Mirum Pharmaceuticals, Inc. Q4 FY2024 Earnings Call

Hello, and welcome to Mirum Pharmaceuticals' report on the financial results for the fourth quarter and year-end 2024, along with a business update. My name is Elliot, and I'll be your coordinator today. I would now like to hand over to Andrew McKibben, Senior Vice President of Strategic Finance and Investor Relations. Please go ahead.

Thanks, Elliot, and good afternoon, everyone. I'd like to welcome you to Mirum Pharmaceuticals' fourth quarter 2024 conference call. I'm joined today by our CEO, Chris Peetz; our Chief Medical Officer, Joanne Quan; and Eric Bjerkholt, our Chief Financial Officer. Peter Radovich, our President and Chief Operating Officer, could not be with us today as he's at an international launch event in Europe this week. Earlier today, Mirum issued a news release announcing the company's results for the fourth quarter and full year 2024. Copies of this news release and SEC filings can be found in the Investors section of our website. Before we start, I'd like to remind you that during the course of this conference call, we will be making certain forward-looking statements based on management's current expectations, including statements regarding Mirum's programs and market opportunities for its approved medicines and product candidates. These statements represent our judgment as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from the results discussed. We are under no duty to update these statements. Please refer to the risk factors in our latest form 10-K and subsequent SEC filings for more information. With that said, I'd like to turn the call over to Chris. Chris?

Thanks, Andrew, and good afternoon, everyone. I'm excited to start today's call with a recap of Mirum's achievements over the last year and share an update on our strategic goals for 2025. In the short time since our founding, through our focus on bringing important medicines to patients, we have created a strong business in ultra-rare disease that is cash flow positive with an attractive pipeline and broader patient populations. We are still early in our journey and we firmly believe that the best is yet to come. Our strategic priorities over the next two years are to: one, further the global growth of our commercial medicines, highlighted by LIVMARLI's continued Alagille syndrome expansion, early PFIC success, and the recent approval of CTEXLI for cerebrotendinous xanthomatosis, or CTX, in the US; two, advance our high-impact pipeline, driving Volixibat to potentially pivotal data in adult cholestasis next year, initiating our Fragile X program for MRM-3379 and completing enrollment of the EXPAND study for LIVMARLI in cholestatic pruritus; three, selectively pursue product acquisition and license opportunities in rare disease with potential for significant patient impact and value creation, just as we have since the launch of Mirum; and four, accomplish all of the above with continued scientific and financial discipline. 2024 was a big year for delivering on strategic goals. Total net product sales were $336.4 million, exceeding the upper-end of our revised guidance range. LIVMARLI finished the year with total net product sales of $213 million, including approximately $155 million from our US business and $59 million internationally. In the second half of last year, PFIC new patient starts and international uptake were drivers of the step-up in growth. We believe the strong demand we are seeing for LIVMARLI in Alagille syndrome and PFIC will continue. Beyond LIVMARLI, we also saw healthy growth in our bile acid medicine. We think we are starting to bend the curve here with total 2024 net product sales of $123 million. I'm also happy to say that last week, the FDA approved CTEXLI, which is our new brand name for chenodiol for CTX in adults. With this approval comes seven years of work on exclusivity and the opportunity to begin promotional efforts with our current field team to reach patients in this under-diagnosed condition. Ultimately, the robust growth dynamics across all of our medicines positions us well for 2025, where we expect to add close to $100 million to our top-line, with anticipated net product sales between $420 million and $435 million for the year. 2024 was also a significant year for our pipeline. We expanded LIVMARLI's label with its approval for PFIC in both the US and Europe. We initiated the Phase 3 EXPAND study of LIVMARLI in broader settings of cholestatic pruritus, a significant growth opportunity for the brand. And beyond LIVMARLI, we achieved positive interim results for Volixibat in both VISTAS PSC and VANTAGE PBC studies, resulting in breakthrough designation in PBC. And finally, we have expanded our pipeline with the addition of MRM-3379 for Fragile X syndrome. This is another high unmet need orphan setting that aligns well with the capabilities we have built in rare genetic neurology for the launch of CTEXLI. Pulling all this together, we are set up for an exciting 2025 and beyond with continued strong execution in both our commercial business and pipeline of potentially high-impact medicines. And with that, I'll turn it over to Joanne to give a brief update on the pipeline. Joanne?

Thanks, Chris. 2024 was a highly productive year for our clinical programs, and I'm excited to continue this momentum into 2025. Starting with our three potentially registrational studies of our IBAT inhibitor, LIVMARLI and Volixibat, I'm pleased to say that the progress we made in 2024 builds further confidence in the impact of this mechanism on cholestatic pruritus. Across multiple settings, including Alagille syndrome, PFIC, biliary atresia, PSC and PBC, we've now seen clinical evidence for the potential of IBAT inhibition to have a pronounced impact on this debilitating symptom. Starting with Volixibat in PSC, recall that the VISTAS study is currently enrolling with a single active dose, 20 milligram BID, versus placebo, based on the blinded interim analysis we conducted in June of last year. Following the positive interim analysis, where we passed both the efficacy and safety thresholds for continuation, we've had great engagement from investigators and patient communities, and we are pleased with the continued progress in this study. We are on track to complete enrollment in the second half of this year, and given that this is a 28-week study, expect topline results in 2026. There are no approved treatments for PSC, and we look forward to another opportunity to work with global health authorities to bring a high-impact medicine to an underserved patient community globally. Turning to PBC, enrollment in the VANTAGE study is also progressing well, and we remain on track to complete full enrollment in 2026. Given the results of our interim analysis, where we showed a statistically significant, rapid, sustained improvement in pruritic versus placebo, we have seen a positive response from the investigator and patient community. Majority of PBC patients are able to maintain a good biochemical response with first-line UDCA treatment, but do not have adequate options to address their symptoms. The strength of the VANTAGE interim results in both first-line and second-line patients positions Volixibat to be a potentially impactful treatment option for a large proportion of patients with PBC. The breakthrough therapy designation we received from FDA last year acknowledges the importance of Volixibat as a potential treatment option. We are also excited about the Phase 3 EXPAND study of LIVMARLI. This is an excellent opportunity to expand the label for LIVMARLI to include additional settings of cholestatic pruritus, where there's a clear need for an approved, effective treatment, and we are encouraged by the enthusiasm we are seeing from investigators. The study is ramping up well, and we are on track to complete enrollment in 2026. Shifting to MRM-3379, our new PDE4D inhibitor for Fragile X syndrome, we are preparing to initiate a Phase 2 study this year following discussions with the FDA. As a reminder, this mechanism has demonstrated proof of concept in Fragile X, and given the high expression of PDE4D in the brain and importance of this pathway in learning and memory, we believe MRM-3379's brain penetrant profile is potentially differentiating. In summary, we're very happy with the continued momentum of all of our clinical programs and the active engagement we foster with investigators and patient communities. I look forward to providing further updates on our progress during the year. I'll now turn it over to Eric. Eric?

Thank you, Joanne. I'm pleased to share that we are in a strong financial position, highlighted by our performance in 2024, which I will summarize briefly. 2024 saw continued robust growth in net product sales for our three commercial medicines. Total net product sales in the fourth quarter of 2024 reached $99.4 million, compared to $69.5 million the previous year, marking a 43% year-over-year increase. For the entire year of 2024, total net product sales amounted to $336.4 million, up from $178.9 million in 2023. For LIVMARLI, net product sales in the fourth quarter of 2024 were $64.1 million, contributing to a total of $213.3 million for the year, which is a 50% increase compared to 2023. In our bile acid medicines, total net product sales in the fourth quarter of 2024 were $35 million, reflecting approximately 25% growth over the same quarter in 2023, the first full quarter the portfolio was available. The total net sales for this portfolio in 2024 was $123.1 million. Our total operating expenses for 2024 were $424.5 million, which includes R&D expenses of $140.6 million, SG&A expenses of $202.2 million, and cost of sales of $81.6 million. Expenses for the year included non-cash stock-based compensation of $48.4 million and intangible amortization and other non-cash items totaling $31 million. This amortization expense is primarily reflected in our cost of goods sold. In both the fourth quarter and for the full year, R&D expenses also included a $7.5 million upfront payment made to Enthorin for the MRM-3379 license. After adjusting for non-cash items, I am pleased to report that the business was cash flow positive in 2024, and we anticipate this trend will continue this year. We concluded 2024 with cash, cash equivalents, and investments totaling $293 million, which is an increase of roughly $7 million from the beginning of the year. Looking forward, we expect net product sales between $420 million and $435 million in 2025, and we are forecasting positive cash flow again this year. We are well-funded and possess the resources to execute our plans and advance our upcoming pipeline catalysts. Now, I will turn the call back over to Chris for final comments.

Thanks, Eric. 2025 is set to be another big year for Mirum. With industry-leading commercial execution and advancing pipeline and a disciplined operating model, we have built a leading rare disease company, one that is positioned for sustained growth in the years to come. I'm proud of what we have accomplished and excited for the opportunities ahead as we continue to deliver life-changing medicines for patients and their families. And with that, operator, please open the call for questions.

Thank you. The first question comes from Gavin Clark-Gartner with Evercore ISI. Your line is open. Please go ahead.

Hey, guys. Congrats on the great progress. So, I just had one more strategic question. I know that you aren't able to call for redemption of convertible notes until next year, but just bigger picture, as your stock has traded well above the conversion price, the back of really strong earnings performance, pipeline advancement, does this all change how you think about BD and capital allocation in general? Thank you.

Thanks, Gavin, for the question. I'll make a first comment there and ask Eric to add anything else on the balance sheet. The thing I'd point out kind of the dynamic behind what you're pointing out there is that we've been able to navigate Mirum to a really unique position, particularly in this market backdrop for rare disease where we can take advantage of our financial position and performance to acquire and basically roll up some of these rare disease products that we see as great value-creation opportunities for the company. And I'll ask Eric to speak more specifically to the financing plans.

Yeah, thank you. The convert matures in four years, so that doesn't really factor into our plans meaningfully. I think our financial and financing flexibility as we continue to progress the business is significant and gives us a lot of flexibility to consider BD alternatives that we might find attractive.

Thanks for the question, Gavin.

We now turn to Jessica Fye with JPMorgan. Your line is open. Please go ahead.

Hey, guys. Good afternoon. Thanks for taking my question. I was hoping you could talk about the underlying assumptions like market penetration or share, potential competition, etc., that are behind the $1 billion revenue potential for MRM-3379 in Fragile X. And I guess, while we're talking about that asset, are there any other indications with the mechanistic rationale that could make sense to pursue? Thank you.

Thanks for the question, Jessica. I'll speak to the market sizing and then have Joanne kind of comment about applicability of the mechanism in other settings. And quite simply, the way to think about the market potential, when we look at just male patients with Fragile X, it's a 50,000-patient market. So, a lot of different ways that you can look at the assumptions to see that the total addressable market is $1 billion or more quite easily. So, really, when we talk about that number, we're looking at the US opportunity. Do see substantial upside beyond that number even. It's a pretty simple kind of watermark to put there. And Joanne, you want to comment about...

Yes. I believe you were asking about additional opportunities. We know that PDE4D is significantly present in the brain regions important for learning and memory. This suggests a variety of conditions where it could be beneficial. Our strategy is to use Fragile X as our initial focus, conducting a proof of concept to determine the appropriate dosage. Once we establish that, we can explore other conditions related to intellectual disabilities. There is certainly a lot of potential that we are eager to pursue.

We now turn to Mani Foroohar with Leerink Partners. Your line is open. Please go ahead.

Hey, guys. You have Ryan on for Mani. Thanks for taking our question. So, I'm curious, when you look at the Alagille market, where do you think we are in terms of penetration into the prevalent population? And kind of going forward, is US growth really going to be driven more by new diagnoses or greater penetration into those that are not on IBAT yet? Thanks.

Thanks, Ryan, for the question. In terms of overall penetration for the eligible treatment population in the US, so Alagille syndrome patients with pruritus that are pre-transplant, we're probably in the range of 40% or so penetrated. So, just from that statistic alone, we see a lot of growth potential in the prevalent patients. And think about what's driving that growth over time, there are actually several tailwinds on that. One is just the further penetration into the prevalent population. There's continued new diagnoses that come along the way, so new patients entering. They're usually infants, so they're generally lower dose patients, but there are new patients that are diagnosed and start each year. And then, behind that, this is weight-based dosing, so you do see some of those dose adjustments over time. So, all of that kind of combines for the US to show that there's a long runway of continued growth for Alagille syndrome in the US.

We now turn to David Lebowitz with Citi. Your line is open. Please go ahead.

Thank you very much for taking my question. In terms of the recent approval for CTX, congratulations on that. Could you, I guess, elaborate on how you expect this could affect the sales trajectory on this point going forward, given there's already use in that particular population?

Thank you for your question, David. Your understanding is correct regarding the situation where a significant number of diagnosed CTX patients are already receiving chenodiol. Our plan is to transition those patients to CTEXLI over the next few months. The aim is to improve diagnosis rates and ensure more patients receive treatment promptly. We anticipate a gradual increase in the number of patients diagnosed earlier, which will help prevent the accumulation of irreversible effects associated with the disease.

Our next question comes from Mike Ulz with Morgan Stanley. Your line is open. Please go ahead.

Hi. This is Rohit on for Mike. Thanks for taking our questions. Can you just talk about the patient mix between Alagille syndrome and PFIC for LIVMARLI in the fourth quarter of '24 and how you expect this to play out in 2025? And then additionally, how many of the patients on the PFIC expanded access program are now on paid drugs? Thank you.

Thank you for the question, Rohit. I'll address the last part first. Last year, we successfully transitioned all US expanded access patients to commercial products, mostly completing this in the third quarter. Regarding the patient mix, we don't disclose specific numbers, but currently, the majority of LIVMARLI patients are those with Alagille syndrome, which accounts for the largest portion of our contributions. Since Q3 of last year, we've seen consistent starts with Alagille patients and a noticeable increase in new patient starts with PFIC patients, who are now making a significant contribution to new patient starts and reflecting positively in our top-line performance. Thanks for the question.

We now turn to Ryan Deschner with Raymond James. Your line is open. Please go ahead.

Hi, there. Congrats on the quarter. My question is, how much commercial team expansion would you anticipate doing for expanded pruritus in ultra-rare cholestatic patients, pending the result of the Phase 3 EXPAND study? And then, I have a quick follow-up.

Thanks for the question, Ryan. Looking at planning for LIVMARLI's potential label expansion with EXPAND, we anticipate that's largely the same prescribing universe as the Alagille syndrome and PFIC prescribers. So, it wouldn't be an expansion of the field team that's already in place. So, a lot that we can leverage there commercially. And you said you had a follow-up question.

Do you have an idea of how much the increasing average patient weights are affecting sales growth in Alagille? How significant is this growth aspect compared to other factors? Additionally, how do you foresee it evolving in the future?

I would describe it as looking at the average dispense, which changes only slightly over time, partly due to the influx of new diagnoses. This means there are new infant patients starting treatment, which moderates the overall impact. However, we have observed a gradual increase over the years.

We now turn to Brian Skorney with Baird. Your line is open. Please go ahead.

Hi. This is Luke on for Brian. Thanks for taking the question. We were hoping you could just talk a little bit about how the VANTAGE study takes into account prior OCA use and enrollment. And do you think patients recently discontinuing OCA could see an impact on pruritus measurements as compared to a patient not discontinuing?

Thanks for the question. I'll let Joanne jump into that one.

Yeah, thanks for the question. So, when the study was started, we actually thought there would be a bigger contribution in terms of patients who are on OCA. It turns out it's really not an issue at this point. And so, our enrollment has actually picked up quite nicely since the interim results came out. We're not really seeing that there's an issue in terms of patients, a lot of patients coming forward with OCA who are candidates for the study otherwise. And I think that just reflects overall kind of usage patterns with OCA in general, not really that much of a contender in this space.

Yeah. Kind of in addition to that, recall that for PBC, the VANTAGE study, about two-thirds of those patients are first-line. So that would be before OCA would have been used or before the new PPARs are used.

Thank you for the question.

Hey, thanks for taking the question. Just wondering, piggy backing on a prior EXPAND question, what do you envision the label looks like if you have success in that Phase 3 trial? And then, how do you wrap your heads around that 1,000 patient US and EU prevalence, given it's a collection of a bunch of small indications?

Thank you for the question, Jonathan. The indication statement is something we need to clarify. As you mentioned, it defines a subset of exclusions. It encompasses various less common causes of cholestasis, excluding PSC, PBC, ICP, Alagille syndrome, and PFIC. The specific wording will be finalized as we proceed with the label expansion. Regarding the patient number, we believe it to be a PFIC-sized opportunity or larger. Based on the compassionate use requests and physician interest we've observed, we've estimated around 1,000 patients in the US and Europe. This estimate is grounded in actual demand rather than just epidemiological studies, so I am confident that it represents a significant market opportunity for LIVMARLI. Thanks for the question.

And our final question comes from Ed Arce with H.C. Wainwright. Your line is open. Please go ahead.

Hello. Good afternoon, everyone. This is Thomas asking questions for Ed. Thank you so much for taking our questions. So first, for the Volixibat study in PSC, good to hear that it's on target to complete enrollment in the second half this year. Just wonder how many months or when should we expect to see topline data after complete enrollment is announced. If you can outline some details on the process?

Yeah, thanks for the question, Thomas. The simple way to think of it is it's an approximately six-month endpoint and time to close and clean the database. So kind of project some amount of time like that after enrollment completion. We do plan to announce enrollment completion when we get there.

Got it. I have a question about the Phase 3 EXPAND study with LIVMARLI. Can you share some patient experiences you've received so far and which rare cholestatic conditions are most prevalent?

Yeah, thanks for the question. I'll maybe ask Joanne to speak to some of the data at AASLD last year on that point.

We have treated several patients with biliary atresia through compassionate use, and the results for their pruritus treatment are impressively positive. It's important to note that this group of patients differs from those studied in the earlier EMBARK study. These are biliary atresia patients who likely underwent a Kasai procedure at a young age but have continued to progress in their disease, often leading to the need for a liver transplant. As the disease progresses, they typically develop pruritus. We have an abstract detailing a few cases with favorable outcomes using IBAT inhibition, which supports our confidence in moving forward with the EXPAND study. There is a clear unmet need, and we believe we have a product that can effectively meet that need.

Understood. Perhaps one follow-up on that. Should we expect to see some kind of interim data from this study perhaps in medical conference posters?

Actually, we do not plan to conduct an interim analysis for the study. Our goal is to complete enrollment in 2026. If we were to do an interim analysis, it would actually delay our progress. We believe we are on track to finish enrollment in 2026 and look forward to sharing the results when the full study is complete.

Thank you, Thomas.

This concludes our Q&A. I'll now hand back to Chris Peetz, CEO, for any final remarks.

Great. Thank you all for joining us today, and have a great afternoon. Thanks.

Ladies and gentlemen, today's call has now concluded. We'd like to thank you for your participation. You can now disconnect your lines.