What changed in this filing

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Item 9A. Controls and Procedures

2025-02-26 compared with 2024-02-28 · 358 added, 211 removed, 625 unchanged (48% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision of our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report.

Based on that

evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2023.

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2024.

Limitations on the Effectiveness of Controls and Procedures

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Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for our company.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Generally Accepted Accounting Principles (“GAAP”).

This process includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

8 unchanged sentences

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) for the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

Director and Executive Officer Adoption of 10b5-1 Plans

Our Section 16 officers and directors may enter into plans or arrangements for the purchase or sale of our securities that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act.

Such plans and arrangements must comply in all respects with our insider trading policies, including our policy governing entry into and operation of 10b5-1 plans and arrangements.

During the quarter ended December 31, 2023:

the following Section 16 officers and directors adopted Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K of the Exchange Act);

and no plans were modified or terminated .

All plans adopted covered sales of Madrigal common stock (including sales of Madrigal common stock following exercise of stock options).

Name of Director or Section 16 Officer

Title of Director or Section 16 Officer

Date of Adoption, Modification, or Termination Duration of the Plan Aggregate Number of Shares of Common Stock that may be Sold under the Plan

Becky Taub, MD

President of R&D, CMO and Director

11/27/2023 April 3, 2025 76,564

Kenneth Bate Director

11/16/2023 June 27, 2024 32,489

Paul Friedman, MD

11/27/2023 April 3, 2025 100,000

Richard Levy, MD

11/30/2023 June 16, 2025 26,000

Certain information required by Part III is omitted from this Annual Report on Form 10-K because we intend to file our definitive Proxy Statement for our next Annual Meeting of Stockholders, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, or the 2024 Proxy Statement, no later than April 29, 2024, and certain information to be included in the 2024 Proxy Statement is incorporated herein by reference.

Director and Executive Officer 10b5-1 Plans

Our policy governing transactions in our securities by our directors, officers and employees permits our directors, officers and employees to enter into trading plans complying with Rule 10b5-1 under the Exchange Act.

The following table describes the written plans for the sale of our securities that were adopted by our executive officers and directors during the quarter ended December 31, 2024.

Each of the plans was entered into during an open trading window and is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (each a “ Trading Plan ”).

Name and Title Action Taken (Date) Duration of Plan (1)

Aggregate Number of Securities that May be Sold

Bill Sibold , Chief Executive Officer

Adoption (11/15/2024)

11/15/24 – 6/30/26 7,616

Mardi Dier , Chief Financial Officer

Adoption (11/13/2024)

11/13/24 – 10/31/25 2,218 (2)

Carole Huntsman , Chief Commercial Officer

Adoption (11/5/2024)

11/5/24 – 1/31/26 4,701 (2)

Shannon Kelley , General Counsel

Adoption (11/7/2024)

11/7/24 – 1/31/26 2,409 (2)

(1) Each Trading Plan is subject to a “cooling-off” period as set forth in Rule 10b5-1(c).

Each Trading Plan may expire on an earlier date if all contemplated transactions are completed before such Trading Plan’s expiration date, upon termination by the broker or the holder of the Trading Plan, or as otherwise provided in the Trading Plan.

(2) Each Trading Plan provides for the sale of shares to be received upon future vesting of certain outstanding equity awards, net of any shares sold to satisfy applicable taxes.

The number of shares to be sold to satisfy taxes, and thus the exact number of shares to be sold pursuant to each Trading Plan, can only be determined upon the occurrence of future vesting events.

For purposes of this disclosure, we have reported the maximum aggregate number of shares to be sold without subtracting any shares to be sold to satisfy tax obligations.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance.

The information required by this item concerning our directors, executive officers, Section 16 compliance and corporate governance matters is incorporated by reference in our 2024 Proxy Statement (excluding the information contained under the heading "Executive Officer and Director Compensation--Pay Versus Performance").

Incorporated by reference from the information in our Proxy Statement for our 2025 Annual Meeting of Stockholders, which we will file with the SEC within 120 days of the end of the fiscal year to which this Annual Report relates.

Executive Compensation.

The information required by this item regarding executive compensation is incorporated by reference in our 2024 Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by reference in our 2024 Proxy Statement.

In addition, information about our equity compensation plans is incorporated herein by reference to our 2024 Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this item regarding certain relationships and related transactions is incorporated by reference in our 2024 Proxy Statement.

Principal Accountant Fees and Services

The information required by this item regarding principal accounting fees and services is incorporated by reference in our 2024 Proxy Statement.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Item 15(a) The following documents are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K:

Item 15(a)(1) and (2) The Consolidated Financial Statements beginning on page F-1 are filed as part of this Annual Report on Form 10-K.

Item 15(a) The following documents are filed as part of, or incorporated by reference into, this Annual Report:

Item 15(a)(1) and (2) The Consolidated Financial Statements beginning on page F-1 are filed as part of this Annual Report.

Other financial statement schedules have been omitted because the information required to be presented in them is not applicable or is shown in the financial statements or related notes.

Item 15(a)(3) We have filed, or incorporated into this Annual Report on Form 10-K by reference, the exhibits listed on the accompanying Exhibit Index.

Item 15(a)(3) We have filed, or incorporated into this Annual Report by reference, the exhibits listed on the accompanying Exhibit Index.

Item 15(b) See Item 15(a)(3) above.

14 unchanged sentences

Form 8-K (Exhibit 3.1)

4/14/2016 001-33277

4.1 Form of Warrant Agreement, dated May 9, 2022, between the Registrant and Hercules Capital, Inc.

14 unchanged sentences

Form 8-K (Exhibit 10.2) 12/23/2022 001-33277

10.3 Sales Agreement, dated June 1, 2021, by and between Madrigal Pharmaceuticals, Inc.

and Cowen and Company, LLC (concerning at-the-market offerings of Madrigal common stock).

10.3 S ales Agreement, dated May 7, 2024, by and between Mad rigal Pharmaceuticals , Inc.

and TD Securities (USA) LLC.

Form 8-K (Exhibit 1.1) 5/7/2024 001-33277

1 unchanged sentence

Form 8-K (Exhibit 10.1) 12/23/2022 001-33277

10.6 Registration Rights Agreement, dated August 7, 2023, by and among Madrigal Pharmaceuticals, Inc., 667, L.P.

and Baker Brothers Life Sciences, L.P.

Form 10-Q (Exhibit 10.2) 8/8/2023 001-33277

Number Exhibit Description Filed

2 unchanged sentences

Filing Date SEC File /

10.5 Amendment No.

1 to Sales Agreement, dated May 9, 2023, by and between Madrigal Pharmaceuticals, Inc.

and Cowen and Company, LLC.

Form 8-K (Exhibit 1.1) 5/9/2023 001-33277

10.6 Registration Rights Agreement, dated August 7, 2023, by and among Madrigal Pharmaceuticals, Inc., 667, L.P.

and Baker Brothers Life Sciences, L.P.

Form 10-Q (Exhibit 10.2) 8/8/2023 001-33277

Debt Agreements

Loan and Security Agreement, dated May 9, 2022, as amended by the First Amendment to Loan and Security Agreement, dated February 3, 2023, by and among the Registrant, Canticle Pharmaceuticals, Inc., the several banks and other financial institutions or entities from time to time party thereto and Hercules Capital, Inc.

Form 8-K (Exhibit 10.1) 2/09/2023 001-33277

L oan and Security Agreement , dated May 9, 2022, as amended by the First Amendment to Loan and Security Agreement, dated F ebruary 3, 2023, and the Second Amendment to Loan and Security Agreement , dated August 22, 2024, by and among Madrigal Pharmaceuticals, Inc., Canticle Pharmac euticals, Inc., the several banks and other financial ins titutions or entities from time to time party thereto and Hercules Cap ital, Inc.

Form 10-Q (Exhibit 10.2)

10/31/2024 001-33277

Agreements with Respect to Collaborations, Licenses, Research and Development

4 unchanged sentences

Amended 2015 Stock Plan .

Definitive Proxy Statement (Annex A) 4/30/2021 001-33277

Form 8-K (Exhibit 10.1)

6/27/2024 001-33277

Form of Incentive Stock Option Agreement under Amended 2015 Stock Plan.

4 unchanged sentences

Form 10-K (Exhibit 10.13) 3/31/2017 001-33277

10.13* Non-Employee Director Equity Compensation Policy

Form 10-Q (Exhibit 10.1) 5/6/2021 001-33277

Form of RSU Agreement for Directors under Amended 2015 Stock Plan .

12 unchanged sentences

Form of Indemnification Agreement between the Registrant and certain directors and executive officers.

Form 10-K (Exhibit 10.20)

2/28/2024 001-33277

Letter Agreement, dated April 13, 2016, by and between the Company and Rebecca Taub, M.D.

Form 8-K (Exhibit 10.4)

7/22/2016 001-33277

Letter Agreement (including agreements attached as exhibits thereto), dated September 7, 2023, by and between Madrigal Pharmaceuticals, Inc.

2 unchanged sentences

9/13/2023 001-33277

21.1 List of Subsidiaries.

Form 10-K (Exhibit 21.1)

Letter Agreement (including agreements attached as exhibits thereto), dated November 5, 2023, by and between Madrigal Pharmaceuticals, Inc.

and Carole Huntsman.

Form 10-Q (Exhibit 10.1)

5/7/2024 001-33277

23.1 Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.

Letter Agreement (including agreements attached as exhibits thereto), dated February 25, 2024, by and between Madrigal Pharmaceuticals, Inc.

and Mardi Dier.

Form 10-Q (Exhibit 10.2)

5/7/2024 001-33277

Letter Agreement, dated January 3, 2024, by and between Madrigal Pharmaceuticals, Inc.

and Shannon Kelley, as amended and supplemented by the Letter Agreement, dated August 2, 20 24 , by and between Madrigal Pharmaceuticals , I nc.

and Shannon Kelley.

Form 10-Q (Exhibit 10.1)

10/31/2024 001-33277

O ffice Lease (with resp ect to corporate headquarters facility located in West Conshohocken , Pennsylvania) and am endments thereto.

Number Exhibit Description Filed

2 unchanged sentences

Filing Date SEC File /

First Amendment to Office Lease.

S econd Amendment to O ffice Lease.

T hird Amendment to Office Lease.

F ourth Amendment to Office Lease.

F ifth Amendment to Office Lease.

Sixth Amendment to Office Lease.

S event h Amendment to Office Lease .

E ight h Amendment to Office Lease.

N inth Amendment to Office Lease.

Commercial Supply Agreement

Commercial Supply Agreement, dated as of August 21, 2023, by and between Gregory Pharmaceutical Holdings, In c.

(d/b/a UPM Pharmaceuticals) and Madrigal Pharmaceuticals, Inc.

Resmetirom Commercial Supply Agreement, dated as of December 23, 2024, by and between Evo nik Corporation and M adrigal Pharmaceuti cals , Inc.

19.1 I nsider Trading Policy.

21.1 List of Subsidiaries.

23.1 Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.

31.1 Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

3 unchanged sentences

97.1 Incentive Compensation Recovery Policy .

Form 10-K (Exhibit 97.1)

2/28/2024 001-33277

97.2 S upplemental Compensation Recovery Policy.

Form 10-Q (Exhibit 10.3)

5/7/2024 001-33277

101.INS Inline XBRL Instance Document.

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† Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

# Exhibits and schedules omitted pursuant to Item 601(a)(5) of Regulation S-K.

Form 10-K Summary.

7 unchanged sentences

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below hereby constitutes and appoints William J.

Sibold, Alex G.

Howarth and Brian J.

Lynch, and each or either of them, acting individually, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or any of them, or their or his or her substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Exchange Act, as amended, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Sibold and Mardi Dier and each or either of them, acting individually, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or any of them, or their or his or her substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Exchange Act, as amended, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signatures Title Date

/s/ WILLIAM J.

SIBOLD President and Chief Executive Officer (Principal Executive Officer)

SIBOLD President and Chief Executive Officer

(Principal Executive Officer)

February 26, 2025

HOWARTH Chief Financial Officer (Principal Accounting and Financial Officer) February 28, 2024

Chief Financial Officer

(Principal Financial and Accounting Officer)

February 26, 2025

/s/ JULIAN C.

Chair of the Board

February 26, 2025

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Friedman, M.D.

/s/ RAYMOND CHEONG

/s/ RAYMOND CHEONG, M.D., PH.D.

Director February 26, 2025

Raymond Cheong

Raymond Cheong, M.D., Ph.D.

Signatures Title Date

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Financial Statements:

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We believe that our audits provide a reasonable basis for our opinions.

Emphasis of Matter

As discussed in Note 3 to the consolidated financial statements, the Company may require additional financing to fund future operations.

Management’s evaluation of the events and conditions and plans to mitigate this matter are also described in Note 3.

Definition and Limitations of Internal Control over Financial Reporting

1 unchanged sentence

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and

directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Research and Development Costs

As described in Notes 2 and 5 to the consolidated financial statements, management uses significant judgment in estimating the amount of research and development costs recognized in each reporting period.

Management analyzes and estimates the progress of its clinical trials, completion of milestone events per underlying agreements, invoices received and contracted costs when estimating the research and development costs to accrue in each reporting period.

Total research and development costs incurred during the year ended December 31, 2023 were $272.4 million and research and development costs accrued were $50.7 million as of December 31, 2023.

The principal considerations for our determination that performing procedures relating to research and development costs is a critical audit matter are (i) the significant judgment by management when estimating the research and development costs to accrue in the reporting period;

and (ii) the high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to using contracted site and patient costs applied to the number of patients screened for and enrolled in the trials to estimate costs incurred that have not been invoiced.

Recognition of Product Revenue, Net

As described in Note 2 to the consolidated financial statements, the Company recognizes revenue at a point in time when the customer obtains control of promised goods or services in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

Revenue is recorded net of variable consideration, which includes prompt pay discounts, returns, chargebacks, rebates, and co-payment assistance.

Total product revenue, net, recognized during the year ended December 31, 2024 was $180.1 million.

The principal consideration for our determination that performing procedures relating to the recognition of product revenue, net is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls over management’s process relating to accruing research and development costs, including controls over estimating the costs incurred for services performed by vendors that have not yet been invoiced.

These procedures also included, among others, testing management’s process for estimating the research and development costs to accrue in the reporting period, evaluating the completeness and accuracy of underlying data used in management’s estimate by testing for consistency with a sample of invoices and assessing whether there were significant changes in contracts, testing the number of patients screened for and enrolled in the trial, testing the mathematical accuracy of the calculation of the accrual for research and development costs incurred, and evaluating the reasonableness of assumptions used in the estimate.

Evaluating the reasonableness of assumptions used in the estimate involved assessing management’s ability to estimate costs incurred that have not been invoiced by performing a comparison of the estimated accrual to contracted costs applied to the number of patients screened for and enrolled in the trials.

These procedures included testing the effectiveness of controls relating to the revenue recognition process.

These procedures also included, among others, (i) testing revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as customer contracts, purchase orders, invoices, proof of delivery and subsequent cash receipts, where applicable;

(ii) testing the Company’s reconciliation of gross revenue recognized from product sales to third-party information, and (iii) testing, on a sample basis, variable consideration transactions by obtaining and inspecting source documents such as rebate claims received from indirect customers and corresponding payments, and evaluating for consistency with the contractual terms and the Company’s policies.

/s/ PricewaterhouseCoopers LLP

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Cash and cash equivalents $ 100,019 $ 99,915

Restricted cash 5,000 —

Marketable securities 826,232 534,216

Trade receivables, net 53,822 —

Prepaid expenses and other current assets 13,786 3,150

1 unchanged sentence

Property and equipment, net 2,190 1,553

Intangible assets, net 4,729 —

Right-of-use asset 2,401 1,713

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Accounts payable $ 43,599 $ 28,041

Accrued expenses 89,980 91,461

Accrued liabilities 124,695 89,980

Lease liability 983 527

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Additional paid-in-capital 2,556,095 1,741,153

Accumulated other comprehensive income (loss) 468 ( 32 )

Accumulated other comprehensive income 468 468

Accumulated deficit ( 1,802,182 ) ( 1,336,290 )

7 unchanged sentences

2024 2023 2022

Total revenues $ — $ — $ —

Product revenue, net $ 180,133 $ — $ —

Operating expenses:

Cost of sales 6,233 — —

Research and development 236,718 272,350 245,441

General and administrative 108,146 48,130 37,318

Selling, general and administrative 435,057 108,146 48,130

Total operating expenses 678,008 380,496 293,571

2 unchanged sentences

Interest expense ( 14,671 ) ( 12,712 ) ( 3,964 )

Other income — — 273

Net loss $ ( 465,892 ) $ ( 373,630 ) $ ( 295,350 )

9 unchanged sentences

Net Loss $ ( 465,892 ) $ ( 373,630 ) $ ( 295,350 )

Other comprehensive income (loss):

Unrealized gain (loss) on available-for-sale securities 500 48 ( 127 )

Other comprehensive income:

Unrealized gain on available-for-sale securities — 500 48

Comprehensive loss $ ( 465,892 ) $ ( 373,130 ) $ ( 295,302 )

10 unchanged sentences

Balance at December 31, 2021 1,969,797 $ — 17,103,395 $ 2 $ 863,495 $ ( 80 ) $ ( 667,310 ) $ 196,107

Issuance of common shares in equity offering, excluding to related parties, net of transaction costs — — 1,584,169 — 170,207 — — 170,207

Issuance of common and preferred shares in equity offering, excluding to related parties, net of transaction costs 400,000 — 783,344 — 255,382 — — 255,382

Sale of common shares to related parties and exercise of common stock options, net of transaction costs — — 215,784 — 8,955 — — 8,955

Compensation expense related to stock options for services — — — — 26,873 — — 26,873

Unrealized loss on marketable securities — — — — — ( 127 ) — ( 127 )

Stock-based compensation expense related to equity-classified awards — — — — 31,625 — — 31,625

Unrealized gain on marketable securities — — — — — 48 — 48

Hercules warrant — — — — 622 — — 622

Net loss — — — — — — ( 295,350 ) ( 295,350 )

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

Issuance of common and preferred shares in equity offerings, excluding to related parties, net of transaction costs 400,000 — 783,344 — 255,382 — — 255,382

Sale of common shares to related parties and exercise of common stock options, net of transaction costs — — 215,784 — 8,955 — — 8,955

Compensation expense related to stock options for services — — — — 31,625 — — 31,625

Issuance of common shares in equity offerings, excluding to related parties, net of transaction costs — — 1,346,199 — 260,187 — — 260,187

Sale of warrants and common shares to related parties and exercise of common stock options, net of transaction costs — — 426,705 — 270,292 — — 270,292

Stock-based compensation expense related to equity-classified awards — — — — 49,735 — — 49,735

Unrealized gain on marketable securities

3 unchanged sentences

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

Issuance of common and preferred shares in equity offerings, excluding to related parties, net of transaction costs — — 1,346,199 — 260,187 — — 260,187

Issuance of common shares in equity offerings, excluding to related parties, net of transaction costs — — 1,096,153 — 397,487 — — 397,487

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

— — 1,033,099 — 337,575 — — 337,575

Compensation expense related to stock options for services — — — — 49,735 — — 49,735

Unrealized gain on marketable securities

— — — — 500 — 500

Hercules warrant — — — — 860 — — 860

Stock-based compensation expense related to equity-classified awards — — — — 79,880 — — 79,880

Net loss — — — — — — ( 465,892 ) ( 465,892 )

12 unchanged sentences

Amortization of debt issuance costs and discount 2,089 2,414 797

Amortization and interest accretion related to operating leases ( 400 ) — —

Changes in operating assets and liabilities:

Trade receivables, net ( 53,822 ) — —

Inventory ( 34,068 ) — —

Prepaid expenses and other current assets ( 10,636 ) ( 555 ) ( 1,257 )

Accounts payable 15,558 4,210 2,451

Accrued expense ( 1,481 ) 36,413 9,826

Accrued liabilities 34,715 ( 1,481 ) 36,413

Accrued interest, net of interest received on maturity of investments ( 24,092 ) ( 5,450 ) ( 3 )

3 unchanged sentences

Sales and maturities of marketable securities 863,283 333,398 350,381

Acquisition of intangible asset ( 5,000 ) — —

Purchases of property and equipment, net of disposals ( 1,462 ) ( 1,479 ) ( 217 )

2 unchanged sentences

Proceeds from issuances of stock, excluding related parties, net of transaction costs 397,487 260,187 255,382

Proceeds from the sale of related party warrants and stock and exercise of common stock options, net of transaction costs 270,292 8,955 1,030

Proceeds from related parties - warrants, exercise of common stock options, net of transaction costs 337,575 270,292 8,955

Proceeds from issuance of loan payable — 65,000 50,000

2 unchanged sentences

Net increase (decrease) in cash and cash equivalents 5,104 ( 231,634 ) 295,280

Cash and cash equivalents at beginning of period 331,549 36,269 54,004

Cash and cash equivalents at end of period $ 99,915 $ 331,549 $ 36,269

Cash, cash equivalents, and restricted cash at beginning of period 99,915 331,549 36,269

Cash, cash equivalents, and restricted cash at end of period $ 105,019 $ 99,915 $ 331,549

Supplemental disclosure of cash flow information:

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Madrigal Pharmaceuticals, Inc.

(the “Company” or “Madrigal”) is a clinical-stage biopharmaceutical company pursuing novel therapeutics for nonalcoholic steatohepatitis (“NASH”), a liver disease with high unmet medical need.

The Company's lead candidate, resmetirom, a once-daily, oral, liver-directed thyroid hormone receptor-β (“THR-β”) agonist designed to target key underlying causes of NASH, is in registration status following review acceptance by the U.S.

Food and Drug Administration (the “FDA”) for its New Drug Application (“NDA”) in September 2023.

(the “Company” or “Madrigal”) is a biopharmaceutical company focused on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (“MASH”), a serious liver disease with high unmet medical need that can lead to cirrhosis, liver failure and premature mortality.

MASH is expected to become the leading cause of liver transplantation in the United States and is already the leading cause of liver transplantation among women in the United States.

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

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

Rezdiffra became commercially available in the United States in April 2024.

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

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) and include accounts of the Company and its wholly-owned subsidiaries.

Certain prior period amounts have been reclassified to align with current period presentation.

During the three months ended December 31, 2024, the Company recorded an out-of-period adjustment related to clinical trial accruals that reduced research and development expense, net loss, and accrued liabilities by $ 36.9 million, $ 25.6 million of which related to fiscal years 2021 through 2023.

The Company evaluated the impact of the error and out-of-period adjustment and concluded the error was not material to any previously filed interim or annual consolidated financial statements, and the out-of-period adjustment for the cumulative correction is not material to the year ended December 31, 2024.

Summary of Significant Accounting Policies

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Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606 - Revenue from Contracts with Customers.

Revenue is recognized at a point in time when the customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligation(s) in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligation(s) in the contract;

and (v) recognize revenue when (or as) the Company satisfies its performance obligation(s).

Product Revenue, Net

On March 14, 2024, the Company announced that the U.S.

Food and Drug Administration (“FDA”) granted accelerated approval of Rezdiffra (resmetirom) in conjunction with diet and exercise for the treatment of adults with

noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis).

The Company enters into agreements with specialty pharmacies and specialty distributors (each a “Customer” and collectively the “Customers”) to sell Rezdiffra in the U.S.

Revenues from product sales are recognized when the Customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the Customer.

Revenue is recorded net of variable consideration, which includes prompt pay discounts, returns, chargebacks, rebates, and co-payment assistance.

The variable consideration is estimated based on contractual terms as well as management assumptions.

The amount of variable consideration is calculated by using the expected value method, which is the sum of probability-weighted amounts in a range of possible outcomes, or the most likely amount method, which is the single most likely amount in a range of possible outcomes.

Estimates are reviewed quarterly and adjusted as necessary.

Accruals are established for gross to net deductions and actual amounts incurred are offset against applicable accruals.

The Company reflects these accruals as either a reduction in the related account receivable from the customer or as an accrued liability, depending on the means by which the deduction is settled.

Sales deductions are based on management’s estimates that involve a substantial degree of judgment.

Customers receive a prompt pay discount for payments made within a contractually agreed number of days before the due date.

The discounts are accounted for as a reduction of the transaction price and recorded as a contra receivable.

The Company records allowances for product returns as a reduction of revenue at the time product sales are recorded.

Product returns are estimated based on forecasted sales and historical and industry data.

Returns are permitted in accordance with the return goods policy defined within each customer agreement.

A returns reserve is recorded as an accrued liability.

Chargebacks :

The Company estimates obligations resulting from contractual commitments with the government and other entities to sell products to qualified healthcare providers at prices lower than the list prices charged to the customer who directly purchases from the Company.

The customer charges the Company for the difference between what it pays to the Company for the product and the selling price to the qualified healthcare providers, with the difference recorded as a contra receivable.

Co-Payment Assistance :

Co-payment assistance programs are offered to eligible end-users as price concessions and are recorded as accrued liabilities and a reduction of the transaction price.

The Company uses a third-party to administer the co-payment program for pharmacy benefit claims.

The Company is subject to discount obligations under government programs, including Medicaid and Medicare.

Reserves for rebates are recorded in the same period the related product revenue is recognized, resulting in a reduction of product revenues and a current liability that is included in accrued expenses on the consolidated balance sheet.

The Company’s estimate for rebates is based on statutory discount rates, expected utilization or an estimated number of patients on treatment, as applicable.

Trade Receivables, Net

The Company's trade receivables relate to amounts due from Customers related to product sales and are recorded net of prompt pay discounts and chargebacks.

The Company assesses collectibility of overdue receivables and those determined to be uncollectible are written-off.

As of December 31, 2024, there were no receivables written off.

Cash and Cash Equivalents

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

During the year ended December 31, 2024, realized gains and losses on marketable securities were not material.

During the years ended December 31, 2023 and 2022, the Company did no t have any realized gains or losses on marketable securities.

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

Inventory, which consists of work in process and finished goods, is stated at the lower of cost or estimated net realizable value, using actual cost, based on a first-in, first-out method.

The balance sheet classification of inventory as current or non-current is determined by whether it will be consumed within the Company’s normal operating cycle.

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 sales in the accompanying Consolidated Statements of Income.

The Company capitalizes inventory costs when future commercial sale in the ordinary course of business is probable.

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 rather were expensed as incurred as

research and development expenses.

The Company began capitalizing inventory in March 2024 after FDA approval was granted.

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 cash compensation and 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.

Management uses significant judgment in estimating the amount of research and development costs recognized in each reporting period.

Management analyzes and estimates the progress of its clinical trials, completion of milestones events per underlying agreements, invoices received and contracted costs when estimating the research and development costs to accrue in each reporting period.

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 statements of operations.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of salaries, benefits and stock-based compensation expenses for employees, management costs, costs associated with obtaining and maintaining our patent portfolio, commercial and marketing activities, advertising, corporate insurance, professional fees for accounting, auditing, consulting and legal services, and allocated overhead expenses.

The Company determines if an arrangement is a lease at contract inception.

All leases are classified as operating leases.

Lease assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the leasing arrangement.

Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

When an implicit rate is not readily determinable, an incremental borrowing rate is estimated based on information available at commencement.

Lease expense is recognized on a straight-line basis over the lease term.

Short-term leases of twelve months or less at commencement date are expensed on a straight-line basis over the lease term.

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

Patent expenses were approximately $ 0.7 million, $ 0.9 million and $ 0.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Intangible Assets

Intangible assets with finite lives are amortized to cost of sales 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

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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.

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”, which prescribes the use of the liability method where deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that a portion or all of the deferred tax assets will not be realized based on the weight of available positive and negative evidence.

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

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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 years ended December 31, 2023, 2022 and 2021, diluted net loss per share is the same as basic net loss per share because

the inclusion of weighted average shares of 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 years ended December 31, 2024, 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.

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:

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Restricted stock units

499,559 376,117 —

Performance-based restricted stock units 235,520 150,000 —

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Warrants 3,625,244 2,067,552 14,899

Recent Accounting Pronouncements Not Yet Adopted

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.

The amendments are effective

for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

Refer to Note 15 for the Company's segment information.

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

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

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses ("DISE"), which applies to all public entities and requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

Public entities must adopt the new standard prospectively for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption and retrospective application are permitted.

The Company is currently evaluating the impact of ASU 2024-03 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 and other government regulations.

The Company has incurred losses since inception, including approximately $ 465.9 million for the year ended December 31, 2024, resulting in an accumulated deficit of approximately $ 1,802.2 million and $ 1,336.3 million as of December 31, 2024 and 2023, respectively.

Management expects to incur losses for the foreseeable future.

Management expects to incur losses until the Company is able to generate sufficient revenue from Rezdiffra and any other approved products.

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.

The Company believes that its cash, cash equivalents and marketable securities at December 31, 2024 will be sufficient to fund operations past one year from the issuance of these financial statements.

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The Company has the ability to delay certain planned commercialization costs, product manufacturing, research activities and related clinical expenses if necessary due to liquidity concerns until a date when those concerns are relieved.

Cash, Cash Equivalents and Marketable Securities

Product Revenue, Net

The following table summarizes balances and activity for gross to net adjustments (in thousands):

Chargebacks, Discounts for Prompt Pay and Other Allowances Rebates, Customer Fees/Credits, Co-Pay Assistance, and Other Totals

Balance at December 31, 2023 $ — $ — $ —

Provision related to sales in the current year 8,045 35,115 43,160

Adjustments related to prior year sales — — —

Payments and customer credits issued ( 3,857 ) ( 13,412 ) ( 17,269 )

Balance at December 31, 2024 $ 4,188 $ 21,703 $ 25,891

Concentrations of Credit Risk and Significant Customers

The Company generates revenue from a small number of large, reputable customers.

The following customers accounted for over 10% of total gross product revenue during the year ended December 31, 2024.

As Rezdiffra was made commercially available in April 2024, there were no sales and no corresponding customer concentrations in 2023 or 2022.

Year ended December 31,

2024 2023 2022

Cash, Cash Equivalents, Restricted Cash, and Marketable Securities

The Company held restricted cash of $ 5.0 million as of December 31, 2024 as collateral to its corporate credit card program.

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

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

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382,793 279 ( 62 ) 383,010

US government and government sponsored entities due within 1 to 2 years of date of purchase (Level 2) 71,739 156 ( 25 ) 71,870

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

3,282 — ( 6 ) 3,276

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

Total cash, cash equivalents, restricted cash, and marketable securities $ 930,783 $ 625 $ ( 157 ) $ 931,251

December 31, 2023

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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

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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 December 31, 2024 and 2023 (in thousands):

December 31, 2024 December 31, 2023

Raw materials $ — $ —

Work in process 29,533 —

Finished goods 4,535 —

Total $ 34,068 $ —

There was no provision for excess inventory recorded as of December 31, 2024.

Accrued Liabilities

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Professional fees 17,512 6,814

Gross to net accrued liabilities 21,703 —

Other 8,171 1,970

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Under the terms of the Loan Facility, the first $ 50.0 million tranche was drawn at closing.

The Company may also 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 may be drawn by the Company, subject to the approval of Hercules.

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 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 will pay interest-only monthly payments of accrued interest under the Loan Facility through May 1, 2025, for a period of 36 months, which period may be extended to May 1, 2026 and May 3, 2027, upon the achievement of regulatory approval milestones and future revenue covenants, subject to compliance with applicable covenants.

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

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 extended to May 3, 2027, upon the achievement of regulatory approval milestones and future revenue covenants, 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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In connection with the first tranche drawn at closing, the Company issued Hercules a warrant to purchase 14,899 shares of Company common stock, which had a Black-Scholes value of $ 0.6 million.

On February 3, 2023, the Company entered into the First Amendment (the “Amendment”) to the Loan Facility (as amended, the “Amended Loan Facility”).

On February 3, 2023, the Company entered into the First Amendment (the “First Amendment”) to the Loan Facility (as amended, the “Amended Loan Facility”).

Under the Amended Loan Facility, an additional $ 35.0 million was drawn under a second, expanded, $ 65.0 million tranche (“Tranche 2”) in February of 2023 following the Company’s achievement of the Phase 3 clinical development milestone.

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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 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 Loan Facility includes affirmative and restrictive financial covenants which commenced 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.

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

The Company did not elect to draw Tranche 3 before it expired in June 2024, but subsequently entered into an amendment to extend the availability of these funds in August 2024.

Coincident with the expansion of Tranche 2 borrowing capacity by $ 15.0 million, the First Amendment reduced the fourth tranche under the Loan Facility (“Tranche 4”) by $ 15.0 million to $ 60.0 million.

In connection with the $ 35.0 million drawn under Tranche 2 at the closing of the First Amendment, $ 15.0 million drawn in June of 2023, and $ 15.0 million drawn in September 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 First 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 First 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.

On August 22, 2024, the Company entered into the Second Amendment (the “Second Amendment”) to the Loan Facility (as amended by the First Amendment and the Second Amendment, the “Second Amended Loan Facility”).

Under the Second Amended Loan Facility, the Company’s borrowing capacity available under Tranche 4 is increased to include the $ 75.0 million available under Tranche 3 that was not utilized by the Company.

After such increase, the Company’s current borrowing capacity is $ 135.0 million under Tranche 4, which is available subject to Hercules’ sole discretion.

The Loan Facility also includes a revenue-based covenant that could apply commencing at or after the time that financial reporting became due for the quarter ended September 30, 2024, however, the revenue-based covenant will be automatically waived pursuant to the terms of the Loan Facility at any time in which the Company maintains, as measured monthly, (i) a certain level of cash, cash equivalents and liquid funds relative outstanding debt under the Loan Facility or (ii) a market capitalization of at least $ 1.2 billion.

The Loan Facility contains event of default provisions for:

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insolvency, attachment or judgment events affecting the Company;

and any circumstance which has occurred or could reasonably be expected to have a material

adverse effect on the Company, provided that, any failure to achieve approval or certain other milestones under the Loan Facility shall not in and of itself constitute a material adverse effect.

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.

and any circumstance which has occurred or could reasonably be expected to have a material adverse effect on the Company, provided that, any failure to achieve a clinical milestone or approval milestone under the Loan Facility shall not in and of itself constitute a material adverse effect.

investments, distributions (including dividends), collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, and deposit accounts.

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

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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.

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 United States 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, pursuant to which the Company sold to the 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 “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.

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 the net proceeds from the Offering for its 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.

The Company intends to use the net proceeds from the 2023 Offering for its clinical and commercial activities in preparation for a potential launch of resmetirom in the United States 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 after the date of issuance.

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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.

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

The 2020 Sales Agreement authorized an aggregate offering of up to $ 200.0 million in shares of our common stock, at the Company’s option, through Cowen as its sales agent.

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

The 2020 Sales Agreement was terminated in June 2021 when the Company filed a new shelf registration statement.

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

Of those shares sold, 1,087,126 were sold in 2021, and 39,607 were sold in 2020.

In June 2021, the Company entered into an at-the-market sales agreement (the “Original 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.

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Subject to the terms and conditions of the Original 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 under the Original 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 Original 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.

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 December 31, 2023, no amounts remained reserved and available for sale under the Original 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.

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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 December 31, 2023, under the Sales Agreement Amendment, the Company sold no shares.

During the year ended December 31, 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.

Since the entry into the Sales Agreement Amendment in May 2023, the Company sold 98,101 shares in total under the 2021 Sales Agreement, as amended by the Sales Agreement Amendment, 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 December 31, 2023, $ 174.8 million remained reserved and available for sale under the 2023 Sales Agreement Amendment and the Company’s related prospectus supplement.

In total, the Company sold 1,334,044 shares of Common Stock having an aggregate offering price of $ 225.1 million pursuant to the 2021 Sales Agreement, as amended by the Sales Agreement Amendment.

In May 2024, the Company entered into a Sales Agreement (the “2024 Sales Agreement”) with Cowen, replacing and superseding the 2021 Sales Agreement, as amended by the Sales Agreement Amendment which was terminated effective upon the entry into the 2024 Sales Agreement.

The Company is authorized to issue and sell up to $ 300.0 million in shares of the Company’s common stock under the 2024 Sales Agreement.

The Company sold no shares in the year ended December 31, 2024 under either the 2021 Sales Agreement, as amended by the Sales Agreement Amendment (the “2024 Sales Agreement”).

Stock-based Compensation

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(in thousands)

Outstanding at January 1, 2023 2,857,054 $ 81.78

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

Options granted 170,872 234.80

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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 December 31, 2024, the Company had 499,559 restricted stock units outstanding, with a weighted average grant date fair value of $ 237.07 per unit.

The following table summarizes RSU activity, excluding performance-based RSUs, during the year ended December 31, 2024:

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average grant date fair value

Unvested at January 1, 2023 — $ —

Outstanding at December 31, 2023 376,117 $ 241.45

295,916 236.90

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( 59,320 ) 242.48

Unvested at December 31, 2023 376,117 $ 241.45

Outstanding at December 31, 2024 499,559 $ 237.07

Performance-Based Restricted Stock Units

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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 December 31, 2023, the Company granted 50,000 PSUs.

The maximum number of PSUs eligible to be earned of 150,000 are outstanding under the Inducement Plan as of December 31, 2023, with a weighted average grant date fair value of $ 146.37 per unit.

The following table summarizes PSU activity during the year ended December 31, 2024:

PSUs Eligible to Earn PSUs Weighted average grant date fair value

Outstanding PSUs at December 31, 2023 50,000 150,000 $ 146.37

PSUs granted 51,202 102,404 388.02

PSUs attained — — —

PSUs forfeited ( 8,442 ) ( 16,884 ) 388.02

Outstanding at December 31, 2024 92,760 235,520 $ 257.77

Exercisable at December 31, 2024 — — $ —

Outstanding Awards

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Restricted stock units

35,136 14,974 —

Performance-based restricted stock units

17,767 4,148 —

Total stock-based compensation expense $ 79,880 $ 49,735 $ 31,625

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Research and development $ 22,158 $ 20,864 $ 13,876

General and administrative 28,871 17,749 16,175

Selling, general and administrative 57,722 28,871 17,749

Total stock-based compensation expense included in net loss $ 79,880 $ 49,735 $ 31,625

Unrecognized stock-based compensation expense as of December 31, 2024 was $ 127.3 million with a weighted average remaining period of 2.60 years.

In 2019, the Company entered into an operating lease for office space, which was renewed and extended in 2020.

The Company adopted ASU 2016-02, “Leases,” on January 1, 2019 requiring, among other changes, operating and finance leases with terms exceeding twelve months to be recognized as a right-of-use asset (or “ROU”) and lease liabilities on the balance sheet.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

The lease term is determined to be the non-cancelable period including any lessee renewal options that are considered reasonably certain of exercise.

The interest rate implicit in lease contracts is typically not readily determinable.

As such, the Company used judgment to determine an appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term in a similar economic environment.

In August 2023, The Company entered into the Fifth Amendment to its 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 year ended December 31, 2023.

In 2019, the Company entered into an operating lease for office space located in West Conshohocken, PA (the “Office Lease”), which was later updated by three amendments entered into from 2019 to 2022.

In May 2023, the Company entered into the Fourth Amendment to the Office Lease (the “Fourth Lease Amendment”), which did not have a financial impact.

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

The Fifth Lease Amendment extended the term of the Office Lease through November 2026.

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

In April 2024 and May 2024, the Company entered into the Sixth Amendment (the “Sixth Lease Amendment”) and the Seventh Amendment (the “Seventh Lease Amendment”) to the Office Lease, respectively, leasing additional office space in the same premises under the Office Lease.

The lease for such additional office space commenced in September 2024 and resulted in an incremental $ 1.2 million right-of-use asset and lease liability being recorded.

In August 2024, the Company entered into the Eighth Amendment (the “Eighth Lease Amendment”) and in October 2024, the Company entered into the Ninth Amendment (the “Ninth Lease Amendment”) to the Office Lease, further expanding the amount of

office space in the same premises.

The lease for the additional office space under the Eighth and Ninth Lease Amendments commenced in December 2024 and resulted in an incremental $ 0.2 million right-of-use asset and lease liability recorded.

Future minimum payments under the Company’s operating leases related to the ROU asset and lease liability as of December 31, 2024 was as follows (in thousand):

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The agreement requires future milestone payments to Roche.

Remaining milestones under the agreement total $ 8.0 million and are earned by 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 was subsequently paid to Roche.

The remaining milestone obligation under the agreement is $ 3.0 million and is 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 years ended December 31, 2023, 2022 and 2021.

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 year ended December 31, 2023.

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

The Company began accruing for royalty payments following its commercial launch of Rezdiffra in April 2024.

The Company had no Licensed Product sales for the years ended December 31, 2023 and 2022.

The Company has entered into customary contractual arrangements and letters of intent in preparation for and in support of the clinical trials as well as manufacturing costs of Rezdiffra.

At December 31, 2024, the Company had federal net operating loss (“NOL”) carryforwards of approximately $ 850.2 million available to reduce future taxable income, of which $ 40.4 million will expire between 2031 and 2037.

The Company also has state operating loss carryforwards of approximately $ 823.5 million, available to reduce future taxable income, which expire between 2031 and 2043.

The Company has unused federal research and development carryforwards of approximately $ 46.1 million which will begin to expire in 2031.

The Company has unused federal and state research and development carryforwards of approximately $ 69.7 million which will begin to expire in 2031.

The Internal Revenue Code (“IRC”) limits the amounts of NOL carryforwards that a Company may use in any one year in the event of certain cumulative changes in ownership over a three-year period as described in Section 382 of the IRC.

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The 2020 through 2023 tax returns are open to review by the IRS and state taxing authorities.

To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the IRS or state taxing authorities, to the extent utilized in a future period.

Interest and penalties, if any, as they relate to income taxes assessed, are included in the income tax provision.

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Unrealized gains on investments $ 117 $ 117 $ —

Other deferred tax liabilities 100 — —

Total Deferred Tax Liabilities $ 217 $ 117 $ —

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Intangibles 401 503 589

Gross to net accruals 167 — —

Stock compensation 16,342 33,976 27,226

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Net deferred tax assets $ — $ — $ —

Differences between the effective income tax rate and the US statutory rate were as follows (in thousands):

Differences between the effective income tax rate and the U.S.

statutory rate were as follows (in thousands):

For the years ended December 31,

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Income tax expense (benefit) $ — $ — $ —

Quarterly Financial Data (unaudited)

The following tables present a summary of quarterly results of operations for 2023 and 2022 (in thousands, except shares and per share data):

Three months ended

March 31, 2023 June 30, 2023 September 30, 2023 December 31,

Total revenues $ — $ — $ — $ —

Operating expenses:

Research and development 62,154 68,605 70,951 70,640

General and administrative 16,182 17,845 27,583 46,536

Total operating expenses 78,336 86,450 98,534 117,176

Loss from operations ( 78,336 ) ( 86,450 ) ( 98,534 ) ( 117,176 )

Interest income 3,776 3,551 3,298 8,953

Interest expense ( 2,336 ) ( 2,901 ) ( 3,504 ) ( 3,971 )

Other income — — — —

Net loss $ ( 76,896 ) $ ( 85,800 ) $ ( 98,740 ) $ ( 112,194 )

Net loss per common share:

Basic and diluted net loss per common share $ ( 4.23 ) $ ( 4.69 ) $ ( 5.34 ) $ ( 5.68 )

Basic and diluted weighted average number of common shares outstanding 18,187,924 18,310,952 18,476,414 19,760,842

Three months ended

March 31, 2022 June 30, 2022 September 30, 2022 December 31,

Total revenues $ — $ — $ — $ —

Operating expenses:

Research and development 47,929 58,499 68,271 70,742

General and administrative 9,658 11,774 12,141 14,557

Total operating expenses 57,587 70,273 80,412 85,299

Loss from operations ( 57,587 ) ( 70,273 ) ( 80,412 ) ( 85,299 )

Interest income 69 323 717 1,076

Interest expense — ( 780 ) ( 1,502 ) ( 1,682 )

Other income — — — —

Segment Information

The Company operates as one reportable segment focused on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (“MASH”).

The Company's Chief Executive Officer, as the chief operating decision maker ("CODM"), leads the Company in support of four core values—focus on the patient, having an owner mindset, the relentless pursuit of innovation and commitment to collaboration.

To best align the Company with these values, the CODM reviews consolidated financials, along with qualitative information, to evaluate performance, manage and allocate resources, make operating decisions, and assess planning and forecasting on a total company basis.

Assets, liabilities, and equity are reviewed and presented on the same level as the Company's consolidated balance sheet.

Management does not segment business operations for internal reporting or decision making purposes.

As the Company has a single reporting segment, the segment accounting policies are the same as those at the Company level, as described in Note 2 "Summary of Significant Accounting Policies".

As of December 31, 2024, the Company did not have revenue or material assets outside of the U.S.

The following table presents net income reported at the segment measure of profit and loss:

Year Ended December 31,

2024 2023 2022

Product revenue, net $ 180,133 $ — $ —

Cost of sales ( 6,233 ) — —

Research and development - personnel and internal expense ( 73,418 ) ( 56,824 ) ( 39,121 )

Research and development - external expense ( 163,300 ) ( 215,526 ) ( 206,320 )

Selling, general and administrative ( 435,057 ) ( 108,146 ) ( 48,130 )

Other segment income (expense) (1)

31,983 6,866 ( 1,779 )

Net loss $ ( 465,892 ) $ ( 373,630 ) $ ( 295,350 )

Net loss per common share:

Basic and diluted net loss per common share $ ( 3.36 ) $ ( 4.14 ) $ ( 4.75 ) $ ( 4.98 )

Basic and diluted weighted average number of common shares outstanding 17,103,395 17,103,395 17,103,395 17,237,517

Subsequent Event

(1) Other segment expense includes interest income and interest expense.

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-K

Item 9A. Controls and Procedures