on Level 2 inputs consisted of high-grade corporate and government agency bonds and commercial paper, and it had no financial assets valued based on Level 3 inputs.

During the nine months ended September 30, 2023 and 2022, the Company did not have any transfers of financial assets between Levels 1 and 2.

As of September 30, 2023 and December 31, 2022, the Company did not have any financial liabilities that were recorded at fair value on a recurring basis on the balance sheet.

As of March 31, 2024, the Company’s financial assets valued based on Level 1 inputs consisted of cash and cash equivalents in a money market fund, its financial assets valued based on Level 2 inputs consisted of high-grade corporate and government agency bonds and commercial paper, and it had no financial assets valued based on Level 3 inputs.

During the three months ended March 31, 2024 and 2023, the Company did not have any transfers of financial assets between Levels 1 and 2.

As of March 31, 2024 and December 31, 2023, the Company did not have any financial liabilities that were recorded at fair value on a recurring basis on the balance sheet.

Inventory is stated at the lower of cost or estimated net realizable value, using actual cost, based on a first-in, first-out (“FIFO”) method.

The Company analyzes its inventory levels quarterly and writes down inventory subject to expiry or in excess of expected requirements, or that has a cost basis in excess of its expected net realizable value.

These write downs are charged to cost of goods sold in the accompanying Consolidated Statements of Income.

The Company considered regulatory approval of its product candidate to be uncertain and product manufactured prior to regulatory approval could not have been sold unless regulatory approval was obtained.

As such, the manufacturing costs incurred prior to regulatory approval were not capitalized as inventory, but were expensed as incurred as research and development expenses.

Research and Development Costs

Research and development costs are expensed as incurred.

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

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

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

In particular, the Company has conducted safety studies in animals, optimized and implemented the manufacturing of its drug, and conducted clinical trials, all of which are considered research and development expenditures.

2 unchanged sentences

Actual results could differ from the Company’s estimates.

Costs to secure and defend patents are expensed as incurred and are classified as general and administrative expense in the Company’s consolidated statements of operations.

Costs to secure and defend patents are expensed as incurred and are classified as selling, general and administrative expense in the Company’s consolidated statements of operations.

Intangible Assets

Intangible assets with finite lives are amortized to cost of goods sold over their estimated useful lives using the straight-line method.

Intangible assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Stock-Based Compensation

9 unchanged sentences

The Company estimates the forfeiture rate based on historical data.

This analysis is re-evaluated

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

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

For other stock-based compensation awards granted to employees and directors that vest based on market conditions, such as the trading price of the Company’s common stock achieving or exceeding certain price targets, the Company uses a Monte Carlo simulation model to estimate the grant date fair value and recognize stock compensation expense over the derived service period.

2 unchanged sentences

Changes in any of these assumptions may materially affect the fair value of awards granted and the amount of stock-based compensation recognized.

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

Under current tax regulations, the Company does not receive a tax deduction for the issuance, exercise or disposition of ISOs if the employee meets certain holding requirements.

If the employee does not meet the holding requirements, a disqualifying disposition occurs, at which time the Company may receive a tax deduction.

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

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

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

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

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

years in which the differences are expected to reverse.

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

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Changes in unrealized gains and losses on marketable securities represent the only difference between the Company’s net loss and comprehensive loss.

2 unchanged sentences

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

However, for the nine months ended September 30, 2023 and 2022, diluted net loss per share is the same as basic net loss per share because the inclusion of weighted average shares of common stock issuable upon the exercise of stock options and warrants or vesting of restricted stock units, and common stock issuable upon the conversion of preferred stock would be anti-dilutive.

However, for the three months ended March 31, 2024 and 2023, diluted net loss per share is the same as basic net loss per share because the inclusion of weighted average shares of common stock issuable upon the exercise of stock options and warrants or vesting of restricted stock units, and common stock issuable upon the conversion of preferred stock would be anti-dilutive.

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

Outstanding at September 30,

Outstanding at March 31,

Common stock options 2,458,227 2,676,598

Restricted stock units 530,671 199,125

Other stock-based awards

Performance-based restricted stock units 252,404 —

Preferred stock 2,369,797 2,369,797

Warrants 3,625,244 17,352

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in the Company's annual and interim consolidated financial statements.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2023-07 on its financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the disclosures required for income taxes in the Company's annual consolidated financial statements.

The amendments are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2023-09 on its financial statements.

Liquidity and Uncertainties

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

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

Food and Drug Administration (“FDA”) and other government regulations.

The Company has incurred losses since inception, including approximately $ 261.4 million for the nine months ended September 30, 2023, resulting in an accumulated deficit of approximately $ 1,224.1 million as of September 30, 2023.

Management expects to incur losses for the foreseeable future.

The Company has incurred losses since inception, including approximately $ 147.5 million for the three months ended March 31, 2024, resulting in an accumulated deficit of approximately $ 1,483.8 million as of March 31, 2024.

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

In October 2023, the Company completed a public offering and received approximately $ 472.0 million net cash proceeds.

Please see “Note 10 – Subsequent Events” to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q

for more information.

In March 2024, the FDA approved Rezdiffra in the U.S.

for the treatment of adults with noncirrhotic NASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis).

Rezdiffra became available in the U.S.

in April 2024.

In March 2024, the Company completed a public offering and received approximately $ 574.0 million net cash proceeds.

In April 2024, underwriters exercised in full their option to purchase additional shares as part of the public offering, resulting in additional net cash proceeds of approximately $ 85.9 million.

Please see “Note 11 – Subsequent Events” to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for

more information.

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

The Company’s future long-term liquidity requirements will be substantial and will depend on many factors, including the Company’s ability to effectively commercialize Rezdiffra.

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

3 unchanged sentences

Cash, Cash Equivalents and Marketable Securities

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

marketable securities held by the Company as of September 30, 2023 and December 31, 2022 is as follows (in thousands):

September 30, 2023

The Company held restricted cash of $ 1.2 million as of March 31, 2024 as collateral to its corporate credit card program.

The Company had no restricted cash as of December 31, 2023.

Restricted cash is included within the cash and cash equivalents balance on the Consolidated Balance Sheet.

A summary of cash, cash equivalents and available-for-sale marketable securities held by the Company as of March 31, 2024 and December 31, 2023 is as follows (in thousands):

March 31, 2024

Cost Unrealized

Cash and cash equivalents:

2 unchanged sentences

Corporate debt securities due within 3 months of date of purchase (Level 2)

14,870 — — 14,870

Total cash and cash equivalents 622,517 — — 622,517

1 unchanged sentence

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

260,811 32 ( 140 ) 260,703

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

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

175,907 25 ( 89 ) 175,843

Total cash, cash equivalents and marketable securities $ 1,059,235 $ 57 $ ( 229 ) $ 1,059,063

December 31, 2023

Cost Unrealized

Cash and cash equivalents:

1 unchanged sentence

Money market funds (Level 1) 78,555 — — 78,555

US government and government sponsored entities (Level 1)

14,967 — — 14,967

Corporate debt securities due within 3 months of date of purchase (Level 2)

3,664 — — 3,664

Total cash and cash equivalents 99,915 — — 99,915

1 unchanged sentence

Corporate debt securities due within 1 year of date of purchase (Level 2) 382,028 195 ( 7 ) 382,216

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

150,743 280 ( 1 ) 151,022

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

Total cash, cash equivalents and marketable securities $ 633,663 $ 476 $ ( 8 ) $ 634,131

The following table summarizes the Company's inventory balances as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024 December 31, 2023

Raw Materials

Work In Process

Finished Goods

Accrued Liabilities

Accrued liabilities as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

September 30,

Accrued liabilities as of March 31, 2024 and December 31, 2023 consisted of the following (in thousands):

2024 December 31,

Contract research organization costs $ 52,974 $ 50,737

3 unchanged sentences

Professional fees 13,241 6,814

Other 4,045 1,970

Total accrued liabilities $ 92,271 $ 89,980

4 unchanged sentences

The Company also could draw up to an additional $ 125.0 million in two separate tranches upon achievement of certain resmetirom clinical and regulatory milestones.

A fourth tranche of $ 75.0 million could be drawn by the Company, subject to the approval of Hercules.

The Loan Facility had a minimum interest rate of 7.45 % and adjusts with changes in the prime rate.

The Company will pay interest-only monthly payments of accrued interest under the Loan Facility for a period of 30 months, which period may be extended to 36, 48, and 60 months upon the successive achievement of certain clinical and regulatory milestones and if the Company maintains compliance with applicable covenants.

The Loan Facility matures in May 2026 and may be extended an additional year upon the achievement of certain clinical and regulatory milestones.

A fourth tranche of $ 75.0 million could have been drawn by the Company, subject to the approval of Hercules.

The Loan Facility had a minimum interest rate of 7.45 % and adjusted with changes in the prime rate.

The Company was originally scheduled to pay interest-only monthly payments of accrued interest under the Loan Facility through May 1, 2025, for a period of 36 months.

In March 2024, the interest-only period was extended to May 1, 2026 when the Company achieved a milestone when Rezdiffra received FDA approval.

The interest only period can further be extended to May 3, 2027, upon the achievement of future revenue milestones, subject to compliance with applicable covenants.

The Loan Facility originally matured in May 2026, but the maturity date was extended to May 2027 when the Company achieved a milestone upon receipt of FDA approval in March 2024.

The Loan Facility is secured by a security interest in substantially all of the Company’s assets, other than intellectual property.

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The remaining $ 15.0 million available under Tranche 2 was drawn in September of 2023 in accordance with the Amended Loan Facility.

The third tranche (“Tranche 3”) of $ 75.0 million remains unchanged by the Amendment, and such borrowings are available subject to the Company obtaining a certain FDA approval for resmetirom.

Coincident with the expansion of Tranche 2 borrowing capacity by $ 15.0 million, the Amendment reduced the fourth tranche under the Loan Facility (“Tranche 4”) by $ 15.0 million to $ 60.0 million, which amount is available subject to Hercules’ sole discretion.

In connection with the $ 35.0 million drawn under Tranche 2 at the closing of the Amendment,

$ 15.0 million drawn in June of 2023, and $ 15.0 million drawn in September of 2023, the Company issued to Hercules and affiliates Tranche 2 Warrants to purchase an aggregate of 4,555 shares of common stock, which had a Black-Scholes value of $ 0.9 million.

The third tranche (“Tranche 3”) of $ 75.0 million remains unchanged by the Amendment, and such borrowings became available when the Company achieved a milestone with FDA approval for Rezdiffra in March 2024.

As of March 31, 2024, the Company has not drawn down on Tranche 3, and the $ 75.0 million remains available until June 12, 2024.

Coincident with the expansion of Tranche 2 borrowing capacity by $ 15.0 million, the Amendment reduced the fourth tranche under the Loan Facility (“Tranche 4”) by $ 15.0 million to $ 60.0 million, which is available subject to Hercules’ sole discretion.

In connection with the $ 35.0 million drawn under Tranche 2 at the closing of the Amendment, $ 15.0 million drawn in June of 2023, and $ 15.0 million drawn in September of 2023, the Company issued to Hercules and

affiliates Tranche 2 Warrants to purchase an aggregate of 4,555 shares of common stock, which had a Black-Scholes value of $ 0.9 million.

The Amendment reduced the interest rate under the Amended Loan Facility to the greater of (i) the prime rate as reported in The Wall Street Journal plus 2.45 % and (ii) 8.25 %.

The Amendment and the Amended Loan Facility summary terms were disclosed in the Company’s Current Report on Form 8-K

filed with the Securities and Exchange Commission on February 9, 2023.

The Amendment and the Amended Loan Facility summary terms were disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 9, 2023.

The Loan Facility includes affirmative and restrictive financial covenants commencing on January 1, 2023, including maintenance of a minimum cash, cash equivalents and liquid funds covenant of $ 35.0 million, which may decrease in certain circumstances if the Company achieves certain clinical milestones and a revenue milestone, and a revenue-based covenant that could apply commencing at or after the time that financial reporting is due for the quarter ending September 30, 2024.

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The Loan Facility also includes customary covenants associated with a secured loan facility, including covenants concerning financial reporting obligations, and certain limitations on indebtedness, liens (including a negative pledge on intellectual property and other assets), investments, distributions (including dividends), collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, and deposit accounts.

As of September 30, 2023, the outstanding principal under the Loan Facility was $ 115.0 million.

The interest rate as of September 30, 2023 was 10.95 %.

As of September 30, 2023, the Company was in compliance with all loan covenants and provisions.

Future minimum payments, including interest and principal, under the loans payable outstanding as of September 30, 2023 are as follows (in thousands):

Period Ending September 30, 2023:

2023 (remaining three months)

As of March 31, 2024, the outstanding principal under the Loan Facility was $ 115.0 million.

The interest rate as of March 31, 2024 was 10.95 %.

As of March 31, 2024, the Company was in compliance with all loan covenants and provisions.

Future minimum payments, including interest and principal, under the loans payable outstanding as of March 31, 2024 are as follows (in thousands):

Period Ending March 31, 2024:

Thereafter 53,387

Less amount representing interest ( 34,225 )

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Preferred Stock

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

ratio, subject to adjustment as provided in the Certificates of Designation of Preferences, Rights and Limitations of Series A Preferred Stock and Series B Preferred Stock that the Company filed with the Secretary of State of the State of Delaware on June 21, 2017 and December 22, 2022, respectively.

The Series A and B Preferred Stock have a par value of $ 0.0001 per share and are convertible into shares of the common stock at a one -to-one ratio, subject to adjustment as provided in the Certificates of Designation of Preferences, Rights and Limitations of Series A Preferred Stock and Series B Preferred Stock that the Company filed with the Secretary of State of the State of Delaware on June 21, 2017 and December 22, 2022, respectively.

The terms of the Series A and B Preferred Stock are set forth in such Certificates of Designation.

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

Upon any liquidation, dissolution or winding-up

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

basis) in the net assets of the Company.

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, after the satisfaction in full of the debts of the Company and the payment of any liquidation preference owed to the holders of shares of capital stock of the Company

ranking prior to the Series A and B Preferred Stock upon liquidation, the holders of the Series A and B Preferred Stock shall participate pari passu with the holders of the common stock (on an as-if-converted-to-Common-Stock basis) in the net assets of the Company.

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

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

December 2022 Registered Direct Offering

In December 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a group of institutional accredited investors, who were existing, non-controlling

stockholders of the Company, pursuant to which the Company sold securities to the Investors in an offering that was registered under the Company’s existing shelf registration statement (the “2022 Registered Direct Offering”).

Under the terms of the Purchase Agreement, the Company sold 44,444 shares of its common stock at a price of $ 225 per share, and 400,000 shares of its Series B Convertible Preferred Stock at a price of $ 225 per share.

The 2022 Registered Direct Offering resulted in gross proceeds to the Company of approximately $ 100.0 million, and net proceeds to the Company of approximately $ 99.5 million.

The 2022 Registered Direct Offering closed on December 23, 2022.

At-The-Market

Issuance Sales Agreement

In June 2021, the Company entered into an at-the-market

sales agreement (the “2021 Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the Company could, from time to time, issue and sell shares of its common stock.

2024 Public Offering

On March 18, 2024, the Company entered into an Underwriting Agreement with Goldman Sachs & Co.

LLC, Jefferies LLC, Cowen and Company, LLC, Evercore Group L.L.C.

and Piper Sandler & Co, as representatives of the several underwriters named therein (the “2024 Underwriters”), pursuant to which the Company sold to the 2024 Underwriters in an underwritten public offering (the “2024 Offering”):

(i) 750,000 shares of common stock at a public offering price of $ 260.00 per share, (ii) pre-funded warrants (the “2024 Pre-Funded Warrants”) to purchase 1,557,692 shares of common stock at a public offering price of $ 259.9999 per 2024 Pre-Funded Warrant, which represents the per share public offering price for the common stock less a $ 0.0001 per share exercise price for each such Pre-Funded Warrant, and (iii) a 30-day option for the 2024 Underwriters to purchase up to 346,153 additional shares of common stock at the public offering price of $ 260.00 per share (the “Underwriters’ Option”).

The 2024 Offering closed on March 21, 2024.

The gross proceeds of the 2024 Offering was $ 600.0 million, and the Company received net proceeds, after deducting the underwriting discount and commissions and other estimated offering expenses payable by the Company, of approximately $ 574.0 million.

The Underwriters’ Option was later exercised in full, and closed on April 2, 2024.

The net proceeds to the Company for the exercise of the Underwriters’ Option, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company, was approximately $ 85.9 million.

See Note 11- Subsequent Events for more information.

The Company intends to use the net proceeds from the 2024 Offering for its commercial activities in connection with the launch of Rezdiffra in the U.S.

and for general corporate purposes, including, without limitation, research and development expenditures, ongoing clinical trial expenditures, manufacture and supply of drug substance and drug products, potential ex-U.S.

commercialization or partnering opportunities, potential acquisitions or licensing of new technologies, capital expenditures and working capital.

The 2024 Pre-Funded Warrants are exercisable at any time after the date of issuance.

A holder of 2024 Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of common stock outstanding immediately after giving effect to such exercise.

A holder of 2024 Pre-Funded Warrants may increase or decrease this percentage, but not in excess of 19.99 %, by providing at least 61 days prior notice to the Company.

2023 Public Offering

On September 28, 2023, the Company entered into an Underwriting Agreement with Goldman Sachs & Co.

LLC, as representative of the several underwriters named therein (the “2023 Underwriters”), pursuant to which the Company sold to the 2023 Underwriters in an underwritten public offering (the “2023 Offering”):

(i) 1,248,098 shares of common stock at a public offering price of $ 151.69 per share, and (ii) pre-funded warrants (the “2023 Pre-Funded Warrants”) to purchase 2,048,098 shares of common stock at a public offering price of $ 151.6899 per 2023 Pre-Funded Warrant, which represents the per share public offering price for the common stock less a $ 0.0001 per share exercise price for each such 2023 Pre-Funded Warrant.

The 2023 Offering closed on October 3, 2023.

The gross proceeds of the 2023 Offering was $ 500.0 million , and the Company received net proceeds, after deducting the underwriting discount and commissions and other estimated offering expenses payable by the Company, of approximately $ 472.0 million .

The Company intends to use t he net proceeds from the Offering for its clinical and commercial activities in preparation for the 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.

The 2023 Pre-Funded Warrants are exercisable at any time afte r the date of issuance.

A holder of 2023 Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of common stock outstanding immediately after giving effect to such exercise.

2023 Pre-Funded Warrants may increase or decrease this percentage, but not in excess of 19.99 % , by providing at least 61 days prior notice to the Company.

At-The-Market Issuance Sales Agreement

In June 2021, the Company entered into an at-the-market sales agreement (the “2021 Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the Company could, from time to time, issue and sell shares of its common stock.

The 2021 Sales Agreement initially authorized an aggregate offering of up to $ 200.0 million in shares of the Company’s common stock, at the Company’s option, through Cowen as its sales agent.

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

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

Sales of common stock through Cowen could be made by any method that is deemed an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including by means of ordinary brokers’ transactions at market prices, in block transactions or as otherwise agreed by the Company and Cowen.

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

In December 2022, the Company sold 738,900 shares of common stock under the 2021 Sales Agreement for an aggregate of $ 159.1 million in gross proceeds, with net proceeds to the Company of $ 155.9 million after deducting commissions and other transaction costs.

In total, under the 2021 Sales Agreement the Company sold 1,235,943 shares for an aggregate of $ 199.9 million in gross proceeds, with net proceeds to the Company of approximately $ 195.8 million after deducting commissions and other transaction costs through December 31, 2022.

Of those shares sold, 738,900 were sold in 2022, and 497,043 were sold in 2021.

All shares were sold pursuant to the Company’s effective shelf registration statement on Form S-3

(the “Registration Statement”) and the prospectus supplement relating thereto.

As of September 30, 2023, no amounts remained reserved and available for sale under the 2021 Sales Agreement and the related prospectus supplement.

In May 2023, the Company amended the 2021 Agreement (the “Sales Agreement Amendment”), with Cowen, pursuant to which the Company may, from time to time, issue and sell in additional $ 200.0 million in shares of its common stock.

All shares were sold pursuant to the Company’s effective shelf registration statement on Form S-3 (the “Registration Statement”) and the prospectus supplement relating thereto.

As of March 31, 2024, no amounts remained reserved and available for sale under the 2021 Sales Agreement and the related prospectus supplement.

In May 2023, the Company amended the 2021 Agreement (the “Sales Agreement Amendment”), with Cowen, pursuant to which the Company may, from time to time, issue and sell an additional $ 200.0 million in shares of its common stock.

The Company is not obligated to make any sales of its common stock under this arrangement.

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The Sales Agreement Amendment authorizes sales of shares of the Company’s common stock, from time to time, at the Company’s option, through Cowen as its sales agent.

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

offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, and as described in the prospectus supplement.

During the three months ended September 30, 2023, under the Sales Agreement Amendment, the Company sold 12,200 shares for an aggregate of $ 2.8 million in gross proceeds, with net proceeds to the Company of approximately $ 2.7 million after deducting commissions and other transaction costs.

During the nine months ended September 30, 2023, and in total under the Sales Agreement Amendment, the Company sold 98,101 shares for an aggregate of $ 25.2 million in gross proceeds, with net proceeds to the Company of approximately $ 24.5 million after deducting commissions and other transaction costs.

Sales of common stock through Cowen may be made by any method that is deemed an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, and as described in the prospectus supplement.

During the three months ended March 31, 2024, under the Sales Agreement Amendment, the Company sold no shares.

In total under the Sales Agreement Amendment, the Company sold 98,101 shares for an aggregate of $ 25.2 million in gross proceeds, with net proceeds to the Company of approximately $ 24.5 million after deducting commissions and other transaction costs.

All shares were sold pursuant to the Company’s effective Registration Statement and the prospectus supplement relating thereto.

As of September 30, 2023, $ 174.8 million remained reserved and available for sale under the 2023 Sales Agreement Amendment and the Company’s related prospectus supplement.

As of March 31, 2024, $ 174.8 million remained reserved and available for sale under the 2023 Sales Agreement Amendment and the Company’s related prospectus supplement.

Stock-based Compensation

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The Company’s 2015 Stock Plan, as amended (the “2015 Stock Plan”), is one of the Company’s equity incentive compensation plans through which equity based grants are awarded.

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

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

The 2015 Stock Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units and other stock-based compensation awards to employees, officers, directors, and consultants of the Company.

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

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

As of September 30, 2023, 686,125 shares were available for future issuance under the 2015 Stock Plan.

As of March 31, 2024, 456,241 shares were available for future issuance under the 2015 Stock Plan.

2023 Inducement Plan

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The Inducement Plan was adopted without stockholder approval, pursuant to Nasdaq Listing Rule 5635(c)(4), and is administered by the Compensation Committee of the Board.

The Inducement Plan provides for the granting of non-statutory

stock options, restricted stock, restricted stock units, performance stock units and other stock-based compensation awards to new employees, but does not allow for the granting of incentive stock options.

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

The Inducement Plan provides for the granting of non-statutory stock options, restricted stock, restricted stock units, performance stock units and other stock-based compensation awards to new employees, but does not allow for the granting of incentive stock options.

term shall not be greater than ten years from the date the option or award is granted.

A total of 500,000 shares of the Company’s common stock were reserved for issuance under the Inducement Plan.

As of September 30, 2023, 287,011 shares were available for future issuance under the 2023 Inducement Plan.

As of March 31, 2024, 23,366 shares were available for future issuance under the 2023 Inducement Plan.

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2023:

The following table summarizes stock option activity during the three months ended March 31, 2024:

average exercise

Outstanding at January 1, 2023

Outstanding at December 31, 2023 2,355,779 $ 79.94

Options granted 135,518 229.77

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Options cancelled ( 14,751 ) 88.80

Outstanding at September 30, 2023

Exercisable at September 30, 2023

The total cash received by the Company as a result of stock option exercises was $ 26.2 million and $ 0.0 million, respectively, for the nine months ended September 30, 2023 and 2022.

The total intrinsic value of options exercised was $ 51.0 million and $ 0.0 million, respectively, for the nine months ended September 30, 2023 and 2022.

The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the nine months ended September 30, 2023 and 2022 were $ 219.02 and $ 55.14 , respectively.

Outstanding at March 31, 2024 2,458,227 $ 88.18

Exercisable at March 31, 2024 1,850,988 $ 75.49

The total cash received by the Company as a result of stock option exercises was $ 1.4 million and $ 17.9 million, respectively, for the three months ended March 31, 2024 and 2023.

The total intrinsic value of options exercised was $ 3.8 million and $ 32.5 million, respectively, for the three months ended March 31, 2024 and 2023.

The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the three months ended March 31, 2024 and 2023 were $ 152.05 and $ 219.02 , respectively.

Restricted Stock Units

The Company’s 2015 Stock Plan provides for awards of restricted stock units to employees, officers, directors and consultants to the Company.

The Company’s Inducement Plan provides for awards of restricted stock units to new employees.

Restricted stock units vest over a period of months or years, or upon the occurrence of certain performance criteria or the attainment of stated goals or events, and are subject to forfeiture if employment or service terminates before vesting.

As of September 30, 2023, the Company had 311,767 restricted stock units outstanding, with a weighted average grant date fair value of $ 256.81 per unit.

Other Stock-Based Awards

The Company’s 2015 Stock Plan provides for other stock-based compensation awards to employees, officers, directors and consultants to the Company.

The Company’s Inducement Plan provides for other stock-based compensation awards to new employees.

As of September 30, 2023, the Company had 150,000 performance stock units outstanding under the Inducement Plan, with a weighted average grant date fair value of $ 146.37 per unit.

The Company’s 2015 Stock Plan provides for awards of restricted stock units (“RSUs”) to employees, officers, directors and consultants to the Company.

The Company’s Inducement Plan provides for awards of RSUs to new employees.

RSUs vest over a period of months or years, or upon the occurrence of certain performance criteria or the attainment of stated goals or events, and are subject to forfeiture if employment or service terminates before vesting.

As of March 31, 2024, the Company had 530,671 restricted stock units outstanding, with a weighted average grant date fair value of $ 231.44 per unit.

The following table summarizes RSU activity, excluding performance-based RSUs, during the three months ended March 31, 2024:

Weighted average grant date fair value

Unvested at December 31, 2023

376,117 $ 241.45

209,347 229.11

( 47,114 ) 297.22

RSUs forfeited

( 7,679 ) 254.45

Unvested at March 31, 2024

530,671 $ 231.44

Performance-Based Restricted Stock Units

The Company has granted various performance-based restricted stock units (“PSUs”) to certain members of senior leadership.

Depending on the terms of the PSUs and the outcome of the pre-established performance criteria, which may include a market and/or performance condition, a recipient may ultimately earn the target number of PSUs granted or a specified multiple thereof at the end of the vesting period.

As of March 31, 2024, the Company granted 101,202 PSUs.

The maximum number of outstanding PSUs eligible to be earned as of March 31, 2024 are 252,404 PSUs, with a weighted average grant date fair value of $ 268.63 per unit.

Outstanding Awards

As of September 30, 2023, the Company had restricted stock units, performance stock units, and options outstanding pursuant to which an aggregate of 2,980,379 shares of its common stock may be issued pursuant to the terms of all awards granted under the 2015 Stock Plan and Inducement Plan.

As of March 31, 2024, the Company had restricted stock units, performance stock units, and options outstanding pursuant to which an aggregate of 3,241,302 shares of its common stock may be issued pursuant to the terms of all awards granted under the 2015 Stock Plan and Inducement Plan.

Stock-Based Compensation Expense

Stock-based compensation expense during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Stock-based compensation expense during the three months ended March 31, 2024 and 2023 was as follows (in thousands):

Three Months Ended March 31,

Stock-based compensation expense by type of award:

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Restricted stock units 8,625 2,652

Other stock-based awards

Performance-based restricted stock units 4,391 —

Total stock-based compensation expense $ 19,902 $ 11,250

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Research and development $ 5,907 $ 5,385

General and administrative

Selling, general and administrative 13,995 5,865

Total stock-based compensation expense included in net loss $ 19,902 $ 11,250

Unrecognized stock-based compensation expense as of September 30, 2023 was $ 119.3 million with a weighted average remaining period of 2.68 years.

Unrecognized stock-based compensation expense as of March 31, 2024 was $ 177.3 million with a weighted average remaining period of 3.00 years.

Commitments and Contingencies

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

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

The Company has a Research, Development and Commercialization Agreement with Hoffmann-La Roche (“Roche”) which grants the Company a sole and exclusive license to develop, use, sell, offer for sale and import any Licensed Product as defined by the agreement.

The agreement requires future milestone payments to Roche.

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

In March 2024, upon receiving FDA approval of Rezdiffra, a milestone was achieved and $ 5.0 million became due to Roche.

Remaining milestones under the agreement total $ 3.0 million and are payable upon the Company achieving specified objectives related to future regulatory approval in Europe of resmetirom or a product developed from resmetirom.

Furthermore, a tiered single-digit royalty is payable on net sales of resmetirom or a product developed from resmetirom, subject to certain reductions.

The Company has not achieved any additional product development or regulatory milestones and had no Licensed Product sales for the nine months ended September 30, 2023 and 2022.

The Company achieved the U.S.

regulatory approval milestone but had no Licensed Product sales for the three months ended March 31, 2024.

The company did no t achieve any product development or regulatory milestones for the three months ended March 31, 2023.

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

In August 2023, the Company entered into the Fifth Amendment to the Office Lease (the “Lease Amendment”).

The Lease Amendment extends the term of the lease through November 2026 .

As a result of the Lease Amendment, an incremental $ 1.6 million ROU asset and lease liabilities were recorded during the nine months ended September 30, 2023.

The Lease Amendment extended the term of the lease through November 2026.

As a result of the Lease Amendment, an incremental $ 1.6 million ROU asset and lease liabilities were recorded during the year ended December 31, 2023.

Subsequent Events

On September 28, 2023, the Company entered into an Underwriting Agreement with Goldman Sachs & Co.

LLC, as representative of the several underwriters named therein, pursuant to which the Company sold to the underwriters in an underwritten public offering (the “Offering”):

(i) 1,248,098 shares of common stock at a public offering price of $ 151.69 per share, and (ii) pre-funded warrants

(the “Pre-Funded Warrants”)

to purchase 2,048,098 shares of common stock at a public offering price of $ 151.6899 per Pre-Funded Warrant,

which represents the per share public offering price for the common stock less a $ 0.0001 per share exercise price for each such Pre-Funded Warrant.

Offering closed on October 3, 2023.

The gross proceeds of the Offering was $ 500.0 million, and the Company received net proceeds, after deducting the underwriting discount and commissions and other estimated offering expenses payable by the Company, of approximately $ 472.0 million.

The Company intends to use the net proceeds from the Offering for its clinical and commercial activities in preparation for a potential launch of resmetirom in the U.S.

The Pre-Funded Warrants are

exercisable at any time after the date of issuance.

A holder of Pre-Funded Warrants may

not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of common stock outstanding immediately after giving effect to such exercise.

A holder of Pre-Funded Warrants may

increase or decrease this percentage, but not in excess of 19.99 %, by providing at least 61 days prior notice to the Company.

As part of the 2024 Offering, on April 2, 2024, the Underwriters’ Option exercise closed.

The 2024 Underwriters exercised in-full their option to purchase 346,153 additional shares of Common Stock at the public offering price for the Shares of $ 260.00 per share, less underwriting discounts and commissions, pursuant to the Underwriting Agreement.

Gross proceeds were $ 90.0 million.

The net proceeds to the Company for the exercise of the Underwriters’ Option, after

deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company, was approximately $ 85.9 million.

********** END OF FINANCIAL STATEMENTS **********

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q

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

This Quarterly Report on Form 10-Q includes “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are based on our beliefs and assumptions and on information currently available to us, but are subject to factors beyond our control Forward-looking statements:

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

include all statements that are not historical facts;

and can be identified by terms such as “accelerate,” “achieve,” “allow,” “anticipates,” “appear,” “be,” “believes,” “can,” “continue,” “confidence,” “could,” “demonstrates,” “design,” “estimates,” “expectation,” “expects,” “forecasts,” “future,” “goal,” “help,” “hopeful,” “inform,” “informed,” “intends,” “may,” “might,” “on track,” “planned,” “planning,” “plans,” “positions,” “potential,” “powers,” “predicts,” ”predictive,” “projects,” “seeks,” “should,” “will,” “will achieve,” “will be,” “would” or similar expressions and the negatives of those terms.

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

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

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

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

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

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

commercial or partnering opportunities), capital needs and financing plans, including incurrence of indebtedness and compliance with debt covenants under the Loan and Security Agreement with Hercules Capital, Inc., as agent and lender, market trends, market sizing, competitive position, industry environment and potential growth opportunities, among other things;

• Post-approval requirements and commitments, including verification of a clinical benefit in confirmatory trials;

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

Our projected resources and sufficiency of capital to fund our operating expenses through the projected commercial launch of resmetirom, assuming Food and Drug Administration (“FDA”) approval is obtained;

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

Research and development activities, and the timing and results associated with the future development of our lead product candidate, resmetirom (formerly known as MGL-3196),

including projected market size, sector leadership, and patient treatment estimates for non-alcoholic

steatohepatitis (“NASH”) and nonalcoholic fatty liver disease (“NAFLD”) patients,

The timing and completion of projected future clinical milestone events, including enrollment, additional studies, top-line

data and open label projections,

Resmetirom’s potential to be a cost-effective specialty therapy for NASH patients with significant liver fibrosis (F2/F3),

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

Projections or objectives for obtaining accelerated or full approval for resmetirom for NASH patients with liver fibrosis and NASH patients with compensated cirrhosis,

• Research and development activities, and the timing and results associated with the future development of our Rezdiffra/resmetirom, including projected market size, sector leadership, and patient treatment estimates for NASH and nonalcoholic fatty liver disease (“NAFLD”) patients;

• The timing and completion of projected future clinical milestone events, including enrollment, additional studies, top-line data and open label projections;

• Rezdiffra’s potential to be a cost-effective specialty therapy for NASH patients with significant liver fibrosis (consistent with fibrosis stages 2 and 3);

• Projections or objectives for obtaining full approval for resmetirom for NASH patients with significant fibrosis (or non-cirrhotic NASH patients) and NASH patients with compensated cirrhosis, including all statements concerning potential clinical benefit to support approval and/or potential approval;

• Estimates of patients diagnosed with NASH;

• Our primary and key secondary study endpoints for resmetirom, and the potential for achieving such endpoints and projections, including NASH resolution, safety, fibrosis treatment, cardiovascular effects and lipid treatment with resmetirom;

• Optimal dosing levels for resmetirom and projections regarding potential NASH or NAFLD and potential patient benefits with resmetirom, including future NASH resolution, safety, fibrosis treatment, cardiovascular effects, lipid treatment and/or biomarker effects with resmetirom;

Our ability to address the unmet needs of patients suffering from NASH with significant liver fibrosis,

The potential efficacy and safety of resmetirom for non-cirrhotic

NASH patients and cirrhotic NASH patients,

The potential for resmetirom to become the best-in-class

and/or first-to-market

treatment option for patients with NASH with significant liver fibrosis;

Anticipated or estimated future results of operations and expenses, and our long-term liquidity expectations as we expand our resmetirom clinical development program and our commercial development program;

launch/partnering plans,

The ability to develop clinical evidence demonstrating the utility of non-invasive

tools and techniques to screen and diagnose NASH and/or NAFLD patients,

The predictive power of liver fat reduction with resmetirom, as measured by non-invasive

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

• The relationship between NASH progression and adverse patient outcomes;

• The estimated clinical burden of uncontrolled NASH;

• Analyses for patients with NASH with significant fibrosis concerning potential progression to cirrhosis, decompensated cirrhosis, liver transplant or death, and cardiovascular risks, comorbidities and outcomes;

• Our ability to address the unmet needs of patients suffering from NASH with significant fibrosis,

• The potential efficacy and safety of resmetirom for non-cirrhotic NASH patients and cirrhotic NASH patients,

• The potential for resmetirom to become the best-in-class treatment option for patients with NASH and significant fibrosis;

• The ability to develop clinical evidence demonstrating the utility of non-invasive tools and techniques to screen and diagnose NASH and/or NAFLD patients;

• The predictive power of liver fat reduction with resmetirom, as measured by non-invasive tests, on NASH resolution and/or fibrosis reduction or improvement, and potential NASH or NAFLD patient risk profile benefits with resmetirom;

• The predictive power of liver fat, liver volume changes or MAST scores for NASH and/or NAFLD patients;

The predictive power of NASH resolution and/or liver fibrosis reduction with resmetirom or improvement using non-invasive

tests, including the use of ELF, FibroScan, MRE and/or MRI-PDFF,

The predictive power of non-invasive

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

• The predictive power of NASH resolution and/or fibrosis reduction with resmetirom or improvement using non-invasive tests, including the use of ELF, FibroScan, MRE and/or MRI-PDFF;

• The predictive power of non-invasive tests generally, including for purposes of diagnosing NASH, monitoring patient response to resmetirom, or recruiting and conducting a NASH clinical trial;

• Market demand for and acceptance of our products;

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• Our continued reliance on third-party contract manufacturers for the manufacture of our product candidates, including resmetirom;

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

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

• Assumptions underlying any of the foregoing.

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our clinical and commercial development of resmetirom;

enrollment and trial outlook uncertainties, generally, based on blinded, locked or limited trial data and in relation to COVID-19-related

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

the challenges with the commercial launch of a new product, particularly for a company that does not have commercial experience;

enrollment and trial outlook uncertainties, generally, based on blinded, locked or limited trial data;

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

our ability to meet post-approval commitments and requirements, including completion of enrollment of—and ability to obtain positive data from—any confirmatory studies required by the FDA;

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

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

our ability to prevent and/or mitigate cyber attacks, unauthorized exfiltration of data or other security incidents;

limitations associated with early stage or non-placebo

controlled study data;

our ability to prevent and/or mitigate cybersecurity attacks, unauthorized exfiltration of data or other security incidents;

limitations associated with early stage or non-placebo controlled study data;

the timing and outcomes of clinical studies of resmetirom;

and the uncertainties inherent in clinical testing;

and uncertainties concerning analyses or assessments outside of a controlled clinical trial.

Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made.

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Securities and Exchange Commission for more detailed information regarding these risks and uncertainties and other factors that may cause actual results to differ materially from those expressed or implied.

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

for the year ended December 31, 2022, filed with the SEC on February 23, 2023 (the “2022 Form 10-K”),

as updated by the risk factors discussed in Part II, Item 1A of our Quarterly Report on Form 10-Q

for the quarter ended June 30, 2023 and in this Quarterly Report on Form 10-Q,

as well as in our other filings with the SEC.

You should read the 2022 Form 10-K,

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

We specifically discuss these risks and uncertainties in greater detail in the section appearing in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024 (the “2023 Form

10-K”), as well as in our other filings with the SEC.

You should read the 2023 Form 10-K, this Quarterly Report, and the other documents that we file or have filed with the SEC, with the understanding that our actual future results may be materially different from the results expressed or implied by these forward-looking statements.

Moreover, we operate in an evolving environment.

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

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

Except as required by applicable law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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

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

What changed 10-Q

Item 1. Financial Statements