Mirum Pharmaceuticals, Inc. Q1 FY2024 Earnings Call

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. There will be an opportunity to ask questions today. I will now hand the call over to Andrew McKibben, Vice President of Investor Relations, to begin. Please go ahead.

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?

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 advance volixibat to market. We continue to build value while delivering on our commitment to create and commercialize life-changing medicines for rare diseases. 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, 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 for 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 keynotes for the treatment of CTX. And third, we are advancing volixibat in PSC and PBC, which are more common adult cholestatic conditions 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?

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. 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 paid 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?

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 an 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 unblind it 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 a 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 outposts 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 top-line 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 with 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 have a severe symptomatic burden. We'll provide an update on projections for the completion of enrollment for both studies when we announce 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?

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, selling expenses of $45.6 million, and the cost of sales of $17.8 million. Total operating expenses for the quarter included approximately $17.1 million of noncash charges. For the quarter ended March 31, the 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 the expansion of our global commercial business. Now I'll turn the call back over to Chris for final comments.

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 expansions and opportunity launches and are very much looking forward to the volixibat interims ahead. And with that, operator, please open the call for questions.

Your first question on the line comes from Jessica Fye of JPMorgan.

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?

Thanks, Jess, for the question. Joanne, can you jump in and talk a little bit about the background setting?

Yes. Thanks, Chris, and thanks, Jess, for the question. We think actually that the way that we designed the studies makes 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 levels of pruritus. So a little bit different than some of the other trials that have been for the other agents in this area. So we really think this translates to use in first line ultimately for PBC. For PSC, as you know, there are no other therapies, and we know that a majority of patients with both these diseases, PSC and PBC, do have pruritus. So we think the way we've designed the studies with a very broad inclusion criteria does allow us to translate a very real-world issue into our studies and therefore, gives us reliable information.

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

Yes. Well, thanks for the follow-up, Jessica. So we know IBAT inhibitors quite well. And I will say, so far, volixibat tracks in line with what we know, and we know exactly how to dose these and what to look for. So we don't expect really any surprises in this way.

Your next question comes from Mani Foroohar from Leerink Partners.

A quick one. You mentioned a $3 million impact this quarter, it sounds like, from 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 to 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?

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

It's a one-time effect that ended by the end of the quarter, so I don’t anticipate any ongoing effects in future quarters. Overall demand for all our products increased, and total prescriptions grew during the quarter, which is why we are very confident in the $310 million to $320 million estimate. Regarding the $3 million, attributing it to individual products would be inaccurate. We view the $3 million as an impact across the U.S. business.

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

I think it's probably balanced. You could think about it generally in proportion to the size of the products.

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 the $310 million to $320 million as fairly consistent, or is more of the growth back-end weighted until like Q3 into Q4? How should we think about that from a modeling perspective now that we're sort of deeper into the year?

Yes. I mean, the way we think about it is generally consistent. 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 will probably contribute 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.

The next question on the line comes from Gavin Clark-Gartner of Evercore ISI.

Congrats on the progress. PSC, I believe you noted there was a 1.75 expected pruritus benefit in 3 standard deviation that was informing your powering assumptions. Was that 1.75 absolute or placebo adjusted? And maybe just remind us your expectations for the placebo arm for this trial?

Yes. So yes, thanks for the question, Gavin. By 1.75, we mean the treatment difference, so active compared to placebo. 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 position the study. But we did want to share at least our starting point for looking at the study design.

Yes, that's helpful. And are you able to share the baseline pruritus scores for either trial for volixibat?

Not at this point. We will be happy to share information when we present the interims in June. We look forward to that along with you.

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

Yes. Thanks for the follow-up there. This is one that we are continuing our dialogue with the European regulators and hope to have an update soon. But still come back to 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.

The next question on the line comes from Dae Gon Ha from Stifel.

Maybe a two-part question on the PFIC side of the story. I was wondering if you can comment on your dialogue with the physicians given the label disparity between this and the existing treatments? And when you think about the reimbursement dialogue, will there need to be subsequent discussions once you get the label expansion done? And switching over to volixibat, bearing in mind the interim update in June for both VISTAS and VANTAGE, how are you guys thinking about the other drug towards the back end of this year? And how might that impact your PBC strategy if both come out positive?

Yes. Thanks for the question. Maybe I'll just make a quick comment on the volixibat competition briefly and then pass over to Peter to talk about PFIC. What we're seeing and how we've approached the dosing for volixibat provides the potential for real advantage in terms of activity level. It's something we've learned across all of the IBAT programs, in particular, all the work we've done with LIVMARLI and volixibat on understanding where we're at on the dose-response curve. I think this provides the potential to have really strong activity here. Of course, this is something we'll see play out with the actual data sets as they come forward, but excited about the dosing regimens we’re evaluating in the VANTAGE study and what that can mean for patients. Maybe you can speak to the PFIC questions.

Sure, thanks for the question. The feedback on the LIVMARLI profile in PFIC has been very positive. We have received a lot of favorable comments regarding the efficacy profile noted in the March study, as well as the broader genetic types of PFIC included in the labeling, which can impact market access depending on payers' policies. Clinicians and patients are pleased to have LIVMARLI available. Payer discussions are progressing well. Although it's still early, we are content with the policies that are starting to emerge. Regarding updated policies following a potential label expansion to include younger patients, those discussions typically happen quickly due to the variety of payers in the U.S. We experienced something similar with Alagille when the initial label specified ages one and older, which was then adjusted to include younger ages. Subsequent conversations to revise policies tend to occur quickly.

The next question on the line comes from Steven Seedhouse of Raymond James.

I have two questions. First, regarding the PBC readout, you mentioned that the focus would be on pruritus improvement, safety, and serum bile acids. Will you also be sharing liver function tests such as ALT and bilirubin to assess any potential impact of de novo bile acid synthesis on those parameters, particularly from a safety perspective? My second question is about business development. What are your thoughts on Mirum's priorities for the next 12 to 18 months? Are you considering expanding the pipeline or focusing mainly on volixibat?

Thanks, Steve, for the questions. I'll speak to and comment on our business development efforts and let Joanne come back on the PBC interims. Our strategy and approach to business development remain consistent with what we've done over the course of Mirum. It's very much in our DNA. It's how the company came to be and started, and its approach is to be disciplined about making sure anything that we look to bring on is something that we can add value to at terms that help grow the company, especially across a number of different rare disease settings. I think we're in a position where we're quite lucky that there’s a lot of growth in the commercial business, label expansion opportunities, and volixibat developments that there's no urgency to do something so we can remain disciplined in looking at ways to grow the company. And then maybe Joanne can speak to the PBC question.

Yes. Thanks, Chris, and thanks for the question. As I mentioned, this is an interim analysis, so it's pretty limited in terms of scope. We're mainly looking at it to ensure safety and to select the dose moving forward. So with that, we'll look at pruritus, we'll look at serum bile acids, and safety in particular. The data set is going to be pretty limited. So we think it will be quite limited in terms of making any conclusions, certainly about any other parameters. I think we’d look to the final data set for that.

The next question on the line comes from Brian Skorney of Baird.

This is Luke on for Brian. As we set expectations for VANTAGE in particular, thinking about a comparison to the seladelpar response study, do you think the subgroup in that study with baseline NRS greater than 4 is a reasonable comparison for pruritus benefit? And then are you aware if the 11-point NRS scale they used in that study is the same as the itch reported outcome scale that you're using?

Thanks for the questions. Yes. I mean the scale used is similar. There are some very minor differences. But for adult pruritus measurements in registrational studies, this aligns with FDA guidance. It uses a 10 scale, which is what we're using in our study. So there is definitely some similarity there. The treatment effect in that subset they looked at is not too far off from how we look at our change from placebo assumptions and powering, where we looked at the 1.75 difference from placebo. And looking at potentially a little bit more effect from an IBAT. But in general, it's really not too far off if you're thinking about study design assumptions. Of course, we’re quite excited about getting this data and seeing what that looks like, particularly change from baseline, which is really what the patient experience is and what you’re doing to address the burden of disease.

The next question on the line comes from David Lebowitz of Citi.

On the 1.75 treatment point difference on pruritus. Could you just elaborate as to whether you're talking about through the blinded portion or through the actual pivotal portion at a subsequent time point and perhaps give us some view of what that point and how you will use it to consider upsizing if that is needed? What type of thresholds we could expect?

Yes. Thanks for the question. We're not going to get into the details of the study design, but I just provided some of the number to give you a sense of what kind of treatment effect we're looking at. The 1.75 treatment difference and the 3 in terms of standard deviation is just a general number that we're looking at for the overall design of the study. So we won't be sharing any specifics in terms of where we are with the interim. Obviously, we'll share the results of the interim since we’ll be blinded. We certainly hope that we'd be continuing the study. So that's what we hope to see in June.

And I want to add to that, David, is that the measurement is actually looking at over time, right? It's the month 3, 4, 5, and 6 treatment effect for the final analysis. That does allow us to add power and try to deal with any potential for placebo response because you're looking at multiple time points and how they roll into the analysis. That's another factor in the study design, applying what we used from the PFIC study and the adult settings.

The next question on the line comes from John Wolleben of Citizens JMP.

Just a logistic one for me on PBC and PSC. When you select the dose, do patients on the higher dose get rolled back in at either placebo or the new dose, or do you have to reenroll patients? And can you comment on how long enrollment could take to complete in both those studies?

Thanks, John, for the question. Just on timelines, we'll give a more formal update on what we expect to see for the full data set in June when we have the interim. I'll let Joanne speak to a bit of the mechanics of how patients flow through the study.

Yes. We are continuing enrollment in the study at this point, and we will be continuing with one active dose and placebo. We expect to include all the patients ultimately in the analysis when we unblind the data set.

The next question on the line comes from Michael Ulz of Morgan Stanley.

This is Robin on for Mike. Can you just provide any color on the ongoing launch prep for PFIC? And when do you expect patients on the expanded access program to get on paid drug?

Yes. Thanks for the question, Robin. In the U.S., obviously, the launch is underway, and we are seeing prescriptions come in for LIVMARLI for PFIC patients now. We have about 25 patients in the U.S. who are on clinical drug. Most of those are eligible to roll over at this time, and we'd expect them to move over to commercial drug in the coming quarters throughout this year. So that's how we see the cadence playing forward.

The next question on the line comes from Ed Arce from H.C. Wainright.

This is Thomas asking a couple of questions for Ed. So first, following up on U.S. performance for the LIVMARLI PFIC. Just wonder of the $42.8 million net sales in the first quarter, how much was from PFIC approximately? And then also what are some early launch metrics that investors came up to?

Thanks, Thomas, for the question. In Q1, there really was no PFIC contribution in there yet. The approval came in March, and we're just now rolling over those clinical patients. So expect that revenue contribution to be pretty minimal from PFIC over the next quarter or two as we get into the back half of the year where we expect more reimbursement.

Got it. And then switching gears to the European front. Have you had any interaction with EMA or CHMP recently given your expectation on a recommendation in the first half of this year? If positive, any ongoing commercial preparations for the European market for PFIC?

Thanks for the follow-up there. On the EMA discussion, we have been active in discussing with EMA. As I mentioned, I feel confident in our arguments and hope to have an update on that soon. So no formal determination yet. Maybe Peter can speak a little bit to the launch prep in Europe for PFIC.

Yes, certainly, upon a potential approval, we would be ready to launch LIVMARLI in Europe. Prescribers for PFIC are essentially identical to the prescribers of LIVMARLI for Alagille syndrome. So you'll see we're ready to go with dossier submissions to health technology agencies, etc., to negotiate pricing and reimbursement on a par with other products.

Okay. And then one last question from us. Discuss some of the main drivers for the bile acid product sales, which slightly dropped by $2 million quarter-to-quarter, major practice?

Yes. I mean, we mentioned the Change Healthcare cyberattack was kind of in play for our entire portfolio. I think if you look back over time in the bile acid product sales, there is quarter-to-quarter volatility given the ultra-rare nature of the disease and a small number of patients over time. But we do see an opportunity to continue to build on those products this year, mid-single-digit year-on-year growth consistent with historically as our expectation. And going forward, we are really excited about the potential approval by FDA next year for CHENODAL and CTX and the chance to find more patients there.

Understood. Thank you again for taking the questions. We look forward to your recommendation soon and also to your presentation for volixibat.

We have no further questions. Therefore, I will hand back the call to Chris Peetz, CEO, for final remarks.

Great. Thank you all for joining us today. I really appreciate the interest in Mirum and our programs. Have a good evening. Goodbye.

This concludes today's conference call. Thank you all for joining. You may now disconnect your lines.