Earnings Call Transcript - MIRM Q2 2022

Operator, Operator

Good afternoon. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Mirum Q2 2022 Business Update.

Ian Clements, CFO

Thanks, Chris, and good afternoon, everyone. I'd like to welcome you to Mirum Pharmaceuticals second quarter 2022 conference call. I'm joined today by our President and CEO, Chris Peetz; our Chief Operating Officer, Peter Radovich; and our Head of R&D, Pam Vig. Earlier this afternoon, Mirum issued a news release announcing the company's results for the second quarter of 2022. Copies of this news release from SEC filings can be found in the Investors section of our website. Before we begin, I would like to remind you that during the course of this conference call, we will be making certain forward-looking statements about Mirum and our programs based on management's current expectations, including statements regarding Mirum's business plans, development programs, strategies, prospects, market opportunities and financial forecasts and guidance. 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, 2021, and any subsequent reports filed with the SEC. With that said, I'd like to turn the call over to Chris.

Chris Peetz, CEO

Thank you, Ian, and good afternoon to everyone. It's been another great quarter for Mirum. In the second quarter, we achieved $17.5 million in LIVMARLI net sales, which reflects our team's commitment and expertise and the life-changing impact of LIVMARLI for Alagille patients with cholestatic pruritus. This quarter's progress furthers our goal in becoming a leader in rare disease. We are proud of our launch success and look forward to continued growth in the United States as LIVMARLI becomes standard of care in this setting. The success and impact for patients with Alagille syndrome in the U.S. are why we are so excited about what's to come across all of our programs. First, the U.S. launch shows what's possible for the upcoming potential European and broader international approvals of LIVMARLI in Alagille syndrome. This disease has a severe burden around the globe, and we look forward to realizing the promise of LIVMARLI for patients more broadly outside the U.S., starting with the anticipated fourth quarter European approval. Second, the clinical impact we've seen in Alagille syndrome in our pivotal data, as well as recent presentations showing improvement in long-term outcomes, provide evidence of the potential for LIVMARLI and volixibat to improve lives across a number of cholestatic settings. We are progressing our five late-stage LIVMARLI and volixibat clinical programs which will generate multiple data readouts over the next 18 months, the first of which will be data from our landmark PFIC Phase 3 study, an important label expansion opportunity for LIVMARLI later this year. We have a lot to look forward to as we head into a busy end of 2022. The progress of LIVMARLI commercialization and in our promising pipeline is made possible by both the unwavering dedication of our team and our collective mission to bring important new treatments to patients around the world. With that, I'll turn it over to Peter, who will provide a commercial update.

Peter Radovich, COO

Thanks, Chris. We are delighted with Mirum's ongoing launch success as we get LIVMARLI, the first and only FDA-approved medication for this disease, into the hands of more patients. Today, I'll share further details around LIVMARLI's $17.5 million net product sales and what we're seeing in the commercial business. As a reminder, there is no inventory in our reported product sales, which are therefore a very accurate representation of patient demand. Now taking a closer look. Second quarter revenue was driven by a steady addition of new Alagille syndrome patients as well as consistent retail cadence with limited treatment discontinuations, which continue to mirror what we saw in the clinical trial set. On the payer side, we have achieved our goal with over 90% of LIVMARLI dispenses being reimbursed, which has been a strong point of the launch. We are thrilled about the rapid acceptance of LIVMARLI by physicians, payers, and patients in the first three quarters on the market. But it's clear we're still in the early days of launch with significant room to grow in the United States. In fact, our market research suggests that physicians intend to substantially increase utilization of LIVMARLI beyond the group that has received a prescription since launch. So looking forward, we expect continued quarter-over-quarter growth in the United States. Now turning to our plans for LIVMARLI's international launches. We are excited about the potential European approval of LIVMARLI in the fourth quarter. The Mirum team in Western Europe has been active this year in early engagement with physicians, payers, and other key stakeholders. As is typical of launching a rare disease medicine in Europe, we expect reimbursement to progress country by country over the year or two following approval. We expect to launch first in Germany shortly after EMA approval followed by other major markets in Western Europe. Beyond Western Europe, our eight commercialization partners are also making great progress towards introducing LIVMARLI to new Alagille patient populations worldwide, with potential approvals starting as early as this year in these geographies. In total, outside of the United States, we currently have over 100 Alagille syndrome patients on the LIVMARLI clinical program that we expect to transition to commercial therapy upon approvals and local commercial availability. And on top of this, in the PFIC clinical program, we currently have nearly 100 patients ongoing worldwide, who will also be eligible to transition to commercial therapy upon regulatory approvals and local commercial availability. And now I'll hand the call over to Pam to provide an update on our pipeline.

Pam Vig, Head of R&D

Thanks, Peter. In the second quarter of 2022, our team has continued to build the foundation for our important upcoming milestones for 2022 and 2023, which positions us well to deliver life-changing medicines to rare disease patients. First up, we expect top line data from our MARCH-PFIC Phase 3 clinical trial in the fourth quarter of this year. This landmark study builds on the findings of the INDIGO Phase 2 study of LIVMARLI and PFIC, in which dramatic clinical response led to breakthrough designation for PFIC2. Patients with sustained serum bile acid response in INDIGO also demonstrated five-year transplant-free survival with LIVMARLI, a remarkable finding in this disease. Also, in these responders, we saw significant improvements in pruritus, growth, and liver function. All of our learnings from the long-term INDIGO experience have been applied to our MARCH-PFIC Phase 3 study. Now as a reminder, this is the largest randomized PFIC clinical study conducted to date, with more than 90 patients randomized. This study includes all PFIC subtypes at higher doses than was previously tested in our Phase 2 clinical study, and we look forward to sharing top line results next quarter. We also have four additional late-stage studies that we expect to read out in 2023. First, the Phase 2b VISTAS study of volixibat in primary sclerosing cholangitis positions volixibat to be a significant advancement in the treatment of this progressive disease with no approved therapies. We now expect to conduct the interim analysis midyear 2023. This revised timeline is largely driven by the current environment for running clinical studies, including impacts on site openings outside the U.S. and the related supply chain. We're optimistic about the direction of the study, and we have recently had several international site openings and patient screenings. Study conduct has otherwise gone well, with some patients now in the open-label extension portion of the study, and we continue to receive positive feedback from sites. Regarding the OHANA study in patients with intrahepatic cholestasis of pregnancy, we recently launched a streamlined protocol amendment. We're enrolling patients for the open-label phase of the study and are planning for an interim readout in the first half of next year. Finally, in the second half of next year, we remain on track for data from both the volixibat Phase 2b VANTAGE study in adults with primary biliary cholangitis as well as primary data from our LIVMARLI Phase 2b EMBARK study biliary atresia. Across our pipeline and publications, we remain dedicated to driving academic and collaborative research in rare disease. We are proud of the significant data presentations we delivered this quarter at both ESPGHAN and EASL. All of these noteworthy presentations on long-term outcomes and response with LIVMARLI in Alagille syndrome can be found in the Publications and Presentations section of our corporate website. And on that note, I will turn the call over to Ian.

Ian Clements, CFO

Thanks, Pam. Earlier today, we issued a press release that included financial results for the quarter, which I'll briefly summarize. Additionally, full details can be found in the Form 10-Q also filed today. As highlighted by Chris and Peter, we recognized $17.5 million of net product sales in the second quarter, a 61% sequential increase over the first quarter of 2022. We expect continued growth of LIVMARLI revenues over the coming quarters. Our total operating expenses for the quarter were $48.9 million, which includes research and development expenses of $25.4 million, SG&A expenses of $21 million, and cost of sales of $2.5 million. I should also note that these numbers include our expense related to noncash stock-based compensation of $6.6 million. For the quarter ended June 30, 2022, net loss was $26.9 million or $0.84 per share. Mirum remains well funded. At the close of the second quarter ended June 30, 2022, we had cash, cash equivalents and investments of $225 million. To further strengthen acquisition, we recently reduced our royalty and milestone obligations for LIVMARLI and volixibat with the acquisition of Satiogen, which was previously a licensing partner and is now a wholly owned subsidiary of Mirum. In summary, with our growing top line contribution and efficient business model, we're in a strong position to achieve critical milestones and expand our global commercial presence over the coming years. Now I'll turn the call back over to Chris for any final comments.

Chris Peetz, CEO

Thanks, Ian, and thanks, everyone, for joining today. To close, Mirum continues to execute on all fronts in 2022 as we deliver on our commitments to make meaningful change for rare disease with LIVMARLI and our development pipeline. With $17.5 million in net product sales we achieved this quarter, this brings us to $28.4 million year-to-date. We intend to build on this trajectory in the months and years ahead through continued growth of LIVMARLI in the U.S., potential additional approvals and launches in Europe and beyond, and through pipeline opportunities as we look to announce top line data from our MARCH-PFIC Phase 3 study later this year, the first of several key data sets over the coming 18 months. And with that, operator, please open the line for questions.

Operator, Operator

Our first question is from Jessica Fye with JPMorgan. Your line is open.

Jessica Fye, Analyst

Hi, guys. Thanks for taking the question. Nice results this quarter. Where do you expect patient adds on LIVMARLI to come from moving forward? Is it more from broadening to new physicians or from existing prescribers going deeper within their patients? Maybe into more moderate patients if they initially started LIVMARLI in the most severe. And then thinking about the Europe launch. How should we think about the average price you might achieve in Europe relative to the U.S.? And lastly, when the Phase 3 MARCH-PFIC data reads out, what in particular are you going to be looking for in that data set in comparison to Albireo's Bylvay data in PFIC?

Chris Peetz, CEO

Thanks for the question, Jess. I'll turn it over to Peter to touch on those two commercial topics, and then we'll circle back on the PFIC data.

Peter Radovich, COO

Thanks for the question, Jess. In terms of where we expect to see growth in the United States regarding new patient adds, I think primarily, it's the latter phenomenon you described. A lot of our target physicians have prescribed initially, as you know, often to maybe the more severely affected patients, have gained comfort with LIVMARLI. We see them growing their prescriptions over time into their patient populations. There may be, to a lesser extent, some newer accounts to come online as well, but really predominantly the former phenomenon you note. In terms of European pricing, it's probably a little bit early to get into specifics as we look towards approval in Q4, but fundamentally feel really confident in LIVMARLI's value proposition and the data that underpins the submission, and that LIVMARLI can achieve a strong price in the European countries, kind of on par with other rare disease medicines.

Chris Peetz, CEO

And circling back to the PFIC question. You touched on the opening comments, Pam talked through some of the analysis points. But overall, we're looking to match or beat the tremendous effects that we saw in the INDIGO Phase 2 study that led to breakthrough designation already with FDA for PFIC Type 2. A lot of that's built into the analysis plan.

Pam Vig, Head of R&D

Yes. And I just would add to that. I think we're just really excited about the study because, as mentioned, it's the largest PFIC population that's ever been studied, with over 90 patients enrolled. I think that's a pretty significant number when you look at the rarity of the disease. In this study, the primary endpoint is in the primary cohort of PFIC2, and so what we're looking at as a primary endpoint is on pruritus. Key secondary endpoints include serum bile acid. And then there's a step-down approach using hierarchical methodology in which we'll then look at all of the patients, which includes PFIC2 as well as other subtypes, for the totality of the PFIC population. Then again looking at the primary endpoint and then the key secondary endpoints. So a lot of data to come, and we're really looking forward to sharing that with you next quarter.

Operator, Operator

Our next question is from Mani Foroohar with SVB. Your line is open.

Lili Nsongo, Analyst

Hi, good afternoon. This is Lili Nsongo on behalf of Mani. I just had a follow-up question on the PFIC data. First, would you be able to provide a little more granularity in timing of presentation? Should we expect the data to be presented at an upcoming medical meeting? And secondly, in terms of the data that we may see, where would you anticipate differentiation from competitive assets?

Chris Peetz, CEO

Thanks for the question, Lili. On timing, we have nothing more specific than Q4. We will plan to share top line findings when we conduct the unblinding and look to get the details presented at a conference, the next one that would make sense. I think it's too early to say which one that would be. In terms of differentiation, I think the key points that we think about as we designed the study was from the findings on dose-ranging across all the prior clinical work with LIVMARLI suggest that, at these higher doses we're using in the MARCH-PFIC Phase 3 study, you can expect more bile acid clearing. That should then translate into better clinical response. We'll be looking for response rates on pruritus and serum bile acids to see how those compare competitively.

Operator, Operator

The next question is from Yasmeen Rahimi with Piper Sandler. Your line is open.

Unidentified Analyst, Analyst

Hi, guys. Thank you so much for taking my question. This is Lauren on behalf of Yas. Just two questions. One, could you shed some light onto why timelines for volixibat moved from Q4 2022 to 2023? And then the second question about the PFIC study as well. What do you expect will be an outstanding data set? And then how soon could you get that data package into the label? And then have you started to warehouse these patients ready to put on LIVMARLI?

Chris Peetz, CEO

Great. Thanks for the question. I'll start with the PFIC follow-up and then let Pam speak to some of the other pipeline questions. In terms of the data timing, when we unblind in Q4, we'll look to turn around and submit that for label expansion relatively quickly. We'd expect to get it in early next year, in the first half of next year, and work through reviews to have subsequent approvals for PFIC based on that data. In terms of patients available, as Peter mentioned, we already have nearly 100 PFIC patients currently on the drug active around the globe with an expanded access program also open for geographies around the globe as well that will eventually be eligible for commercial rollover once we get to those approvals and reimbursements. So yes, we do have a very active clinical program in PFIC that will be eligible for rollover down the road. I'll let Pam speak to the parts about timelines.

Pam Vig, Head of R&D

Yes. So thanks for the question. For the VISTA study, which is the PSC study, we're enrolling. What we're seeing is that we have patients on the long-term extension, open-label phase of the study. We remain really positive that that's a great sign, and patients are remaining on drug. With regard to the timelines, I think that there's a typical nature of what's been seen across the industry, frankly, with some slower start-ups, some staffing shortages due to hangover from COVID and still existing, as well as supply chain issues. So all of that has been mitigated. Most of these issues and sites are now up and running. We've got new centers that are now opening outside of the U.S. and patients are in screening. We feel pretty good about where we are today and looking forward to that data readout next year.

Operator, Operator

The next question is from Ed Arce with H.C. Wainright. Your line is open.

Ed Arce, Analyst

Great. Thanks for taking my questions. And congrats on another strong quarter. Two questions for me. Firstly, on the $17.5 million in LIVMARLI sales. Just wanted to dig in a little deeper, if you could, and describe what really are some of the key drivers to that rapid growth. What, in your view, is really working so far during the launch? And then secondly, how many patients are on commercial drug as opposed to other pre-commercial programs? And then of that, what is the split between those naive and those that have come on to commercial drug as a rollover from trials?

Chris Peetz, CEO

Great. Thanks, Ed, for the question. I'll take a little bit on kind of that last part of the question, and I'll let Peter speak to what we're seeing in the field and what's being effective and dynamic on uptake. I think the first point to make on actual current patient numbers on commercial drug, given that there is no inventory in our model, it is pretty clear. So that $17.5 million, if you divided by what the approximate net price is per patient per quarter, you can see that roughly translates to about 200 patients on drug this last quarter. We give you that direction just so it's pretty simple to track from the net sales, which is what we're using to gauge our performance. In terms of the U.S. rollover, it really is very much a minority of the patients on drug. The vast majority of patients in the U.S. were prescribed after the approval. One thing that gives us a lot of optimism about ex-U.S. growth is that, in the 100 patients we mentioned for the Alagille syndrome expanded access and clinical program, is much larger than what we had in the U.S. Comparatively. But with that said, I'll let Peter talk about what's being seen out there in the field.

Peter Radovich, COO

Yes. Thanks, Chris. It's really been a steady addition of new patients over time since approval. Really high compliance and persistence rates, which is consistent with what we expected from our clinical trial. Products like LIVMARLI, which have a rapid symptomatic benefit, can be felt by patients very quickly after starting. Likewise, if they forget to take it for a few days, they'll notice that as well. We see very high compliance, persistence, and very low discontinuation rates. Those phenomena, combined with steady new patient adds, are driving the growth. Maybe the final point I'd add is we mentioned that over 90% of our dispenses were reimbursed this last quarter. So we're very happy with that, seeing the payers come online, with the vast majority of our dispenses being paid.

Operator, Operator

The next question is from Brian Skorney with Baird. Your line is open.

Unidentified Analyst, Analyst

Hi, guys. Charlie on for Brian today. Thanks for taking the question. Congrats on the quarter. I just wanted to get a little more color on how you're thinking about the magnitude of commercial potential in PFIC compared to Alagille syndrome, especially given what we've seen in the space lagging behind in terms of sales compared to how you've been doing in Alagille. I'd just be curious how you're thinking about those, especially given we've heard from a KOL that they should be similar prevalence and incidence rates. So it'd just be great to get your thoughts on that.

Chris Peetz, CEO

Thanks, Charlie, for the question. That's actually a good one to dig into because there are a couple of dynamics at play. Overall, from what we see, both literature and our conversations with some of the prescribers and pediatric GIs and hepatologists who see these patients suggest that Alagille syndrome is much more common. We see it as likely three to four times the size of PFIC overall, with 2,000 to 2,500 kids in the U.S. that we talked about for Alagille syndrome. One of the dynamics that makes some of the literature and epidemiology a little harder to be precise for PFIC is that it is a recessive disorder, so it does vary by geography much more than Alagille syndrome does. The dynamic you mentioned, where a KOL sees a similar number of PFIC patients as Alagille patients, often varies from city to city or state to state. There are several centers where the opposite is found where Alagille syndrome is common and PFIC patients are rarely seen. It does vary by geography, making PFIC numbers harder to nail down.

Operator, Operator

The next question is from Steve Seedhouse with Raymond James. Your line is open.

Ryan Deschner, Analyst

Hi, this is Ryan Deschner on for Steve Seedhouse. I was just wondering if you think it's possible to demonstrate a reduction in preterm birth, given the clinical outcome importance and also the pharmacoeconomic importance in the ICP program.

Chris Peetz, CEO

Thanks, Ryan, for the question. I'll let Pam jump in on this one.

Pam Vig, Head of R&D

Yes. So it's a great question. When you look at the literature on elevated serum bile acids, what you're alluding to is that any increase in serum bile acids corresponds to an increased risk to the fetus. So obviously, we are looking for outcomes in one of our secondary endpoints in the potentially registrational portion of the OHANA ICP study. We are looking at those outcomes as well. Any reduction you would expect in serum bile acids should hopefully translate to fewer untoward fetal outcomes. So pruritus is the primary and immediate outcome, as per the FDA guidelines looking at serum bile acids, and then also considering other events such as untoward fetal outcomes. We'll hopefully be assessing that in Part 2 of the study.

Operator, Operator

We have no further questions at this time. I'll turn it over to Chris Peetz for any closing remarks.

Chris Peetz, CEO

Thanks, Chris. And thank you everyone for joining today. Have a great evening. Goodbye.

Operator, Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.