Mirum Pharmaceuticals, Inc. Q3 FY2025 Earnings Call

Hello, and welcome to the Mirum Pharmaceuticals Third Quarter 2025 Financial Results and Business Update. My name is Harry, and I'll be your operator today. I would now like to hand the conference over to Andrew McKibben, SVP of Strategic Finance and Investor Relations. Please go ahead.

Thanks, Harry, and good afternoon, everyone. I'd like to welcome you to Mirum Pharmaceuticals Third Quarter 2025 Conference Call. I'm joined today by our CEO, Chris Peetz; our President and Chief Operating Officer, Peter Radovich; our Chief Medical Officer, Joanne M. Quan; and Eric Bjerkholt, our Chief Financial Officer. Earlier today, Mirum issued a news release announcing the company's results for the third quarter of 2025. 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 and knowledge of events 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-Q 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. 2025 continues to be an outstanding year for Mirum. We've created a leading rare disease company, purpose-built to create and deliver life-changing medicines to patients. Our success comes from that foundation. The team is deeply connected to patients and families, turning their insights into meaningful therapies and measurable performance. In the third quarter, we delivered strong commercial results, advanced our clinical pipeline, and strengthened our financial foundation. I'm proud of the way our team continues to execute with focus and consistency. First, on commercial performance. We reported third quarter revenue of $133 million, representing a nearly 50% year-over-year increase over the same period last year. This performance reflects the strength and breadth of our commercial portfolio, including continued momentum from the U.S. PFIC launch and expanding demand from our international markets. Turning to R&D. We remain on track for three potentially pivotal readouts over the next 18 months. First up is the VISTAS Phase IIb study in PSC. With enrollment complete, we expect to announce top-line data in the second quarter of 2026. With the successful interim analysis last year and a consistent body of supporting data with IBAT inhibitors across multiple cholestatic diseases, we're optimistic about volixibat's potential to become the first approved treatment in this setting. We are also progressing well with our VANTAGE study of volixibat in PBC, the EXPAND study of LIVMARLI in ultra-rare cholestatic conditions, and our newly initiated Phase II study of MRM-3379 in Fragile X syndrome. We've also taken meaningful steps to further strengthen our financial performance. This quarter, our cash balance grew significantly, and we recognized positive net income for the first time. This is an important milestone that highlights the operating leverage in our commercial model. In sum, it's been another solid quarter of execution for Mirum. I want to thank the entire Mirum team for their continued dedication to patients. We built a high-growth cash flow-positive rare disease company with a broad pipeline and global footprint, and we're just getting started. And with that, I'll hand the call over to Peter. Peter?

Thanks, Chris. Q3 was another excellent quarter for Mirum with total net product sales of $133 million. This was driven by continued robust performance of LIVMARLI in both the U.S. and international markets as well as steady contribution from our bile acid portfolio. LIVMARLI net product sales totaled $92 million for the quarter. In the U.S., LIVMARLI demand remains healthy in both Alagille syndrome and PFIC with $64 million in net product sales. Alagille syndrome growth remains durable, and PFIC continues to contribute meaningfully, reflecting the real-world benefit of expanded diagnosis and increased genetic screening. As we begin reaching into broader segments of the medical community, particularly adult-focused providers, we're finding that genetic testing is still less embedded in practice and often requires more education and dialogue. So we view this as an area where sustained engagement can continue to drive incremental gains. Internationally, LIVMARLI demand continues to grow with $28 million in net product sales this quarter. Demand across our direct and partner markets remains robust, supported by expanding reimbursement and launches in new geographies. Q3 was the first full quarter of commercialization for our partner, Takeda in Japan, with in-market adoption dynamics generally consistent with LIVMARLI's U.S. launch. Our Bile Acid Medicines, CHOLBAM and CTEXLI generated $41 million in net product sales this quarter, supported by increased CTX patient finding following CTEXLI's FDA approval earlier this year. And I'm happy to say that we now expect to land in the upper end of our prior full year 2025 guidance range with $500 million to $510 million in revenues. This reflects the continued strength of our U.S. business in both Alagille syndrome and PFIC, steady contributions from our bile acid portfolio, along with the typical quarter-to-quarter variability in international partner and distributor ordering patterns. Looking ahead, we continue to see substantial growth potential across our portfolio with peak revenue potential for LIVMARLI, volixibat, and MRM-3379 each exceeding $1 billion. And with that, I'll turn it over to Joanne for an update on the pipeline. Joanne?

Thanks, Peter. I'm pleased to provide an update on the continued progress across our clinical pipeline, where we're seeing continued collaboration and momentum with physicians and patients across all of our ongoing studies. Starting with volixibat, we completed enrollment in the Phase IIb VISTAS study in primary sclerosing cholangitis, or PSC, and expect to announce top-line data in the second quarter of 2026. PSC represents a significant area of unmet need with no approved therapies and limited treatment options. We're deeply grateful to the investigators and the PSC patient community for their partnership in advancing this important study. As a reminder, the outcome of the interim analysis of the VISTAS study last year was what we'd hoped for. The recommendation was to keep the current sample size, which we believe reflects a strong signal for the final analysis. It's worth noting that the study was powered using conservative assumptions, a placebo-adjusted treatment effect of 1.75 points and standard deviation of 3. A case series is being presented at AASLD of 8 PSC patients treated with maralixibat under our compassionate use program, a continuation of a case series presented earlier this year at DDW. All of these patients had meaningful reductions in pruritus, and 4 of the 8 had complete resolution. This data supports the role for IBAT inhibition as a treatment for PSC. Turning to PBC. The VANTAGE study continues to progress well, and we expect to complete enrollment next year. Interim data presented last year demonstrated statistically significant improvement in pruritus, meaningful reductions in serum bile acids, and encouraging improvements in fatigue. We're excited to advance this study through the confirmatory stage. Additional analyses from the VANTAGE interim will be presented at AASLD, which highlight the decreases in fatigue and improvement in sleep in volixibat patients, as well as showing a decrease in IL-31 in treated patients. Our EXPAND study evaluating LIVMARLI in additional settings of cholestatic pruritus is also enrolling well. This study is designed to broaden access to patients across multiple rare cholestatic diseases who currently have few or no treatment options. It represents a meaningful label expansion opportunity, and we're targeting enrollment completion in 2026. Finally, I'm excited to share that we've initiated our Phase II study of MRM-3379, our brain-penetrant PDE4D inhibitor for Fragile X syndrome. The preclinical data we recently presented from a mouse FMR1 knockout model of Fragile X showed that MRM-3379 reversed the disease phenotype across multiple behavioral assessments and increases our confidence in the importance of this pathway in Fragile X. Overall, we're very encouraged by the progress across our development programs and look forward to upcoming milestones in 2026. With that, I'll turn the call over to Eric to discuss our financial results. Eric?

Thanks, Joanne, and good afternoon, everyone. We delivered another solid quarter of financial performance, highlighted by total net product revenue of $133 million, representing a 47% increase over the prior year and reflecting growth across all our commercial medicines. This quarter included approximately $5 million in sales to our partner, Takeda in Japan. We do not expect additional sales to Takeda in Q4 of this year. Total operating expense for the quarter ended September 30 was $130 million, which includes R&D expense of $43 million, SG&A expense of $62 million, and cost of sales of $26 million. Expenses for the quarter included noncash stock-based compensation expense of $18 million and intangible amortization and other noncash items of $6 million. The intangible amortization and other noncash items expense are largely reflected in our cost of sales. Our cash operating margins continued to improve, and we delivered GAAP profitability in the third quarter, generating approximately $3 million in net income. While this reflects the strength and scalability of our business model, we view quarterly GAAP profitability as a milestone, not yet a consistent expectation as we continue to invest in growth. Cash, cash equivalents, and investments were $378 million at September 30, an $85 million increase from the beginning of the year. We continue to be well-funded and financially independent, providing us the resources required to expand our patient impact and grow our business. With that, I'll turn the call back to Chris.

Thanks, Eric. Before we open the call for questions, I want to close by reflecting on what's been an incredibly productive quarter. Across every dimension of our business, commercial, clinical, and operational, we continue to execute with purpose and discipline, anchored by the same patient-centric approach that's driven our success from the start. That's what's enabled us to become a high-growth cash flow positive, leading rare disease company. Thanks again to the Mirum team and to the patients and families who inspire our work every day. With that, operator, please open the call for questions.

Our first question will be from Jessica Fye with JPMorgan.

This is Abdul on for Jess. We just have two questions. What are going to be the key drivers of LIVMARLI's performance as we look ahead to 2026? And can you talk about why the midpoint of the new guidance range now implies 4Q reps flat sequentially from 3Q? I don't think we saw that dynamic last year.

Abdul, thanks for the question. On key drivers into 2026, I mean, we see a lot of basically what we have today rolling forward into next year. We expect that we'll probably give guidance early in the year next year on what that year looks like. But we are in early innings of the PFIC launch, both in the U.S. and internationally. So expect that to continue to build in over time. And I think for the guidance this year for Q4, maybe I ask Peter to speak to what we see from kind of the quarter-to-quarter dynamics...

Thanks, Chris. Yes, and I appreciate the question, Abdul. The main dynamic is tried to highlight in our prepared remarks. We see growth for LIVMARLI U.S. We see the bile acid portfolio continuing to do what it does. It's really the LIVMARLI international line where we expect variability as we move quarter-to-quarter. As we've talked about before, that business has periodic large orders from distributors, and we saw those come in, in Q3. We also mentioned that we had Takeda revenue in Q3, which we also had Q1 and Q2 that we don't expect in Q4. So there's a fair bit of an inventory build there. So that's really the dynamic that's in the LIVMARLI international line.

The next question will be from the line of Josh Schimmer with Cantor.

Maybe I have two quick ones. First, what trends are you seeing in terms of adoption of the solid tablet formulation of LIVMARLI? And what percent of sales are for that versus the liquid? And then for volixibat, what are you thinking in terms of the appropriate price analogs, especially after we've seen a significant increase in rare orphan disease prices perhaps over the last year, particularly for conditions that perhaps are less prevalent than PBC and more aligned with PSC.

Thank you for the questions, Josh. Yes, the solid tablet was launched in the U.S. in mid-June, making this our first full quarter with it. We've observed a very encouraging uptake, particularly a shift from liquids. According to the prescribing information, patients weighing at least 25 kilos are eligible to switch, and a significant proportion of those eligible are indeed making the switch. This is promising for long-term persistence and adherence, as the single tablet per dose format is likely to be preferred by adolescents and adults. Regarding volixibat pricing, we haven't made a final decision yet and are closely monitoring the relevant market dynamics. Our initial analysis suggests that we can consider other PPARs and products currently approved in primary biliary cholangitis priced between 130 to 150, but it's still too early to determine the appropriate pricing strategy for volixibat.

The next question will be from the line of Gavin Clark-Gartner with Evercore.

Just had one. What's your expectation for Paragraph IV filers? Maybe just helpful to lay out your confidence in your whole IP portfolio, especially around the method patents and including volixibat.

Gavin, thanks for the question. Overall, I mean, we're in the window where we could potentially see that and kind of all routine for this point in the life cycle for LIVMARLI, and really quite confident in our overall IP position. In particular, you mentioned the method patents that are specific to dosing of LIVMARLI in these indications. So we've seen this has been really the key fundamental observation that's made all of Mirum possible and the IP behind it, we see is quite strong and in a great position and prepared to defend it. So more to come if and when we do see any filers, but nothing to date.

The next question will be from the line of James Condulis with Stifel.

This is Mark on for James. So recently on earnings, Shionogi seemed to suggest it's still an open question around sort of what exactly the best endpoint is for their Fragile X study. I wanted to see if you guys had any perspectives on that and sort of the implications for your program that you initiated this year. And then we had a second question on PSC. And these patients typically kind of have inflammatory disease sort of like comorbidities. And we know that IBAT inhibitors by nature, sort of have some of these GI side effects. So curious your thoughts on the safety risks there. And if you can see sort of anything in the blinded data on like GI side effects, and whether those look any materially different than, say, PBC or Alagille.

Thank you for the question, Mark. I can't provide too much insight into Shionogi's update and the details surrounding it. However, I will hand it over to Joanne to discuss our endpoint strategy and our approach to our programs.

Yes. Thanks for the question. We feel that we're in a good spot at this point. The preclinical data in terms of this pathway and the importance of this pathway in Fragile X is quite strong. We recently presented some preclinical data with our compound in a mouse model, mouse knockout model, which supports efficacy in us moving forward. And then we've also had very good engagement with the community with patients and with physicians; we also had a very successful and engaging pre-NDA meeting with the FDA earlier this year, and they're entirely aware of the range of endpoints that we're looking at, and we're well aware of the types of validations that are needed for these types of outcomes. So I think we're actually in a pretty good spot. A lot of interest in the community, and we're looking forward to conducting the study and seeing what we see.

And then on the PSC safety standpoint, I actually look to Joanne for that...

Yes. Regarding the PSC study, we've had a data monitoring committee working with us, and no issues have been raised or suggested modifications to the protocol. We feel confident there are no significant safety concerns and are comfortable proceeding with the protocol as originally designed. No issues have emerged in that regard.

Profile overall is consistent with what we know about IBAT at this point.

The next question will be from the line of Joseph Thome with TD Cowen.

Congratulations on the progress. Regarding the PSC study, now that enrollment is complete, can you share details about the baseline criteria of the enrolled patients, particularly in relation to the interim analysis population? Additionally, could you discuss the significance of quality of life measures or bile acids concerning ITCH? Will the secondary endpoints be included in the top line release in the second quarter?

Thank you, Joseph, for your question. At this stage, we are not prepared to present or analyze the baseline criteria. From what we've observed, patients selected for ITCH show elevated baseline pruritus scores, which we believe are representative of the PSC population regarding their background disease and medications. Overall, this aligns with our expectations for this population. Regarding endpoints, our primary regulatory focus is on the pruritus endpoint we have discussed with the FDA. We are looking forward to seeing progress in areas like fatigue and bile acids based on experiences in other settings, as bile acids are an important mechanistic marker and fatigue is a significant concern for patients. However, these are secondary endpoints, and our regulatory path is centered on the pruritus endpoint.

The next question will be from the line of Ryan Deschner with Raymond James.

Congrats on the quarter. Can you remind us what went into the decision to offer BID dosing for the EXPAND study? And how would you expect the dosing instructions to look on an expanded label in cholestatic pruritus patients? And then I have a follow-up.

Thanks, Ryan, for the question. I mean the simple answer is empirical, right? So this is based on observations we've had in compassionate use settings at dose levels that have explored across a range in this kind of all in the bracket of these elevated dose levels from the Alagille label up to the PFIC label. And empirically, this is where we've seen really great response stories from compassionate use examples. And Ryan, do have a follow-up...

Yes. Real quick, how big of an impact has the government shutdown been so far for things like genetic screening programs and other programs related to Alagille and PFIC?

To date, no impact that we've seen across kind of all of our interactions with customers and really across the business.

The next question will be from the line of Mani Foroohar with Leerink Partners.

You have Ryan on for Mani. Congrats on the quarter. Can you just talk a little bit about the pace of new PFIC adds that you guys saw in the third quarter compared to the second quarter? I know you talked a lot about genetic testing and new patient diagnoses. And then maybe more broadly, as you guys start to see consistent positive cash flow and you have several launches on the horizon, maybe just talk through your BD strategy about adding more products to the pipeline.

Yes. Thanks for the question. I'll turn it over to Peter to jump into those.

Yes. The pace of new PFIC additions remains strong and is drawing from a wide patient demographic, ranging from infants to adults. We have mentioned that there is a significant shift in how adult healthcare providers are beginning to recognize genetic cholestasis as a clinical condition that warrants suspicion. This represents an educational initiative, and some of the leading academic medical centers are participating in this effort by investigating genetic causes of cholestatic liver diseases in patients whose conditions aren't accounted for by other diagnoses. However, many providers have yet to adopt this approach. This effort is slowly progressing, and we are seeing positive outcomes in the third quarter. Oh, BD, would you like to add anything?

Sure. I mean the thing we'd say on BD is since the beginning of the company, that's really been at our core is looking for underappreciated programs. So we continue to do that and expect to always be active doing that. But we're in just a fantastic position where there's no urgency and no need. So we have a very high bar. And as you can see from the programs we've brought in since the start of the company, and look for good value creation opportunity. So that will continue to be the standard we take going forward, and plenty in the company to grow and build and optimistic about adding more down the road.

Next question will be from the line of Mike Ulz with Morgan Stanley.

This is Rohit on for Mike. Just with the recent linerixibat PDUFA announced for GSK, how do you see the competitive dynamics playing out in PBC?

Rohit, thanks for the question. I think two overarching things to think about for the competitive landscape in PBC. One is just kind of a reminder on lines of therapy and where the volixibat program plays. And in the VANTAGE study, there is no baseline alkaline phosphatase criteria. So our program incorporates both first and second-line PBC settings. So those that have stable alkaline phosphatase on UDCA that likely wouldn't be a treatment candidate for some of the PPARs that are recently launched, but still have ITCH, that's the candidate for the volixibat study and what we expect ultimately volixibat marketed treatment. And then with respect to linerixibat as a competitor, we're very excited about the interim data that we saw from the VANTAGE study and what it means for the dose level that was selected. The placebo-adjusted difference that we saw on ITCH in that data set was striking, it led to breakthrough designation. And it's really everything that we had hoped to see from all that we've learned about dosing of this mechanism in these settings. So quite excited about the competitive profile of volixibat given that highly active dose level.

The next question will be from the line of Jon Wolleben with Citizens.

Wondering if you guys are anticipating seeing similar disease-modifying effects over time with volixibat as you saw with LIVMARLI in PSC and PBC? And if so, what would be the time frame? And do you think that would be an important consideration for adoption and use over time?

Thank you for the question, Jon. My initial thought is that it's probably too early to assess the first readouts and we should focus on the ITCH endpoint, which represents the launch profile. I'll let Joanne elaborate on what we will be monitoring and what we can expect from the program over time.

Yes. Thanks for the question. As Chris alluded to, the whole discussion, especially with the regulators, has been around how do we get something in PSC approved. And clearly, that's with the pruritus endpoint. At this point, in the field of PSC, that's really the only approval endpoint. Obviously, we'll look at other things. Look, longer term, we do expect those types of endpoints may take quite a long time to evolve. We'll continue to follow these patients. And obviously, we'll continue to engage with the agency in terms of appropriate endpoints. But we do think a concrete path forward is with pruritus, and we're pretty confident in terms of the ability of volixibat to affect that in a positive way for patients.

And with no further questions on the line at this time, I would like to hand the call back to Chris Peetz for some closing remarks.

Great. Thanks again, everyone, for joining us today and for your continued support. We look forward to updating you next quarter. Good afternoon.

This will conclude the Mirum Pharmaceuticals Third Quarter 2025 Financial Results and Business Update. Thank you to everyone who is able to join us today. You may now disconnect your lines.