Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) Q1 2024 Earnings Call Transcript

Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) Q1 2024 Earnings Call Transcript May 11, 2024

Mirum Pharmaceuticals, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Hello, and welcome to the Mirum Pharmaceuticals First Quarter 2024 Financial Results and Business Update. My name is Terry, and I will be the conference operator today. All lines have been placed on mute to prevent any background noise. [Operator Instructions] I will now hand the call over to Andrew McKibben, Vice President of Investor Relations, to begin. Please go ahead.

Andrew McKibben: Thanks, Terry, and good afternoon, everyone. I’d like to welcome you to Mirum Pharmaceuticals first quarter 2024 conference call. I’m joined today by our CEO, Chris Peetz; our President and Chief Operating Officer, Peter Radovich; Chief Medical Officer, Joanne Quan; and Eric Bjerkholt, our Chief Financial Officer. Earlier today, Mirum issued a news release announcing the company’s results for the first quarter 2024. Copies of this news release and SEC filings can be found in the Investors section of our website. Before we begin, I’d like to remind you that during the course of this conference call, we will be making certain forward-looking statements about Mirum and our programs based on management’s current expectations, including statements regarding Mirum’s current and future business plans, development programs and regulatory expectations, strategies, prospects, market opportunities and financial expectations.

Mirum is under no duty to update these statements, and they are subject to numerous risks and uncertainties, and actual results could differ materially from the results anticipated by these statements. Investors should read the risk factors set forth in Mirum’s 10-Q for the quarter ended March 31, 2024, and any subsequent reports filed with the SEC. With that said, I’d like to turn the call over to Chris. Chris?

Chris Peetz: Thanks, Andrew, and good afternoon to everyone. 2024 is tracking to be another year of significant growth for us. And I’m very pleased to highlight our progress across key strategic objectives to grow the commercial business, expand the indications of our commercial medicines and advanced volixibat to market. We continue to build value while delivering on our commitment to create and commercialize life-changing medicines for rare disease. Now, first, driving growth across our commercial medicines. Total net product sales this past quarter were $68.9 million, representing a 137% increase from the first quarter of 2023. LIVMARLI continues its strong performance. Newly diagnosed and prevalent patients continue to come to treatment in both the U.S. and internationally, and we are well positioned to meet our full year revenue guidance of $310 million to $320 million, driven by continued demand increases across all medicines, internal — international launches and contribution from the PFIC approval.

Second, we are also making significant progress towards expanding the impact of our potentially life-changing medicines through new approvals and label expansions. In March, we announced the U.S. approval of LIVMARLI and PFIC, an important milestone for Mirum in the PFIC patient community. This approval represents the culmination of years of dedication from patients, researchers and our team. We are excited to be able to bring LIVMARLI to this community, particularly those patients with rare genetic types of PFIC. The pivotal data was also just published this week in the Lancet, highlighting the improvements in itch, bile acids, bilirubin and growth seen with LIVMARLI treatment. And we’re off to a great start with positive reception post approval.

We’ve also made great progress preparing our upcoming NDA submission for CHENODAL for the treatment of CTX. And third, we are advancing volixibat in PSC and PBC, which are more common adult cholestatic setting, where we can apply the scientific and regulatory insights from the LIVMARLI program to address bile acid accumulation in patients suffering from these diseases. This quarter, we will be taking an important step in advancing the program with our interim analysis of volixibat in the VISTAS PSC and VANTAGE PBC studies, which are scheduled in June. We see both indications as significant opportunities as there are no approved therapies for PSC and no approved therapies to treat cholestatic pruritus in PBC. In summary, we continue to make excellent progress across our core strategic objectives, supported by a strong underlying financial position that will allow us to further execute on upcoming opportunities.

And with that, I’ll turn the call over to Peter to discuss our commercial business. Peter?

Peter Radovich: Thanks, Chris. Our commercial teams delivered another strong quarter with continued demand growth for LIVMARLI across all geographies. Underlying growth dynamics remain strong across our medicines and geographies, and we are tracking well towards achieving our full year revenue guidance of $310 million to $320 million. For LIVMARLI, total global net product sales grew to $42.8 million in the first quarter, up from $41.4 million in the fourth quarter of 2023 and $29.1 million a year ago. U.S. LIVMARLI sales were $30.8 million, and international LIVMARLI sales were $12.1 million. Our U.S. Alagille business continues to benefit from durable demand expansion in total LIVMARLI prescriptions, with a mix of older and newly diagnosed patients starting treatment.

Internationally, we are also seeing sustained demand growth from our core markets, and we continue to launch in new countries, most recently in Italy. Our U.S. business was impacted by the changed healthcare cybersecurity incident affecting our specialty pharmacy. This resulted in a temporary disruption to insurance claims processing during the quarter, which we estimate had approximately a $3 million impact on Q1 sales across our products. Turning to the recent approval of LIVMARLI for cholestatic pruritus in PFIC patients, this is an important step forward for the business, and I’m happy to say that our approval has been well received by the physician and patient community, and discussions with payers are progressing well. We continue to anticipate reimbursement and pay dispenses to materialize over the next few quarters.

Turning to CHOLBAM and CHENODAL, we recognized net product sales of $26.1 million in the first quarter of this year. Overall, I’m pleased with the strong demand we have seen year-to-date and how this positions us towards achieving our full year guidance of $310 million to $320 million. I look forward to continued growth in the coming quarters and years to come. And with that, I’ll turn it over to Joanne. Joanne?

Joanne Quan: Thanks, Peter. We have a lot to look forward to this quarter as we continue to advance our pipeline. First, I would like to take a few minutes to talk about our upcoming interim analysis in June for our volixibat VISTAS PSC study and VANTAGE PBC study. Starting with the VISTAS PSC study, a blinded interim analysis will be conducted to support dose selection. We have prespecified and efficacy threshold for continuation, which is based on prior experience with IBAT inhibitors and cholestatic pruritus. Using these criteria, the independent data monitoring committee will review the data and recommend whether to continue the study with a selected dose or to unblind if the thresholds for safety or efficacy are not met.

The starting point for the study design assumed a treatment difference of 1.75 points in pruritus and standard deviation of 3. As a reminder, pruritus is assessed on a 10-point numerical rating scale. This approach allows us to accomplish three key objectives: first, we want to confirm a meaningful treatment effect; second, we want to select the best dose; and third, by keeping ourselves blinded to the interim results, patients from the interim will be included in the potentially pivotal data set. This gets us to pivotal data faster, and at the same time, we have reassurance of a meaningful treatment effect. We will also be sharing top line data from the interim analysis of the VANTAGE study in PBC. As a reminder, this study allows patients with both normal and elevated alphos who are on ursodiol.

The interim data set included 32 patients across three arms with two active doses and placebo. The objective of the interim is to select the appropriate dose to take forward to the pivotal portion of the study. Given the historical data with IBAT inhibitors in PBC, we believe this is adequately sized to select the dose and show a trend on efficacy. The interim is not designed to show statistical significance. At the interim, we expect to show topline data on pruritus improvement, safety and other biomarkers such as serum bile acids. Both of these are seamless adaptive study designs, and we continue to enroll the goal of supporting registration. Enrollment in both studies is progressing well. These studies represent an important step towards addressing the accumulation of bile acids in broader patient groups with adult cholestasis where a significant portion of patients lack adequate treatment options for cholestasis and a severe symptomatic burden.

We’ll provide an update on projections for completion of enrollment for both studies when we announced the interims in June. 2024 is off to a great start, and I look forward to sharing our progress with you this year. With that, I’ll now turn the call over to Eric to discuss our financial results. Eric?

Eric Bjerkholt: Thanks, Joanne. Earlier today, we issued a press release that included financial results for the first quarter, which I’ll briefly summarize. Total revenue in the first quarter of 2024 was $69.2 million compared to total revenue of $31.6 million in the first quarter last year. Total operating expenses for the quarter ended March 31 were $95.7 million, which includes R&D expenses of $32.2 million, SG&A expenses of $45.6 million, and cost of sales of $17.8 million. The total operating expense for the quarter included approximately $17.1 million of non-cash charges. For the quarter ended March 31, net loss was $25.3 million or $0.53 per share. Our cash, cash equivalents and investments increased to $302.8 million as of March 31, 2024, up from $286.3 million at the end of last year, primarily due to a reduction in working capital.

We expect that our working capital balances will vary from quarter-to-quarter depending on timing of payments and inventory investments. So, in summary, our business continues to be well funded, and we are in an excellent position to support the advancement of our pipeline and expansion of our global commercial business. Now, I’ll turn the call back over to Chris for final comments.

Chris Peetz: Thanks, Eric. It’s been a great start to the year, and our business continues to grow. We remain on track for our full year revenue guidance. We are executing across our label expansion opportunity [indiscernible] launches and are very much looking forward to the volixibat interims ahead. And with that, operator, please open the call for questions.

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Q&A Session

Operator: Thank you. [Operator Instructions] Your first question on the line comes from Jessica Fye of JPMorgan. Please go ahead. Your line is open.

Jessica Fye: Great. Good afternoon. Thanks for taking my questions. For the two volixibat studies, can you remind us what background medications patients are allowed to be on that may also address pruritus? And how that kind of factors into your expectations for the results, if at all?

Chris Peetz: Thanks, Jess, for the question. I’ll ask Joanne to jump in and talk a little bit about the background setting.

Joanne Quan: Yeah. Thanks Chris, and thanks Jess for the question. We think actually that the way that we designed the studies actually make it really broadly applicable for both of these populations. So for instance, in PBC, we’re allowing patients who are either on or not on ursodiol and we’re allowing patients with varying — with any level of alphos. So, a little bit different than some of the other trials that have been for the other agents kind of in this area. So, we really think this translates to use in first-line [indiscernible] ultimately for PBC. For PSC, as you know, there’s no other therapies and we know that a majority of patients with both these diseases, PSC and PBC do have pruritus. So, we think this — the way we’ve designed the studies with a very broad inclusion criteria do allow us to translate kind of a very real world issue into our studies and therefore, give us useful information.

Jessica Fye: Great. And maybe just one more, if I could. Can you remind us what to expect from a tolerability standpoint for volixibat?

Joanne Quan: Yeah. Well, thanks for the follow-up, Jessica. So we know IBAT inhibitors quite well. And I will say, so far, volixibat kind of tracks in what we know and we know exactly how to dose these and we know exactly what to look for. So, we don’t expect really any surprises in this way.

Jessica Fye: Great. Thank you.

Chris Peetz: Thanks, Jess.

Operator: Thank you. Your next question comes from Mani Foroohar from Leerink Partners. Your line is now open.

Mani Foroohar: Thanks for taking the question, guys. A quick one. You mentioned about a $3 million impact this quarter, it sounds like, some changed healthcare issue. To what extent is that sort of a one-time loss revenue as opposed to revenue might pop up in sort of a recognition function next quarter? And separately, when you think about that $3 million, as we try and back that out and think about kind of underlying demand metrics, how is that separated between your products this quarter in terms of the split between LIVMARLI versus the acquired TBTX assets?

Chris Peetz: Thanks for the question, Mani. I’ll let Peter kind of dive into the details. I mean short answer to this, it’s a one-time effect, but Peter can give a little color on the background here.

Peter Radovich: Yeah, one-time effect that is concluded by the end of the quarter. So I don’t expect to see any lingering effects from this in future quarters. And the overall demand for all of our products grew. Total prescriptions grew over the quarter. So not really — that’s why we’re very confident in the $310 million to $320 million. I think — and you also asked about the $3 million. I think assigning $3 million by individual product is kind of probably a false precision here. I mean we kind of think about $3 million as an impact across the U.S. business.

Mani Foroohar: Okay. But is it reasonable to assume the great majority of it was driven by LIVMARLI given the geographics of those products?

Peter Radovich: I think it’s probably balanced. It’s — you could think about it generally in proportion to the size of the products.

Mani Foroohar: Okay. That’s helpful. And as we think about between now and the end of the year, staying on commercial questions, obviously, you maintained your guidance. Should we think about the tempo between now and reaching somewhere in $310 million to $320 million as fairly consistent is more of the growth back end weighted until like 3Q into 4Q, how should we think about that from a modeling perspective now that we’re sort of deeper into the year?

Peter Radovich: Yes. I think — I mean, the way we think about it is generally consistent. I mean the cadence of demand is strong, and we see it growing quarter-to-quarter. You will have PFIC coming on, although as we’ve commented, most of 2024, we expect many of the PFIC dispensers to be pre-drug and they’re probably contributing more in 2025. That might be the one dynamic that comes into play more later in the year. But generally, I think it’s a pretty consistent build towards the $310 million to $320 million.

Mani Foroohar: Okay. That’s helpful. Thanks, guys.

Chris Peetz: Thanks for the question.

Operator: The next question on the line comes from Gavin Clark-Gartner of Evercore ISI. Please go ahead. Your line is now open.

Gavin Clark-Gartner: Hey, congrats on the progress, and thanks for taking my questions. First, on the PSC, I believe you noted there was a 1.75 point expected pruritus benefit in 3 standard deviation that was informing your powering assumptions. Was that 1.75 point absolute or placebo adjusted? And maybe just remind us your expectations for the placebo arm for this trial?

Joanne Quan: Yeah. So yeah, thanks for the question, Gavin. So by 1.75 point, we mean the treatment difference, so active compared to placebo. And we took some fairly conservative assumptions by putting that together. And as you know, those are always kind of a starting point for where you kind of put the study. But we did want to share at least our starting point for looking at the study design.

Gavin Clark-Gartner: Yeah, that’s helpful. And are you able to share the baseline pruritus scores for either trial for volixibat?

Joanne Quan: Not at this point. When we — we’ll be happy to share information when we show the interims in June with you. So I think that would be — we look forward to that along with you folks.

Gavin Clark-Gartner: That sounds good. Just the last one. Any updates on the potential for orphan drug status for PFIC in the EU?

Chris Peetz: Yeah. Thanks for the follow-up there. This is one that we are continuing in dialogue with the European regulators and hope to have an update soon. But still come back to really strong conviction in our data for the LIVMARLI program in PFIC, providing some real advantages for patients. So hoping to have an update on that one soon.

Gavin Clark-Gartner: Sounds good. Thanks, guys.

Chris Peetz: Yeah, thanks for the questions.

Operator: The next question on the line comes from Dae Gon Ha from Stifel. Please go ahead. Your line is open.