On February 23, 2023 Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of cancer and autoimmune diseases, reported financial results for the fourth quarter and full year ended December 31, 2022 and provided a review of recent business and clinical highlights (Press release, Xencor, FEB 23, 2023, View Source [SID1234627636]).

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"In 2022, we focused on advancing our internal portfolio of XmAb drug candidates, including the ongoing Phase 2 studies for vudalimab in combination with chemotherapy and as a monotherapy in prostate and gynecological tumors. We also advanced XmAb564, our regulatory T-cell targeting cytokine, into a multiple-ascending dose study in atopic dermatitis and psoriasis, following encouraging single-dose data that showed potentially differentiated durability at boosting target cells," said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. "We continue to leverage our XmAb technologies and protein engineering capabilities, both internally and with partners, to address challenging areas of biology and continually grow our portfolio. We initiated Phase 1 studies for two novel T-cell engagers, XmAb819, our 2+1 formatted CD3 bispecific for renal cell carcinoma, and XmAb808, our first internal bispecific targeting CD28, a new class of anti-tumor agent that we are at the forefront of developing."

"Looking ahead, in 2023, we expect to further expand our wholly owned portfolio by initiating a Phase 1 study for XmAb662, our engineered IL-12 for oncology and our third clinical-stage cytokine using our reduced potency design. Then later this year, we anticipate submitting an IND for XmAb541, a 2+1 formatted CLDN6 x CD3 bispecific antibody that we are developing for patients with ovarian cancer."

Highlights from Xencor’s Wholly Owned Portfolio

Vudalimab (PD-1 x CTLA-4): Two Phase 2 studies of vudalimab, a selective dual checkpoint inhibitor, are enrolling patients. Initial combination data from a study in patients with metastatic castration-resistant prostate cancer (mCRPC) were presented in November 2022, and the study continues to enroll patients under a modified chemotherapy regimen. A second study in patients with advanced gynecologic tumors and clinically defined high-risk mCRPC is also enrolling patients who will receive vudalimab as a monotherapy.

XmAb564 (IL2-Fc): XmAb564 is a potency-reduced, monovalent interleukin-2 Fc fusion protein, designed to selectively activate and expand regulatory T cells (Tregs) for the potential treatment of patients with autoimmune diseases. In November 2022, Xencor presented data from a Phase 1a single-ascending dose study in healthy volunteers, demonstrating that a single dose was well tolerated and generates durable, dose-dependent and selective expansion of Tregs. A Phase 1b, multiple-ascending dose study is enrolling patients with atopic dermatitis and psoriasis and exploring multi-week dosing regimens.

XmAb819 (ENPP3 x CD3): XmAb819 is an XmAb 2+1 bispecific antibody being developed for patients with renal cell carcinoma (RCC). XmAb819 is designed to engage the immune system, activating T cells for highly potent and targeted killing of tumor cells expressing ENPP3, an antigen highly expressed on kidney cancers. Xencor’s XmAb 2+1 bispecific antibody format enables greater selectivity of ENPP3-expressing tumor cells compared to normal cells, which express lower levels of ENPP3. A Phase 1 dose-escalation study is enrolling patients with advanced RCC.

XmAb808 (B7-H3 x CD28): XmAb808 is a 2+1 formatted, tumor-selective, co-stimulatory CD28 bispecific antibody that binds to the broadly expressed tumor antigen B7-H3. Co-stimulatory receptor engagement is required for T cells to achieve full activation, and targeted CD28 bispecific antibodies may provide conditional co-stimulation of T cells when the antibodies are bound to tumor cells. A Phase 1 dose-escalation study in combination with pembrolizumab is now enrolling patients with advanced solid tumors.

XmAb662 (IL12-Fc): XmAb662 is a potency-reduced IL12-Fc fusion protein designed to increase tumor immunogenicity. Xencor’s potency-reduced approach to cytokine engineering may improve the therapeutic index and duration of action of its cytokine candidates compared to engineered cytokines with native cytokine potency. A Phase 1 study in patients with advanced solid tumors is expected to start in mid-2023.
Recent Partnership Developments

Janssen Biotech, Inc.: In the first quarter of 2023, Janssen selected a CD28 bispecific antibody candidate under the companies’ second collaboration agreement, which is focused on the discovery of XmAb bispecific antibodies against CD28 and B-cell targets. Janssen has an exclusive worldwide license to develop selected CD28 molecules in combination with plamotamab (CD20 x CD3) and other agents.
Atreca, Inc.: Under the companies’ July 2020 agreement, a CD3 bispecific antibody program was mutually selected for further development and commercialization, with Atreca leading clinical activities and Xencor sharing 50 percent of costs and profits.

Caris Life Sciences: In January 2023, the Company expanded its collaboration with Caris to create XmAb bispecific or multi-specific antibodies with Caris’ unique human tissue bank and bioinformatics approach to find addressable tumor markers.

Zenas BioPharma Ltd.: In January 2023, Zenas dosed the first patient in a Phase 3 study evaluating obexelimab in patients with immunoglobulin G4-related disease (IgG4-RD).
Corporate: On Monday, February 27, Xencor will open its Pasadena, California laboratory and corporate headquarters, which has larger laboratories with expanded protein engineering capabilities.

Financial Results for the Fourth Quarter and Full Year Ended December 31, 2022

Cash, cash equivalents, receivables and marketable debt securities totaled $613.5 million as of December 31, 2022, compared to $664.1 million on December 31, 2021.

Total revenue for the fourth quarter ended December 31, 2022 was $21.6 million compared to $154.0 million for the same period in 2021. Revenues earned in the fourth quarter of 2022 were primarily royalties from the Alexion and Vir agreements and research collaboration revenue from the second Janssen agreement, compared to the same period in 2021, which were primarily from the Janssen collaboration and royalty revenue from Alexion and Vir. Revenues for the full year 2022 were $164.6 million compared to $275.1 million for the same period in 2021. Revenues for the full year 2022 were primarily royalties from Alexion, MorphoSys and Vir, milestone revenue from Astellas and collaboration revenue from our second Janssen collaboration, compared to the same period in 2021, which were earned primarily from the collaborations with Janssen and Novartis, milestone revenue from MorphoSys and royalties from Alexion and Vir.

Research and development (R&D) expenses for the fourth quarter ended December 31, 2022 were $51.5 million and is comparable to R&D expenses for the same period in 2021 which were $51.0 million. R&D expenses for the year ended December 31, 2022 were $199.6 million compared to $192.5 million for the same period in 2021. Increased R&D spending for the full year 2022 reflects additional spending on our CD3, CD28 and cytokine programs including XmAb808, XmAb662 and XmAb541.

General and administrative (G&A) expenses for the fourth quarter ended December 31, 2022 were $12.8 million compared to $11.4 million for the same period in 2021. G&A expenses for the full year ended December 31, 2022 were $47.5 million compared to $38.8 million for the same period in 2021. Increased G&A spending for the fourth quarter and full year ended 2022 compared to amounts for the same periods in 2021 reflects additional compensation costs on general and administrative staffing, additional spending on facilities and licensing fees.

Other income for the fourth quarter ended December 31, 2022 was $30.1 million compared to other expense of $18.6 million in the same period in 2021. Other income for the fourth quarter ended December 31, 2022 represents unrealized gain from the change in fair value of equity securities and interest income earned on investments. Other expenses in the same period in 2021 represents unrealized loss from the change in fair value of equity securities. Other income for the full year ended December 31, 2022 was $28.0 million, compared to $38.9 million in the same period in 2021. Other income in 2022 reflects unrealized gain from the change in fair value of equity securities. In 2021, other income includes realized gain from the sale of an equity security of $18.3 million and unrealized gains of $20.5 million from the change in fair value of equity securities.

Non-cash, stock-based compensation expense for the full year ended December 31, 2022 was $48.9 million compared to $37.0 million for the same period in 2021.

Net loss for the fourth quarter ended December 31, 2022 was $12.0 million or $(0.20) on a fully diluted per share basis, compared to net income of $73.1 million or $1.21 on a fully diluted per share basis, for the same period in 2021. For the full year ended December 31, 2022 net loss was $55.2 million or $(0.93) on a fully diluted per share basis, compared to net income of $82.6 million or $1.37 on a fully diluted per share basis, for the same period in 2021. Net loss reported for the fourth quarter ended December 31, 2022 compared to net income reported for the same period in 2021 is primarily due to decreased revenue reported in 2022 compared to amounts reported in 2021. Net loss for the full year 2022, compared to net income reported for the same period in 2021, is primarily due to higher revenues and realized gain on equity investments reported for the full year ended December 31, 2021 compared to amounts reported for the full year ended December 31, 2022.

The total shares outstanding were 59,997,713 as of December 31, 2022, compared to 59,355,558 as of December 31, 2021.

Financial Guidance

Based on current operating plans, Xencor expects to end 2023 with between $425 million and $475 million in cash, cash equivalents, receivables and marketable debt securities, and to have cash to fund research and development programs and operations through the end of 2025.

Conference Call and Webcast

Xencor will host a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to discuss the full year 2022 financial results and provide a corporate update.

The live webcast will be available under "Events & Presentations" in the Investors section of the Company’s website at investors.xencor.com and will be archived for at least 30 days. Active participants in the conference call may receive credentials for telephone access by registering at the following link: https://register.vevent.com/register/BI70c60751330540e3909534dca3801239.

Upcoming Investor Conferences

Xencor management will participate at three upcoming investor conferences:

Cowen 43rd Annual Health Care Conference
Date: Wednesday, March 8, 2023
Presentation Time: 12:50 p.m. ET / 9:50 a.m. PT
Location: Boston

Inaugural Mizuho Oncology Therapeutics Summit
Date: Monday, March 13, 2023
Location: Virtual

Barclays Global Healthcare Conference
Date: Tuesday, March 14, 2023
Presentation Time: 2:05 p.m. ET / 11:05 a.m. PT
Location: Miami
Live webcasts of the Cowen and Barclays presentations will be available under "Events & Presentations" in the Investors section of the Company’s website located at www.xencor.com. Replays of the events will be available on the Xencor website for at least 30 days following the presentations.

On February 23, 2023 Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, reported financial results and business highlights for the fourth quarter and year ended December 31, 2022, and provided full-year 2023 financial guidance (Press release, Vericel, FEB 23, 2023, View Source [SID1234627635]).

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Fourth Quarter 2022 Financial Highlights
•Total net revenue of $52.7 million
•MACI net revenue of $46.3 million, and Epicel net revenue of $6.3 million
•Gross margin of 73%
•Net income of $5.9 million, or $0.12 per diluted share
•Non-GAAP adjusted EBITDA of $14.9 million, or adjusted EBITDA margin of 28%
•Operating cash flow of $7.0 million
•As of December 31, 2022, the Company had approximately $140 million in cash and investments, and no debt

Full-Year 2022 Financial Highlights
•Total net revenue of $164.4 million
•MACI net revenue of $132 million, Epicel net revenue of $31.7 million, and NexoBrid revenue of $0.7 million
•Gross margin of 67%
•Net loss of $16.7 million, or $0.35 per diluted share
•Non-GAAP adjusted EBITDA of $24.2 million, or adjusted EBITDA margin of 15%
•Operating cash flow of $17.7 million

Business Highlights and Updates
•Record quarterly total revenue of $52.7 million
•Fourth-quarter MACI revenue growth of 24% compared to the prior year and approximately 50% sequential growth versus the prior quarter, representing the highest quarterly revenue since the launch of MACI
•Fourth-quarter net income growth of 31% compared to the prior year
•10th straight quarter of positive adjusted EBITDA and operating cash flow
•Announced FDA approval of NexoBrid (anacaulase-bcbd) for the removal of eschar in adults with deep partial-thickness and/or full-thickness thermal burns, with U.S. commercial availability expected in the second quarter of 2023
•Announced that the Company is planning to initiate a human factors validation study in 2023 to support expanding the MACI label to include arthroscopic administration of MACI for the treatment of cartilage defects of the knee and now anticipates an accelerated commercial launch of arthroscopic MACI in 2024
•Announced that the Company will hold a pre-IND meeting with the FDA during the first half of 2023 regarding the clinical development program for MACI for the treatment of cartilage injuries in the ankle

"The Company delivered strong financial and business results to end the year as we generated record quarterly MACI and total revenue and another quarter of profitability," said Nick Colangelo, President and CEO of Vericel. "We also achieved significant development milestones for the Company with the approval of NexoBrid and an accelerated regulatory pathway for the MACI arthroscopic delivery program. Based on our current portfolio and anticipated new product launches, we believe that the Company is well-positioned to continue to deliver strong revenue and profit growth over the long term."

2023 Financial Guidance
•Total net revenue for 2023 expected to be in the range of $180 to $188 million
◦MACI revenue expected to be in the range of $152 to $156 million
◦Total Burn Care revenue, which includes Epicel and NexoBrid, expected to be in the range of $28 to $32 million
•Gross margin expected to be in the high-60% range
•Adjusted EBITDA margin expected to be in the mid-teens % range

Fourth Quarter 2022 Results
Total net revenue for the quarter ended December 31, 2022 increased 11% to $52.7 million, compared to $47.6 million in the fourth quarter of 2021. Total net product revenue for the quarter included $46.3 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue and $6.3 million of Epicel (cultured epidermal autografts) net revenue, compared to $37.3 million of MACI net revenue and $9.7 million of Epicel net revenue, respectively, in the fourth quarter of 2021.

Gross profit for the quarter ended December 31, 2022 was $38.2 million, or 73% of net revenue, compared to $34.0 million, or 72% of net revenue, for the fourth quarter of 2021.

Total operating expenses for the quarter ended December 31, 2022 were $32.2 million, compared to $29.9 million for the same period in 2021. The increase in operating expenses was primarily due to an increase in headcount and higher sales and marketing expenses.

Net income for the quarter ended December 31, 2022 was $5.9 million, or $0.12 per diluted share, compared to net income of $4.5 million, or $0.09 per diluted share, for the fourth quarter of 2021.

Non-GAAP adjusted EBITDA for the quarter ended December 31, 2022 was $14.9 million, or 28% of net revenue, compared to $12.8 million, or 27% of net revenue, for the fourth quarter of 2021. A table reconciling non-GAAP measures is included in this press release for reference.

As of December 31, 2022, the Company had approximately $140 million in cash and investments, and no debt.

Full-Year 2022 Results
Total net revenue for the year ended December 31, 2022 was $164.4 million, compared to $156.2 million in 2021. Total net product revenue for the year included $132.0 million of MACI net revenue and $31.7 million of Epicel net revenue, compared to $111.6 million of MACI net revenue and $41.5 million of Epicel net revenue, respectively, in 2021. Total net revenue in 2022 also included $0.7 million of revenue related to the procurement of NexoBrid by the U.S. Biomedical Advanced Research and Development Authority (BARDA) for emergency response preparedness, compared to $3.1 million of revenue in 2021.

Gross profit for the year ended December 31, 2022 was $109.8 million, or 67% of net revenue, compared to $106.0 million, or 68% of net revenue, in 2021.

Total operating expenses for the year ended December 31, 2022 were $126.8 million, compared to $113.9 million in 2021. The increase in operating expenses was primarily due to an increase in headcount, higher sales and marketing expenses and a $2.9 million increase in non-cash stock-based compensation expense.
Net loss for the year ended December 31, 2022 was $16.7 million, or $0.35 per diluted share, compared to net income of $7.5 million, or $0.16 per diluted share, in 2021.

Non-GAAP adjusted EBITDA for the year ended December 31, 2022 was $24.2 million, or 15% of net revenue, compared to $29.5 million, or 19% of net revenue, in 2021. A table reconciling non-GAAP measures is included in this press release for reference.

Conference Call Information
Today’s conference call will be available live at 8:30am Eastern Time and can be accessed through the Investor Relations section of the Vericel website at View Source

presentations. A slide presentation with highlights from today’s conference call will be available on the webcast and in the Investor Relations section of the Vericel website. Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software, if necessary. To participate by telephone, please register here to receive dial-in details and your personal passcode. A replay of the webcast will be available on the Vericel website until February 23, 2024.

On February 23, 2023 Tvardi Therapeutics, Inc., a privately held, clinical-stage biopharmaceutical company focused on the development of STAT3 inhibitors, reported that the first breast cancer patients have been dosed in the Phase 1b/2 REVERT trial of TTI-101 added to palbociclib and aromatase inhibitor (AI) therapy in adult patients with HR+/HER2- palbociclib-resistant metastatic breast cancer (Press release, Tvardi Therapeutics, FEB 23, 2023, View Source [SID1234627634]). The first patients were dosed at the Washington University School of Medicine Siteman Cancer Center by Cynthia Ma, MD, PhD, Professor of Medicine, Clinical Director of the Breast Cancer Program, Section of Medical Oncology.

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In the US, approximately 74,000 patients per year are diagnosed with HR+/HER2- metastatic breast cancer. These patients are generally treated with CDK4/6 inhibitors (such as palbociclib) and an AI. Unfortunately, the vast majority of these patients acquire resistance to palbociclib and AI therapy and their tumors continue to metastasize. Recent research has demonstrated that this resistance is driven by the activation of a protein in tumors known as STAT3. Tvardi has developed a STAT3 inhibitor, TTI-101, that has been well tolerated and has clinical activity across a broad range of tumors. The REVERT trial has been designed to add TTI-101 to palbociclib and AI therapy when breast cancer patients acquire resistance to standard therapy.

"I am excited the Washington University School of Medicine Siteman Cancer Center was the first to enroll patients to this important trial. The addition of TTI-101 to palbociclib and AI directly addresses the mechanism which leads to patients becoming resistant to the standard of care. TTI-101 has the potential to improve clinical outcomes for HR+/HER2- metastatic breast cancer patients," said Cynthia Ma, MD, PhD.

"STAT3 is a well-known driver of tumor resistance. Based on Phase 1 trial data, TTI-101 specifically targets STAT3, and is well-positioned to reverse the resistance pathway for metastatic breast cancer," said Imran Alibhai, PhD, CEO of Tvardi. "This is the first of three Phase 2 trials in metastatic breast cancer, advanced liver cancer, and idiopathic pulmonary fibrosis that Tvardi has initiated to address diseases driven by STAT3."

For more information about the REVERT breast cancer trial that is enrolling at sites throughout the US, please visit ClinicalTrials.gov (NCT05384119).

On February 23, 2023 Syros Pharmaceuticals (NASDAQ:SYRS), a biopharmaceutical company committed to advancing new standards of care for the frontline treatment of hematologic malignancies, reported that it will host a live conference call and webcast at 8:30 a.m. ET on Thursday, March 2, 2023 to report its fourth quarter and full year 2022 financial results and provide a corporate update (Press release, Syros Pharmaceuticals, FEB 23, 2023, View Source [SID1234627633]).

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To access the live conference call, please dial (888) 575-5167 (domestic) or (416) 764-8687 (international) and refer to conference ID 74534085. A webcast of the call will also be available on the Investors & Media section of the Syros website at www.syros.com. An archived replay of the webcast will be available for approximately 30 days following the call.

On February 23, 2023 Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), a clinical-stage biopharmaceutical company pursuing novel therapeutics for nonalcoholic steatohepatitis (NASH), reported a summary of corporate updates and reports fourth quarter and full year 2022 financial results (Press release, Synta Pharmaceuticals, FEB 23, 2023, View Source [SID1234627631]).

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Paul Friedman, M.D., Chief Executive Officer of Madrigal, stated, "The positive Phase 3 MAESTRO-NASH results reported in Q4 2022 have allowed us to advance our regulatory filing preparations, accelerate our prelaunch market development programs, and strengthen our financial position with funding to support the company’s operations through the potential accelerated approval of resmetirom in the U.S. The results have also reinforced our conviction in the value of resmetirom. The Institute for Clinical and Economic Review (ICER), a non-profit organization that conducts pharmacoeconomic assessments of new therapies, recently published a draft Evidence Report indicating that resmetirom has the potential to be a cost-effective treatment for NASH patients with significant fibrosis."

Becky Taub, M.D., Chief Medical Officer and President of Research & Development of Madrigal, stated, "We remain on track to file our NDA for resmetirom in the first half of 2023. The filing will be supported by positive Phase 3 biopsy results, a standalone Phase 3 safety study, and two ongoing outcomes studies designed to verify clinical benefit following accelerated approval. Based on current screening and enrollment trends, we anticipate that the 54-month outcomes portion of MAESTRO-NASH will be fully enrolled prior to NDA filing in the first half of 2023. We believe that data from the 52-week liver biopsy primary endpoints of MAESTRO-NASH, in which both the NASH resolution and fibrosis reduction primary endpoints were achieved, support NDA and market authorization filings for accelerated approval in the U.S. and Europe. In addition, the noninvasive data from MAESTRO-NASH will provide a framework for identification and monitoring of patients treated with resmetirom in real world clinical practice following a potential approval."

Remy Sukhija, Chief Commercial Officer of Madrigal, added, "The positive results from MAESTRO-NASH reinforce and increase our confidence in the resmetirom commercial opportunity. Our market research indicates specialist healthcare providers, patients and payers in the U.S. and Europe view NASH with significant fibrosis as an urgent unmet need and understand the potential value that resmetirom can deliver. I’m pleased with the momentum we have established with our market development initiatives and we look forward to launching our new disease education campaign for patients in the coming days."

Summary of Madrigal 2022 Accomplishments

In 2022, Madrigal achieved multiple business and clinical milestones, including two positive Phase 3 data readouts from the MAESTRO program.

In January, Madrigal announced topline data from the Phase 3 MAESTRO-NAFLD-1 safety study of resmetirom. Primary and key secondary endpoints from the study were achieved: resmetirom was safe, well-tolerated and provided statistically significant improvements in key measures of liver and cardiovascular health.

In May, Madrigal secured a $250 million term loan facility with Hercules Capital, Inc. to support the resmetirom clinical program and ramp-up for a potential launch in the U.S.

In June, Madrigal presented results from the MAESTRO-NAFLD-1 study in a late-breaking oral abstract at the European Association for the Study of the Liver’s (EASL) International Liver Congress.

Also in June, Madrigal launched the NASHExplored website for healthcare professionals and expanded its partnerships with leading patient advocacy groups.

In August, Madrigal initiated the Phase 3 MAESTRO-NASH OUTCOMES trial. This noninvasive trial will evaluate the effects of resmetirom on progression to liver decompensation events in patients with compensated NASH cirrhosis. Positive results from this trial have the potential to expand the indication for resmetirom to include patients with compensated NASH cirrhosis and provide a faster route to full approval in noncirrhotic NASH.

In November, Madrigal presented additional data from the Phase 3 MAESTRO trials in oral presentations at the American Association for the Study of Liver Disease (AASLD) Liver Meeting.

In December, Madrigal announced positive topline results from the Phase 3 MAESTRO-NASH trial. Resmetirom achieved both primary endpoints with both daily oral doses, 80 mg and 100 mg, relative to placebo. The results established resmetirom as the first and only investigational medication to demonstrate both NASH resolution and fibrosis improvement in Phase 3.

Also in December, Madrigal announced $300+ million in financing events to support planned commercial and clinical activities through potential accelerated approval of resmetirom in the U.S.

Financial Results for the Three and Twelve Months Ended December 31, 2022

As of December 31, 2022, Madrigal had cash, cash equivalents and marketable securities of $358.8 million, compared to $270.3 million at December 31, 2021. The increase in cash and marketable securities was primarily from equity offerings and our Loan Facility, partially offset by cash used in operations of $224.9 million.

Operating expenses were $85.3 million and $293.6 million for the three and twelve month periods ended December 31, 2022, compared to $64.6 million and $242.5 million in the comparable prior year periods.

Research and development expenses for the three and twelve month periods ended December 31, 2022 were $70.7 million and $245.4 million, compared to $52.9 million and $205.2 million in the comparable prior year periods. The increases are attributable primarily to additional activities related to the Phase 3 clinical trials, an increase in head count, and an increase in non-cash stock compensation expense.

General and administrative expenses for the three and twelve month periods ended December 31, 2022 were $14.6 million and $48.1 million, compared to $11.7 million and $37.3 million in the comparable prior year periods. The increases are attributable primarily to increases in commercial preparation activities, including an increase in headcount and an increase in non-cash stock compensation expense.

Interest income for the three and twelve month periods ended December 31, 2022 was $1.1 million and $2.2 million, compared to $0.1 million and $0.4 million in the comparable prior year periods. The increases in interest income for the latest three and twelve month periods were due primarily to a higher average interest rates in 2022.

Interest expense for the three and twelve month periods ended December 31, 2022 was $1.7 million and $4.0 million, compared to $0 million and $0 million in the comparable prior year periods. The increase in interest expense was as a result of the Loan Facility we entered with Hercules and increases in interest rates throughout the year.

About the Resmetirom Phase 3 Registration Program for the Treatment of NASH

Madrigal is currently conducting four Phase 3 clinical trials to demonstrate the safety and efficacy of resmetirom for the treatment of NASH: MAESTRO-NASH, MAESTRO-NAFLD-1, MAESTRO-NAFLD-OLE, and MAESTRO-NASH-OUTCOMES.

MAESTRO-NASH is a multicenter, randomized, double-blind, placebo-controlled Phase 3 study of resmetirom in patients with liver biopsy-confirmed NASH and was initiated in March 2019. The subpart H portion of the study enrolled more than 1,000 patients with biopsy-proven NASH (at least half with F3 (advanced) fibrosis, the remainder F2 or F1B (moderate fibrosis) with a few earlier F1 patients, randomized 1:1:1 to receive once-daily resmetirom 80 mg, resmetirom 100 mg, or placebo. After 52 weeks of treatment, a second liver biopsy is performed. The dual primary surrogate endpoints on biopsy were NASH resolution with ≥2-point reduction in NAS (NAFLD Activity Score), and with no worsening of fibrosis OR a 1-point decrease in fibrosis with no worsening of NAS. Achievement of either primary endpoint was considered a successful trial outcome. A key secondary endpoint was lowering of LDL-C.

Patients enrolled in the MAESTRO-NASH study (up to 2,000 in total) continue on therapy after the initial 52-week treatment period for up to 54 months to accrue and measure hepatic clinical outcome events including progression to cirrhosis on biopsy (52 weeks and 54 months) and hepatic decompensation events, as well as all-cause mortality.

MAESTRO-NAFLD-1 was initiated in December 2019 and the 52-week multicenter, randomized, placebo-controlled Phase 3 study of resmetirom in over 1,200 patients with NAFLD, presumed NASH, has completed the double-blind arms and an open-label 100 mg arm. An additional open-label active treatment arm in patients with early (well-compensated) NASH cirrhosis is ongoing. The primary endpoint was to evaluate the safety and tolerability of resmetirom. A separate 52 week Phase 3 clinical trial, an open-label extension study of MAESTRO-NAFLD-1 (MAESTRO-NAFLD-OLE), is ongoing.

Patients in the 52-week Phase 3 MAESTRO-NAFLD-1 study were randomized 1:1:1:1 to receive once-daily resmetirom 80 mg, resmetirom 100 mg, placebo in double-blind arms or resmetirom 100 mg in an open-label arm. MAESTRO-NAFLD-1 (unlike MAESTRO-NASH), did not include a liver biopsy and represents a "real-life" NASH study. Patients with 3 metabolic risk factors were documented with NASH or NAFLD by historical liver biopsy or noninvasive techniques. Using noninvasive measures, MAESTRO-NAFLD-1 was designed to provide incremental safety information to support the NASH indication as well as provide additional data regarding clinically relevant key secondary efficacy endpoints to better characterize the potential clinical benefits of resmetirom on cardiovascular- and liver-related endpoints. The primary safety endpoint and several key secondary endpoints were met, including LDL-C, apolipoprotein B, and triglyceride lowering and reduction of liver fat as determined by MRI-PDFF. Additional secondary and exploratory endpoints were assessed including reduction in liver enzymes, FibroScan, and MRE scores, and other NASH biomarkers.

Data from the 52-week first 1,000 patient portion of MAESTRO-NASH, together with data from MAESTRO-NAFLD-1, MAESTRO-NAFLD-OLE, Phase 2 and Phase 1 data, including safety parameters, will form the basis for a planned subpart H submission to FDA for accelerated approval of resmetirom for treatment of NASH.

In August 2022, Madrigal initiated MAESTRO-NASH-OUTCOMES, a randomized double-blind placebo-controlled study in approximately 700 patients with early NASH cirrhosis to allow for noninvasive monitoring of progression to liver decompensation events. A positive outcome is expected to support the full approval of resmetirom for noncirrhotic NASH, potentially accelerating the timeline to full approval. In addition, this study has the potential to support an additional indication for resmetirom in patients with well-compensated NASH cirrhosis.

About NASH

Nonalcoholic steatohepatitis (NASH) is a more advanced form of nonalcoholic fatty liver disease (NAFLD). NAFLD is estimated to afflict more than 20% of adults globally, about 30% in the United States. Of that population, 20% may have NASH.

NASH is a leading cause of liver related mortality and an increasing burden on healthcare systems globally. Additionally, patients with NASH, especially those with more advanced metabolic risk factors (hypertension, concomitant type 2 diabetes), are at increased risk for adverse cardiovascular events and increased morbidity and mortality.

Once NASH progresses to significant liver fibrosis (stages F2 and F3) the risk of adverse liver outcomes increases dramatically. NASH is rapidly becoming the leading cause of liver transplantation in the U.S. There are currently no FDA-approved therapies available for the treatment of NASH.