Mirum Pharmaceuticals, Inc. Q1 FY2021 Earnings Call

Welcome to the Mirum Pharmaceuticals Q1 Earnings Call. My name is Rees, and I will be your operator for today's call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. The operator provided instructions for the call. I will now turn the call over to Ian Clements. Ian, you may begin.

So thanks for joining us. As I mentioned, I'm joined today by our President and CEO, Chris Peetz, and our Chief Operating Officer, Peter Radovich. Earlier this afternoon, Mirum issued a news release announcing the company's results for the quarter ended March 31, 2021. 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 business plans, development programs, strategies, prospects, market opportunities and financial forecasts and guidance. These statements 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 Form 10-Q for the quarter ended March 31, 2021 and any subsequent reports filed with the SEC. With all of that said, I would like to turn the call over to Chris Peetz. Chris?

Great, thanks, Ian. Mirum is focused on advancing life-changing medicines for rare liver diseases. Today, we'll provide updates and context around some of the exciting recent steps we've taken in building Mirum as the leading rare liver disease company. It's an important time in realizing our vision. I'll cover our regulatory and pipeline updates, followed by Peter on global commercialization and then Ian with the financial update. First, recapping recent announcements. Our first potential launch is around the corner for maralixibat for Alagille syndrome in the U.S. with the PDUFA date in the third quarter. We strengthened our IP position with the patent allowance in the U.S. that extends exclusivity for maralixibat to 2040. We've broadened our pipeline to include late-stage programs in six indications and a gene therapy collaboration for PFIC. And we entered into a partnership for maralixibat in Greater China to accelerate the global launch of maralixibat. Today, we'll talk about these updates and the value we continue to build within Mirum's programs. With that, maralixibat has great momentum and is on the cusp of launch, if approved by the FDA. In March, our NDA was accepted for priority review by the FDA with the PDUFA date of September 29. We are planning to be launch-ready by late summer. The FDA also indicated that at this time, there are no plans for an advisory committee. From our standpoint, our regulatory review progress is on track, and we've been able to accommodate all inspections to date. If maralixibat is approved in the U.S., it would serve as the first treatment approved for patients with Alagille syndrome. Peter will share more with you about our launch readiness and the unveiling of our patient services program, Mirum Access Plus. We are optimistic about the benefit maralixibat can have for patients with Alagille syndrome. In the ICONIC study, which serves as our pivotal study, highly significant improvements in pruritus were observed, with more than 80% of patients achieving a clinically meaningful reduction in itch score. We have six years of follow-up data and are seeing durable responses across all three randomized studies of maralixibat in Alagille syndrome, a program that included 86 patients in total. Now we are analyzing the impact of maralixibat on event-free survival across these studies, looking at time to biliary diversion surgery, liver transplant, hepatic decompensation events or death. These data and natural history comparisons are planned to be part of our European filing for Alagille syndrome, anticipated next year as an indication expansion to the PFIC2 application. Our PFIC2 application in Europe has been validated. We are working through the review process and remain on track with our plans to launch maralixibat for PFIC2 in Europe in early 2022, should it be approved. As a reminder, this filing is based on key findings from the Indigo Phase II study: first, serum bile acid response leading to improvement in itch, growth and other liver parameters; second, improvements in transplant-free survival in those serum bile acid responders; and third, our filing includes comparisons to a natural history cohort on event-free survival. Turning to our Phase III MARCH-PFIC study, the study is advancing well with approximately 50 patients with PFIC subtypes 1, 2, 3 and 4 randomized across two cohorts. Some countries continue to be impacted by COVID-19 and competitive enrollment, so we now plan to extend enrollment in order to achieve the target number of patients per cohort. This study is projected to be the largest randomized study ever conducted in PFIC, and includes a broad range of genetic subtypes. As a reminder, MARCH-PFIC evaluates a higher dose of maralixibat that has been shown to drive greater bile acid clearing activity. And importantly, we remain on track to report top-line results in early 2022. Further strengthening our position in PFIC, we recently announced an exciting new gene therapy collaboration with Vivet Therapeutics, a leader in liver-directed gene therapy. While achieving incredible clinical results with maralixibat, including improvements in five-year transplant-free survival, we have recognized that there will be PFIC patients with genetic subtypes who will not respond to ASBT inhibition. This was the impetus for entering into the optional license agreement with Vivet for their two PFIC gene therapy programs. Our vision is that maralixibat will be first-line treatment in PFIC, and VTX-803 and VTX-802 will be second-line treatment options for patients with PFIC3 and PFIC2 and those patients who do not respond to ASBT inhibition. These programs work by addressing the root cause of the disease through correction of the defective genes that cause each condition. This is cutting-edge technology, and while early, it's our hope that these gene therapies could someday offer a cure for patients living with PFIC3 and PFIC2. In the collaboration, Vivet's experienced gene therapy team will lead work until IND submission and Mirum will lead the clinical development and commercialization globally. We look forward to sharing more with you as these studies progress. Of note, Vivet has two abstracts at the upcoming American Society for Gene and Cell Therapy showing additional preclinical proof-of-concept for VTX-803. Now shifting back to our clinical development programs underway. We were pleased to expand the maralixibat program with the initiation of the Phase IIb EMBARK study in Biliary Atresia. And we also significantly expanded our clinical programs for volixibat. We believe this is another potentially transformative treatment for several cholestatic liver diseases. Earlier this year, we launched our Phase IIb VISTAS study for adults with primary sclerosing cholangitis. More recently, we launched the Phase IIb OHANA study that will evaluate volixibat in intrahepatic cholestasis of pregnancy. And finally, a Phase IIb study in primary biliary cholangitis is targeted for later this year. We've incorporated FDA feedback into the design of all of these studies, all of which we believe are potentially registrational. We expect interim analysis for the VISTAS and OHANA studies to occur in 2022. So the growing body of evidence for maralixibat and volixibat strengthens the science and their potential transformative impact on the lives of patients with cholestatic liver diseases and their families. On that note, I will now turn it over to Peter, who will provide an overview of our launch readiness activities and partnership update. Peter?

Thanks, Chris. With our PDUFA date of September 29, just over a quarter away, we are working diligently to ensure we are ready to deliver maralixibat to the Alagille syndrome community, should it be approved by the FDA. Our goal is to establish maralixibat as the standard of care in Alagille syndrome. We believe in its opportunity to transform the management of this disease, offering an early treatment option that could potentially delay or prevent the need for liver transplant, which, as Chris said, is based on more than six years of clinical data in this patient population. If approved, maralixibat would serve as the first approval in Alagille syndrome and will represent the only pharmacologic therapy with clinical data to support its use. We have made great progress toward being launch-ready by late summer ahead of our PDUFA date. I'd like to spend a few moments highlighting some of these key activities. An important component of our launch strategy is ensuring thorough disease awareness of Alagille syndrome by health care professionals. To that end, we launched our Alagille syndrome disease awareness campaign, a program developed for health care providers to increase awareness of the disease, educate on pathophysiology, including the link between bile acids and clinical manifestations seen in patients, and to improve the time to diagnosis. Our goal is also to elevate awareness around the burden of pruritus, which is often the most troubling symptom for patients with Alagille syndrome and their families. To further ensure launch readiness, we have achieved several critical milestones that prime Mirum and maralixibat for success. For instance, hiring the right team is of utmost importance. Our colleagues in medical affairs were first to be fully on board and engaging in scientific discussions with our key pediatric liver centers. On the commercial side, we recently completed hiring of our U.S.-based team, including our field sales representatives. I'm particularly pleased with the highly scaled group we were able to bring together, which consists of broadly experienced professionals who have a track record of success in rare and pediatric disease markets. We also hired our payer account team, and we have filled other crucial commercial roles in market access, marketing, trade distribution and patient services. Together, this team of high-caliber, experienced professionals have worked to build the capabilities to launch maralixibat in Alagille syndrome and beyond. One hallmark of our launch readiness is the development of our patient support program, which we are calling Mirum Access Plus. The goal of this program is to provide a seamless and caring experience for patients and families, addressing key educational gaps for patients who are prescribed maralixibat through the deployment of a fully dedicated staff. We worked closely with patients, families, advocates and health care professionals to understand the needs and concerns that are of utmost importance as they think about starting a trial on a prescription medication for Alagille syndrome. This input has been invaluable to us and helped to establish what we hope will be a program that provides exceptional customer service and one that provides support around the issues that are really critical to families as they navigate a new diagnosis and treatment. In Alagille syndrome, many patients exhibit a range of symptoms and are no strangers to prescription medications and the associated issues that often follow. Through our payer team, our goal is to ensure broad payer coverage. Our payer team has already begun discussions with payers as a top prelaunch priority and to date, have engaged with payers covering approximately 95% of United States lives. Through these conversations, we will introduce maralixibat and our focus on cholestatic liver disease, helping to underscore the disease burden as well as to provide key clinical detail around maralixibat to accelerate formulary reviews. Post launch, the team's goal is to gain formulary acceptance and align payer clinical management criteria to evidence-based medicine. Turning to our plans for commercializing maralixibat in Europe. Earlier this year, the EMA validated our marketing authorization application for maralixibat for patients with PFIC2, which puts us on track for a launch in early 2022, if approved. To support the launch in Europe and globally, we are building out our team in Europe and have begun to fill key roles. We are also actively preparing for payer dossier submissions in key markets. Our strategy is to have a targeted approach, focused on larger European markets first, while leveraging early access programs. More broadly, our goal is to extend maralixibat's availability worldwide through partnerships with distributors or out-licensing opportunities in the regions outside of Mirum's direct operations in the United States and Europe. We've engaged in conversations with top rare disease companies with local expertise who have a proven track record of success in commercializing treatments in high unmet need rare disease settings. With this strategy in mind, we announced last week our first out-licensing agreement with CANbridge Pharmaceuticals, a leading rare disease company based in China. We believe CANbridge is a strong strategic partner who is poised to accelerate the global launch of maralixibat in China, Taiwan, Hong Kong and Macau based on their experience developing and commercializing medications for patients in these highly populous regions. They will also support the development of maralixibat's availability and distribution. We look forward to sharing more about additional geographic expansion efforts in the coming months. I came to Mirum last year because of my enthusiasm and confidence in what maralixibat has proven in the clinic and I'm thrilled to be at the forefront of delivering the first medication for the Alagille syndrome community. I also look forward to keeping you appraised of our great progress as we near launch. I’ll now turn the call over to Ian to share an update on our financial health. Ian?

Thanks, Peter. I’m not going to do a deep dive into our quarterly financials, as those are available in the press release we distributed earlier this afternoon and in the Form 10-Q, both of which you can view in the Investors & Media section of our corporate website at mirumpharma.com. I will, however, provide an overview of what we believe to be the highlights that demonstrate our financial strength and position us well to support the launch of maralixibat in two geographies, if approved, as well as advance our development pipeline for both maralixibat and volixibat. From a balance sheet perspective, at the close of the first quarter ended March 31, 2021 we had cash, cash equivalents and investments of $230.1 million. Subsequent to the quarter end in April, we received $65 million from Oberland Capital related to the acceptance of our NDA for maralixibat in Alagille syndrome. As a reminder, we also have access to up to a further $85 million from Oberland Capital. This figure comprises: one, $35 million upon approval of our NDA for maralixibat in Alagille syndrome; and two, a further $50 million from mutually agreed upon in-licensing or acquisition opportunities. Additionally, we anticipate receiving the rare pediatric disease priority review voucher in connection with our expected FDA approval of maralixibat later this year that may provide a source of funds. With respect to operating expenses, first, G&A expense: for the quarter ended March 31, 2021, our G&A expenses were $9.5 million and this reflects increased activity around launch readiness, including market research, disease state awareness activities and increased personnel costs to support our planned launches, if approved. Second, R&D expenses were $38.1 million, which included $15 million of milestone-related expense, consisting of $5 million which would have been due had we initiated a Phase 3 clinical trial in Alagille syndrome, and $10 million associated with the acceptance of the company's NDA filing for maralixibat for the treatment of cholestatic pruritus in patients with Alagille syndrome. Now turning to our recent business development activities. First, regarding our option and licensing agreement with Vivet Therapeutics, we paid an upfront fee of EUR 3.5 million and additional expense of EUR 5.3 million for initial development work. We'll also contribute ongoing cost-sharing payments on development work with potential progress payments and opt-in payments at option exercise. We'll also receive mid- to high-single digit royalties on sales of VTX-803 and VTX-802, if approved. Finally, turning to our recently announced licensing agreement with CANbridge Pharmaceuticals. As Peter outlined, last week we entered into an agreement with CANbridge. Under the terms of this licensing agreement, CANbridge has obtained the exclusive rights to develop and commercialize maralixibat within the Greater China regions for Alagille syndrome, PFIC and Biliary Atresia. In exchange, we're entitled to receive an $11 million upfront payment, R&D funding, and up to $109 million for the achievement of future regulatory and commercial milestones for maralixibat, plus significant double-digit tiered royalties based on product net sales. Our strong and healthy balance sheet is a testament to strategic investments, judicious spend and planning surrounding our upcoming anticipated launches and continued pipeline development. With access to approximately $400 million in capital, we expect our cash position to sustain our operations for the next three years. With that, I'll turn the call over to Chris for final comments. Chris?

Thanks, Ian. And thanks again to everyone who joined the call today. Before we go to questions, I wanted to share a few final thoughts. We are paving the way to be the leader in the treatment of rare liver diseases with clinical programs across a wide range of indications. We take pride in the strong value of scientific evidence that we have built, including more than six years of outcomes and safety data in both Alagille syndrome and PFIC. We have numerous clinical and commercial milestones ahead in both the U.S. and Europe. We are confident in our ability to achieve these milestones and create a remarkable impact on the lives of patients and their families. A quick recap of these milestones: first, we plan to launch maralixibat for the treatment of pruritus in patients with Alagille syndrome in the U.S. in Q3, if approved. Our European application for maralixibat in PFIC2 was validated, and we are planning to launch in Europe in early 2022 if approved. We expect top-line data from our Phase III MARCH-PFIC study in early 2022. We expect interim analyses from our two volixibat Phase IIb programs for ICP and PSC next year as well. And finally, in the second half of this year, we will be initiating a Phase IIb study evaluating volixibat in patients with primary biliary cholangitis. We have built a strong team and a pipeline with tremendous potential. We are positioned for success and meaningful outcomes for our patients and families and also in creating significant value for our shareholders. Thanks again for joining us. Ian, Peter and I are happy to take your questions. Operator, will you please remind everyone of the prompt?

Absolutely. Thank you. We will now begin the question-and-answer session. The operator provided instructions for participants to enter the queue for questions. And we have our first question from Mani Foroohar from SVB Leerink. Please go ahead with your question.

Thanks for taking my question. It’s Mani Foroohar. So some really obvious and boring questions because someone has to. In anticipation of the launch, obviously, there's an element of warehoused patient volume in the EAP, clinically beneficial for the patients, obviously, and a little bit of uncertainty around timing of those patients transitioning to commercial pay and flowing through the income statement. How should we expect you to disclose metrics around EAP, patient numbers, new starts, start forms, give us a sense of what the metrics we should expect? And on what time horizon would you expect to transition to just giving us a revenue number?

Great. Thanks, Mani, for the question. From a high-level standpoint, at this point we don't have specific metrics that we're going to be communicating before approval, but what I can tell you is that there is really great interest across U.S. and ex-U.S. countries in the expanded access program. So we have multiple sites open and multiple patients at a number of those sites. So that effect is happening out there, but it's not something that we'll give updates on ahead of the approval. Keep in mind that we also have some of the patients from the original maralixibat studies in Alagille syndrome; many of them remain on therapy long term. With that as a setting for expectations a bit, maybe I'll turn to Peter to comment a little bit on how we think about managing that transition to really convert some of these patients to commercial supply upon approval.

Thanks, Chris, and thanks for the question, Mani. Yes, the Mirum Access Plus program will be in touch with those patients. I think the first and most important point is we'll ensure uninterrupted supply through the approval process and we'll be in touch with them around the time of approval. In terms of being able to comment on precise timelines, there is heterogeneity of payers in the U.S., and what we'd expect to see is variability on formulary coverage decisions and access decisions on the commercial side as well as variability on the state Medicaid side. So I think as we get into the launch, we'll be able to give you more details on how that's going, which I think will ultimately be what drives the timing for those patients coming over to reimbursement of the product.

Great. That's really helpful. And I guess the other question, now that we're entering into a world where we've got very uneven pandemic status, hospital volume status, et cetera. Just looking at how do you — as you continue to have multiple Phase IIb studies, et cetera, how should we think about the geographic split of enrollment in your ongoing late-stage studies, especially MARCH-PFIC, et cetera?

Thanks for the follow-up. A couple of comments on what we're seeing out there. There is clearly different impact by country. As we look at the volixibat program and the Biliary Atresia study where we've opened those up first in the U.S., we're not really seeing any COVID impact on sites in the U.S. in a meaningful way at this point. On some of the upcoming country openings that we have in those programs, a lot of those are in countries that in the early starts aren't as impacted. So we're not projecting any headwinds from a pandemic standpoint as we look at volixibat and Biliary Atresia rollout. The UK, for example, is one of the key countries ahead for us, where there aren't as many restrictions currently.

Great. That's really helpful. I'll hop back in the queue.

Great, thanks, Mani.

Our next question is from Yasmeen Rahimi from Piper Sandler.

Hi, team. This is Steffi on for Yas. Can you guys hear me okay?

Yes, we hear you.

Cool. First, thank you for taking our questions and congrats on the progress this quarter. I had three. Do you want to go one at a time or should I roll them off at once?

Oh, I think one at a time sounds good; high-risk to try and remember all three.

Okay, cool. So my first question is for the MARCH-PFIC study. You noted that there's expanded enrollment due to COVID. Can you provide us some color on the enrollment updates, like how many sites are going to be open, or when you expect that one to be fully enrolled?

Yes, thanks for the question. Helpful to get into some of the color here. From a starting point, we have approximately 50 patients randomized currently. So we've made tremendous progress in terms of tracking towards the largest randomized study ever conducted in this setting. We're also seeing a very broad mix of genetic subtypes — the current enrollment includes PFIC types 1, 2, 3, and 4. In terms of impact by site over time, it evolved over the course of the pandemic and continues to be dependent on how each country is managing factors locally. At this point we have a broad geographic spread of sites and we're getting close to where we want in terms of a mix of patient subtypes as well as the number of PFIC2 patients in the study.

Cool. Thank you. And then my next question is what information is needed to kick off the Phase IIb in PBC in the second half of the year?

Yes, so for the volixibat PBC study, we recently completed follow-up steps with FDA to finalize our protocol in the IND. At this point we are just completing some of the operational steps for startup. So that's around the corner. For all of the volixibat programs, we felt it was important to meet with regulators and discuss the endpoints, so that we could incorporate everything they wanted to see for an NDA. We took a full shot on the goal of these studies as potentially registrational.

Cool. Thank you. And then my last question is referring to EASL. What data should we expect to see for maralixibat in the next two months?

Thanks for the question. For conference abstracts, we'll have an announcement just ahead of the conference in terms of what we're presenting. We do have abstracts covering the maralixibat program in a number of analyses. I think the most exciting analysis that people are interested in is some of the long-term event-free survival analysis that we've been conducting for Alagille syndrome. We're in the midst of finalizing some of that work now, so it is not submitted for EASL, and you can look for that later this year.

Our next question comes from Etzer Darout from Guggenheim Partners. Please go ahead.

Hey, this is Paul on for Etzer. Thanks for taking our question. I have a follow-up on the EAP comments earlier and the interest in maralixibat in a number of countries across the globe. Can you speak on any feedback you've received on the drug from physicians and patients from that program? And then maybe how that could influence your focus for efforts beyond the U.S. and major EU countries?

Thanks for the question. A couple of comments to make there. First, the feedback has been positive. We've heard back from different channels that overall the experience is good. More concretely, we are incorporating the first cohort of these expanded access patients into data that will ultimately be submitted to FDA, further expanding the amount of maralixibat data that gets worked into the filing. That will also inform our global approach.

Great. Just a quick follow-up then on the gene therapy programs from your partnership. Where are these assets currently in preclinical development? And how far away might they be from the clinic?

Great. So just to clarify, I heard the question on the timeline for the Vivet collaboration to get into the clinic. I'll let Peter comment a little bit on some of the work that's going on there and what you can expect ahead.

Thanks for the question. Vivet has an AAV platform, and they're working on optimizing both of these vectors right now. The VTX-803 program in PFIC3 is further along. While it's important to note that research is difficult to put timelines around, we think there's an IND in a one-to-two-year window for the VTX-803 program, with the VTX-802 program following behind that.

Thank you.

Our next question comes from Brian Skorney from Baird.

Hi. Thank you for taking the question. This is Jack Allen on for Brian. You mentioned your disease awareness campaign. I was wondering if you could elaborate a little bit on that program. And are you contributing to any testing programs to help identify patients and develop a patient database?

Yes. Thanks for the question. With regards to the disease awareness campaign, I can provide some color on the strategy. One of the things we see in rare diseases almost universally is that promoting disease awareness to the medical community itself is among the most important things — not even promoting a product. We talked about the 125 key accounts, and really the top centers and experts are well aware, but outside of that there's not a lot of awareness of the symptoms, how to make the diagnosis, and the patient journey for Alagille syndrome. So we focused our disease awareness campaign on trying to reach the broader community of health care professionals beyond just the top centers: community-based pediatric GI doctors, neonatologists, and even some regional primary care. Of course, this is non-personal promotion. The idea here is to increase awareness of the disease, shorten time to diagnosis, and educate on the link between bile acids themselves and adverse clinical outcomes. This is an opportunity for market shaping that we undertook ahead of anticipated approval. On testing, we do have collaboration work led by a third-party testing consortium, and we provide support to them as an industry partner to enable a testing program. I believe their panel is now almost up to 70 genes for children with cholestasis, which helps improve diagnosis over the years. We've been involved and that aligns with the epidemiology we discuss for Alagille syndrome, which we estimate is about 2,000 to 2,500 patients in the U.S.

Great. Thank you.

Our next question comes from Steve Seedhouse from Raymond James.

Good afternoon. This is Ryan Deschner on for Steve. I wanted to ask a little bit more about the Vivet potential assets. How different would primary and secondary endpoints and serum biomarkers look for a clinical VTX-803 program in PFIC3 versus maralixibat in PFIC2? And is expansion into other PFIC subtypes a possibility?

Thanks, Ryan. A couple of points: as we think about gene therapy in PFIC3 and PFIC2, the approach is to restore transporter functionality for patients who have mutations that lead to a complete or near-complete lack of function in that transporter. In effect, what we're trying to do is achieve an effect similar to correcting the underlying defect versus the ASBT inhibition approach. For patients who have no transporter function, ASBT inhibition is unlikely to be effective, so these gene therapies would be most impactful in those severe patients. In terms of what you would measure, you would look at many of the same measures: levels of serum bile acids as a primary marker of cholestasis and bile transport function, and other liver parameters — improvements there indicate better overall liver health. Those are the types of endpoints and biomarkers you would expect to see evaluated.

Okay. And did I hear correctly that the target timeline or the targeted regulatory positioning for exercising the licensing option would theoretically be around the time of IND for these assets?

That’s correct. It is addressed on a product-by-product basis: VTX-803 for PFIC3, VTX-802 for PFIC2. We can make a decision up through IND acceptance.

Okay. Thank you very much.

Thanks for the question.

There are currently no further questions in the queue. The operator provided final instructions. Please continue.

Thanks, operator. We can go ahead and wrap and make a couple of closing comments. First of all, thank you to all those who joined us today. As we shared, this is a big year for Mirum; we're advancing potentially life-changing therapies for rare liver disease. Our approval and launch of maralixibat for Alagille syndrome is expected next quarter, if approved. Our pipeline has expanded to six late-stage indications and includes a gene therapy collaboration for PFIC. We project our balance sheet and future access to non-dilutive capital provides three-plus years of runway. We look forward to sharing updates in the coming months. Thanks so much.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.