On February 26, 2020 Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) reported its fourth quarter and full year 2019 financial results and highlights (Press release, Synta Pharmaceuticals, FEB 26, 2020, View Source [SID1234554778]):
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"Madrigal made significant progress during 2019 in executing our business strategy and advancing the development of resmetirom. We initiated two Phase 3 studies in NASH: the liver biopsy endpoint study, MAESTRO-NASH, and a non-invasive study in NAFLD patients with presumed NASH, MAESTRO-NAFLD-1," stated Paul Friedman, M.D., Chief Executive Officer of Madrigal. "We filled vital organizational needs including expansion of our medical operations team and the addition of Jim Daly, who has deep commercial expertise, to our Board. Further, we believe we have sufficient financial resources to fund our two ongoing Phase 3 clinical studies."
Becky Taub, M.D., CMO and President, Research & Development of Madrigal added, "According to plan, we initiated our Phase 3 MAESTRO-NASH clinical study in the first quarter, and our Phase 3 MAESTRO-NAFLD-1 study in the fourth quarter. Both Phase 3 studies are on track to complete enrollment this year for the 52 week readout by the end of 2021. In addition, MAESTRO-NAFLD-1 includes an open label active treatment arm that will provide data on lipids and non-invasive NASH biomarkers in 2020. We were also pleased with the publication of our successful Phase 2 NASH study in The Lancet in 2019. We continue to believe resmetirom has the potential to resolve NASH and reduce liver fibrosis while decreasing cardiovascular risk, through reduction of levels of multiple atherogenic lipids including LDL-C and triglycerides, and through the reduction of inflammatory fat in the liver. Realization of this potential could provide an important new therapy that delivers benefit to patients across the spectrum of early and late-stage NASH."
Financial Results for the Three Months and Twelve Months Ended December 31, 2019
As of December 31, 2019, Madrigal had cash, cash equivalents and marketable securities of $439.0 million, compared to $483.7 million at December 31, 2018. The decrease in cash and marketable securities resulted primarily from cash used in operations of $41.6 million.
Operating expenses were $30.0 million and $95.0 million, respectively, for the three month and twelve month periods ended December 31, 2019, compared to $14.5 million and $40.7 million in the comparable prior year periods.
Research and development expenses for the three month and twelve month periods ended December 31, 2019 were $24.9 million and $72.3 million, respectively, compared to $8.9 million and $25.4 million in the comparable prior year periods. The increases are primarily attributable to increases in clinical costs resulting from initiation of our Phase 3 studies, and personnel costs, including non-cash stock compensation.
General and administrative expenses for the three month and twelve month periods ended December 31, 2019 were $5.0 million and $22.6 million, respectively, compared to $5.6 million and $15.3 million in the comparable prior year periods. The decrease in general and administrative expenses for the latest three month period was due primarily to lower stock compensation expense, the effect of which was partially offset by higher personnel costs. The increase in general and administrative expenses for the latest twelve month period was due primarily to higher stock compensation, and personnel costs.
Interest income for the three month and twelve month periods ended December 31, 2019 was $2.2 million and $11.0 million, respectively, as compared to $3.0 million and $7.7 million in the comparable prior year periods. The decrease in interest income for the latest three month period was due primarily to lower average principal balances in our investment accounts in 2019, and lower interest rates. The increase in interest income for 2019 was due primarily to higher average principal balances in our investment accounts, the effects of which were partially offset by lower interest rates.
About resmetirom (MGL-3196)
Among its many functions in the human body, thyroid hormone, through activation of its beta receptor, plays a central role in controlling lipid metabolism, impacting a range of health parameters from levels of serum cholesterol and triglycerides to the pathological buildup of fat in the liver. Attempts to exploit this pathway for therapeutic purposes in cardio-metabolic and liver diseases have been hampered by the lack of selectivity of older compounds for the thyroid hormone receptor (THR)-ß, chemically-related toxicities and undesirable distribution in the body.
Madrigal recognized that greater selectivity for thyroid hormone receptor (THR)-ß and liver targeting might overcome these challenges and deliver the full therapeutic potential of THR-ß agonism. Madrigal believes that resmetirom is the first orally administered, small-molecule, liver-directed, truly ß-selective THR agonist.
Based on the positive Phase 2 clinical study results in patients with NASH (Phase 2 NASH 36-Week Results Press Release), Madrigal initiated a Phase 3 multinational, double-blind, randomized, placebo-controlled study of resmetirom in patients with non-alcoholic steatohepatitis (NASH) and fibrosis to resolve NASH and reduce progression to cirrhosis and/or hepatic decompensation (Phase 3 MAESTRO-NASH Initiation Press Release and ClinicalTrials.gov NCT03900429). Additionally, in both the NASH Phase 2 study, and a second positive Phase 2 clinical study in patients with heterozygous familial hypercholesterolemia (Phase 2 HeFH Results Press Release Phase 2 HeFH Results Press Release), significant reductions in multiple atherogenic lipids were observed. Based on the foregoing positive results, Madrigal also initiated MAESTRO-NAFLD-1, a 52-week, double-blind, placebo controlled Phase 3 clinical study in patients with biopsy-confirmed or presumed NASH (Phase 3 MAESTRO-NAFLD-1 Initiation Press Release and ClinicalTrials.gov NCT04197479). Key MAESTRO-NAFLD-1 endpoints are safety, including safety biomarkers, LDL cholesterol, lipid biomarkers, and fibrosis biomarkers. Except for serial liver biopsies, the study protocol is similar to the MAESTRO-NASH study and includes key secondary lipid, MRI-PDFF and NASH biomarker endpoints. In addition, MAESTRO-NAFLD-1 includes an open label arm in which up to 100 patients will be dosed with 100 mg resmetirom. The MAESTRO -NAFLD-1 study will help support the adequacy of the safety database at the time of NDA submission for subpart H approval for treatment of NASH in patients with F2 or F3 fibrosis (MAESTRO-NASH, NASH resolution surrogate endpoint).