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.

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

MADRIGAL PHARMACEUTICALS, INC. Leases Disclosure

About Leases Disclosures

Other Available Disclosures