Madrigal Pharmaceuticals, Inc. (MDGL) Earnings & Analysis

Latest quarter

Madrigal reported third-quarter revenue of $431.3 million, up 50.1% from $287.3 million a year earlier and 7.81% above the consensus. A consensus comparison put quarterly earnings at $1.83 per share against an expected loss of $1.09 per share.

The filing attributed the revenue increase to greater U.S. demand for Rezdiffra, its medicine for MASH, a liver disease. Gross margin fell to 91.2% from 93.7%; the filing said higher royalties payable to Roche were the primary driver of increased cost of sales.

Madrigal reported net income of $55.4 million, and its operating margin rose to 13.0% from −39.7% a year earlier. The filing said research and development expenses fell to $71.8 million from $174.0 million, primarily because the prior-year quarter included one-time business development expenses. Selling, general and administrative expenses rose to $265.7 million from $209.1 million, reflecting commercial spending and increased headcount.

Free cash flow was $116.6 million, compared with $76.0 million a year earlier. The filing showed $961.8 million in cash, cash equivalents, restricted cash and marketable securities at September 30.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Bill Sibold said specialists were prescribing Rezdiffra more often and that the company ended the quarter with more than 55,850 active patients, compared with more than 29,500 a year earlier. He said the count was net of patients who had discontinued treatment.

Sibold estimated that the diagnosed U.S. population with F2–F3 MASH had grown to more than 530,000 patients by midyear. He attributed market growth primarily to greater awareness and diagnosis, and said endocrinologists were still establishing pathways for identifying and treating patients.

On pricing, CFO Mardi Dier said Madrigal expected gross-to-net deductions for 2026 at the low end of its mid-to-high 30s range. Asked about Medicare Part D contracts, she said negotiations were ongoing and expected 2027 gross-to-net to be around the high end of that range. Dier also said Madrigal expected higher fourth-quarter selling, general and administrative spending than in the third quarter, partly reflecting the timing of marketing expenses.

Dier called the quarter Madrigal’s first period of profitability but said the company “may dip in and out of profitability in the near term,” depending on investment timing, business development and first-quarter dynamics. She said the company had been operating cash-flow positive for the last two quarters.

Sibold said competitors had changed their programs, increased study sizes and delayed timelines in compensated MASH cirrhosis. Asked about the timing of Madrigal’s MAESTRO-NASH OUTCOMES study, Chief Medical Officer Dave Soergel said the event-driven trial was expected to deliver data in late 2027. He declined to give specifics on event accrual, saying that in smaller trials “it tends to be a bit choppy.” Soergel said Madrigal would engage with the FDA as it finalized the protocol for its MAESTRO-CSPH study.

Guidance

Madrigal now expects full-year 2026 research and development expenses to be nominally lower than in 2025. It had previously expected them to be roughly the same as in 2025.