Madrigal's Rezdiffra posts first profitable quarter as SG&A growth lags sales

The quarter in numbers

Madrigal Pharmaceuticals reported third-quarter 2026 net revenues of $431.3 million, up 50% from $287.3 million a year earlier. All revenue comes from Rezdiffra (resmetirom). The company said the growth was driven by increased U.S. demand for the drug.

Net income was $55.4 million, or $1.90 per basic share and $1.83 per diluted share. In the comparable 2025 quarter the company recorded a net loss of $114.2 million, or $4.01 per share. Madrigal described the result as its first quarter of profitability. It also said year-to-date net sales reached $1.1 billion, which it framed as blockbuster status less than three years after launch.

What drove sales

The release gives no split between price and volume, no quarter-on-quarter comparison and no regional revenue breakdown. Its evidence for demand is patient numbers: the company said more than 55,850 patients were on Rezdiffra as of Sept. 30, 2026, nearly double the level in the third quarter of 2025.

Madrigal also pointed to market expansion. It said the U.S. F2-F3 MASH market grew to more than 530,000 addressable patients through June 30, 2026, and is on track for more than 30% growth by year-end 2026. The release attributes revenue to U.S. demand. Europe appears only as a regulatory approval and a commercialisation risk, with no sales figure.

Costs and margins: operating leverage, with a one-off distorting the comparison

Operating expenses were $375.3 million, including $38.9 million of non-cash stock-based compensation, against $401.2 million, including $26.3 million, a year earlier. By our arithmetic, revenue less operating expenses gives about $56.0 million of operating income, roughly 13% of sales, against an operating loss of about $113.9 million in the prior-year quarter.

The year-on-year drop in operating expenses is flattered by a one-off. R&D was $71.8 million versus $174.0 million, and the company attributed the decrease primarily to a $117.3 million upfront business development expense in the prior-year period. Stripping that out, our calculation puts prior-year operating expenses near $283.9 million, which would have left that quarter roughly at breakeven at the operating line. The swing to profit is therefore driven more by revenue growth than by cost cuts.

Cost of sales rose to $37.8 million from $18.1 million, which the company said was primarily due to higher royalties payable to Roche on increased Rezdiffra sales. That is about 8.8% of revenue versus about 6.3% a year ago, on our calculation, and it will keep scaling with sales.

SG&A rose to $265.7 million from $209.1 million. Madrigal cited continued commercial investment, including headcount for the endocrinology field force expansion that began in the fourth quarter of 2025 and marketing efforts such as a direct-to-consumer campaign. SG&A grew by roughly 27% against 50% revenue growth, so its share of sales fell from about 73% to about 62% on our figures. It remains the dominant cost line.

Cash, guidance and the cirrhosis pipeline

Cash, cash equivalents, restricted cash and marketable securities were $961.8 million at Sept. 30, 2026, versus $988.6 million at Dec. 31, 2025, a decline of $26.8 million over nine months. The release does not explain the movement. Its risk-factor language still refers to Madrigal's ability to service indebtedness and comply with debt covenants, and it still cites a history of operating losses and the possibility that the company may never achieve or maintain consistent profitability. The release provides no financial guidance.

The strategic emphasis is on well-compensated MASH cirrhosis (F4c). The company said MAESTRO-NASH OUTCOMES is on track, with data expected in late 2027. It also plans a second Phase 3 event-driven outcomes trial, MAESTRO-CSPH, which it expects to enroll more than 2,000 F4c patients with a population significantly enriched for clinically significant portal hypertension. The company said the trial is designed to generate the broadest F4c dataset and support validation of noninvasive biomarkers for Rezdiffra and future pipeline programs. Initiation is expected in the first half of 2027, subject to regulatory discussions.

On evidence generation, the company said a secondary analysis of the Phase 3 MAESTRO-NASH trial, published in the Journal of Hepatology, showed improvements in histology and MRI-PDFF across common genetic variants including PNPLA3, HSD17B13, TM6SF2, MTARC1 and MBOAT7. It also appointed John C. Reed, M.D., Ph.D., of Johnson & Johnson, to its board in August.

What to watch next

The first event is the AASLD Liver Meeting in Denver on Nov. 5-9. Madrigal said 18 of its abstracts were accepted, 13 of them real-world evidence, with the largest dataset spanning nearly 12,000 patients. The company said resmetirom will feature in more abstracts than any other MASH therapy.

Beyond that, watch four things: whether SG&A keeps growing more slowly than sales as the endocrinology force and DTC spending mature; the trajectory of Roche royalties in cost of sales; whether the company discloses more on pricing, volume and Europe; and the regulatory discussions that gate MAESTRO-CSPH. The late-2027 MAESTRO-NASH OUTCOMES readout is the next major clinical catalyst the company has flagged.