Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) Q3 2023 Earnings Call Transcript

Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) Q3 2023 Earnings Call Transcript November 5, 2023

Operator: Good afternoon. I would like to welcome you all to the Mirum Pharmaceuticals Conference Call. My name is Brika and I’ll be the event specialist running today’s call with you. [Operator Instructions]. I would now like to pass the call over to your host, Andrew McKibben, Vice President of Investor Relations to begin. So Andrew, you may begin.

Andrew McKibben: Thanks, Brika, and good afternoon, everyone. I’d like to welcome you to Mirum Pharmaceuticals’ Third Quarter 2023 Conference Call. I’m joined today by our President and CEO, Chris Peetz; our Chief Operating Officer, Peter Radovich, our Head of Research and Development, Pam Vig and our newest team member Eric Bjerkholt, our Chief Financial Officer. Earlier today, Mirum issued a news release announcing the company’s results for the third 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 and 10-Q issued today. 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-K for the year ended December 31, 2022 and subsequent reports filed with the SEC. With that said, I’d like to turn the call over to Chris. Chris?

Christopher Peetz: Thanks, Andrew, and good afternoon to everyone. This was another strong quarter of execution at Mirum. The team has continued to grow our business by focusing on delivering life-changing medicines for patients and their families living with rare diseases. We have achieved multiple goals this quarter, including realizing total revenue of $47.7 million for the quarter. We saw continued strong global adoption of LIVMARLI. We also completed the acquisition of 2 high impact and synergistic commercial medicines, CHENODAL and CHOLBAM. We continued our commitment to delivering on our pipeline with the recent positive RESTORE Phase III study readout and upcoming clinical and regulatory milestones. And all of this has been accomplished while improving our financial position in terms of performance and balance sheet.

These achievements come alongside another special milestone for Mirum coming up this weekend, our 5-year anniversary of launching the company. I’d like to thank the Mirum team’s dedication, perseverance and unmatched spirit for making all of our success possible in a short time with much more to come. Now moving to LIVMARLI, we see steady demand growth in the U.S. and internationally. This reflects the positive impact of LIVMARLI for patients and families in the Alagille syndrome community and also the focused execution of the Mirum team to make this important medicine accessible to patients around the world. I am proud of what we’ve been able to accomplish with LIVMARLI and Alagille syndrome and what that means for our execution on our expanded portfolio.

This quarter, we grew our business with the acquisition of 2 commercial medicines, CHENODAL and CHOLBAM and have assumed sponsorship of a broadly used cholestasis genetic testing panel, vital for diagnosing several rare genetic disorders that is free to patients and providers. This has created a leading pediatric hepatology franchise and also brings significant and growing revenue contribution with approximately $100 million in annual net product sales from the bile acid portfolio. Regarding our pipeline, we have made good progress here as well. In October, we announced positive data from the Phase III RESTORE study, evaluating CHENODAL and patients with cerebrotendinous xanthomatosis or CTX. The data showed CHENODAL has a significant impact across key measures of the disease.

And this Phase III data set and the potential approval of CHENODAL for CTX is a critical step forward for CTX patients. We plan to submit a new drug application for CTX to the FDA in the first half of 2024. We also look forward to significant upcoming milestones and opportunities to support LIVMARLI, with the March 13 PDUFA date for PFIC and our upcoming Phase IIB data and biliary atresia. And for volixibat, we expect to conduct our interim analyses in PSC and PBC in the first half of next year. Now, before I turn the call over to Peter to discuss our commercial business, I want to welcome our new CFO, Eric Bjerkholt, who joined Mirum in September. We are thrilled to have Eric and his extensive leadership experience, helping to drive the growth and value creation we see ahead for Mirum.

We’ll hear from him later in the call. And with that, I’ll turn the call over to Peter. Peter?

Peter Radovich: Thanks, Chris. With total revenue reaching $47.7 million in Q3, we are excited by the tremendous progress that we have made across our U.S. and international businesses. Our team continues to bring LIVMARLI to more patients worldwide. And we have taken significant steps in establishing a leading pediatric hepatology franchise through the ongoing execution of our commercial strategy with LIVMARLI and the addition of CHENODAL and CHOLBAM. Starting with LIVMARLI, in the third quarter, our revenues grew to $39 million in total net product sales, which represents over 100% growth before the addition of the bile acid portfolio. This reflects the life-changing impact LIVMARLI is having in Alagille patients with pruritus and the excellent execution of our commercial team.

The U.S. business, which saw $28.6 million this quarter, continues to grow. Internationally, we see similar strength in patient uptake in Germany and France as well as distributor markets. Going forward, we continue to anticipate quarter-to-quarter variability in international revenue. Overall, we are looking forward to our continued expansion in both the U.S. and globally and are excited for the opportunity to broaden access to LIVMARLI to patients with Alagille syndrome and future indications. Moving to CHENODAL and CHOLBAM, the addition of these medicines presents a significant opportunity to both augment LIVMARLI’s growth and significantly enhance our relationships with the patient communities and prescribers in pediatric hepatology. There are striking similarities between the commercial models for these medicines.

So in the hands of one team, we expect top and bottom line synergies. In terms of our commercial strategy, our pediatric hepatology team has been extremely effective. So we don’t plan to change a model that is working well. But we do see some opportunity to augment our efforts with the expertise that we have brought in contributor. Pediatric hepatologists are the main call point for LIVMARLI and CHOLBAM. And we will continue to deepen our relationships with these prescribers through our expanded offering of high-impact medicines and our branded cholestasis genetic testing panel, which is an important diagnostic tool that positions Mirum as a partner from the start of the patient journey. While CHOLBAM and CHENODAL have grown steadily over the last several years, we see opportunity to improve diagnosis and increase treatment across these indications.

In CTX, for example, the consequences of the disease first manifests in organs other than the liver, such as juvenile bilateral cataracts and may not be linked to CTX until much later in adulthood, usually after irreversible neurological damage has occurred. To address this gap in diagnosis and treatment, we have increased investment in disease awareness and diagnosis among specialties where this disease often first presents such as ophthalmology, neurology and medical genetics. This expanded team will allow us to reach more patients earlier in their journey and is a key step as we prepare for a potential approval and launch in CTX. In summary, we are thrilled by the addition of the new products and team members and look to build on the tremendous momentum we’ve achieved, delivering important medicines to even more patients with rare liver diseases.

On that note, I’ll turn the call over to Pam. Pam?

Pamela Vig: Thanks, Peter. Last month, our team announced positive data from the Phase III RESTORE study evaluating CHENODAL in CTX. The study objective was to evaluate the safety and efficacy of CHENODAL by measurement of urine bile alcohols and other biomarker measures, including cholestanol. The study showed the market had statistically significant improvement across the primary and all key secondary endpoints, demonstrating a broad and consistent effect of CHENODAL in patients with CTX. As a reminder, disease progression in CTX is due to the accumulation of cholestanol in the tissue and brain. And we were thrilled to see the depth of improvement across all measures. In particular, the cholestanol results are a critical finding.

Prior to this, it was not certain that treatment with CHENODAL could impact cholestanol levels this quickly. And the results of the RESTORE trial highlight the importance to diagnose and treat CTX patients as early as possible. Additionally, a greater proportion of patients receiving placebo required rescue therapy, demonstrating the immediate impact of CHENODAL and CTX. And while CHENODAL is currently standard-of-care in CTX and recognized as a medical necessity by the FDA, we are very pleased that the results confirm the life-changing impact CHENODAL can have for these patients. We’re grateful to the work the Travere team has put into the development and execution of this study, including selection of the endpoints, which were developed in close collaboration with the FDA.

And with these strong results, we believe we are well positioned for our NDA filing, which we expect in the first half of next year. Moving on to clinical milestones, we’re looking forward to reporting top line data later this year from our Phase IIB EMBARK study of LIVMARLI for pediatric patients with biliary atresia, which will be the first placebo-controlled data with an IBAT inhibitor in this setting. For volixibat in PSC and PBC, we expect to report on the interim analysis in the first half of next year. We continue to push on screening activities and are looking forward to sharing the interim data. Lastly, I’m proud of the growing body of important clinical data and real-world evidence validating the role of LIVMARLI for patients with Alagille syndrome and PFIC.

The body of research we presented at the ESPGHAN meeting recently, including data from our March PFIC Phase III study and real-world experience in Alagille syndrome, speaks to the tremendous effects across the clinical and real-world settings. In summary, Mirum’s leadership position in pediatric hepatology continues to build, and we remain committed to growing our presence across these indications. We also look forward to the multiple upcoming data readouts across settings where we believe IBAT inhibition can play a key role in changing the treatment paradigm for patients living with biliary atresia, PSC, and PBC. And with that, I’ll now turn the call over to Eric to discuss our financial results. Eric?

Eric Bjerkholt: Thanks, Pam. Before I begin, I’d like to mention how pleased I am to have joined the Mirum team at such an exciting time for the company, and I look forward to helping advance new medicines for patients with rare diseases. Now for the third quarter financial results, earlier today, we issued a press release that included financial results for the quarter, which I’ll briefly summarize. Full details can be found in the Form 10-Q also filed today. As highlighted by Chris and Peter, we recognized $47.7 million of net product sales in the third quarter, a 47% increase over net sales the previous quarter. This reflects product sales of $38.7 million for LIVMARLI, as well as $9 million for CHENODAL and CHOLBAM. I’d like to point out that for the bile acid products, we only recognized product sales since the date of the transaction closed on August 31, but we’ll see the full quarterly contribution of these medicines in the fourth quarter of this year.

Our total operating expenses for the quarter were $72.9 million, which includes R&D expenses of $26.1 million, SG&A expenses of $36.5 million, and cost of sales of $10.2 million. For the quarter ended September 30, net loss were $23.6 million, or $0.57 a share. Net loss for the quarter included non-cash stock-based compensation expense of $8.4 million and intangible amortization of $2.6 million. At the close of the third quarter end of September 30, 2023, we had cash, cash equivalents, and investments of $306 million. In summary, we’re well-funded with a growing revenue base, which places us in an exceptional position to execute on our business plan, including execution of our clinical trials and continued expansion of our global commercial presence over the coming years.

Now I’ll turn the call back over to Chris for final comments.

Christopher Peetz: Thanks, Eric. As you can tell, Mirum has continued to execute on all fronts. We’ve built the leading franchise in pediatric hepatology with 3 standard-of-care medicines and the leading genetic testing tool. We are seeing strong sales growth across all of our medicines. We’ve generated important Phase III data to support the filing for approval of CHENODAL and CTX. We have several clinical and regulatory catalysts ahead as we strive to make continued advances for rare disease patients around the world. And we’ve accomplished all of this while putting Mirum in a strong financial position. We look forward to keeping you updated on our exciting progress as we head into 2024. And with that, operator, please open the call for questions.

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Q&A Session

Operator: [Operator Instructions]. We have the first question from Josh Schimmer of Cantor.

Josh Schimmer: Congrats on another exceptional quarter. I just wanted to ask, because Ipsen on their call indicated that they had seen some switching of patients from LIVMARLI to Bylvay for Alagille syndrome. I’m curious as to what you’re actually seeing from your lens and whether you expect their launch to impede at the strong growth curve you’ve been on for LIVMARLI.

Christopher Peetz: Thanks, Josh for the question, I’ll hand it over to Peter to talk about the competitive dynamic.

Peter Radovich: Yes. Thanks, Josh. And indeed, LIVMARLI has been approved and marketed in the U.S. for over 2 years now. And Q3 is the first quarter where there was another product available in Alagille syndrome. And I think that what we’d really point you to is the headline tape. The net revenue that we saw in Q3 was a really strong step up over Q2. In fact, even a little stronger than what we saw from Q1 to Q2 in terms of LIVMARLI U.S. sales. So I think the story is there that LIVMARLI’s trajectory is very strong and it’s not been impacted.

Josh Schimmer: Can you comment on the split between U.S. and rest of the world as well? Can you comment on whether you have seen any attrition of patients to Bylvay? And if so, how many and why do you think they might have switched?

Christopher Peetz: Well, I think Peter commented on the U.S. dynamic. Internationally, the regulatory situation is a bit different where we’ve not seen in Europe, for example, an approval of Bylvay and Alagille syndrome. And so we are continuing to grow and add patients there. It’s a really strong situation for international markets really anchored around Europe at this point.

Operator: Your next question comes from Gavin Clark-Gartner of Evercore ISI.

Gavin Clark-Gartner: Congrats on the quarter. For the EMBARK readout, what is the baseline bilirubin value taken in relation to the Kasai procedure?

Pamela Vig: Yes, thanks for the question. So the baseline bilirubin that we see in the EMBARK study is very similar to what’s observed in the natural history. Pre-Kasai, it’s close to about 10, which has been shown in a few literature papers, about 9.5 to 10. And post-Kasai, we see it around 7. And so that really leaves a lot of room in the 6 months for improvement of treatment. So looking forward to sharing that data later this year.

Gavin Clark-Gartner: And just to clarify, is the baseline value for the trial after the Kasai when it’s around the 7 value?

Pamela Vig: It is. It’s after the Kasai.

Operator: We now have Mani Foroohar of Leerink Partners.

Mani Foroohar: Congrats on a strong quarter. I guess a broader question around sort of looking past approval of the NDA and now that you have the Chenodal Phase II positive data in hand. How should we think about avenues that you have available to you to accelerate growth, whether through pricing, promotional opportunities, et cetera, that perhaps weren’t available when this — prior to having that data on FDA approval? And how do we think about avenues to accelerate growth in that asset and potentially expand margins and the consequence?

Christopher Peetz: Yes, thanks for the question, Mani. Yes, I think, we anticipate FDA approval of CHENODAL and CTX, potential approval in 2025. And thinking from that point, really the opportunity here is to increase the diagnosis rate. Once you have a diagnosed patient in a clinic, we see substantially all patients are offered CHENODAL already. It’s really seen as a necessity. But we do know from KOLs and literature, diagnosis rates are quite low. We think only 10% of patients approximately are diagnosed. So we’ve spent a lot of time thinking about what can we do to increase that 10%. Obviously, you don’t have to do a lot to make a difference in terms of the growth of the product. So we’re — we have a team and efforts around, promote disease state awareness, genetic testing, and neurology, ophthalmology, medical genetics, to try to find more patients, essentially, and bring more patients into a diagnosis and under care.