10-K – 2026-02-19 – mdgl-20251231.htm

10. Stock-based Compensation
2015 Stock Plan
The 2015 Stock Plan, as amended (the “2015 Stock Plan”), is our shareholder-approved incentive plan through which equity based grants are awarded. The 2015 Stock Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units and other stock-based compensation awards to employees, officers, directors, and consultants of the Company. The administration of the 2015 Stock Plan is under the general supervision of the Compensation Committee of the Board of Directors. The terms of stock options awarded under the 2015 Stock Plan, in general, are determined by the Compensation Committee, provided the exercise price per share generally shall not be set at less than the fair market value of a share of the common stock on the date of grant and the term shall not be greater than ten years from the date the option is granted. As of December 31, 2025, 654,994 shares were available for future issuance under the 2015 Stock Plan.
2023 Inducement Plan
In September 2023, the Company adopted the 2023 Inducement Plan (the “2023 Inducement Plan”), pursuant to which the Company from time to time was permitted to make equity grants to new employees as a material inducement to their employment. The 2023 Inducement Plan was adopted without stockholder approval, pursuant to Nasdaq Listing Rule 5635(c)(4), and was administered by the Compensation Committee of the Board. The 2023 Inducement Plan provided for the granting of non-statutory stock options, restricted stock, restricted stock units, performance stock units and other stock-based compensation awards to new employees, but did not allow for the granting of incentive stock options. The terms of the stock options under the 2023 Inducement Plan, in general, were determined by the Compensation Committee, provided the exercise price per share generally would not be set at less than the fair market value of a share of the common stock on the date of grant and the term would not be greater than ten years from the date the option or award was granted. A total of 500,000 shares of the Company’s common stock were reserved for issuance under the 2023 Inducement Plan. In June 2025, the Company terminated the 2023 Inducement Plan, and therefore no additional awards may be made from the 2023 Inducement Plan. Any awards outstanding under the 2023 Inducement Plan will continue to be governed by the terms thereof.
2025 Inducement Plan
In June 2025, the Company adopted the 2025 Inducement Plan (the “2025 Inducement Plan”), pursuant to which the Company may from time to time make equity grants to new employees as a material inducement to their employment. The 2025 Inducement Plan was adopted without stockholder approval, pursuant to Nasdaq Listing Rule 5635(c)(4), and is administered by the Compensation Committee of the Board. The 2025 Inducement Plan provides for the granting of non-statutory stock options, restricted stock, restricted stock units, performance stock units and other stock-based compensation awards to new employees, but does not allow for the granting of incentive stock options. The terms of the stock options under the 2025 Inducement Plan, in general, are determined by the Compensation Committee, provided the exercise price per share generally shall not be set at less than the fair market value of a share of the common stock on the date of grant and the term shall not be greater than ten years from the date the option or award is granted. A total of 100,000 shares of the Company’s common stock were initially reserved for issuance under the 2025 Inducement Plan. In September 2025, the 2025 Inducement Plan was amended to increase the aggregate number of shares reserved for issuance by an additional 300,000 shares. A total of 267,451 shares were available for future issuance as of December 31, 2025.
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Stock Options
The following table summarizes stock option activity during the year ended December 31, 2025:

Shares
Weighted
average exercise
price Weighted
average
remaining
contractual life
(years) Aggregate
intrinsic value
(in thousands)
Outstanding at December 31, 2024 1,528,143 $ 93.57  
Options granted 145,219 340.27  
Options exercised ( 681,134 ) 55.91  
Options cancelled ( 12,367 ) 177.52  
Outstanding at December 31, 2025 979,861 $ 155.25   5.19 $ 418,487  
Exercisable at December 31, 2025 715,046 $ 112.02   4.28 $ 336,297  

The total cash received by the Company as a result of stock option exercises was $ 38.1 million, $ 76.9 million and $ 34.0 million for the years ended December 31, 2025, 2024, and 2023. The total intrinsic value of options exercised was $ 227.5 million, $ 167.8 million, and $ 70.4 million for the years ended December 31, 2025, 2024, and 2023. The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the year ended December 31, 2025, 2024 and 2023 was $ 200.55 , $ 155.42 , and $ 149.15 , respectively.
The following table summarizes the weighted average values of the assumptions used in computing the fair value of option grants during 2025, 2024, and 2023.

2025 2024 2023
Risk-free interest rate
4.1   % 4.1   % 4.4   %
Expected dividend yield
—   % —   % —   %
Expected option life
6.2 years 4.7 years 6.3 years
Expected volatility
58   % 82   % 92   %

Restricted Stock Units
The Company awards restricted stock units (“RSUs”) to employees, officers, directors and consultants to the Company. RSUs vest over a period of years and are subject to forfeiture if employment or service terminates before vesting.
The following table summarizes RSU activity, excluding performance-based RSUs, during the year ended December 31, 2025:

Shares Weighted
average grant date fair value

Outstanding at December 31, 2024 499,559 $ 237.07  
RSUs granted
491,079 357.36  
RSUs vested
( 151,464 ) 239.43  
RSUs forfeited
( 40,752 ) 291.04  
Outstanding at December 31, 2025 798,422 $ 307.85  

For the years ended December 31, 2025 and 2024 the total fair value of RSUs vested was $ 54.3 million, $ 28.9 million, respectively. For the year ended December 31, 2023 the fair value of RSUs vested was immaterial . For the years
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ended December 31, 2025, 2024, and 2023, the weighted-average grant date fair value of RSUs granted was $ 357.36 , $ 236.90 , and $ 243.81 , respectively.
Performance-Based Restricted Stock Units
The Company has granted various performance-based restricted stock units (“PSUs”) to certain senior leadership. Depending on the terms of the PSUs and the outcome of the pre-established performance criteria, which may include a market and/or performance condition, a recipient may ultimately earn the target number of PSUs granted or a specified multiple thereof at the end of the vesting period.
The following table summarizes PSU activity during the year ended December 31, 2025:

PSUs Eligible to Earn PSUs Weighted average grant date fair value
Outstanding PSUs at December 31, 2024 92,760   235,520   $ 257.77  
PSUs granted 61,717   123,434   580.38
PSUs attained ( 50,000 ) ( 100,000 ) 146.37  
PSUs forfeited ( 1,233 ) ( 2,466 ) 593.93
Outstanding at December 31, 2025 103,244   256,488   $ 500.55  
Exercisable at December 31, 2025 —   —   $ —  

For the years ended December 31, 2025, 2024, and 2023, the weighted average grant date fair value of PSUs granted was $ 580.38 , $ 388.02 , and $ 146.37 , respectively.
Outstanding Awards
As of December 31, 2025, the Company had RSUs, PSUs and options outstanding pursuant to which an aggregate of 2,034,771 shares of its common stock may be issued pursuant to the terms of all awards granted under the 2015 Stock Plan, 2023 Inducement Plan and 2025 Inducement Plan.
Stock-Based Compensation Expense
Stock-based compensation expense during the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):

Year Ended December 31,
2025 2024 2023
Stock-based compensation expense by type of award:
Stock options $ 21,328   $ 26,977   $ 30,613  
Restricted stock units
58,610 35,136   14,974  
Performance-based restricted stock units
18,192 17,767   4,148  
Total stock-based compensation expense $ 98,130   $ 79,880   $ 49,735  
Effect of stock-based compensation expense by line item:
Research and development $ 22,147   $ 22,158   $ 20,864  
Selling, general and administrative 75,983   57,722   28,871  
Total stock-based compensation expense included in net loss $ 98,130   $ 79,880   $ 49,735  

Unrecognized stock-based compensation expense as of December 31, 2025 was $ 238.8 million with a weighted average remaining period of 2.81 years.
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11. Leases
In 2019, the Company entered into an operating lease for office space located in West Conshohocken, Pennsylvania (the “Office Lease”), which was further amended by four amendments entered into from 2019 to May 2023. In August 2023, the Company entered into the Fifth Amendment to the Office Lease (the “Fifth Lease Amendment”). The Fifth Lease Amendment extended the term of the Office Lease through November 2026. As a result of the Fifth Lease Amendment, an incremental $ 1.6 million right-of-use asset and lease liabilities were recorded during the year ended December 31, 2023. In 2024, the Company entered into the Sixth, Seventh, Eighth, and Ninth Amendments to the Office Lease, leasing additional office space available in the same premises under the Office Lease, which resulted in an incremental $ 1.3  million right-of-use asset and lease liability recorded.
In April 2025, the Company 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 September 2025, the Company entered into an operating lease for office space in Waltham, Massachusetts. The commencement date did not occur as of December 31, 2025 and therefore the new lease had no impact on the financial statements.
Future minimum payments under the Company’s operating leases related to the ROU asset and lease liability as of December 31, 2025 was as follows (in thousands):

Operating
Leases

2026 $ 1,242  
2027 2,065  
2028 2,102  
2029 2,140  
2030 2,178  
Thereafter
555  
Total minimum payments $ 10,282  
Less: imputed interest ( 2,533 )
Present value of lease liabilities $ 7,749  

As of December 31, 2025, the weighted average remaining operating lease term was 3.6 years and the weighted average discount rate used to determine the operating lease liabilities was 10.04 %. Cash paid related to lease liabilities was $ 1.4 million for the year ended December 31, 2025 and $ 1.1 million for the years ended December 31, 2024 and 2023, respectively. Operating lease costs were $ 1.9 million, $ 0.9 million and $ 1.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. Rent, short term and variable lease costs were immaterial during the years ended December 31, 2025, 2024 and 2023.

12. Commitments and Contingencies
Licenses and Other Commitments
The Company has entered into customary contractual arrangements and letters of intent in preparation for and in support of operations in the normal course of business. As of December 31, 2025, the Company had approximately $ 268.3 million of obligations under these agreements related to active pharmaceutical ingredient, which is expected to be paid through 2029.
Roche Agreement
The Company has a Research, Development and Commercialization Agreement (as amended, the “Roche Agreement”) with Hoffmann-La Roche (“Roche”) which grants the Company a sole and exclusive license to develop, use, sell, offer for sale and import any Licensed Product (as defined in the Roche Agreement). In January 2026, the Company entered into an amendment to the Roche Agreement to provide the Company the full and exclusive right and discretion to control all patent term adjustments and patent term extensions applicable to Rezdiffra, including patents owned by Roche and jointly owned between the parties. In consideration of the foregoing, the royalty payable to Roche based on net sales of
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Rezdiffra will not be reduced until the expiration of certain patent term extensions that have been, or could have been, filed.
The Roche Agreement required certain milestone payments to Roche. In March 2024, upon receiving FDA approval of Rezdiffra, a milestone was achieved and $ 5.0 million was paid to Roche. In August 2025, upon receiving conditional marketing authorization from the EC, a milestone was achieved and $ 3.0 million was paid to Roche. Furthermore, a tiered single-digit royalty is payable on net sales of resmetirom or a product developed from resmetirom, subject to certain reductions. The Company began incurring royalty expense following its commercial launch of Rezdiffra in April 2024.
CSPC License (MGL-2086)
In July 2025, the Company entered into an exclusive global license agreement (the “CSPC License Agreement”) with CSPC Pharmaceutical Group Limited (“CSPC”) for MGL-2086 (formerly known as SYH2086), an oral small molecule GLP-1 receptor agonist. Pursuant to the CSPC License Agreement, CSPC has granted the Company an exclusive global license to develop, manufacture, and commercialize MGL-2086. The transaction closed in September 2025. The Company paid CSPC an upfront payment of $ 120.0 million in October 2025. CSPC is eligible to receive up to $ 2.0 billion in development, regulatory and commercial milestone payments, as well as royalties on net sales ranging from mid-single digits to low-double digits.
Pfizer License (ervogastat)
In December 2025, the Company entered into an exclusive global license agreement with Pfizer (the “Pfizer License Agreement”) to develop, manufacture and commercialize ervogastat, a Phase 2 oral DGAT-2 inhibitor, and two additional early-stage MASH assets. The Company paid Pfizer an upfront payment of $ 50.0 million in December 2025. In addition, Pfizer is eligible to receive up to $ 70.0 million in development and regulatory milestone payments related to ervogastat and low-double digit royalties on net sales of ervogastat. Pfizer is eligible to receive additional development, regulatory and commercial milestone payments and royalty payments on net sales of the two licensed early stage assets.
Ribocure License (siRNA programs)
In February 2026, the Company entered into an exclusive global license agreement (the “Ribocure License Agreement”) with Suzhou Ribo Life Science Co. Ltd. and Ribocure Pharmaceuticals AB (together, “Ribocure”) granting the Company exclusive global rights to develop, manufacture and commercialize six siRNA programs. Pursuant to the Ribocure License Agreement, the Company will pay Ribocure an upfront payment of $ 60.0 million. In addition, Ribocure is eligible to receive up to $ 4.4 billion in development, regulatory and commercial milestone payments across all programs, as well as royalties on net sales ranging from mid-single digits to low-double digits.

13. Income Taxes
The Company is subject to U.S. federal, state, and foreign income taxes. For the years ended December 31, 2025, 2024, and 2023, the components of loss before provision for income taxes consisted of $ 158.5 million, $ 465.9 million, and $ 373.6 million, respectively, for the United States and $ 129.8 million for foreign in 2025. The Company did not have any foreign operations in 2024 or 2023.
As of December 31, 2025, the Company had federal net operating loss (“NOL”) carryforwards of approximately $ 1,179.0 million available to reduce future taxable income, of which $ 40.4 million will expire between 2031 and 2037. In addition, the Company had foreign NOL carryforwards of approximately $ 130.8 million available to reduce future taxable income, which will begin to expire in 2033. The Company also had state NOL carryforwards of approximately $ 979.5 million available to reduce future taxable income, which expire between 2031 and 2043. In addition, the Company had unused federal and state research and development tax credit carryforwards of approximately $ 81.6 million.
Under Section 382 of the Internal Revenue Code (“IRC”), the utilization of NOL carryforwards may be limited in the event of certain cumulative changes in ownership over a three-year period. Such an ownership change could limit the Company’s ability to utilize its NOL carryforwards and could be triggered by future issuances or sales of securities by the Company or its stockholders. The Company has determined that an ownership change occurred during the year ended December 31, 2017. As a result, the Company’s NOL carryforwards are estimated to be subject to an annual limitation; however, none of the NOLs are expected to expire before becoming available to reduce future taxable income.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
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As there is no assurance of future taxable income, a full valuation allowance has been established to offset the deferred tax assets. The valuation allowance increased $ 82.2 million for the year ended December 31, 2025. Changes in the deferred tax asset will be recorded as an income tax benefit or expense on the accompanying consolidated statements of operations.
Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax provisions taken on their income tax returns. The Company has analyzed its tax positions and determined that it had net liabilities for uncertain tax positions, including accrued interest and penalties, of $ 12.1 million as of December 31, 2025. There were no uncertain tax positions as of December 31, 2024. Of the liabilities for uncertain tax positions as of December 31, 2025, none would impact the Company’s effective tax rate if recognized. The Company does not reasonably expect any material changes to the estimated liability associated with its uncertain tax positions in the next twelve months. Interest and penalties, if any, as they relate to income taxes assessed, are included in the income tax provision. There were no income tax related interest and penalties included in the income tax provision for 2025.
Unrecognized tax benefits were as follows (in thousands):

For the years ended December 31,
2025 2024 2023
Balance at beginning of period
$ —   $ —   $ —  
Increases related to current period tax positions
3,160   —   —  
Increases related to prior period tax positions
8,898   —   —  
Balance at end of period
$ 12,058   $ —   $ —  

The Company files U.S. federal income tax returns and income tax returns in various state, local, and foreign jurisdictions and is routinely subject to examination by taxing authorities in those jurisdictions. Tax years beginning in 2021 remain open to examination by the Internal Revenue Service (“IRS”), state, and foreign taxing authorities. To the extent that the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon IRS, state, or foreign tax authorities’ examination to the extent utilized in a future period.
Temporary differences that give rise to deferred tax assets and liabilities are as follows (in thousands):

For the years ended December 31,
2025 2024 2023
Deferred tax liabilities
Unrealized gains on investments $ 117   $ 117   $ 117  
Other deferred tax liabilities —   100   —  
Property, plant & equipment
245   —   —  
Total deferred tax liabilities $ 362   $ 217   $ 117  
Deferred tax assets
Accrued expenses 14,958   8,082   3,857  
Intangibles 40,777   401   503  
Gross to net accruals 3,462   167   —  
Stock compensation 21,940   16,342   33,976  
Property, plant & equipment —   172   95  
Net operating losses and other carryforwards 318,121   214,464   121,589  
Capitalized R&D 120,932   200,199   175,145  
Other deferred tax assets
2,192   —   —  
R&D credit 69,029   69,201   48,074  
Total deferred tax assets before valuation allowance 591,411   509,028   383,239  
Valuation allowance ( 591,049 ) ( 508,811 ) ( 383,122 )
Total deferred tax assets 362   217   117  
Net deferred tax assets $ —   $ —   $ —  

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A reconciliation of the U.S. federal statutory tax rate to the Company’s effective tax rate for the year ended December 31, 2025 is as follows (in thousands, except percent):

For the year ended December 31, 2025
Amount Percent
Tax benefit at U.S. federal statutory rate $ ( 60,352 )   21.0   %
State and local income taxes, net of federal income tax effect
—   —  
Foreign tax effects

Switzerland

Statutory tax rate difference between Switzerland & United States
17,227   ( 6.0 )
Change in valuation allowance
10,242   ( 3.6 )
Other foreign jurisdictions
95   —  
Tax credits
( 11,886 ) 4.1  
Change in valuation allowance
64,331   ( 22.4 )
Nontaxable or nondeductible items

Stock based compensation ( 44,008 )   15.3  
162M limitation 9,755     ( 3.4 )
Change in unrecognized Tax Benefits
12,058   ( 4.2 )
Other adjustments 2,538     ( 0.9 )
Income tax expense (benefit) and effective tax rate $ —     —   %

A reconciliation of the U.S. federal statutory tax rate to the Company’s effective tax rate for the years ended December 31, 2024 and 2023 is as follows (in thousands):

For the years ended December 31,
2024 2023
Tax benefit at U.S. federal statutory rate $ ( 97,837 ) $ ( 78,462 )
Stock-based compensation
( 9,954 ) ( 8,287 )
162M limitation
21,627   3,183  
Other nondeductible expenses
835   53  
State income tax benefit before valuation allowance, net of federal benefit
( 19,280 ) ( 16,246 )
Increase in domestic valuation allowance
125,689   112,606  
Research and development credit
( 17,679 ) ( 12,971 )
Other adjustments ( 3,401 ) 124  
Income tax expense (benefit) $ —   $ —  

14. Segment Information
The Company operates as one reportable segment focused on delivering novel therapeutics for MASH. The Company’s Chief Executive Officer, as the chief operating decision maker ("CODM"), leads the Company in support of four core values—focus on the patient, having an owner mindset, the relentless pursuit of innovation and commitment to collaboration. To best align the Company with these values, the CODM reviews consolidated financials, along with qualitative information, to evaluate performance, manage and allocate resources, make operating decisions, and assess planning and forecasting on a total company basis. Assets, liabilities and equity are reviewed and presented on the same level as the Company’s consolidated balance sheet.
Management does not segment business operations for internal reporting or decision making purposes. As the Company has a single reporting segment, the segment accounting policies are the same as those at the Company level, as
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described in Note 2 "Summary of Significant Accounting Policies." As of December 31, 2025, the Company did not have material revenue or assets outside of the United States.
The following table presents net income reported at the segment measure of profit and loss:

Year Ended December 31,
2025 2024 2023
Product revenue, net $ 958,403   $ 180,133   $ —  
Cost of sales ( 56,148 ) ( 6,233 ) —  
Research and development - personnel and internal expense ( 73,283 ) ( 73,418 ) ( 56,824 )
Research and development - external expense ( 315,242 ) ( 163,300 ) ( 215,526 )
Selling, general and administrative ( 813,827 ) ( 435,057 ) ( 108,146 )
Other segment income (1)
11,813   31,983   6,866  
Net loss $ ( 288,284 ) $ ( 465,892 ) $ ( 373,630 )

(1) Other segment income includes interest income, interest expense, loss on extinguishment of debt and other expense, net.

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