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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2017	Aug. 04, 2017
Document and Entity Information
Entity Registrant Name	MADRIGAL PHARMACEUTICALS, INC.
Entity Central Index Key	0001157601
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		12,495,705
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 34,797	$ 19,145
Marketable securities	32,369	21,355
Prepaid expenses and other current assets	781	707
Total current assets	67,947	41,207
Property and equipment, net	120	3
Total assets	68,067	41,210
Current liabilities:
Accounts payable	1,285	762
Accrued expenses	5,151	4,038
Total current liabilities	6,436	4,800
Total liabilities	6,436	4,800
Stockholders' equity:
Preferred stock, par value $0.0001 per share authorized: 5,000,000 shares at June 30, 2017 and December 31, 2016; 1,969,797 and no shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
Common stock, par value $0.0001 per share authorized: 200,000,000 at June 30, 2017 and December 31, 2016, respectively; 12,495,705 and 11,951,866 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively	1	1
Additional paid-in-capital	151,247	111,691
Accumulated other comprehensive income	36	25
Accumulated deficit	(89,653)	(75,307)
Total stockholders' equity	61,631	36,410
Total liabilities and stockholders' equity	$ 68,067	$ 41,210

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, shares issued	1,969,797	0
Preferred stock, shares outstanding	1,969,797	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized shares	200,000,000	200,000,000
Common stock, shares issued	12,495,705	11,951,866
Common stock, shares outstanding	12,495,705	11,951,866

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Operating expenses:
Research and development	$ 6,816	$ 2,088	$ 11,196	$ 2,604
General and administrative	1,623	551	3,318	773
Total operating expenses	8,439	2,639	14,514	3,377
Loss from operations	(8,439)	(2,639)	(14,514)	(3,377)
Interest expense		(238)		(1,213)
Interest income	92		168
Net loss	$ (8,347)	$ (2,877)	$ (14,346)	$ (4,590)
Net loss per common share:
Basic and diluted net loss per common share (in dollars per share)	$ (0.69)	$ (16.33)	$ (1.20)	$ (26.06)
Basic and diluted weighted average number of common shares outstanding	12,039,005	176,158	11,997,602	176,158

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Condensed Consolidated Statements of Comprehensive Loss
Net Loss	$ (8,347)	$ (2,877)	$ (14,346)	$ (4,590)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale securities	(28)		11
Comprehensive loss	$ (8,375)	$ (2,877)	$ (14,335)	$ (4,590)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ (14,346)	$ (4,590)
Adjustments to reconcile net loss to net cash used in operating activities:
PIK interest expense on convertible promissory notes payable - related parties		1,207
Stock-based compensation expense	1,278
Depreciation and amortization expense	8
Changes in operating assets and liabilities:
Accounts receivable - related parties		7
Prepaid expenses and other current assets	3	(658)
Accounts payable	523	529
Accrued expense	1,113	414
Accrued interest - related party		6
Net cash used in operating activities	(11,421)	(3,085)
Cash flows from investing activities:
Purchases of marketable securities	(31,113)
Sales and maturities of marketable securities	20,033
Purchases of property and equipment	(125)
Net cash used in investing activities	(11,205)
Cash flows from financing activities:
Proceeds from issuance of common and preferred stock, net of transaction costs	38,278
Proceeds from convertible notes - related parties		6,875
Net cash provided by financing activities	38,278	6,875
Net increase in cash and cash equivalents	15,652	3,790
Cash and cash equivalents at beginning of period	19,145	306
Cash and cash equivalents at end of period	$ 34,797	4,096
Supplemental disclosure of cash flow information:
Exchange of related party advances payable for convertible notes		500
Related party debt restructuring		$ 11,224

Organization, Business and Basis of Presentation	6 Months Ended
Organization, Business and Basis of Presentation	Jun. 30, 2017
Organization, Business and Basis of Presentation
Organization, Business and Basis of Presentation	1. Organization, Business and Basis of Presentation Organization and Business Madrigal Pharmaceuticals, Inc. (the “Company” or “Madrigal”) is a clinical-stage pharmaceutical company developing novel, high-quality, small-molecule drugs addressing major unmet needs in cardiovascular and metabolic diseases. The Company’s lead compound, MGL-3196, is being advanced for non-alcoholic steatohepatitis (“NASH”), a liver disease that commonly affects people with metabolic diseases such as obesity and diabetes, and indications in dyslipidemia, particularly genetic dyslipidemias such as familial hypercholesterolemia (“FH”), including both homozygous and heterozygous forms of the disease. The Company initiated a Phase 2 study of MGL-3196 in NASH in October 2016. In February 2017, the Company initiated a Phase 2 study of MGL-3196 in patients with Heterozygous Familial Hypercholesterolemia (“HeFH”). Madrigal was originally incorporated as a private company (“Private Madrigal”) on August 19, 2011 and commenced operations in September 2011. On July 22, 2016, Private Madrigal completed a reverse merger (the “Merger”) into Synta Pharmaceuticals Corp. (“Synta”) (see Note 3). Upon the consummation of the Merger, the historical financial statements of Private Madrigal became the Company’s historical financial statements. Accordingly, the historical financial statements of Private Madrigal are included in the comparative prior periods. The Company, or Madrigal, as used in the accompanying notes to the unaudited condensed consolidated financial statements, refers to Private Madrigal prior to the completion of the Merger and Public Madrigal subsequent to the completion of the Merger. Basis of Presentation Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. Accordingly, the unaudited condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete annual financial statements. However, we believe that the disclosures included in these financial statements are adequate to make the information presented not misleading. The unaudited condensed financial statements, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of such interim results. The interim results are not necessarily indicative of the results that we will have for the full year ended December 31, 2017 or any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2016.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash in bank accounts, the balance of which, at times, exceeds Federal Deposit Insurance Corporation insured limits.

The primary objective of the Company’s investment activities is to preserve its capital for the purpose of funding operations and the Company does not enter into investments for trading or speculative purposes. The Company’s cash is deposited in highly rated financial institutions in the United States. The Company invests in money market funds and high-grade, short-term commercial paper and corporate bonds, which management believes are subject to minimal credit and market risk.

Marketable Securities

Marketable securities consist of investments in high-grade corporate obligations, and government and government agency obligations that are classified as available-for-sale. Since these securities are available to fund current operations they are classified as current assets on the consolidated balance sheets.

The Company adjusts the cost of available-for-sale debt securities for amortization of premiums and accretion of discounts to maturity. The Company includes such amortization and accretion as a component of interest income, net. Realized gains and losses and declines in value, if any, that the Company judges to be other-than-temporary on available-for-sale securities are reported as a component of interest income, net. To determine whether an other-than-temporary impairment exists, the Company considers whether it intends to sell the debt security and, if the Company does not intend to sell the debt security, it considers available evidence to assess whether it is more likely than not that it will be required to sell the security before the recovery of its amortized cost basis. During the three and six months ended June 30, 2017 and 2016, the Company determined it did not have any securities that were other-than-temporarily impaired.

Marketable securities are stated at fair value, including accrued interest, with their unrealized gains and losses included as a component of accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity. The fair value of these securities is based on quoted prices and observable inputs on a recurring basis. Realized gains and losses are determined on the specific identification method. During the three and six months ended June 30, 2017 and 2016, the Company did not have any realized gains or losses on marketable securities.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash equivalents, and marketable securities, approximate their fair values. The fair value of the Company’s financial instruments reflects the amounts that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy has the following three levels:

Level 1—quoted prices in active markets for identical assets and liabilities.

Level 2—observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3—unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Financial assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company measures the fair value of its marketable securities by taking into consideration valuations obtained from third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker-dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs. As of June 30, 2017, the Company’s financial assets valued based on Level 1 inputs consisted of cash and cash equivalents in a money market fund and its financial assets valued based on Level 2 inputs consisted of high-grade corporate bonds and commercial paper. During the three and six months ended June 30, 2017 and 2016, the Company did not have any transfers of financial assets between Levels 1 and 2. As of June 30, 2017, the Company did not have any financial liabilities that were recorded at fair value on a recurring basis on the balance sheet.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development costs are comprised of costs incurred in performing research and development activities, including internal costs (including stock-based compensation), costs for consultants, and other costs associated with the Company’s preclinical and clinical programs. In particular, Madrigal has conducted safety studies in animals, optimized and implemented the API manufacturing, and conducted Phase 1 & 2 clinical trials, all of which are considered research and development expenditures.

Patents

Costs to secure and defend patents are expensed as incurred and are classified as general and administrative expense in the Company’s statements of operations.

Stock-Based Compensation

The Company recognizes stock-based compensation expense based on the grant date fair value of stock options granted to employees, officers and directors. The Company uses the Black-Scholes option pricing model to determine the grant date fair value as management believes it is the most appropriate valuation method for its option grants. The Black-Scholes model requires inputs for risk-free interest rate, dividend yield, volatility and expected lives of the options.

Certain of the employee stock options granted by the Company are structured to qualify as incentive stock options (ISOs). Under current tax regulations, the Company does not receive a tax deduction for the issuance, exercise or disposition of ISOs if the employee meets certain holding requirements. If the employee does not meet the holding requirements, a disqualifying disposition occurs, at which time the Company may receive a tax deduction. The Company does not record tax benefits related to ISOs unless and until a disqualifying disposition is reported. In the event of a disqualifying disposition, the entire tax benefit is recorded as a reduction of income tax expense. The Company has not recognized any income tax benefit for its share-based compensation arrangements due to the fact that the Company does not believe it is more likely than not it will realize the related deferred tax assets.

Income Taxes

The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. The Company currently maintains a 100% valuation allowance on its deferred tax assets.

Basic and Diluted Loss Per Common Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period, excluding restricted stock that has been issued but is not yet vested. Diluted net loss per common share is computed using the weighted average number of common shares outstanding and the weighted average dilutive potential common shares outstanding using the treasury stock method. However, for the three and six months ended June 30, 2017 and 2016, diluted net loss per share is the same as basic net loss per share as the inclusion of weighted average shares of unvested restricted common stock and common stock issuable upon the exercise of stock options would be anti-dilutive.

The following table summarizes outstanding securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive:

	June 30,
	2017	2016
Common stock options	976,711	—
Unvested restricted common stock	157,262	—
Preferred stock	1,969,797	—
Conversion option on promissory notes — related parties	—	512,160

Recent Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which was designed to simplify several aspects of the accounting for share-based payment transactions, including, among other things, guidance related to accounting for income taxes, modification of the criteria for classification of awards as either equity awards or liability awards where an employer withholds shares from an employee’s share-based award for tax withholding purposes, and classification on the statement of cash flows of cash payments to a tax authority by an employer that withholds shares from an employee’s award for tax withholding purposes. The amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted ASU No. 2016-09 effective January 1, 2017. There was no significant impact from the adoption of ASU No. 2016-09 because the Company currently maintains a 100% valuation allowance on its deferred tax assets.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments.” The objective of ASU No. 2016-15 is to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. For public business entities, ASU 2016-15 is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted. ASU 2015-16 provides that the amendments in the update should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. The Company is currently evaluating the impact this standard may have on its financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance in U.S. generally accepted accounting principles on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The amendments in this ASU are effective for fiscal years and interim periods beginning after December 15, 2017, and are to be adopted by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact this standard may have on its financial statements.

Reverse Merger	6 Months Ended
Reverse Merger	Jun. 30, 2017
Reverse Merger
Reverse Merger	3. Reverse Merger On July 22, 2016, the Company, Synta and Saffron Merger Sub, Inc., a wholly-owned subsidiary of Synta (“Merger Sub”), completed their merger transaction pursuant to which Merger Sub merged with and into the Company with the Company becoming a wholly-owned subsidiary of Synta and the surviving corporation of the Merger. Each outstanding share of Private Madrigal common stock was converted into 0.1593 shares of common stock of the post-merger combined company. As a result, Synta issued 7.3 million shares of common stock to the stockholders of Private Madrigal in exchange for the outstanding common shares of Private Madrigal. For accounting purposes, the Company was considered to have acquired Synta in the Merger. The Company was determined to be the accounting acquirer based upon the terms of the Merger Agreement and other factors including: (i) Madrigal security holders owned approximately 64% of the voting interests of the combined company immediately following the closing of the Merger; (ii) directors appointed by Madrigal hold a majority of board seats in the combined company; and (iii) Madrigal management hold a majority of the key positions in the management of the combined company. As the accounting acquirer, the Company’s assets and liabilities continue to be recorded at their historical carrying amounts and the historical operations that are reflected in the financial statements are those of the Company. Immediately prior to the closing of the Merger, Synta completed a one-for-35 reverse stock split. Following the reverse stock split and the Merger, the post-merger combined company had approximately 11.3 million shares outstanding and the former stockholders of the Company owned approximately 64% of the outstanding capital stock of the post-merger combined company. The impact of the recapitalization of the Company has been retroactively applied to all periods presented.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

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+ Details

Liquidity and Uncertainties	6 Months Ended
Liquidity and Uncertainties	Jun. 30, 2017
Liquidity and Uncertainties
Liquidity and Uncertainties	4. Liquidity and Uncertainties The Company is subject to risks common to development stage companies in the Bio-Pharmaceutical industry including, but not limited to, uncertainty of product development and commercialization, dependence on key personnel, uncertainty of market acceptance of products and product reimbursement, product liability, uncertain protection of proprietary technology, potential inability to raise additional financing necessary for development and commercialization, and compliance with the U.S. Food and Drug Administration and other government regulations. The Company has incurred losses since inception, including approximately $14.3 million for the six months ended June 30, 2017, resulting in an accumulated deficit of approximately $89.7 million as of June 30, 2017. Management expects to incur losses for the foreseeable future. Subsequent to the reverse merger, the Company has funded its operations primarily through proceeds from sales of the Company’s common stock under the October 2015 Sales Agreement (as defined below), and the sale of the Company’s Series A Convertible Preferred Stock and common stock in a private placement offering. The Company believes that its cash, cash equivalents and marketable securities at June 30, 2017 will be sufficient to fund operations past one year from the issuance of these financial statements. To meet its future capital needs beyond our assessment period, the Company will need to raise additional capital through debt or equity financings, collaborations, partnerships or other strategic transactions. However, there can be no assurance that the Company will be able to complete any such transactions on acceptable terms or otherwise. The inability of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition. The Company also has the ability to delay certain research activities and related clinical expenses if necessary due to liquidity concerns until a date in which those concerns are relieved.

Cash, Cash Equivalents and Marketable Securities

6 Months Ended

Jun. 30, 2017

Cash, Cash Equivalents and Marketable Securities

Cash, Cash Equivalents and Marketable Securities

5. Cash, Cash Equivalents and Marketable Securities

A summary of cash, cash equivalents and available-for-sale marketable securities held by the Company as of June 30, 2017 and December 31, 2016 is as follows (in thousands):

	June 30, 2017
	Cost		Unrealized gains		Unrealized losses		Fair value

Cash and cash equivalents:
Cash (Level 1)	$	3,887	$	—	$	—	$	3,887
Money market funds (Level 1)	30,910		—		—		30,910

Total cash and cash equivalents	34,797		—		—		34,797
Marketable securities:
Corporate debt securities due within 1 year of date of purchase (Level 2)	32,333		36		—		32,369

Total cash, cash equivalents and marketable securities	$	67,130	$	36	$	—	$	67,166

	December 31, 2016
	Cost		Unrealized gains		Unrealized losses		Fair value

Cash and cash equivalents:
Cash (Level 1)	$	5,651	$	—	$	—	$	5,651
Money market funds (Level 1)	13,494		—		—		13,494

Total cash and cash equivalents	19,145		—		—		19,145
Marketable securities:
Corporate debt securities due within 1 year of date of purchase (Level 2)	21,330		25		—		21,355

Total cash, cash equivalents and marketable securities	$	40,475	$	25	$	—	$	40,500

Convertible Promissory Notes - Related Parties	6 Months Ended
Convertible Promissory Notes - Related Parties	Jun. 30, 2017
Convertible Promissory Notes - Related Parties
Convertible Promissory Notes - Related Parties	6. Convertible Promissory Notes — Related Parties Prior to the Merger, the Company was financed via issuances of convertible promissory notes, designated as “the September 14, 2011 Notes”, “the September 16, 2011 Notes”, and “the March 1, 2016 Notes”, respectively (collectively “the Notes”). The Notes accrued interest at 8% per annum, compounded monthly, and were collateralized by all assets of the Company. Effective April 13, 2016, in connection with execution of the Merger Agreement, the Notes were amended and restated, primarily to provide for mandatory conversion upon completion of the Merger. On that same date, the lenders collectively waived all accrued and unpaid interest under all of the convertible notes. The total accrued and waived interest amounted to $13,680,000. The lenders also agreed that no additional interest on these notes would be accrued through the date on which the Merger was consummated or terminated. Also on April 13, 2016, the Company reduced the convertible notes payable by the waived accrued interest less $2,456,000 of accrued interest for the period April 14, 2016 through the maturity date of December 31, 2016, as required under Troubled Debt Restructuring accounting guidance. The net waived interest of $11,224,000 was recorded as an increase in Additional Paid in Capital (“APIC”) at the time of the amendment, as the notes were held by related parties. The remaining $2,456,000 of accrued interest was recorded as an increase in APIC upon conversion at the Merger. During the period March 1, 2016 through the Merger, the lenders provided convertible promissory note financing of $8,500,000 in cash. Additionally, on April 13, 2016, one of the lenders exchanged $500,000 of Advances Payable for an equal amount of convertible promissory notes.

Stockholders' Equity (Deficit)	6 Months Ended
Stockholders' Equity (Deficit)	Jun. 30, 2017
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit)	7. Stockholders’ Equity (Deficit) Common Stock Each common stockholder is entitled to one vote for each share of common stock held. The common stock will vote together with all other classes and series of stock of the Company as a single class on all actions to be taken by the Company’s stockholders. Each share of common stock is entitled to receive dividends, as and when declared by the Company’s board of directors. The Company has never declared cash dividends on its common stock and does not expect to do so in the foreseeable future. At-The-Market Issuance Sales Agreement In October 2015, the Company entered into an at-the-market issuance sales agreement (the October 2015 Sales Agreement), with Cowen and Company, LLC (Cowen), pursuant to which the Company may issue and sell shares of its common stock, having an aggregate offering price of up to $100 million, from time to time, at the Company’s option, through Cowen as its sales agent. Sales of common stock through Cowen may be made by any method that is deemed an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including by means of ordinary brokers’ transactions at market prices, in block transactions or as otherwise agreed by the Company and Cowen. Subject to the terms and conditions of the October 2015 Sales Agreement, Cowen will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the common stock based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company is not obligated to make any sales of its common stock under the October 2015 Sales Agreement. Any shares sold will be sold pursuant to an effective shelf registration statement on Form S-3 (file no. 333-206135). The Company will pay Cowen a commission of up to 3% of the gross proceeds. The October 2015 Sales Agreement may be terminated by the Company at any time upon 10 days’ notice. As of June 30, 2017, 597,256 shares have been sold to-date under the October 2015 Sales Agreement for an aggregate of approximately $9.6 million in gross proceeds. Net proceeds to the Company were approximately $9.4 million after deducting commissions and other transactions costs. Of those shares sold, 215,539 were sold in 2017 for an aggregate of approximately $3.5 million in gross proceeds, and $3.4 million in net proceeds. Approximately $90.4 million remained reserved under the Company’s shelf registration statement and the applicable prospectus supplement for possible future issuance under the October 2015 Sales Agreement. Private Placement Offering and its Series A Convertible Preferred Stock In June 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a group of institutional accredited investors, who were existing, non-controlling stockholders of the Company, pursuant to which the Company sold securities to the Investors in a private placement transaction (the “Offering”). Under the terms of the Offering, the Company sold 328,300 shares of its common stock at a price of $15.23 per share, and 1,969,797 shares of its Series A Convertible Preferred Stock (the “Series A Preferred Stock”) at a price of $15.23 per share. The Offering resulted in gross proceeds to the Company of approximately $35.0 million, and net proceeds to the Company of approximately $34.9 million. The Offering closed on June 23, 2017. The Series A Preferred Stock has a par value of $0.0001 per share and is convertible into shares of the common stock at a one-to-one ratio, subject to adjustment as provided in the Purchase Agreement. The terms of the Series A Preferred Stock are set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, that the Company filed with the Secretary of State of the State of Delaware on June 21, 2017. Each share of the Series A Preferred Stock is convertible into shares of the Common Stock at any time at the holder’s option. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, after the satisfaction in full of the debts of the Company and the payment of any liquidation preference owed to the holders of shares of capital stock of the Company ranking prior to the Series A Preferred Stock upon liquidation, the holders of the Series A Preferred Stock shall participate pari passu with the holders of the Common Stock (on an as-if-converted-to-Common-Stock basis) in the net assets of the Company. Shares of the Series A Preferred Stock will generally have no voting rights, except as required by law. Shares of the Series A Preferred Stock will be entitled to receive dividends before shares of any other class or series of capital stock of the Company (other than dividends in the form of the Common Stock) equal to the dividend payable on each share of the Common Stock, on an as-converted basis.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
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-Section S99
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Stock-based Compensation

6 Months Ended

Jun. 30, 2017

Stock-based Compensation

Stock-based Compensation

8. Stock-based Compensation

In June 2015, upon obtaining stockholder approval at its annual shareholder meeting, the Company implemented its new 2015 Stock Plan. The 2015 Stock Plan replaced the 2006 Stock Plan which was terminated upon adoption of the 2015 Stock Plan. Shares of common stock reserved for outstanding awards under the 2006 Stock Plan that lapse or are canceled will be added back to the share reserve available for future awards under the 2015 Stock Plan. The 2015 Stock Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock 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 exercise price of the stock options is determined by the compensation committee of the board of directors, provided that incentive stock options are granted with an exercise price not less than fair market value of the common stock on the date of grant and expire no later than ten years from the date the option is granted. As of June 30, 2017, the Company had options outstanding to purchase 976,711 shares of its common stock, which includes options outstanding under its 2006 Stock Plan that was terminated in June 2015. As of June 30, 2017, 1,458,561 shares were available for future issuance under the 2015 Stock Plan.

The following table summarizes stock option activity during the six months ended June 30, 2017:

	Shares	Weighted average exercise price
Outstanding at January 1, 2017	784,011	$	10.70
Options granted	192,700	15.96
Options exercised	—	—
Options cancelled	—	—

Outstanding at June 30, 2017	976,711	$	11.74

Exercisable at June 30, 2017	153,088	$	13.06

The total cash received by the Company as a result of stock option exercises was $0 in each of the six months ended June 30, 2017 and 2016. The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the six months ended June 30, 2017 was $12.68.

Restricted Common Stock

The Company’s share-based compensation plan provides for awards of restricted shares of common stock to employees, officers, directors and consultants to the Company. Restricted stock awards are subject to forfeiture if employment or service terminates during the prescribed retention period. Restricted shares vest over the service period. There were 157,262 unvested restricted shares outstanding at a weighted average grant date fair value of $10.06 at June 30, 2017 and December 31, 2016.

Stock-Based Compensation Expense

Stock-based compensation expense during the three and six months ended June 30, 2017 and 2016 was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Stock-based compensation expense by type of award:
Stock options	$	527	$	—	$	981	$	—
Restricted stock	149		—		297		—

Total stock-based compensation expense	$	676	$	—	$	1,278	$	—


Effect of stock-based compensation expense by line item:
Research and development	$	168	$	—	$	305	$	—
General and administrative	508				973		—

Total stock-based compensation expense included in net loss	$	676	$	—	$	1,278	$	—

Unrecognized stock-based compensation expense as of June 30, 2017 was as follows (in thousands):

	Unrecognized stock compensation expense		Weighted average remaining period (in years)
Stock options	$	5,916	2.44
Restricted stock	1,061		1.99

Total	$	6,977	2.38

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2017
Related Party Transactions
Related Party Transactions	9. Related Party Transactions Related party financing Certain related party lenders provided financing to the Company prior to the Merger, which was subsequently converted to equity at the time of the Merger. For the six months ended June 30, 2016, the Company incurred approximately $1.2 million of interest expense to related party lenders. Consulting agreement Prior to the Merger, the Company had a consulting agreement with its former Chief Executive Officer, who is also a stockholder of the Company. For the six months ended June 30, 2016, the Company paid $83 thousand pursuant to this agreement. On July 22, 2016, the consulting agreement was replaced by an employment agreement for the position of Chief Medical Officer, Executive Vice President, Research and Development, upon the completion of the Merger.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2017
Commitments and Contingencies
Commitments and Contingencies	10. Commitments and Contingencies The Company has a Research, Development and Commercialization 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 by the agreement. The agreement requires future milestone payments to Roche, the remainder of which total $10 million and are earned by the commencement of Phase 3 clinical trials as well as future regulatory approval in the United States and Europe of a product developed from MGL-3916. A single-digit royalty payment range is based on net sales of products developed from MGL-3196, subject to certain reductions. In October 2016 the Company commenced a Phase 2 study in Non-Alcoholic Steatohepatitis (NASH), which triggered a milestone payment under the agreement. Except as described above, the Company has not achieved any additional product development or regulatory milestones to date and has no Licensed Product sales for the quarters ended June 30, 2017 and 2016. During 2017, the Company has entered into several customary contractual arrangements and letters of intent in preparation for and in support of the Phase 2 clinical trials.

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Summary of Significant Accounting Policies

Use of Estimates

Cash and Cash Equivalents

Marketable Securities

Fair Value of Financial Instruments

Level 1—quoted prices in active markets for identical assets and liabilities.

Level 3—unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Research and Development Costs

Patents

Costs to secure and defend patents are expensed as incurred and are classified as general and administrative expense in the Company’s statements of operations.

Stock-Based Compensation

Income Taxes

Basic and Diluted Loss Per Common Share

The following table summarizes outstanding securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive:

	June 30,
	2017	2016
Common stock options	976,711	—
Unvested restricted common stock	157,262	—
Preferred stock	1,969,797	—
Conversion option on promissory notes — related parties	—	512,160

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2017

Summary of Significant Accounting Policies

Summary of the outstanding securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive

	June 30,
	2017	2016
Common stock options	976,711	—
Unvested restricted common stock	157,262	—
Preferred stock	1,969,797	—
Conversion option on promissory notes — related parties	—	512,160

Cash, Cash Equivalents and Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2017

Cash, Cash Equivalents and Marketable Securities

Summary of cash, cash equivalents and available-for-sale marketable securities

A summary of cash, cash equivalents and available-for-sale marketable securities held by the Company as of June 30, 2017 and December 31, 2016 is as follows (in thousands):

	June 30, 2017
	Cost		Unrealized gains		Unrealized losses		Fair value

Cash and cash equivalents:
Cash (Level 1)	$	3,887	$	—	$	—	$	3,887
Money market funds (Level 1)	30,910		—		—		30,910

Total cash and cash equivalents	34,797		—		—		34,797
Marketable securities:
Corporate debt securities due within 1 year of date of purchase (Level 2)	32,333		36		—		32,369

Total cash, cash equivalents and marketable securities	$	67,130	$	36	$	—	$	67,166

	December 31, 2016
	Cost		Unrealized gains		Unrealized losses		Fair value

Cash and cash equivalents:
Cash (Level 1)	$	5,651	$	—	$	—	$	5,651
Money market funds (Level 1)	13,494		—		—		13,494

Total cash and cash equivalents	19,145		—		—		19,145
Marketable securities:
Corporate debt securities due within 1 year of date of purchase (Level 2)	21,330		25		—		21,355

Total cash, cash equivalents and marketable securities	$	40,475	$	25	$	—	$	40,500

Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2017

Stock-based Compensation

Summary of stock option activity

	Shares	Weighted average exercise price
Outstanding at January 1, 2017	784,011	$	10.70
Options granted	192,700	15.96
Options exercised	—	—
Options cancelled	—	—

Outstanding at June 30, 2017	976,711	$	11.74

Exercisable at June 30, 2017	153,088	$	13.06

Schedule of stock-based compensation expense

Stock-based compensation expense during the three and six months ended June 30, 2017 and 2016 was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Stock-based compensation expense by type of award:
Stock options	$	527	$	—	$	981	$	—
Restricted stock	149		—		297		—

Total stock-based compensation expense	$	676	$	—	$	1,278	$	—


Effect of stock-based compensation expense by line item:
Research and development	$	168	$	—	$	305	$	—
General and administrative	508				973		—

Total stock-based compensation expense included in net loss	$	676	$	—	$	1,278	$	—

Schedule of unrecognized stock-based compensation expense

Unrecognized stock-based compensation expense as of June 30, 2017 was as follows (in thousands):

	Unrecognized stock compensation expense		Weighted average remaining period (in years)
Stock options	$	5,916	2.44
Restricted stock	1,061		1.99

Total	$	6,977	2.38

Summary of Significant Accounting Policies - Income Taxes (Details)	6 Months Ended
	Jun. 30, 2017
Income Taxes
Valuation allowance on deferred tax assets (as a percent)	100.00%

Summary of Significant Accounting Policies - Basic and Diluted Loss Per Common Share (Details) - shares	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Stock options
Anti-dilutive securities
Outstanding securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive (in shares)	976,711
Restricted stock
Anti-dilutive securities
Outstanding securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive (in shares)	157,262
Preferred stock
Anti-dilutive securities
Outstanding securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive (in shares)	1,969,797
Conversion option on promissory notes - related parties
Anti-dilutive securities
Outstanding securities not included in the computation of diluted net loss per common share as their inclusion would be anti-dilutive (in shares)		512,160

Reverse Merger (Details) - shares	Jul. 22, 2016	Jul. 21, 2016	Jun. 30, 2017	Dec. 31, 2016
Reverse Merger
Common stock received			12,495,705	11,951,866
Shares outstanding			12,495,705	11,951,866
Merged Company \| Stockholders
Reverse Merger
Voting interest acquired	64.00%	64.00%
Merged Company
Reverse Merger
Number of shares issued for each share of private Madrigal stock	0.1593
Shares outstanding		11,300,000
Synta Pharmaceuticals Corp
Reverse Merger
Reverse stock split		0.02857
Synta Pharmaceuticals Corp \| Madrigal Pharmaceuticals, Inc
Reverse Merger
Common stock received	7,300,000

Liquidity and Uncertainties (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Liquidity and Uncertainties
Net loss	$ 8,347	$ 2,877	$ 14,346	$ 4,590
Accumulated deficit	$ (89,653)		$ (89,653)		$ (75,307)

Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents and marketable securities, unrealized gains	$ 36	$ 25
Carrying value
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	34,797	19,145
Total cash, cash equivalents and marketable securities, cost	67,130	40,475
Fair value
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	34,797	19,145
Total cash, cash equivalents and marketable securities	$ 67,166	$ 40,500
Corporate debt securities due within 1 year of date of purchase
Cash, Cash Equivalents and Marketable Securities
Maturity period from date of purchase to classify an investment as marketable securities	1 year	1 year
Corporate debt securities due within 1 year of date of purchase \| Level 2
Cash, Cash Equivalents and Marketable Securities
Marketable securities, unrealized gains	$ 36	$ 25
Corporate debt securities due within 1 year of date of purchase \| Carrying value \| Level 2
Cash, Cash Equivalents and Marketable Securities
Marketable securities, cost	32,333	21,330
Corporate debt securities due within 1 year of date of purchase \| Fair value \| Level 2
Cash, Cash Equivalents and Marketable Securities
Marketable securities, fair value	32,369	21,355
Cash \| Carrying value \| Level 1
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	3,887	5,651
Cash \| Fair value \| Level 1
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	3,887	5,651
Money market funds \| Carrying value \| Level 1
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	30,910	13,494
Money market funds \| Fair value \| Level 1
Cash, Cash Equivalents and Marketable Securities
Cash and cash equivalents	$ 30,910	$ 13,494

Convertible Promissory Notes - Related Parties (Details)		5 Months Ended	6 Months Ended
	Apr. 13, 2016 USD ($) Lender	Jul. 22, 2016 USD ($)	Jun. 30, 2017	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Cash received				$ 6,875,000
Conversion amount				$ 500,000
Conversion option on promissory notes - related parties
Interest rate			8.00%
Total accrued and waived interest	$ 13,680,000
Accrued interest					$ 2,456,000
Net waived interest recorded as an increase to APIC	$ 11,224,000
Amended And Restated March 1, 2016 Notes
Cash received		$ 8,500,000
Lender D \| Amended And Restated March 1, 2016 Notes
Number of lender that exchanged advances payable to convertible debt \| Lender	1
Conversion amount	$ 500,000

Stockholders' Equity (Deficit) (Details) $ / shares in Units, $ in Millions	1 Months Ended		6 Months Ended	21 Months Ended
	Jun. 30, 2017 USD ($) Vote $ / shares shares	Oct. 31, 2015 USD ($)	Jun. 30, 2017 USD ($) Vote $ / shares shares	Jun. 30, 2017 USD ($) Vote $ / shares shares	Dec. 31, 2016 $ / shares
Stockholders' Equity (Deficit)
Number of votes per share that common stockholders are entitled to receive \| Vote			1
Preferred Stock, Par or Stated Value Per Share \| $ / shares	$ 0.0001		$ 0.0001	$ 0.0001	$ 0.0001
At-The-Market Issuance Sales Agreement
Stockholders' Equity (Deficit)
Number of shares sold by the entity \| shares			215,539	597,256
Value of shares sold by the entity			$ 3.5	$ 9.6
Net proceeds after deducting commissions and other transactions costs			3.4	9.4
Remaining reserved amount under shelf registration	$ 90.4		$ 90.4	$ 90.4
Cowen & Co. LLC \| At-The-Market Issuance Sales Agreement
Stockholders' Equity (Deficit)
Maximum aggregate offering price		$ 100.0
Notice period of termination of sales agreement		10 days
Cowen & Co. LLC \| Maximum \| At-The-Market Issuance Sales Agreement
Stockholders' Equity (Deficit)
Percentage of gross proceeds payable as commission		3.00%
Series A Convertible Preferred Stock
Stockholders' Equity (Deficit)
Preferred Stock, Par or Stated Value Per Share \| $ / shares	$ 0.0001		$ 0.0001	$ 0.0001
Preferred stock conversion ratio \| shares	1
Preferred shares number voting rights \| Vote	0		0	0
Private Placement Offering \| Purchase Agreement
Stockholders' Equity (Deficit)
Value of shares sold by the entity	$ 35.0
Net proceeds after deducting commissions and other transactions costs	$ 34.9
Private Placement Offering \| Common stock \| Purchase Agreement
Stockholders' Equity (Deficit)
Number of shares sold by the entity \| shares	328,300
Issue price of stock \| $ / shares	$ 15.23		$ 15.23	$ 15.23
Private Placement Offering \| Series A Convertible Preferred Stock \| Purchase Agreement
Stockholders' Equity (Deficit)
Number of shares sold by the entity \| shares	1,969,797
Issue price of stock \| $ / shares	$ 15.23		$ 15.23	$ 15.23

Stock-based Compensation - Stock Option and Restricted Share Activity (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Stock options
Stock-based compensation expense
Shares available for future issuance	1,458,561
Shares
Outstanding at the beginning of the period (in shares)	784,011
Options granted (in shares)	192,700
Outstanding at the end of the period (in shares)	976,711
Exercisable at the end of the period (in shares)	153,088
Weighted average exercise price
Outstanding at the beginning of the period (in dollars per share)	$ 10.70
Options granted (in dollars per share)	15.96
Outstanding at the end of the period (in dollars per share)	11.74
Exercisable at the end of the period (in dollars per share)	$ 13.06
Additional disclosures
Total cash received from stock option exercises	$ 0	$ 0
Weighted-average grant date fair value of options (in dollars per share)	$ 12.68
Stock options \| Maximum
Stock-based compensation expense
Expiration period	10 years
Restricted stock
Shares
Unvested restricted common stock	157,262		157,262
Weighted average grant date fair value
Weighted average grant date fair value	$ 10.06		$ 10.06

Stock-based Compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Stock-based compensation expense
Stock-based compensation expense	$ 676	$ 1,278
Research and development
Stock-based compensation expense
Stock-based compensation expense	168	305
General and administrative
Stock-based compensation expense
Stock-based compensation expense	508	973
Stock options
Stock-based compensation expense
Stock-based compensation expense	527	981
Restricted stock
Stock-based compensation expense
Stock-based compensation expense	$ 149	$ 297

Stock-based Compensation - Unrecognized Expense (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Unrecognized stock-based compensation expense
Unrecognized stock compensation expense	$ 6,977
Weighted average remaining period (in years)	2 years 4 months 17 days
Employee stock options
Unrecognized stock-based compensation expense
Unrecognized stock compensation expense	$ 5,916
Weighted average remaining period (in years)	2 years 5 months 9 days
Restricted stock
Unrecognized stock-based compensation expense
Unrecognized stock compensation expense	$ 1,061
Weighted average remaining period (in years)	1 year 11 months 27 days

Related Party Transactions (Details) $ in Thousands	6 Months Ended
Related Party Transactions (Details) $ in Thousands	Jun. 30, 2016 USD ($)
Related Party Transactions
Interest expense incurred on debt from related parties	$ 1,200
Former CEO \| Consulting agreement
Related Party Transactions
Consulting fees paid	$ 83

Commitments and Contingencies (Details) - Research, Development and Commercialization Agreement - Hoffmann-La Roche ("Roche") - USD ($)	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Commitments and Contingencies
Remainder of future milestone payments	$ 10,000,000
Licensed product sales	$ 0	$ 0