Earnings Call Transcript - MIRM Q1 2023

Operator, Operator

Ladies and gentlemen, welcome to the Mirum Pharmaceuticals first quarter 2023 financial results and business update. My name is Glenn, and I will be your operator for today's call. I will now hand over to your host, Andrew McKibben, to begin. Andrew, please proceed.

Andrew McKibben, President

Thanks, Glenn, and good afternoon, everyone. I'd like to welcome you to Mirum Pharmaceuticals' first quarter 2023 conference call. I'm joined today by our President and CEO, Chris Peetz; our Chief Operating Officer, Peter Radovich, and our Head of Research and Development, Pam Vig. Earlier today, Mirum issued a news release announcing the company's results for the first quarter of 2023. Copies of this news release and SEC filings can be found in the Investors section of our website. Full details and updates from the quarter can be found in our news release and 10-Q issued today. Before we begin, I'd like to remind you that during the course of this conference call, we will be making certain forward-looking statements about Mirum and our programs based on management's current expectations, including statements regarding Mirum's current and future business plans, development programs, and regulatory expectations, strategies, prospects, market opportunities, and financial forecasts and guidance. Mirum is under no duty to update these statements, and they are subject to numerous risks and uncertainties, and actual results could differ materially from the results anticipated by these statements. Investors should read the risk factors set forth in Mirum's 10-K for the year ended December 31, 2022, and any subsequent reports filed with the SEC. With that said, I'd like to turn the call over to Chris. Chris?

Chris Peetz, President and CEO

Thank you, Andrew, and good afternoon to everyone joining us on the call today. It's been another exceptional quarter for Mirum, as we continue to advance our leadership position as a high growth rare disease company focused on life-changing medicines. Our clinical, regulatory and business achievements in the first quarter with total revenue of $31.6 million are driven by our team's passion and expertise in addressing urgent unmet needs for patients with rare disease. With our five-part strategy to become a global leader in rare disease in place, we're pleased with the progress we've already made in 2023. First, we've continued to build on the successful launch of LIVMARLI in Alagille syndrome in the U.S., tracking well on our guidance of 50% year-over-year net product sales growth driven by new patient starts. Second, our international business is also building well with the recent launch in Germany and early access programs in France and other international partner markets. We look forward to additional launches around the globe later this year and into 2024. Third, we've accomplished an important step in our strategy to expand the label for LIVMARLI. In the first quarter, we announced label expansion to include patients three months and older. In addition, we submitted a supplemental NDA and European equivalent with our positive LIVMARLI PFIC Phase 3 data. Our team is preparing for the December 13 PDUFA date and is excited about bringing LIVMARLI as a new treatment option advancing care for PFIC patients. We also anticipate providing top-line data from the EMBARK study in Biliary Atresia in the second half of this year, a third potential indication for LIVMARLI. And fourth, in advancing into adult indications, we are conducting potentially pivotal studies for Volixibat in Primary Sclerosing Cholangitis and Primary Biliary Cholangitis and look forward to providing interim updates from these studies in the second half of this year. And the fifth part of our strategy, we continue to evaluate opportunities across rare diseases for leverage Mirum's industry-leading capabilities. We also recently took a significant step towards enabling our strategy with convertible note financing of approximately $316 million aggregate principal amount. This financing enabled the repurchase of the nearly 10% royalty committed to our prior royalty investor and added additional growth capital to the balance sheet. We were excited to see the high level of interest in supporting our strategy in this well oversubscribed transaction. We continue to project that our balance sheet provides three plus years of runway beyond cash flow breakeven. We have started 2023 off with great momentum, and I'm excited about what the Mirum team is poised to achieve this year and beyond as we provide patients with life-changing medicines. And with that, I'll pass the call over to Peter to discuss our commercial business in more detail before Pam gives an R&D update. Peter?

Peter Radovich, Chief Operating Officer

Thanks, Chris. We are pleased with the $29.1 million in LIVMARLI net product sales in the first quarter of 2023, which included $24.7 million from the U.S. and $4.4 million from international markets. The U.S. growth was driven by the addition of new patients as well as a strong retail cadence. And we're pleased to report that substantially all of the key pediatric liver accounts in the U.S. have prescribed LIVMARLI. Based on their positive clinical experience and ease of access with Mirum Access Plus, healthcare professionals report that they intend to increase the use of LIVMARLI across their Alagille syndrome patients. Taken together, the U.S. business performance is tracking well against our guidance for 50% growth in 2023 net product sales. Now turning to international markets. In Q1, we launched LIVMARLI in Germany, and it's off to a great start. We've already converted early access program patients to commercial drug, and we have seen impressive de novo demand, in line with what we saw in the U.S. launch. Pricing and reimbursement discussions are ongoing in major European markets, which we expect to unfold throughout 2023, with full launches in European countries beyond Germany starting in 2024. Also, we expect named patient sales in European and distributor markets to continue throughout 2023, although we anticipate quarter-to-quarter variability in order patterns. In summary, LIVMARLI is in a strong position after a year and a half in market as the first and only treatment for Alagille syndrome that is providing rapid symptomatic relief and long-term improvement in outcomes. LIVMARLI is becoming standard of care in treating cholestatic pruritus with over 600 Alagille syndrome patients treated globally to date. Clinicians have gained familiarity with and confidence in LIVMARLI's robust clinical profile as well as its exceptional access in patient support. And we believe this provides a strong competitive position, propelling a continued growth story in Alagille syndrome with exciting pediatric cholestasis indication expansion opportunities just on the horizon. And on that note, I'll turn the call over to Pam. Pam?

Pamela Vig, Head of Research and Development

Thanks, Peter. In the first quarter, we achieved important milestones in our pipeline that support the growth of our programs and ability to impact more patients. As a reminder, the primary problem in all of these diseases studied in our pipeline is accumulation of bile acids. In a classic cholestatic setting, IBAT inhibition has been shown to directly reduce toxic bile acid accumulation, the associated debilitating symptomatic burden, and in Alagille, LIVMARLI showed improved long-term outcomes versus standard of care. The benefits of profound IBAT inhibition were shown by the impressive data from our March PFIC Phase 3 study announced at the end of last year. And we're happy to share that our supplemental NDA submission was accepted with a PDUFA date of December 13 of this year. In April, we also submitted for approval of LIVMARLI in PFIC to the EMA for patients two months of age and older. Now the data from the March PFIC study proved our hypothesis with greater IBAT inhibition using higher dosing ratio for LIVMARLI drove a highly statistically significant reduction in both pruritus and serum bile acids across the broadest range of genetic PFIC types studied to date. Additionally, early and statistically significant improvements in growth as well as in bilirubin were observed in patients treated with LIVMARLI, where 40% of patients with abnormal bilirubin levels normalized compared to zero in the placebo group. Now these data suggest an overall clinical improvement beyond pruritus for these patients, and we have heard strong positive feedback from the physician community and if approved, look forward to the opportunity to expand LIVMARLI to a broad patient population. We're also happy to announce that we remain on track for top-line data readout for our Biliary Atresia program in the second half of this year. This study will provide the first placebo-controlled data for an IBAT inhibitor in this setting, and we're really excited to share them all when the study is completed. As a reminder, the primary endpoint is the Biliary Atresia study assessment bilirubin at 26 weeks, as bilirubin is the most predictive marker of disease progression and transplant in this setting. The dosing regimen in the BA study is the same as the March PFIC study, and the bilirubin improvements we observed in March are extremely encouraging as we look forward to our Biliary Atresia readout. Now turning to our pipeline programs in adult cholestatic indications. We expect interim analysis from our studies of Volixibat in both PSC and PBC in the second half of this year. We've previously shown that marked reductions in pruritus and serum bile acids can be achieved with IBAT inhibition in PSC, underscoring the potential for Volixibat in this setting. Currently, there are no approved therapies for PSC and roughly 60% of patients are being actively managed for pruritus with largely ineffective off-label therapies, none of which lower bile acids. Building off of our learnings from our pediatric program, we are dosing at a higher level with a BID dosing regimen, which adds to our confidence in these upcoming interim analyses. Finally, I'm proud of our team's academic and collaborative efforts as we continue to advance the benefit for patients from clinical studies to the real world. We're committed to leveraging our deep experience across all of these cholestatic disease settings as we continue our scientific leadership. And with that, I'll turn the call back over to Chris. Chris?

Chris Peetz, President and CEO

Thanks, Pam. Mirum is poised for continued growth throughout the years ahead. We anticipate that 2023 will be another transformative year with strong commercial growth, potential PFIC label expansion, top-line data of the first randomized dataset of an IBAT inhibitor in Biliary Atresia and interim analysis from our potentially pivotal Volixibat studies. We remain excited about the growth prospects and potential of Mirum as we work to provide new medicines to patients with rare disease. And with that, operator, please open the call for questions.

Operator, Operator

Thank you. We have our first question from Jessica Fye from JPMorgan. Jessica, your line is now open.

Unidentified Analyst, Analyst

Hey, this is Nick on for Jess. Thanks for taking our questions. Two quick ones for me. One, could you just talk a little bit about the factors that resulted in that timing shift for the Phase 2b VISTAS trial from mid-2023 to the second half '23? Is that more of a narrowing or a shift?

Pamela Vig, Head of Research and Development

Yes, hi. I'm happy to answer that question. Thanks for the question. So the reason for the delay in the PSC study is really a slight delay and mostly based on screening sales. There are a number of reasons why patients are screening out. One is the mix of lab values and some pruritus compliance during screening where they have to report their pruritus scoring, and if they're not compliant, they also get kicked out, because we want to ensure that they can remain in the study. Additionally, some are screening out due to itch scores that do not meet the minimum threshold to enter the study. What we're doing with some of this is we've got plans to advance tools and education on standardizing training and interpretation of those itch scores and just continue to drive forward, and we're starting to see more movement and good activity.

Unidentified Analyst, Analyst

Great. And as a quick follow-up. I know there have been some PBC trials in the past that have run into issues with high placebo responses on itch. Can you kind of just discuss how the VANTAGE trial is designed to help kind of mitigate those risks?

Pamela Vig, Head of Research and Development

Yes. Thanks for the question. In our PBC clarity study, as you know, we experienced a high placebo response rate. We took those learnings and applied them into this study design. We incorporated some of that into the assumptions for our analysis, and we also adjusted our study design to accommodate for placebo failures. I can't provide specifics about how we're doing that in the trial, but we have thought very deeply about it.

Unidentified Analyst, Analyst

Great. Thanks so much.

Chris Peetz, President and CEO

Thanks for the questions.

Operator, Operator

Thank you. Our next question comes from Mani Foroohar from SVB Securities. Mani, your line is now open.

Mani Foroohar, Analyst

A quick question on Biliary Atresia. How should we think about the scale of the opportunity, both in terms of the number of patients, which I think is fairly well defined, but also at what point would patients be treated and how long would they be treated? Is the expectation here that you'd pursue a lifelong study? Or would you expect that, based on your clinical feedback, patients in the case of a successful study commercialization may after one year, two years, some period of time, withdraw from the drug rather than remain on it for life?

Chris Peetz, President and CEO

Thanks, Mani, for the question. I just want to first comment that Biliary Atresia is the most common indication for transplant in liver transplantation and pediatrics. So really, in terms of scale of unmet need and impact you can have, this is a really important indication. I will ask Peter to maybe speak to a little bit about how to think about how this evolves over time, the duration of treatment, because there are some nuances on how we think this indication can build over time.

Peter Radovich, Chief Operating Officer

Yes. As you consider Biliary Atresia, it is more common than Alagille and PFIC by a fair amount when looking at it from an incidence perspective; probably about three times more common at newborn incidence than Alagille. However, the dynamics that Chris is describing result in a much lesser prevalent pool, as it is generally pretty rapidly progressive, often leading to liver transplant. We envision that, in the early years after approval, the eligible patient population will be roughly those children who are born within the last 12 to 36 months. However, if the drug performs as we hope and gets patients on therapy, and hopefully keeps them from liver transplant, that number could build over time and may surpass the other two indications.

Mani Foroohar, Analyst

That's very helpful. And when we discuss what the drug hopes to achieve, there is less certainty around the regulatory dynamic here, since it doesn't internally ask. Can you provide insight on how you think about target effects by target product profile? Is there more certainty regarding what is needed to show for clinical uptake, or is that still a bit uncertain?

Chris Peetz, President and CEO

Thanks for the question. There are several aspects to consider when thinking about the regulatory conversations we will have after this dataset is unblinded. Regulators are data-driven and they have patient interest in mind. I believe if we present a compelling dataset while advancing understanding of the disease and the significance of bilirubin, which is work we're doing in parallel, that will form a strong basis for asking why the EMBARK study could potentially support approval in Biliary Atresia. We do need to collect that data, and that is factored into the study design. I would point out some additional data from the PFIC study regarding mean change in bilirubin, and also consider the risk profile for transplant based on bilirubin levels at three months. We will focus on categorizing patients by bilirubin score, which facilitates understanding of risk outcomes.

Mani Foroohar, Analyst

All right. That's very helpful. Thanks, guys.

Chris Peetz, President and CEO

Thanks for the question.

Operator, Operator

Thank you. Our next question comes from Steve Seedhouse from Raymond James. Steve, your line is now open.

Ryan Deschner, Analyst

Hi, I have two questions. This is Ryan Deschner substituting for Steve Seedhouse. First, now that we're over a year into the LIVMARLI launch, have you noticed a significant increase in sales due to the rise in average patient weight? Additionally, how frequently are treating physicians adjusting doses for growth and other factors?

Chris Peetz, President and CEO

Thanks for the question. What we see is that patients are weighed approximately once a year and assessed for dose increases. We do observe dose increases in the real-world setting, which is consistent with the prescribing information for LIVMARLI. However, the majority of the growth we're seeing is due to de novo demand and new patient starts.

Ryan Deschner, Analyst

Excellent. And then also, in what areas do you anticipate potentially being able to differentiate from competitor odevixibat in Biliary Atresia?

Peter Radovich, Chief Operating Officer

In terms of Biliary Atresia, the timeline to have a randomized dataset was a significant part of our strategy. The EMBARK study is on track to deliver data in the second half of this year, and will give us a sizable lead with robust results in this setting. Another advantage is that at six months, patients will transition to open-label therapy, allowing us to understand the effect of starting treatment later for these prevalent patients. Finally, similar to previous settings, we expect our higher dose of LIVMARLI to have a larger clinical impact. We believe our advancements in understanding IBAT inhibitors will be evident in our top-line data.

Ryan Deschner, Analyst

Thank you very much.

Peter Radovich, Chief Operating Officer

Thanks for the questions.

Operator, Operator

Thank you. We have our next question coming from Debanjana Chatterjee from Citi. Debanjana, your line is now open.

Unidentified Analyst, Analyst

Hi, thanks for taking our call. I'm on for David Lebowitz from Citi. So we were wondering if you could comment on the ex U.S. inventory build? And what should we expect in terms of the sales strategy ex U.S. going forward?

Chris Peetz, President and CEO

In reference to the $4.4 million in sales we saw in Q1, much of that was from Germany and Western Europe, where there is very little inventory, indicating true demand sales as we initiate in those countries. We also have sales from named patient programs in distributor markets or regions where we do not sell directly, but our partners do, such as Central Eastern Europe, and the Middle East. In these dynamics, there is a country-specific mechanism in which individual patients are identified by physicians, and our distributor partners navigate local reimbursement access. Oftentimes, orders are placed for one patient covering three, six, and in some cases, 12 months of supply. This explains the lack of a consistent refill cadence every 30 days like we see in the U.S. Regarding our guidance for 50% growth, it is based primarily on U.S. sales, and while we are excited about the feedback we're receiving, it is too early to provide firm guidance on the international performance, given that we are just beginning there.

Unidentified Analyst, Analyst

That's very helpful. Thank you.

Chris Peetz, President and CEO

Thanks for the question.

Operator, Operator

Thank you. We have our next question from Ed Arce from H.C. Wainwright. Ed, your line is now open.

Unidentified Analyst, Analyst

This is Thomas here asking a couple of questions for Ed. First, congratulations on the very impressive quarter. So just trying to tease out the of the 600 patients with Alagille syndrome that are being treated with LIVMARLI globally. Can you tell us roughly what percentage stay on chronic segment? And if you can provide some major factors for patients to remain on LIVMARLI or why some may be discontinuing?

Chris Peetz, President and CEO

Hi, thanks for the question. We see the 600 number as a strong statement on familiarity and interest in prescribing LIVMARLI. This number reflects all sources over the life of the program for patients with Alagille syndrome who have been prescribed or part of the clinical study protocol. Thus, it isn’t useful to parse it out by country or source. However, across all pathways that brought patients to LIVMARLI—clinical study, expanded access program, commercial, compassionate use—there is a pattern of high compliance and persistence. Some of these patients have stayed with the program for six plus years due to the profound impact it can have.

Unidentified Analyst, Analyst

Thanks for that detail. Perhaps sticking with Alagille syndrome, with the U.S. label expansion down to three months of age and up, what are your expectations for both top-line impacts and also strategic considerations?

Chris Peetz, President and CEO

Yes, regarding the label expansion for Alagille down to three months of age, this is a critical step as that’s when most patients are diagnosed. It enables LIVMARLI to be a treatment option earlier. We currently maintain our guidance of 50% year-over-year growth in the U.S., and we’ll consider how to incorporate this expansion into international guidance as we proceed.

Unidentified Analyst, Analyst

Got it. Perhaps switching gears to PFIC with the application submitted to the EMA in Europe, when can we expect your next milestone, including CHMP opinion?

Chris Peetz, President and CEO

Yes, the PDUFA date is set for December, and we are excited about that. Potential timing for a CHMP opinion would be in late Q3 or Q4.

Unidentified Analyst, Analyst

Got it. Perhaps one final question. This one is financial. With the convertible offering growth in April, what is your estimated cash runway?

Chris Peetz, President and CEO

Just as we indicated in our earlier remarks, we are fully funded to reach cash flow breakeven and beyond. We estimate a runway of three plus years, which underscores the strength we have to operate our business long-term and avoid cash flow issues while continuing to grow our products.

Unidentified Analyst, Analyst

Got it. Understood. Thank you so much. Thank you again for taking our questions. Looking forward to the Biliary Atresia data.

Chris Peetz, President and CEO

Yes, thanks for the question.

Operator, Operator

Thank you. We have our next question from Brian Skorney from Baird. Brian, your line is now open.

Unidentified Analyst, Analyst

Hi, this is Luke on for Brian. Just a couple on EMBARK. Do you have an update on the scope of detail you might expect to include with the top-line readout beyond just bilirubin in particular or maybe any outcomes data? And then are you able to generally characterize the geographic dispersion of the enrolled patients in terms of U.S. versus other territories? Thanks.

Chris Peetz, President and CEO

Thanks for the question. Other than the primary, I can't specifically comment on what will be included in the top-line readout, as the study is not powered for outcomes at that time point. We have geographical activity across all regions, but there is nothing specific to highlight.

Unidentified Analyst, Analyst

Great, thanks. And then just one on the PFIC launch—do you think this will be a lean add-on, or do you see a need to further invest in the commercial team?

Chris Peetz, President and CEO

We do not anticipate needing additional operational expenses for PFIC; it's straightforward. In fact, the PFIC patients are likely being treated by a subset of prescribers who currently prescribe LIVMARLI for Alagille syndrome.

Unidentified Analyst, Analyst

Great. I'll back in the queue. Thank you.

Chris Peetz, President and CEO

Thanks for the questions.

Operator, Operator

Thank you. We have no further questions on the line.

Chris Peetz, President and CEO

Great. Thank you, operator. And thank you to everyone for joining today's call. Hope you have a great day. Bye-bye.

Operator, Operator

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.