MDGL 10-K & 10-Q changes, risk factors and insider trading

Our prospects are highly dependent on the success of our only approved product, Rezdiffra, which was approved in the United States under the Subpart H accelerated approval pathway for new drugs for serious or life-threatening illnesses.illnesses and has received a CMA in the EU. If we are unable to successfully commercialize or maintain approval for Rezdiffra, our business, financial condition, results of operations and prospects and the value of our common stock will be materially adversely affected.

In March 2024, the FDA granted accelerated approval for Rezdiffra 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)., and in August 2025, the EC granted a CMA for Rezdiffra in the EU. We have invested, and continue to invest, significant efforts and financial resources in the launch of Rezdiffra. We have never, as an organization, launched or commercialized any other product, and there is no guarantee that we will be ablecontinue to successfully commercialize Rezdiffra. There are numerous examples of failures to meet high expectations of market potential, including by pharmaceutical companies with more experience and resources than us. We believe that the commercial success of Rezdiffra depends on many factors, including the following:

•our ability to effectively educate healthcare providers and patients on the risks of MASH and the potential clinical benefits of Rezdiffra, the first FDA-approved treatment in MASHRezdiffra;

•the effectiveness of our commercial strategy for the marketing of Rezdiffra, including our pricing strategy and the effectiveness of our efforts to obtain and maintain adequate third-party reimbursements;

•our ability to remain compliant with laws and regulations that apply to us and our commercialcommercial, promotional and medical activities;

While we believe that Rezdiffra has a commercially competitive profile, we cannot accurately predict the amount of time needed to attain a commercially successful profile or the amount of revenue that would be generated from the sale of Rezdiffra. If we do not effectively commercialize Rezdiffra, we will not be able to execute our business plan and may not be able to achieve profitability. If our revenues, market share or other indicators of market acceptance of Rezdiffra do not meet the expectations of investors or public market analysts, the market price of our common stock would likely decline.

We obtained regulatory approval of Rezdiffra through the Subpart H accelerated approval pathway,pathway in the United States and fullRezdiffra approvalhas received a CMA in the EU. Full approvals will be contingent on successfulthe completion of atrials confirmatoryto post-marketingsuccessfully trial.confirm the clinical benefit of Rezdiffra. Failure to obtain full approval or otherwise meet our post-marketing requirements and commitments would have a material adverse effect on our business.

The FDA approved Rezdiffra under the accelerated approval pathway for new drugs for serious or life-threatening illnesses and wasthe EC granted a CMA for Rezdiffra in the EU. The approvals were supported by 52-week data from the Phase 3 MAESTRO-NASH trial, which achieved both primary endpoints—MASH resolution with no worsening of fibrosis and an improvement in fibrosis by at least one stage with no worsening of the NAFLD activity score. In connection with the FDA'sFDA’s accelerated approval, we have agreed to certain post-marketing commitments, including completing our MAESTRO-NASH trial to demonstrate a clinical benefit of Rezdiffra on composite endpoints. Our MAESTRO-NASH trial is ongoing as a 54-month outcomes trial designed to generate confirmatory outcomes data that, if positive, is expected to verify a clinical benefit and support the full approval of Rezdiffra.Rezdiffra in the U.S. Additionally, full approval could also be based on results from our MAESTRO-NASH OUTCOMES trial that will noninvasively measure progression to liver decompensation events in patients with compensated MASH cirrhosis. Positive data from our MAESTRO-NASH OUTCOMES trial is expected to support the full approval of Rezdiffra in noncirrhotic MASH in the U.S. and support approval for patients with compensated cirrhosis,cirrhosis (F4c), expanding the eligible patient population.population for Rezdiffra. We have agreed to submit results from these trials to the EMA in support of transitioning the CMA into a standard marketing authorization for Rezdiffra in the EU. Failure to meet post-marketing commitments and requirements, including completion of enrollment of—and in particular, any failure to obtain positive data from— any confirmatory studies requireddesigned byto theconfirm FDA,clinical benefit, could result in negative regulatory action from the FDA and/or withdrawal of such accelerated approval.approvals. The recently enacted Food and Drug Omnibus Reform ActFDORA has expanded FDA’s expedited withdrawal procedures for drugs approved through the accelerated approval pathway if a sponsor fails to conduct any required post-approval study with due diligence.

Despite receiving FDA and EC approval of Rezdiffra, our product may not gain, or over time may not retain, market acceptance by physicians, patients, third-party payors or others in the health care community. Rezdiffra was the first product approved by the FDA and EC for the treatment of MASH. Accordingly, we must educate healthcare providers and patients on the risks of MASH and the potential clinical benefits and appropriate use of Rezdiffra. If Rezdiffra does not achieve and maintain an adequate level of acceptance, it is likely that we will not generate significant revenue or become profitable. The degree of market acceptance of Rezdiffra, which we launched in the United States early in the second quarter of 2024,Rezdiffra is also dependent on a number of additional factors, including the following:

While many of our officers and employees have experience commercializing drug products with prior companies, we have never as an organization engaged in commercial activities prior to the approval of Rezdiffra. We have hired and trained a commercial team and developed the organizational infrastructure we believe we need to support the commercial success of Rezdiffra,Rezdiffra in the U.S. and EU, and we continue to invest time and financial resources in optimizing this infrastructure. Factors that may inhibit our efforts to maintain and further develop commercial capabilities include:

Our ability to successfully commercialize Rezdiffra and any future product candidatecandidate, if approved, will depend in part on the extent to which coverage and reimbursement for these drugs and drug candidates and related treatments will be available from third party payors, including government authorities,authorities (such as Medicare and Medicaid programs in the U.S.), managed care organizations and private health insurers and other organizations.insurers. See the section titled “Business—Government Regulation—Coverage and Reimbursement” in this Annual Report for more information.

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular drugs. NetFor example, third party payors may require prior authorization for, and require reauthorization for continuation of, prescription products or impose step edits, which require prior use of another medication, prior to approving coverage for a particular product. We cannot predict actions that third party payors may take, or whether they will limit the access and level of reimbursement for Rezdiffra or refuse to provide any approvals or coverage. In addition, net prices for drugs may also be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States.payors. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for drugs. We cannot be sure that coverage will be available or maintained for Rezdiffra or any drug candidate that we commercialize and, if coverage is available, the level of reimbursement. Reimbursement may impact the demand for, or the price of, Rezdiffra or any future drug candidate for which we obtain marketing approval. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize Rezdiffra or any future drug candidate for which we obtain marketing approval. Many pharmaceutical manufacturers must also calculate and report certain price reporting metrics to the government, such as average sales price (“ASP”) and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs.

The pricing of pharmaceutical products has come under increasing scrutiny as part of a global trend toward healthcare cost containment. Resulting changes in healthcare law and policy, including recently enacted changes to Medicare, may impact our business in ways that we cannot currently predict, which could have a material adverse effect on our business and financial condition.

In addition to the ACA, the U.S. government continues to seek to adopt healthcare policies and reforms intended to curb healthcare costs, such as federal or state controls on payment for drugs (including under Medicare, Medicaid, and commercial health plans). The IRAIRA, among other things, establishes Medicare Part B and Part D inflation rebate schemes. Failure to timely pay a Part B or Part D inflation rebate is subject to a civil monetary penalty. The IRA also creates a drug price negotiation program under which the prices for Medicare units of certain high Medicare spend drugs and biologics without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price, starting in 2026. Failure to comply with requirements under the drug price negotiation program is subject to an excise tax and/or a civil monetary penalty. The IRA further makes changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and a change in manufacturer liability under a new discount program which could negatively affect the profitability of our product candidates. Failure to pay a discount under this new program will be subject to a civil monetary penalty. Congress continues to examine various policy proposals that may result in pressure on the prices of prescription drugs in the government health benefit programs. The effect of the IRA on our business and the healthcare industry in general continues to evolve and we may discover adverse impacts on our company or otherour legislativeindustry. changesThe couldIRA impactis anticipated to have significant effects on the marketpharmaceutical conditionsindustry and may reduce the prices we can charge and reimbursement we can receive for our productproduct, candidate.among other effects.

Like all medicinal products, Rezdiffra remains subject to ongoing regulatory review, and if we fail to comply with continuingregulations regulations,or satisfy our post-approval commitments, we could lose our approval and the sale of Rezdiffra could be suspended.

Even though we received FDA accelerated approval and EC CMA for Rezdiffra, the manufacturing, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, sampling, and record keeping related to our product will remain subject to extensive regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations, and GCPs for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize Rezdiffra. As such, we and our contract manufacturers will be subject to periodic review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA or other marketing application and previous responses to inspection observations. For certain commercial prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control. The FDA may also require a REMS program as a condition of approval of Rezdiffra or any future product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

If we fail to comply with the regulatory requirements of the FDAFDA, the EMA and other applicable domestic and foreign regulatory authorities, or previously unknown problems with Rezdiffra, manufacturer, or manufacturing process are discovered, we could be subject to administrative or judicially imposed sanctions, including:

The regulatory approvals for Rezdiffra waswere grantedsupported accelerated approval from the FDA based onby 52-week data from the MAESTRO-NASH trial and additional safety data from the Phase 3 MAESTRO-NAFLD-1 and MAESTRO-NAFLD-OLE extensions trials. In the United States, Rezdiffra will now be used by more patients, potentially for longer periods of time, and we and others (including regulatory agencies and private payors) will collect extensive information on the efficacy and safety of Rezdiffra by monitoring its use in the marketplace. In addition, we are generating confirmatory data regarding the longer-term use of Rezdiffra in two ongoing trials. New safety or efficacy data from both market surveillance and our clinical trials may result in negative consequences including the following:

While Rezdiffra is currently the only FDA approved drug for the treatment of MASH, thereThere are over 150140 drugs in development for the potential treatment of MASH by companies ranging in size from private biotech companies to large pharmapharmaceutical organizations. See the section titled “Business—Competition” in this Annual Report for more information.

The FDA granted accelerated approval ofof, and the EC granted a CMA for, Rezdiffra for the treatment of MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). A key component to our corporate strategy is to expand the target patient population for Rezdiffra. We have fully enrolled our Phase 3 MAESTRO-NASH OUTCOMES trial. In this trial, we are evaluating progression to liver decompensation events in patients with compensated MASH cirrhosis (F4c) treated with Rezdiffra versus placebo. A positive outcome is expected to support the full approval of Rezdiffra for noncirrhotic MASH in the U.S. and also expand the eligible patient population for Rezdiffra with an additional indication in patients with compensated MASH cirrhosis. We cannot guarantee positive results in this trial. If we are unable to expand the indication for use of Rezdiffra, our prospects and the value of our common stock may be materially adversely affected.

While Rezdiffra has been approved by the FDA and EC for the treatment of noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis), it has not been approved in any other jurisdiction for this indication or for any other indication. In order to market Rezdiffra for other indications or in other jurisdictions, we must obtain regulatory approval for each of those indications and in each of the applicable jurisdictions, and we may never be able to obtain such approval. While our MAA for resmetirom for the treatment of MASH with liver fibrosis has been validated and is now under evaluation with the CHMP, no guarantee can be made that we will receive requisite marketing approvals. In order to market any products outside of the United States,States and EU, we must establish and comply with numerous and varying regulatory requirements of other countries regarding clinical trial design, safety and efficacy. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials, which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries. Satisfying these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays. In addition, our failure to obtain regulatory approval in any country may delay or have negative effects on the process for regulatory approval in other countries. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, our target market will be reduced and our ability to realize the full market potential of Rezdiffra will be harmed.

Rezdiffra is currently only available for distribution through a limited number of specialty pharmacies in the United States. These specialty pharmacies account for substantially all of our revenue.revenue in the U.S. A specialty pharmacy is a pharmacy that specializes in the dispensing of medications for complex or chronic conditions that often require a high level of patient education and ongoing management. The use of specialty pharmacies involves certain risks, including, but not limited to, risks that these specialty pharmacies:

•conduct appropriate preclinical and clinical trials, including confirmatory clinical trials, according to good laboratory practices and good clinical practicesGCP and disease-specific expectations of the FDA and other regulatory bodies;

If we fail to successfully develop and commercialize our other product candidates, we may be unable to grow our business.

We plan to evaluate the development and commercialization of therapies beyond Rezdiffra.Rezdiffra, including MGL-2086, ervogastat and our siRNA programs. We may choose to in-license or acquire otheradditional product candidates as well as commercial products to treat patients suffering from disorders with high unmet medical needs and limited treatment options. These other product candidates maywill require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and/or applicable foreign regulatory authorities. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, we cannot assure you that any such products that are approved will be manufactured or produced economically, be successfully commercialized, be widely accepted in the marketplace, or be more effective than other commercially available alternatives.

Further, other parties, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the particular program or commercialization of the particular drug candidate or product, and our business in general. In addition, in regards to the information we publicly disclose regarding a particular study or clinical trial, such as topline data, others may not agree with what we determine is the material or otherwise appropriate information to include in such disclosure, and any information we determine not to disclose, or to disclose at a later date, such as at a medical meeting may ultimately be deemed significant with respect to future decisions, conclusions, views, activities, or otherwise regarding a particular drug, drug candidate, or our business. If the interim, topline or preliminary data that we report differ from actual results or are interpreted differently once additional data are disclosed at a later date, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our drug candidates, our business, operating results, prospects, or financial condition may be harmed or our stock price may decline.

•conditions imposed on us by the FDAFDA, the EMA or other regulatory authorities regarding the scope or design of our clinical trials;

If we inadvertently fail to comply with foreign regulatory requirements governing human clinical trials and marketing approval for drugs, we could be prevented from selling our drug candidates in such foreign markets, which may adversely affect our operating results and financial condition.

Identifying and qualifying patients to participate in clinical trials is critical to our success. We may not be able to initiate, continue, or complete clinical trials required by the FDA or foreign regulatory agencies if we are unable to locate, enroll and maintain a sufficient number of eligible patients to participate. The timing to conduct and complete clinical trials, is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials, and clinicians’ and patients’ perceptions as to the potential advantages and disadvantages of the product candidate being studied in relation to other available therapies. Delays in patient enrollment for our clinical trials could increase costs and delay commercialization and sales, if any, of our products. With respect to our MAESTRO-NASH OUTCOMES trial, our inability to maintain a sufficient number of eligible patients enrolled in the trial could restrict our ability to commercialize Rezdiffra in a broader population of patients with noncirrhotic MASH. Once enrolled, patients may elect to discontinue participation in a clinical trial at any time. For example, patients in our ongoing MAESTRO-NASH trial may elect to discontinue their participation in the trial now that Rezdiffra is an approved product and is commercially available. If patients elect to discontinue participation in our clinical trials at a higher rate than expected, we may be unable to generate the data required by regulators for approval. Enrollment delays in these clinical trials may result in increased development costs for our planned or future product candidates, which would cause the value of our Company to decline and limit our ability to obtain additional financing.

Our failure to successfully in-license, acquire, develop and market additional product candidates or approved products could impair our ability to grow our business.

As part of our business strategy, we may effect acquisitions or licenses to obtain additional businesses,product products,candidates, technologies, capabilities or personnel. The success of this strategy depends partly upon our ability to identify and select promising pharmaceutical product candidates, negotiate licensing or acquisition agreements with their current owners and finance these arrangements. The process of proposing, negotiating and implementing a license or acquisition of a product candidate is lengthy and complex. Other companies, including some with substantially greater financial and other resources, may compete with us for the license or acquisition of product candidates. Moreover, we may devote resources to potential acquisitions or licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts. Additionally, we may not be able to acquire the rights to additional product candidates on terms that we find acceptable, or at all.

The following discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto contained elsewhere in this Annual Report on Form 10-K (this “Annual Report”).Report. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under the sections titled “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and elsewhere herein, our actual results may differ materially from those anticipated in these forward-looking statements.

We are a biopharmaceutical company focused on delivering novel therapeutics for metabolic dysfunction-associated steatohepatitis (“MASH”),MASH, a serious liver disease with high unmet medical need that can lead to cirrhosis, liver failurefailure, liver cancer, need for liver transplantation and premature mortality. MASH is expected to become the leading cause of liver transplantation in women, the second leading cause of all liver transplantation in the United States and is already the leadingfastest-growing causeindication offor liver transplantation among women in the United States.Europe. Our 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 therapy approved by the U.S. Food and Drug Administration (the “FDA”) for patients with MASH and was commercially available in the United States beginning in April 2024. Following receipt of CMA from the EC, we launched Rezdiffra is indicated in conjunctionGermany within dietSeptember 2025. Rezdiffra was the first medication approved by both the FDA and exerciseEC for the treatment of adults with noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). We are also evaluating Rezdiffra in patients with compensated MASH cirrhosis (consistent with F4c fibrosis) in our MAESTRO-NASH OUTCOMES trial, that, if successful, could expand the eligible patient population for Rezdiffra.

We have incurred losses since inceptioninception, resulting in an accumulated deficit of $1,802.2$2,090.5 million as of December 31, 2024.2025. Prior to generating product revenue from sales of Rezdiffra beginning in April 2024, we financed our operations primarily through public and private offerings of our equity securities and through our loancredit facility (“Loan Facility”) with Hercules Capital, Inc. (“Hercules”).facilities. We have generated losses principally from costs associated with research and development activities, acquiring, filing and expanding intellectual property rights, establishing a commercial infrastructure to support the launch of Rezdiffra and selling, general and administrative expenses. As a result of planned expenditures to commercialize Rezdiffra, expand our commercial operations toin Europe (subject to receipt of regulatory approval),Europe, continue research and development activities, manage and grow our intellectual property portfolio,portfolio and engage in potential business development transactions and costs associated with general corporate activities, we expect to incur additional operating losses.

Our ability to reduce operating losses and begin to generate positive cash flow from operations depends on a number of factors, including our ability to continue to successfully commercialize Rezdiffra andRezdiffra, achieve positive results from our post-approval trials in order to obtain full approval of Rezdiffra in the United States and potentiallythe European Union, expand the eligible patient population.population for Rezdiffra and successfully develop and receive regulatory approval for additional therapies. Our financial results may fluctuate from quarter to quarter and will depend on, among other factors, the net sales of Rezdiffra; the scope and progress of our research and development efforts and the timing of certain expenses.

In March 2024, the FDA approved Rezdiffra for the treatment of noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). RezdiffraWe isbegan agenerating once-daily,revenue oral,from liver-directed, THR-ß agonist designed to target key underlying causessales of MASH. Rezdiffra was launched for sale in the United States in April 2024. In addition, we launched Rezdiffra in Germany in September 2025. As described in the “Critical Accounting Policies and Estimates” section below, revenue is recorded net of variable consideration, which includes prompt pay discounts, service fees, returns, chargebacks, government rebates and co-payment assistance.

Cost of sales includes the cost of manufacturing and distribution of inventory related to sales of Rezdiffra.Rezdiffra, including royalties payable to Roche. We expect cost of sales to increase in the future, as manufacturing costs incurred prior to regulatory approval were expensed to research and development rather than capitalized as inventory, as approval was considered uncertain.

•expenses related to preclinical studiesactivities;

•expenses related to compliance with drug development regulatory requirements; and

•other allocated expenses, which include direct and allocated expenses for depreciation of equipment and other supplies.supplies; and

Completion dates and costs for our clinical development programs as well as our research program can vary significantly for any future product candidate and are difficult to predict. As a result, we cannot estimate with any degree of certainty the costs we will incur in connection with the development of product candidates at this point in time. We expect that we will make determinations as to which programs and product candidates to pursue and how much funding to direct to each program and product candidate on an ongoing basis in response to the scientific success of research, results of ongoing and future clinical trials, potential collaborative agreements with respect to programs or potential product candidates and ongoing assessments as to each product candidate’s commercial potential.

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

Interest expense consists primarily of interest accrued on principal balances outstanding under our Financing Agreement. We also accrued interest on loans outstanding under our loan facility (the “Hercules Loan Facility”) with Hercules until the Hercules Loan Facility withwas Hercules.repaid in full and terminated in July 2025.

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements which have been prepared in accordance with generally accepted accounting principles in the United States.States ("GAAP"). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to gross to net expenses, inventory valuation, accrued research and development expenses and stock-based compensation expenses. We base our estimates on historical experience, known trends and events,events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Our accounting policy over revenue recognition has a significant impact on our financial results and involves substantial judgementjudgment and estimation. The amount of revenue we recognize is impacted by variable consideration, as described in Note 2,2 “Summary of Significant Accounting Policies,” in the accompanying notes to the consolidated financial statements. Our gross to net estimates are based on contracts with customers, government agencies, healthcare providers, industry data, historical information, and other factors. The judgementsjudgments and estimates involved in determining variable consideration are reviewed each reporting period, as all are subject to adjustments as new information becomes available.

We recognize revenue in accordance with ASC Topic 606 - Revenue from Contracts with Customers.Customers ("ASC 606"). Revenue is recognized at athe point in time when the customer obtains control of promised goods or services in an amount that reflects the consideration to which thewe entity expectsexpect to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform 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) we satisfy its performance obligation(s).

Revenue is recorded net of variable consideration, which includes prompt pay discounts, returns, chargebacks, rebates,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. We reflect these accruals as either a reduction in the related account receivable from the customer or as ana accruedcurrent 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.

Prompt Pay: 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.

Returns: We record 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: We estimate 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 us. The customer charges us for the difference between what it pays to us for the product and the selling price to the qualified healthcare providers, with the difference recorded as a contra receivable.providers.

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.concessions. We use a third-party to administer the co-payment program for pharmacy benefit claims.

Rebates: WeOur arerebates subjectinclude amounts paid to discountMedicaid, obligationsMedicare, undercertain governmentcommercial programs, including Medicaidpayors and Medicare.other rebate programs. 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.recognized. Our estimate for rebates is based on statutory or contractual discount rates, expected utilization or an estimated number of patients on treatment, as applicable.

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 our normal operating cycle. We periodically review our inventory for factors that could impact the future recoverability and realization of future sales, which requires estimates and judgements.judgments. We analyze our inventory levels quarterly and write down inventory subject to expiry, in excess of expected requirements,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.Operations. We capitalize inventory costs when future commercial sale in the ordinary course of business is probable.

Our research and development expenses were $388.5 million for the year ended December 31, 2025 compared to $236.7 million for the year ended December 31, 2024 compared to $272.4 million for the year ended December 31, 2023.2024. Research and development expenses decreasedincreased by $35.6$151.8 million in 20242025 primarily due to abusiness reductiondevelopment intransactions, clinicalincluding trial$120.0 million upfront expense andunder the changeCSPC inLicense accountingAgreement forand inventory$50.0 costsmillion followingunder FDAthe approvalPfizer ofLicense Rezdiffra in March 2024,Agreement, partially offset by increasesa reduction in headcount.expenses related to clinical trials.

Our selling, general and administrative expenses were $813.8 million for the year ended December 31, 2025 compared to $435.1 million for the year ended December 31, 2024 compared to $108.1 million for the year ended December 31, 2023.2024. Selling, general and administrative expenses increased by $326.9$378.8 million in 20242025 primarily due primarily to increasesan forincrease in commercial launch activities for Rezdiffra, including a corresponding increase in headcount,headcount andto ansupport increaseour incommercialization stock compensation expense.efforts.

Our interest income was $37.4 million for the year ended December 31, 2025 compared to $46.7 million for the year ended December 31, 2024 compared to $19.6 million for the year ended December 31, 2023.2024. The increasedecrease in interest income was due primarily to higher principal balances and interest rates in 2024.

Our interest expense was $22.3 million for the year ended December 31, 2025, compared to $14.7 million for the year ended December 31, 2024, compared to $12.7 million for the year ended December 31, 2023.2024. The increase in interest expense was primarily the result of a higher average outstanding principal balance during the period underafter entering into the LoanFinancing Facility with Hercules.Agreement.

For discussion of our 20232024 results and a comparison with 20222023 resultsresults, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 20232024 that was filed with the SEC on February 28,26, 2024.2025.

Until we are able to generate sufficient revenue from Rezdiffra and any other future approved products, we anticipate that we will continue to incur significant losses. While our rate of cash usage will likely increase in the future, in particular to support our product development and clinical trial efforts, our commercialization efforts and geographic expansion activities and our business development goals, we believe our available cash resources are sufficient to fund our operations past one year from the issuance of the financial statements contained herein. Our future long-term liquidity requirements will be substantial and will depend on many factors, including our ability to effectively commercialize Rezdiffra, our decisions regarding future geographic expansion, the conduct of any future preclinical studies and clinical trials andtrials, our entry into any strategic transactions.transactions, our ability to maintain compliance with the liquidity covenant in the Financing Agreement and potential milestone payments payable pursuant to our license agreements. To meet future long-term liquidity requirements, as well as maintain compliance with certain of our Loan Facility covenants, we may need to raise additional capital to fund our operations through equity or debt financings, collaborations, partnerships or other strategic transactions. Additional capital, if needed, may not be available on terms acceptable to us, or at all. If adequate funds are not available, or if the terms of potential funding sources are unfavorable, this could have a material adverse effect on our business, results of operations and financial condition. We have the ability to delay certain commercial activities, geographic expansion activities and certain research activities and related clinical expenses, if necessary, due to liquidity concerns until a date when those concerns are relieved.

In May 2024, we entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC, an affiliate of TD Securities (USA) LLC (“Cowen”), replacing and superseding our prior sales agreement. We are authorized to issue and sell up to $300.0 million of shares of our common stock under the Sales Agreement. Sales of our common stock, if any, under the Sales Agreement will be made by any method that is deemed to be an “at the market” offering as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended. We have no obligation to sell any common stock and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement pursuant to its terms.

LoanCredit FacilityFacilities

As of December 31, 2024,2025, the outstanding principal under the LoanFinancing FacilityAgreement was $115.0$350.0 million. The interest rate as of December 31, 20242025 was 9.95%.8.75%. As of December 31, 2024,2025, we were in compliance with all loan covenants and provisions.

March 2024 Public Offering

OnIn March 18, 2024, we 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 we 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 WarrantWarrant, 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.

In addition, we are advancing a focused pipeline to lead the evolution of MASH treatment for patients for decades to come. Through our business development efforts, we have acquired rights to MGL-2086, an oral glucagon-like peptide-1 (“GLP-1”) receptor agonist, ervogastat, an oral diacylglycerol O-acyltransferase 2 (“DGAT-2”) inhibitor, MGL-0795 (formerly ARO-PNPLA3), an siRNA asset targeting a mutation in the patatin-like phospholipase domain-containing protein 3 (“PNPLA3”) gene, six small interfering RNA (“siRNA”) programs and additional preclinical MASH candidates. We plan to evaluate these candidates with the goal of delivering best-in-disease therapies for the treatment of MASH. As we continue to build our pipeline, we will evaluate mechanisms that fit scientifically, strategically and commercially to enhance our leading position in MASH care.

The FDA’s accelerated approval and the EC’s conditional marketing authorization, as well as Rezdiffra’s approved prescribing information, were supported by 52-week data from our Phase 3 MAESTRO-NASH trial in which both 100 mg and 80 mg doses of Rezdiffra demonstrated statistically significant improvement compared to placebo on (i) MASH resolution with no worsening of fibrosis and (ii) an improvement in fibrosis by at least one stage with no worsening of the nonalcoholic fatty liver disease (“NAFLD”) activity score. MAESTRO-NASH remains ongoing as an outcomes trial where we are generating confirmatory outcomes data to 54-months that, if positive, is expected to verify a clinical benefit and support the full FDA approval of Rezdiffra to treat noncirrhotic MASH. We expect outcomes data from this trial in 2028. In addition, full FDA approval of Rezdiffra to treat noncirrhotic MASH could also be based on results from our Phase 3 MAESTRO-NASH OUTCOMES trial. In this event-driven trial, we are assessing progression to liver decompensation events in patients with compensated MASH cirrhosis treated with Rezdiffra versus placebo. A positive outcome in this trial is also expected to support the full FDA approval of Rezdiffra for noncirrhotic MASH, and expand the eligible patient population for Rezdiffra with an additional indication in patients with compensated MASH cirrhosis. We expect results from the MAESTRO-NASH OUTCOMES trial in 2027. We have agreed to submit results from these trials to the European Medicines Agency (“EMA”) in support of full approval of Rezdiffra in the European Union.

In May 2026, we announced an exclusive global license agreement (the “Arrowhead License Agreement”) with Arrowhead Pharmaceuticals Inc. (“Arrowhead”) for ARO-PNPLA3,ARO-PNPLA3 (now referred to as MGL-0795), a clinical-stage siRNA asset targeting a mutation in the patatin-like phospholipase domain-containing protein 3 (PNPLA3) gene, a genetically validated driver of MASH. ARO-PNPLA3MGL-0795 is a GalNac-conjugated siRNA designed to reduce expression of PNPLA3. Mutations in the PNPLA3 gene have been shown to disrupt the liver’s ability to properly process fat. This leads to increased fat accumulation in hepatocytes, and is strongly associated with MASH progression and a high risk of developing hepatocellular carcinoma (HCC).carcinoma. The results of two Phase 1 trials suggested that a single dose of ARO-PNPLA3MGL-0795 reduced liver fat content in homozygous carriers of the PNPLA3 I148M variant, providing proof-of-concept for ARO-PNPLA3 as a precision-medicine approach in this patient population. We will consult with the FDA on design of a Phase 2 combination trial with Rezdiffra.resmetirom.

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

Three Months Ended MarchJune 31,30, 2026 and 2025

The following table provides comparative unaudited results of operations for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):

We recorded $311.3$364.3 million of product revenue, net for the three months ended MarchJune 31,30, 2026, compared to $137.3$212.8 million in the corresponding period in 2025. The increase was driven by increased demand for Rezdiffra in the United States in 2026.

Cost of sales were incurred as a result of sales of Rezdiffra and includes non-cash stock-based compensation expense for employees dedicated to the production of Rezdiffra. For the three months ended MarchJune 31,30, 2026, we recorded $26.8$40.0 million of cost of sales compared to $4.5$9.1 million in the corresponding period in 2025. The increase in cost of sales was primarily driven by (i) an increase in royalties payable to Roche as a result of an increase in net sales of Rezdiffra in 2026.2026 and (ii) a write-down of $10.4 million for certain work-in-process inventory that may not meet quality specifications.

The following table represents our research and development expenses for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Our research and development expenses were $108.7$91.2 million for the three months ended MarchJune 31,30, 2026, compared to $44.2$54.1 million in the corresponding period in 2025. Research and development expenses include non-cash stock-based compensation expense associated with employees engaged in research and development activities. Research and development expenses increased by $64.5$37.1 million in the 2026 period, primarily due to one-time upfront payments of $54.3 million related to business development transactionsexpenses duringof the$25.0 three months ended March 31, 2026million and an $8.7$8.0 million increase in compensation and benefit-related expenses and stock-based compensation expense as a result of increased headcount in connection with pipeline expansion activities.

The following table represents our selling, general and administrative expenses for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Our selling, general and administrative expenses were $268.5$289.4 million for the three months ended MarchJune 31,30, 2026, compared to $167.9$196.9 million in the corresponding period in 2025. Selling, general and administrative expenses includes non-cash stock-based compensation expense. Selling, general and administrative expenses increased by $100.6$92.5 million in the 2026 period, primarily due to a $43.2$39.2 million increase in professional fees and other external expenses as a result of continued investment in commercial activities for Rezdiffra, including direct-to-consumer (DTC) marketing efforts,efforts and a $45.6$36.4 million increase in compensation and benefit-related expenses and stock-based compensation expense primarily due to headcount for the endocrinology field force expansion that began in the fourth quarter of 2025.

Our net interest income was $8.2$7.1 million for the three months ended MarchJune 31,30, 2026, compared to $9.4$8.2 million in the corresponding period in 2025. The decrease in interest income was primarily due to lower interest rates and lower average balances of interest-bearing cash equivalents and marketable securities compared to the corresponding period in 2025.

Our interest expense was $7.8$7.9 million for the three months ended MarchJune 31,30, 2026, compared to $3.3 million in the corresponding period in 2025. The increase of $4.5$4.7 million was primarily the result of a higher average outstanding principal balance after entering into the Financing Agreement.

As of MarchJune 31,30, 2026, we had cash, cash equivalents, restricted cash, and marketable securities totaling $817.9$838.9 million compared to $988.6 million as of December 31, 2025. We have historically funded our operations primarily through proceeds from sales of our capital stock and debt financings. In July 2025, we entered into a senior secured credit facility that provides up to $500.0 million. See Note 8 “Long Term Debt” for additional details. We began receiving revenue from sales of Rezdiffra following the receipt of accelerated FDA approval in March 2024 and CMA from the EC in August 2025.

We did not make any sales under the Sales Agreement during the three and six months ended MarchJune 31,30, 2026 or 2025. As of MarchJune 31,30, 2026, $300.0 million remained available for sale under the Sales Agreement and our related prospectus supplement.

As of MarchJune 31,30, 2026, the outstanding principal amount under the Financing Agreement was $350.0 million. The interest rate duringas theof threeJune months ended March 31,30, 2026 was 8.42%.8.45%. Interest expense was $7.8$7.9 million and $3.3$15.8 million for the three and six months ended MarchJune 31,30, 20262026, respectively. Interest expense was $3.3 million and $6.6 million for the three and six months ended June 30, 2025, respectively. As of MarchJune 31,30, 2026, we were in compliance with all loan covenants and provisions.

Net cash used in operating activities was $167.4$144.1 million for the threesix months ended MarchJune 31,30, 2026, compared to $88.9$135.9 million for the corresponding period in 2025. The use of cash in these periods resulted primarily from our losses from operations, driven by commercialization efforts, including purchases of API, one-time upfront payments related to business development transactions and higher annual incentive bonus payouts, partially offset by cash receipts from sales of Rezdiffra, as adjusted for non-cash charges for stock-based compensation,charges, and changes in our working capital accounts.

Net cash provided by investing activities was $192.2$226.4 million for the threesix months ended MarchJune 31,30, 2026, compared to net cash provided by investing activities of $163.9$211.7 million for the corresponding period in 2025. Net cash provided by investing activities for the threesix months ended MarchJune 31,30, 2026 primarily consisted of $353.9$541.2 million from sales and maturities of marketable securities, partially offset by $157.8$306.7 million of purchases of marketable securities for our investment portfolio and $3.8$8.1 million of purchases of property and equipment. Net cash provided by investing activities for the corresponding period in 2025 primarily consisted of $294.7$568.1 million from sales and maturities of marketable securities, partially offset by $130.8$356.3 million of purchases of marketable securities in our investment portfolio.

Net cash provided by financing activities was $2.3$5.4 million for the threesix months ended MarchJune 31,30, 2026, compared to $8.6$10.4 million for the corresponding period in 2025. Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 consisted of $2.3$5.4 million from the exercise of stock options. Net cash provided by financing activities for the corresponding period in 2025 consisted of $8.6$10.4 million from the exercise of stock options.

In April 2025, we entered into an operating lease for additional office space in West Conshohocken, Pennsylvania. The lease commenced in May 2025 and resulted in a $4.0 million right-of-use asset and lease liability. In March 2026, we entered into an amendment to this lease, which modified the lease term and payment schedule. As a result, the right-of-use asset and lease liability balances were remeasured,remeasured resulting in balances ofto $4.0 million and $4.6 million as of March 31, 2026,million, respectively.

In September 2025, we entered into an operating lease for office space in Waltham, Massachusetts. The commencement date had not occurred as of MarchJune 31,30, 2026. Upon lease commencement, we expect to make total lease payments of $9.9 million over an 84-month lease term. As of MarchJune 31,30, 2026, we recorded a $1.2$1.3 million prepaid lease payment related to approved change orders, which will be included in the measurement of the right-of-use asset upon commencement.

In May 2026, we entered into the Arrowhead License Agreement with Arrowhead granting us an exclusive global license to ARO-PNPLA3.ARO-PNPLA3 (now referred to as MGL-0795). Pursuant to the Arrowhead License Agreement, we will pay Arrowheadmade an upfront payment of $25.0 million.million, which was recognized as research and development expense in June 2026. In addition, Arrowhead is eligible to receive up to $975.0 million in development, regulatory and commercial milestone payments, as well as royalties on net sales ranging from high-single digits to the mid-teens.

We have entered into customary contractual agreements in support of the Phase 3 clinical trials and in connection with manufacturing Rezdiffra. As of MarchJune 31,30, 2026, we had approximately $222.9$239.4 million of obligations under these agreements related to active pharmaceutical ingredient, which is expected to be paid through December 2029.

Except as noted above, no significant changes to contractual obligations and commitments occurred during the threesix months ended MarchJune 31,30, 2026, as compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on February 19, 2026.