Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) Q2 2023 Earnings Call Transcript

Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) Q2 2023 Earnings Call Transcript August 5, 2023

Operator: Good afternoon, and thank you all for joining. I would like to welcome you all to the Mirum Pharmaceuticals Report Second Quarter 2023 Financial Results and Provide Business Update. My name is Brika, and I’ll be your moderator for today’s call. [Operator Instructions] I would now like to turn the call over to Andrew McKibben, VP of Investor Relations and Finance. So Andrew, please go ahead.

Andrew McKibben: Thanks, Brika, and good afternoon, everyone. I’d like to welcome you to Mirum Pharmaceuticals’ second quarter 2023 conference call. I’m joined today by our President and CEO, Chris Peetz; our Chief Operating Officer, Peter Radovich, and our Head of Research and Development, Pam Vig. Earlier today, Mirum issued a news release announcing the company’s results for the second quarter of 2023. Copies of this news release and SEC filings can be found in the Investors section of our website. Full details and updates from the quarter can be found in our news release. 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, our pending acquisition of Travere’s bile acid product portfolio and our programs based on management’s current expectations, including statements regarding Mirum’s current and future business and commercial plans, development programs, regulatory expectations, strategies, prospects, market opportunities and financial forecasts and guidance.

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 filing with the SEC. With that said, I’d like to turn the call over to Chris. Chris?

Chris Peetz: Thank you, Andrew, and good afternoon to everyone joining us on the call today. We are thrilled to discuss yet another quarter of strong growth at Mirum. We are on track to become a leading multi-product franchise in pediatric hepatology through the impact of LIVMARLI for patients globally, continued progress of volixibat in the clinic and the pending acquisition of CHENODAL and CHOLBAM. The last quarter saw a substantial progress on our five-part strategy, which is to grow LIVMARLI in the U.S., launch LIVMARLI in international markets, establish new indications for LIVMARLI, advance and commercialize volixibat in adult cholestatic indications, and acquire additional high impact medicines for rare disease. We’ve made great strides on all of these areas of strategic focus so far this year.

First on growing LIVMARLI’s commercial business, in the second quarter, we performed well against our guidance of 50% year-over-year, net product sales growth in the U.S. in 2023, as well as growth from international markets achieving $32.5 million of LIVMARLI revenue and $37.5 million total revenue. We are also excited about the recent progress in international markets with our approval in Canada and a growing list of countries selling LIVMARLI in distributor markets. LIVMARLI indication expansion efforts are also making great progress with our PFIC application under review with the December 13, 2023 PDUFA date. We’re looking forward to the potential label expansion based on the compelling March Phase 3 data and bringing LIVMARLI to PFIC patients.

In addition, the EMBARK biliary atresia study is fully enrolled heading towards top line data later this year. Volixibat is also progressing nicely towards interim analysis and PSC and PVC later this year, positioning those studies to expand into their potentially registrational portions. And finally, on the fifth strategic pillar of product acquisition, we are advancing towards closing the acquisition of CHENODAL and CHOLBAM, two commercial products with over an aggregate of $100 million of annual net sales in 2022. As we’ve shared recently, we expect this acquisition to deepen our leadership in pediatric hepatology and accelerate our growth across our product line. We expect the transaction to close in the third quarter and are excited about the fit of these bile acid replacement medicines with LIVMARLI and the upcoming Phase 3 readout for CHENODAL and CTX.

Financially, we are well positioned to execute on our strategy. We ended the second quarter with a $330 million cash balance, and Q2 was another quarter of financial growth with relatively steady operating expense levels and a growing top line compared to the first quarter. The pending addition of CHENODAL and CHOLBAM offers an opportunity to further accelerate our revenue with a highly synergistic business. Concurrent to this pending acquisition, we entered a private placement agreement for $210 million supported by several existing and new investors, which we’ll use to fund the upfront payment in connection with the acquisition. This financing allows us to maintain the strength of our balance sheet and positions us for continued growth.

With that, I’ll pass the call over to Peter to discuss our commercial business in more detail before Pam gives an R&D update. Peter?

Peter Radovich: Thanks, Chris. We continue to see strong demand for LIVMARLI with $32.5 million in LIVMARLI net product sales in the second quarter of 2023, which represents 86% growth over the second quarter of 2022. Our U.S. business continues to perform well with net product sales of $26.2 million. This growth was driven by strong underlying new patient demand. Notably in Q2, we saw an increase in uptake by patients less than 12 months of age, consistent with the LIVMARLI label expansion to three months of age and older in March. Early treatment in Alagille syndrome is important to limit the impact of the disease, and we’re pleased to see LIVMARLI addressing this need in the real world setting. The U.S. business performance continues to track very well against our guidance of 50% growth in 2023 net product sales.

Turning to international markets. We continue to see strong de novo demand in Germany and France launches in line with what we saw in the U.S. launch of LIVMARLI. Pricing and reimbursement discussions are ongoing in major European markets, which we expect will continue throughout 2023 with full launches in most European countries starting in 2024. We also anticipate use of name patient programs in European and distributor markets to continue to grow throughout 2023. Overall, we are making great progress and are looking forward to our potential label expansion for PFIC in December in the United States and the upcoming readout of the EMBARK study in biliary atresia. We see the total opportunity for LIVMARLI across Alagille syndrome, PFIC and BA as greater than $1 billion, and that this opportunity is strengthened by our recently announced agreement to acquire CHENODAL and CHOLBAM, which will deepen our presence in pediatric hepatology and established a focused multi-product franchise.

There is a substantial amount of top and bottom line synergy to unlock by putting the bile asset portfolio and LIVMARLI together in the hands of one commercial team as the marketing efforts are similar in scope and the approach to market access, product distribution and patient services are quite complementary. We expect the bile asset products to continue to grow at low single digit rates annually with a potential indication expansion to CTX for CHENODAL, providing an upside opportunity to increase patient diagnosis and treatment upon approval. Financially, the strong second quarter net sales of $32.5 million for LIVMARLI and $27.5 million for CHENODAL and CHOLBAM reported today by Travere totals approximately $60 million for the future combined franchise with growth expected across all three products.

In summary, we are building on the tremendous momentum and potential of our expanded portfolio to deliver these important medicines to patients with rare liver diseases. On that note, I’ll turn the call over to Pam. Pam?

Pam Vig: Thanks, Peter. We are thrilled to be heading into a data rich second half of the year. First, as Chris mentioned, we are eagerly awaiting the December 13 PDUFA date for PFIC. Secondly, we announced in May the completed enrollment for the EMBARK Phase 2 study in biliary atresia. This study has a six-month primary endpoint assessing bilirubin, and we’re on track for the top line data readout later this year, which will be the first placebo-controlled data with an IBAT inhibitor in this setting. I’m also pleased to say that the Phase 2b VISTAS study of volixibat in PSC currently has the total number of patients randomized or in screening required for the interim analysis. This interim will be triggered when 45 randomized patients have been on study for a minimum of three months and is expected around year end.

In addition, the interim analysis for the Phase 2b VANTAGE study in PBC is also expected around the same time. As a reminder after these interim analyses, both studies will move into the potentially pivotal portion of the trial. And finally turning toward the pending acquisition. We have high confidence in the success of the RESTORE Phase 3 trial evaluating CHENODAL in patients with CTX and look forward to top line data in the fourth quarter. If positive, this study could support a label expansion for CTX with the potential for orphan exclusivity. Now, regarding our ongoing efforts to present the growing body of data on LIVMARLI, this summer, we presented 12 abstracts at both the EASL and the European pediatric hepatology congresses. These data demonstrated LIVMARLI’S significant ability to reduce bilirubin, symptoms associated with Alagille syndrome and PFIC, as well as real world data in which patients with Alagille syndrome came off of the liver transplant waiting list after LIVMARLI treatment.

In addition, we published a seminal analysis in hepatology demonstrating that pruritus, serum bile acids and bilirubin are significantly predictive for transplant and event-free survival in Alagille syndrome, showing that 93% of LIVMARLI-treated patients with pruritus reductions remain transplant free after six years. So in summary, the upcoming data readouts across indications along with the ongoing robust clinical evidence of LIVMARLI in both Alagille and PFIC cements our leadership position in pediatric hepatology. And we remain committed to growing our presence in rare disease. And with that, I’ll turn the call back over to Chris. Chris?

Chris Peetz: Thanks, Pam. Mirum is proud to be the leader in pediatric hepatology. The team continues to deliver high growth with LIVMARLI and make important advances in treatment options for cholestatic disease across our clinical programs. At the close of our acquisition of CHENODAL and CHOLBAM expected in the third quarter this year, we will have three approved rare disease products, an upcoming PDUFA date for label expansion for LIVMARLI, and four additional indications in development in high need orphan settings with upcoming clinical readouts. We are exceptionally positioned to expand our leadership and impact in rare disease and look forward to bringing these important medicines to patients around the world. With that, operator, please open the call for questions.

Q&A Session

Operator: Thank you. [Operator Instructions] We have our first question from Steve Seedhouse of Raymond James. Your line is open.

Steve Seedhouse: Hey. Good afternoon guys. I wanted to ask a couple questions about EMBARK. The first one is just are you – like our patient screening consented and ultimately enrolled in the study before they’ve had their Kasai procedure or in the days or weeks after? And I’m curious if there’s a lead in period sort of before treatment where you track bilirubin kinetics and see sort of what the response is to the surgery before initiating treatment. I have a couple follow-ups as well.

Pam Vig: Right. Thanks for the question. Appreciate it. So for the EMBARK study, the patients immediately post Kasai for the discussion happens sometimes prior to the Kasai procedure when they learn of the diagnosis after the baby is born. And so the consent process can happen either before the Kasai surgery or immediately after the Kasai surgery. But the goal is to get these patients on to the – was to get – we’re now fully enrolled, was to get these patients into the study as quickly as possible. There are no criteria for bilirubin in the study. So we’re not looking at any bilirubin effects post Kasai. We’re enrolling all patients and we’re really excited to have this study read out towards the end of the year.

Steve Seedhouse: Okay, great. Thanks for that. And then just on the six-month analysis, I’m curious if there’s a formal assessment of like transplant or other liver events already in that six-month time point or let’s say just through last follow-up of all the patients that are enrolled by the time you announced the six-month bilirubin analysis?

Pam Vig: Yes, thanks. So for the six-month primary endpoint as you note is bilirubin. But we are assessing in other key secondary outcomes transplant at that six-month time point, as well as other thresholds of bilirubin that are predictive of transplant. And then, these patients at the end of the double-blind treatment period roll over into open label extension. So we’ll continue to follow those patients long term.

Steve Seedhouse: Okay. And then just the last question I have was just on that open label extension. So I think, correct me if I’m wrong, I think it will go through 24 months total, so 18 months post the six-month analysis. And the question is, do you think you’ll have the ability to leverage natural history control cohort data in similar ways that just based on some quality databases in Alagille on PFIC for instance here for biliary atresia, or if not, is that work that you would hope to do at Mirum in the coming year? Thanks so much.

Pam Vig: Yes, that’s a great question. We’re actually doing that right now. We’re working with natural history registries, looking at kind of aligning those patients with the patients that are enrolled in our study and understanding a little bit more about thresholds and prognostic markers for transplant free survival. And we’ll continue to work with those registries throughout. We’re looking at six-month time points, and then we’ll obviously continue to look at long-term treatment versus natural history. So all of that will be kind of as much as we can in the timeframe. The package will contain our dataset plus work that we’re doing supported by the natural history, and we’ll have discussion with the FDA at that time.

Steve Seedhouse: Great. Thanks so much.

Chris Peetz: Thanks for the questions.

Operator: Your next question comes from Mani Foroohar of SVB Leerink.

Mani Foroohar: [Indiscernible]. Thanks for taking the question, guys. A quick commercial question. I know we had a little bit of discussion last year around 2Q, 3Q seasonality. Can you give a sense of where those trends are now? How should we think about modeling and sort of what are the sort of key metrics we should be following and thinking about as we think about going through each season this year?

Chris Peetz: Thanks for that question, Mani. Yes, so, we feel that what we’ve seen in Q2 is really strong demand. I feel really good about how the business is planned heading into Q3. But we’re worth mentioning, we’re just now beginning of August. So we’ll have to see how things unfold over the next couple months. But overall feel really good about how the business is planned going forward.

Mani Foroohar: Great. That’s helpful. And can you separately looking forward post presumptive deal close of the acquired assets, how should we think about margin evolving over time? Obviously, you’re going to have a little bit of expense that you bring on, but that’s going to be coming with a substantial amount of revenue. Is there room for further margin expansion going forward? On what time horizon might we see that as we transition from this Q4 first quarter with revenues from all the assets put together through next year?

Chris Peetz: Thanks Mani for the question. The overall picture of bringing CHENODAL and CHOLBAM into Mirum, we do see a tremendous amount of synergy. So they will contribute substantially to margin at Mirum because of the overlap in our business. A lot of that behind some of the rationale of why we’re so excited about bringing these products into our portfolio. We’re not going to be guiding towards margin, but what I can say is that the – this puts us on a very sound financial footing, and we do expect all three products to continue growing for the foreseeable future. So that will continue to improve financial performance as we go.

Mani Foroohar: Great. That’s really helpful. Thanks guys. Congrats on the quarter.

Chris Peetz: Yes, thanks, Mani.

Operator: We now have David Lebowitz of Citibank. Please go ahead when you’re ready.

Unidentified Analyst: Hi. Thanks for taking our question. This is Debanjana on for David. So we wanted to ask if you could update us on the timing of the closure of the Travere transaction? And also could we have some insight as to how the operating spend might shift post closure? Thank you.

Chris Peetz: Yes, thanks for the question. We’re tracking towards closing this quarter. So we do expect a Q3 close. And then, as we move into a post-close time period, we’re excited about jumping right into to bring these products over to Mirum. Overall, they’ll have a high impact in terms of margin and cash contribution right at the start in Q4. So see that synergy will play through in having these products in our hands. So expect that impact to show up with improved performance in Q4 from having these products at Mirum.

Unidentified Analyst: Okay. So maybe just a quick follow-up on that. So how – what’s your strategy on incorporating this product into your current pipeline? [Indiscernible].

Chris Peetz: Absolutely. Yes, we can – I’ll have Peter speak through some of the planning, but these fit very well with LIVMARLI and the current LIVMARLI business. I let Peter to get into some of the strategies we have planned.

Peter Radovich: Thanks, Chris. Yes, we’re really excited about bringing these products into Mirum and excited about bringing several really talented folks from Travere and to Mirum as well. We have a team right now that’s been out promoting LIVMARLI to pediatric hepatologists and anticipate that team continues. And also will have a team that focuses on physicians subspecialties that are often involved in identifying patients with bile acid synthesis disorders, Zellweger spectrum disorders, et cetera, that focus on neurology, ophthalmology, meta-genetics [ph]. So have a liver-focused team and what we’re calling a metabolics focused team and modest expansion to our field footprint. So pretty excited about how that plays out going forward.

Unidentified Analyst: Okay. That’s very helpful. Thank you.

Chris Peetz: Thanks for the questions.

Operator: Thank you. We now have Ed Arce of H.C. Wainwright.

Thomas Yip: Hi. Good afternoon, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for taking questions. Perhaps first question regarding the EMBARK data – regarding data positive and given LIVMARLI’s orphan drug designation for biliary atresia. Do you anticipate EMBARK top line data along with natural history data that you mentioned earlier? Do you think collectively that’s enough to support LIVMARLI’s approval?

Chris Peetz: Thanks Thomas for the question. Overall, that is – that’s our strategy to take that package to FDA. It is too early to say what the determination will be at this point that bilirubin has not yet been fully established as an endpoint for approval. And that’s the work that we’re doing with the EMBARK data and the natural history of work. So looking forward to putting together what we think will be a really compelling data set.

Thomas Yip: Okay. Got it. And then perhaps can you go over some major differences that of so far between the FDA and the EMA what they’re looking for treatable endpoint for biliary atresia?

Chris Peetz: Yes. Thanks for the question there. I mean, there we see a pretty common point of view in what we’ve had for our conversations, and I think it’s worth noting that there really is not a lot of clinical data or research that’s been done in this space. So the EMBARK study really is a landmark. It’s going to be the largest and first study of IBAT in the setting. And one of the few studies that actually has an intervention that early after the Kasai. So really important data set to bring forward to advance care for these patients.

Thomas Yip: Got it. And then perhaps one final question for volixibat, you mentioned the interim analysis for both VISTAS and VANTAGE studies both expected later this year. Can you tell us what type of data we can expect to see?

Pam Vig: Yes, thanks for the question. So for the PSC VISTAS study, this is a blinded interim. So we won’t be sharing any data, but it is for dose selection and then the study will upsize if need to or not, and then carry on if potentially registrational part two of the study. So wouldn’t expect any top line data out there, but would expect to be able to communicate that the study is carrying on and continuing on. For the PBC VANTAGE study, we will be sharing top line data. This is an open interim analysis and so we’ll be able to have a look at the data and we’ll be sharing that with you later.

Thomas Yip: Okay. Understood. Thank you again for taking the questions and looking forward to data from the VANTAGE study.

Chris Peetz: Yes, thanks Thomas.

Operator: Thank you. [Operator Instructions] Our next question comes from Brian Skorney with Baird.

Unidentified Analyst: Hi. This is Charlie on for Brian. So I wanted to ask about the SG&A, we’ve seen it climbing somewhat steadily over the past several quarters. Just want to know, particularly as you start to integrate the bile acid team from Travere, if we should expect that to keep rising, what kind of trajectory that’s going to take. And along a similar line, thinking about volixibat as that hopefully gets closer to getting commercialized. What kind of regulatory strategy are you taking going forward and considering that these are adult liver diseases? Will this require a different commercial sales force? Or do you think that you can also leverage the field force that you have currently? Thank you.

Chris Peetz: Thanks for the questions. I will comment a bit on SG&A and regulatory strategy and pass it over to Peter to talk about the field team. And for SG&A, what we have – what we see is kind of this modest increases over prior quarters, really driven by initially the launch in the U.S. and now some of the international markets that we’ve brought on. So just for the base business, some incremental SG&A increase over time is what we’d expect. And then with adding in CHENODAL and CHOLBAM that will bring incremental SG&A expense, but really modest compared to the top line opportunity. As you know, Peter was mentioning earlier, there’s a lot of synergy in how we approach those markets and the fit with LIVMARLI. So we are bringing some people over who have great experience with those products from Travere.

Excited about bringing those folks into the Mirum family. And – but overall, the total contribution will be quite attractive with these products in our hands. Now as we move forward to volixibat, which will be an opportunity to expand into adult hepatology. First, the endpoint and registration to comment on these studies incorporate pruritus as the primary endpoint similar to Alagille syndrome and the ongoing review for PFIC, the pruritus is the outcome for approval. And that’s what we’re using for the registration approach for the adult indications. I’ll let Peter comment on the commercialization strategy.

Peter Radovich: Yes. Thanks, Chris. So yes, I think we would be able to leverage our commercialization team and infrastructure to launch volixibat to adults. Our current team is primarily pediatric focused maybe goes to the lot of higher decile, larger volume adult liver doctors. But we would look to expand to a broader group of adult hepatologists, gastroenterologist. So I think of it as kind of an incremental build for that launch.

Unidentified Analyst: Great. Thanks a ton for the color and congrats on the quarter.

Chris Peetz: Thanks for the questions.

Operator: Thank you. I’d like to hand the call back over to Chris for any final remarks.

Chris Peetz: Great. Thanks, operator. And thanks again to everyone for joining today’s call. Have a great day. Good bye.

Operator: Thank you all for joining. I can confirm this does conclude today’s call. Please have a lovely rest of your day and you may now disconnect.