Mirum Pharmaceuticals Inc

NASDAQ:MIRM

Earnings Call Transcript 2022-Q1

[Operator]

Hello, and welcome to the Mirum Pharmaceuticals first quarter business update. My name is Harry, and I'll be coordinating your call today. [Operator Instructions]

It's now my pleasure to hand you over to Ian Clements, Mirum's Chief Financial Officer, to begin. Mr. Clements, please go ahead.

[Ian Clements, CFO]

Thanks, Harry, and good morning, everyone. I'd like to welcome you to Mirum Pharmaceuticals' first 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 morning, Mirum issued a news release announcing the company's results for the first quarter of 2022. Copies of this news release and SEC filings can be found in the Investors section of our website.

Before we begin, I'd like to remind you that during the course of this conference call, we will be making certain forward-looking statements about Mirum and our programs based on management's current expectations including statements regarding Mirum's 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 all of that said, I'd like to turn the call over to Chris Peetz. Chris?

[Chris Peetz, President, CEO]

Thanks, Ian, and good morning, everyone. The first quarter of 2022 was another strong one for Mirum. In the first quarter, we achieved nearly $13 million of revenue, including nearly $11 million in net sales of LIVMARLI, a testament to our team's expertise and execution. The exciting pace of building value has existed at Mirum since inception, and we expect it to continue in the years ahead. We'll keep our call brief today with a quick launch and business update and then take questions.

First, for the context of the launch, I'll remind you of the heavy burden of disease and pruritis and Alagille syndrome and the tremendous impact that LIVMARLI has seen in our clinical program. Our launch has been informed by broad clinical experience spanning many years showing durable improvements in pruritus. More recent data have evaluated the long-term impact of LIVMARLI, suggesting potential improvement and event-free survival over time in Alagille syndrome. The success of our launch has been underpinned by the urgency we see to bring LIVMARLI to patients.

The importance of LIVMARLI to this community is evident in our commercial launch achievements in the first quarter, namely net product revenue of $10.9 million, continuing to show the progress of our commercial efforts. Our first quarter performance gives us confidence in continued growth throughout the year.

And the LIVMARLI opportunity for cholestatic pruritus and Alagille syndrome is only the beginning of what's possible for Mirum. The foundation of our pipeline and Mirum's success is innovative research for rare disease to bring new medicines to patients as quickly as possible.

As we continue to execute against the greater-than-$500 million U.S. market opportunity in Alagille syndrome, we are progressing our 5 other late-stage LIVMARLI and volixibat clinical programs which will generate multiple data readouts over the next 2 years. While in parallel, we are progressing expansion in global markets of LIVMARLI for Alagille syndrome.

Now with that, I'll turn it over to Peter, who will provide an update on our LIVMARLI launch progress. Peter?

[Peter Radovich, COO]

Thanks, Chris. We are proud of LIVMARLI's launch success and its role as the first and only FDA-approved medication for pruritus and Alagille syndrome. Today, I'll share further color about our $10.9 million net LIVMARLI revenue, what we're seeing in the commercial business and why we're so excited about the growth trajectory.

Before I get into the details of the quarter, I think it's important to note that there is no inventory in our reported product sales. Thus, the revenue number here is a true representation of demand.

Now taking a closer look at the first quarter, revenue was driven by strong demand dynamics, consistent refill cadence and both broader and earlier-than-expected support from payers. On this point, in the first quarter, approximately 75% of expenses were reimbursed. And we expect that rate in Q2 and beyond to be 90% or higher.

Regarding payer mix, we continue to see approximately 50% Medicaid and 50% commercial at this stage of the launch. And we have heard very positive feedback on treatment benefits from clinicians and families, observing impressive treatment compliance in the commercial setting. In fact, we are seeing similar compliance from what we saw in our clinical trials in the real world setting, a testament to the importance of this medicine for patients and parents.

On adoption dynamics, we are pleased that the majority of our targeted key accounts have prescribed LIVMARLI. Further, we have seen that some patients residing in outlying areas often don't travel to a major center in a metropolitan area and instead receive care from a community-based pediatric GI or liver doctor. Accordingly, we've added a few sales territories to ensure our team can adequately reach patients.

Turning to our plans for LIVMARLI's international launches. The Mirum international team and our partners are preparing for launch following anticipated approval in Europe later this year. Our team is initiating early access programs now while ensuring readiness for launch in key European countries. Further, our 7 commercialization partners outside Western Europe are matching our dedication to introduce LIVMARLI to patients around the world, with potential approvals starting early next year in these geographies.

And now I'll hand it over to Pam to provide an update on our pipeline. Pam?

[Pam Vig, Head, R&D]

Thanks, Peter. In the first quarter of 2022, our team has been focused on laying the groundwork for our important upcoming milestones for this year and beyond. Most notably, we expect top line data from our MARCH-PFIC Phase III clinical trial in the fourth quarter. As a reminder, the MARCH-PFIC study, now fully enrolled, includes multiple PFIC subtypes and higher doses than the Phase II INDIGO study, which was the basis for breakthrough therapy designation. And the MARCH study is the largest randomized Phase III clinical trial ever conducted in PFIC with more than 90 patients enrolled.

Moving to the rest of our pipeline, we have 4 additional indications under evaluation in cholestasis. By year-end 2022, we're expecting 2 interim analyses from our volixibat programs. The first interim analysis will be from our Phase IIb VISTAS study, evaluating volixibat in patients with primary sclerosing cholangitis. And the second will be open-label data from our Phase IIb OHANA study for patients with intrahepatic cholestasis of pregnancy.

And in 2023, we're targeting interim data from our Phase IIb VANTAGE study, evaluating volixibat in patients with primary biliary cholangitis. In addition, we're expecting primary data from our Phase IIb EMBARK study, evaluating LIVMARLI for children with biliary atresia.

Mirum prides itself on its innovative research and for being recognized in well-respected peer-reviewed journals. And with that, I'm very excited to share that our PFIC INDIGO Phase II data have been published in Hepatology Communications just yesterday. The authors found that maralixibat led to rapid and sustained reductions in serum bile acid levels in patients with nontruncated PFIC2, leading to 5-year transplant-free survival, as well as reductions in pruritus and meaningful improvements in growth and quality of life.

They further concluded that maralixibat appears to be a realistic and effective treatment strategy, which benefited the lives of patients and caregivers by relieving disease symptoms, increasing transplant-free survival and providing a well-tolerated nonsurgical alternative. We're excited about the potentials to confirm and hopefully improve upon these results in our MARCH-PFIC Phase III readout later this year.

In addition, the European Medical Journal also published our recent presentations from AASLD and NASPGHAN.

So all in all, we are very excited for what's to come as we build upon the incredible success of LIVMARLI for cholestatic pruritus in patients with Alagille syndrome 1 year of age and older. And we will keep you all updated on our progress across the various additional programs and data readouts.

And on that note, I will turn the call over to Ian. Ian?

[Ian Clements, CFO]

Thanks, Pam. The press release filed earlier today and the 10-Q to be filed later today provide a full financial update. I'll call out a few of the highlights here. Total revenue for the quarter is $12.9 million, including $10.9 million of net product revenue from LIVMARLI sales and $2 million in licensing revenue from our partner, Cambridge in China.

Our total operating expenses for the quarter were $45.6 million, which includes research and development expenses of $24.1 million and SG&A expenses of $19.1 million and cost of sales of $2.4 million.

Mirum remains well funded, and at the close of the first quarter ended March 31, 2022, we had cash, cash equivalents and investments of $239.9 million.

With that, I'll turn the call back over to Chris for any final comments. Chris?

[Chris Peetz, President, CEO]

Thanks, Ian, and thanks, everyone, for joining today. To close, Mirum continues to make remarkable progress. And nearly $13 million in revenue we achieved this quarter speaks to not only our team's dedication to ensure this medicine is in the hands of patients, but also to LIVMARLI's impressive safety and efficacy profile and ability to fill an urgent unmet medical need. We look forward to continuing on this trajectory in the months and years ahead as we both build on this initial launch of LIVMARLI and advance the balance of our pipeline to develop meaningful therapies for communities living with rare disease.

Operator, please open the line for questions.

[Operator]

[Operator Instructions] And our first question is from Jessica Fye of JPMorgan.

[Nick Lenard, JPMorgan]

This is Nick on for Jess. So first question from us. With revenue of $10.9 million, it seems strong well below the $8 million floor that you gave last quarter. Can you just talk a little bit about what drove that? The dynamics behind it? And how you're thinking about the remaining quarters leading up to the at least $50 million? Your guide for the full year 2022? And maybe how those -- how that revenue should be distributed?

[Chris Peetz, President, CEO]

Yes. Thanks for the question. I'll -- I can speak to kind of the full year and kind of guidance question, and I'll pass it over to Peter to talk about the dynamics underneath that.

And just to speak to the full year with the, at least $50 million number that we spoke about previously, that was provided as a floor, not necessarily a guidance point. And so what we see today, looking forward for the full year is that we're comfortably above that number is where we expect the year to land. So I wouldn't look at that as a guidance number and feeling like we're tracking to be certainly above it.

And I'll let Peter speak to kind of what drove the demand in the quarter and some of the dynamics out in the field.

[Peter Radovich, COO]

Yes, sure. In terms of the Q1 performance, I think we saw really strong demand dynamics and as well as refill dynamics. I think we've been really pleased there with the cadence of refills. And as I mentioned in the prepared comments, also from the payer perspective, our team has kind of executed really well. And now we're expecting, going forward, that 90% of our prescriptions will be reimbursed, and that kind of came in a little faster than other rare launches that we booked at, which is what informed our expectations for the prior thoughts.

[Nick Lenard, JPMorgan]

Great. And maybe just one quick follow-up on that 90% drug reimbursed by year '22. Where do you currently stand now? And should we expect you to achieve that 90% in Q4? Or could we potentially see that we didn't maybe before that in Q3?

[Peter Radovich, COO]

We think Q2 and going forward, it would be the expectation for the 90%.

[Operator]

And our next question is from Mani Foroohar from SVB.

[Rick Bienkowski, SVB]

This is Rick on the call for Mani. Congrats on the quarter. So we're just looking for some additional color on the LIVMARLI launch. I guess, first, as far as the expanded access patients in the U.S. goes, have those patients really been transitioned to commercial product at this point? Or is that still an ongoing process?

[Chris Peetz, President, CEO]

Yes. Thanks for the question. We -- so the expanded access and clinical study patients, those -- the conversion was pretty rapid actually. So we saw them convert over to commercial drug in the fourth quarter, so that first launch quarter.

[Rick Bienkowski, SVB]

Okay. Got it. I guess, also thinking about later this year with the potential launch in Europe, could you just maybe discuss a little bit how you see the time line to reimbursement across the EU? And maybe some of the target countries for the initial launch there?

[Peter Radovich, COO]

Sure. At a high level, following EMA approval, the first country we're launching is Germany, where shortly after launch, we kind of have the -- sorry, shortly after the central approval, we got the opportunity to launch. And then I think variable time lines, our focus has been primarily Western European countries. But I think in kind of a typical organ launch time line, we can expect over the next -- over the course of 2023 to be launching into other Western European countries like France, Italy, hopefully U.K. as well.

[Chris Peetz, President, CEO]

Yes. And I'd add on that, in addition to those kind of Mirum territories where we're going to be, the folks on the ground actually launching the products through some of our partner and distributor markets. We'll see -- expect to see approvals kind of starting early next year, leading to launches in some of those partner markets.

[Rick Bienkowski, SVB]

Fantastic. One more question from us. I guess, is -- also thinking through potential company updates for the rest of the year, could we potentially see any guidance revisions as you get more color on the LIVMARLI launch across the year? Or do you think you're currently happy with the 4 guidance and don't see that being updated for the rest of the year?

[Chris Peetz, President, CEO]

Yes. We're -- at this point, we're not providing -- continuing to not provide point guidance, but just to reiterate, very comfortable that we are above that number. So I would not look at that $50 million as a guidance number at all, frankly. And so we're still early in the launch and things continue to track well. We do expect quarter-over-quarter growth throughout the year. And as we get closer to year-end, we'll evaluate whether we provide a formal guidance when we get closer.

[Operator]

And our next question is from the line of Josh Schimmer of Evercore.

[Josh Schimmer, Evercore]

So you emphasized growth throughout the year. To what extent is that -- do you expect that to be driven by additional patients in the U.S. compared to contribution from other territories and you're on a fairly toward growth trajectory thus far, in terms of addressing the Alagille unmet medical need, how long do you think you're going to be able to sustain this type of growth?

[Chris Peetz, President, CEO]

Thanks for the question, Josh. Looking at the dynamics and as we look at the growth for this year, we're seeing it largely driven by the U.S. So Alagille's contributions will be very modest in the calendar year. We do expect some of it to come online. But as we talk about our growth expectations and that full year number, we're looking primarily at the U.S. And maybe I'll let Peter chime in a little bit on kind of what the dynamics in that over the year will be.

[Peter Radovich, COO]

Yes. Yes. I think within the U.S. We're really pleased with where we're at today in terms of adoption. We're tracking ahead of comparable rare launches that we look at, but still see more addressable Alagille patients that haven't received with LIVMARLI than those who have. And kind of the typical pattern we see is our accounts maybe prescribed with Marley for a more severe effect -- severely affected Alagille syndrome patients kind of gain experience, gain comfort and then broaden. So we expect to see how those dynamics continue to play out throughout 2022.

[Josh Schimmer, Evercore]

Great. And then R&D spend has ticked down nicely over the past couple of quarters. How should we think about that line going forward?

[Ian Clements, CFO]

Yes. So from an R&D spend perspective, I think that one would anticipate kind of fairly flat, I think, is the way that I'd look at it, I'm not giving kind of formal guidance on that OpEx for the year. But clearly, as we look at some of the studies that are kind of coming off, other studies are starting to ramp up. So you see some of that, for example, the MARCH-PFIC study kind of as we come towards the end of that, that will wind down a little bit. But conversely, obviously, we look at the ramp up on the volixibat studies to replace the expenses there. So I'd characterize it as kind of flat throughout the year from that perspective.

[Operator]

Our next question is from Yasmeen Rahimi from Piper Sandler.

[Yasmeen Rahimi, Piper Sandler]

Congrats on a great quarter. Two questions for you. Maybe the first one would be -- there's a competitor product that's going to read out in Phase III in Alagille, and I would love to -- in the fourth quarter, what activities are going to be put in place sort of into the second half of the year to really ensure that physicians continue to build strong brand awareness with LIVMARLI? And continue to really keep their patients on this product and not be enticed to switch over? That's one.

And then the second question is on the Advantage study that's going to read out. So the interim analysis -- sorry, the VISTAS studies, that's what I meant to ask. In the VISTAS study, can you kind of give us a little bit of color of like what the interim cutoff are that would qualify the Phase IIb to then transition into like a Phase III? And what type of information you would be sharing with us?

[Chris Peetz, President, CEO]

Great. Thanks, Yas. And to speak to the first one, then I'll pass it over to Pam to speak to VISTAS. And we're looking at the impact of LIVMARLI analysis in terms of the data we have there, that's really the focus of what we're doing this year, is make sure we roll out and get access for as many patients as possible as urgently as we can and get some of the data that we've generated from LIVMARLI and Alagille syndrome published.

Pam mentioned the journal article that highlighted some of the long-term event-free survival data, building awareness of that and showing what has been so exciting from the clinical program more broadly, all plays into how we see this -- the year playing out.

And I'll let Pam speak to VISTAS.

[Pam Vig, Head, R&D]

Yes. Thanks, Yas, for the question. So for -- just at a high level, for the maralixibat programs altogether, we're really excited about these studies and the opportunity that it presents across these cholestatic indications. And particularly for the VISTAS study, to answer your question, we're currently enrolling and expecting to complete a blinded interim analysis this year. And this interim is blinded, so we won't be reporting out any data. And we need to keep it blinded so that we can retain those patients to use them in the Part 2 registrational portion of the study.

And what we plan to learn from that interim is we'll be making a dose selection. So that data will inform for dose selection as well as determine sample size for the second portion of the study, so determining if you need to upsize the trial or not. And then we'll feed that into the potentially registrational portion of the study. So we'll keep you updated when we get to that portion of the study.

[Chris Peetz, President, CEO]

And I think just to kind of reiterate and recap the point on the VISTAS study design, we discussed it with FDA and incorporated all of their feedback for this to be the pivotal study once it moves into the second part , in part 2.

[Yasmeen Rahimi, Piper Sandler]

Team, just to clarify, so let's say the announcement comes and says, you don't need to increase the sample size and you're going to go with, let's say, the highest dose, and does that mean that the blinded, the committee that looked at the data saw really quite remarkable improvements in pruritus that gave them the confidence that it has a high statistical powering POS to hit in the -- by transitioning into a pivotal study? Like I guess what I'm trying to get at is like how strongly confident can we be on that announcement that the efficacy was really astonishingly strong and that -- and predictability of the Phase III?

[Chris Peetz, President, CEO]

Yas, you're thinking about it the right way. So there's a prespecified threshold that does mean that if the results remain blinded, there's an effect in there. And so that's exactly how we designed the study. And if that's not the case, we'll have an open analysis and share the findings with you.

[Operator]

And our next question is from the line of Ed Arce of H.C. Wainwright.

[Ed Arce, H.C. Wainwright]

Congratulations on the impressive quarter. First, I wanted to ask about what you're seeing? I know you've spoken about in terms of the commercial progress early in this launch on several aspects, including on the payer side. But I'm wondering if you could speak about the dynamic between the physicians and patients and sort of the push and pull there that is also underlying the strong demand that you're seeing?

And I guess in a related question, some companies have been reporting impact from the Omicron wave this quarter, especially in January, February. Any thoughts or commentary around that as well? And I have a follow-up.

[Chris Peetz, President, CEO]

I'll ask Peter to speak to that.

[Peter Radovich, COO]

Yes. Thanks for the question. So yes, I think the dynamic between physicians and patients. The pruritus and Alagille syndrome is really debilitating. And I think it's recognized as one of the major -- based on the needs and the management of these patients. So I think, as I mentioned, kind of what we see is particularly physicians in or part of the clinical program, they want to get familiar with LIVMARLI. So they'll trial it on a probably a bit more severely affected patients and just kind of gain comfort with this new medicine and then kind of broaden over time.

The Omicron wave is a really good point. We -- I think now that we're past that, we are kind of back in person in most of the country. But I think COVID and especially the staffing issues in a lot of these clinics that have kind of come up around the pandemic, have been a pretty big challenge I think for a lot of new product launches. A lot of patients haven't seen their hepatologists in a couple of years and they're scheduling and logistical backlogs to get them in to clinic in BC, which is generally when clinicians would look to start a new chronic medication.

So I think there have been challenges there for us, but I mean, obviously, despite those challenges, the performance has been very, very strong. And I think that's another thing as those issues kind of work out, work themselves out and come out of the pandemic, I think there's a reason that we could see continued growth as those dynamics work out.

[Ed Arce, H.C. Wainwright]

That's great. And then I just wanted to ask sort of as you continue to build on this commercial platform that is growing quite rapidly. And with the additional LIVMARLI indications, obviously, strongly overlapping in terms of call points and just thinking about how you could leverage what you're building now for future indications. And thinking about how would you communicate the efficiencies there that you could gain in future indications?

[Chris Peetz, President, CEO]

A couple of points to make on that. First, within LIVMARLI, you're spot on that there's 100% call point overlap between the indications. In particular, Alagille syndrome probably is the broader call point of the 3, just given the dynamic of the indication and number of patients out there. So that sets us up well to have a highly leveraged organization here as we launch the additional LIVMARLI indications eventually, and then expand into adult hepatology. I'd say already, the commercial business is highly performing.

In the first quarter, if you just look at the net revenue and commercial expenses, we're already breakeven as a commercial organization. So see this as a really attractive business model as we go and push further into the Alagille launch and add the additional indications.

[Operator]

[Operator Instructions] And our next question is from Brian Skorney of Baird.

[Brian Skorney, Baird]

Really impressive launch but would really be great to get any sort of qualitative insight into sort of the penetration of the identified ALGS market so far in the U.S. It's obviously off to a quick start, but I guess from the field, can you give any sort of thoughts on what the penetration is looking like into sort of a low-hanging fruit of patients who are sort of warehoused or have prior experience with maralixibat? And in and under care versus kind of when would we expect to get to a point where you're looking at -- pooling in patients who maybe are not under active care identifying patients not in the system yet?

[Chris Peetz, President, CEO]

Thanks, Brian. Just from a -- broadly speaking, it's been a great fast start, but we do see opportunity and more patients to go deeper here. So we are still early on in the launch. Maybe I'll ask Peter to speak to some of the things we're doing to kind of expand and kind of go further into the launch.

[Peter Radovich, COO]

Yes, sure. I mean 1 comment also the -- I think Alagille syndrome has a very high diagnosis rate. So I think the vast majority of patients out there who have the disease are identified and in the system. And we have noticed that some patients, for example, choose not to travel to a major metropolitan area, and they prefer to get management from their local pediatric GI doc. That's a very tractable target for us. There's still not that many that pediatric GI docs in the country, so that's kind of 1 area we've been able to expand. But I think the take home point is, as Chris mentioned, there's still more addressable patients that haven't proceed LIVMARLI than have. So we do foresee continued growth.

[Brian Skorney, Baird]

Great. And then maybe if I could ask another question on the MARCH-PFIC study. I think you're dosing at 570 micrograms per kilogram BID versus the LIVMARLI label, which is at 380 QD, but titrated up from 190. So I just wanted to see, could you give us a reminder of the clinical experience that you have at this dose to date? And any thoughts on sort of this higher level of dosing or expectations for how much this could further impact bile acid reductions and pruritus here?

And given the LIVMARLI pricing, if it is not in the same milligram basis, would seem like a pretty substantial step up. Would you be able to offer 2 brands with differential pricing?

[Chris Peetz, President, CEO]

Thanks, Brian. On the pricing front, we're still -- it's too early to kind of talk about a pricing strategy, and we'll kind of finalize that as we get to the potential label expansion. I'll ask Pam to speak to some of the clinical questions.

[Pam Vig, Head, R&D]

Yes. Thanks for the question. So we're really excited about this as we're, first of all, very excited about our recent publication yesterday on the INDIGO study. And at that dose, as you mentioned, which is -- which we started with a lower dose of 280 micrograms per kilogram per day. And when we double that dose in that Phase II study, we saw a greater proportion of patients than having a response, driving more bile acids out of the body with higher doses.

So we think that by going even higher than that, which is doubling that double of the dose in the Phase III study that we're hopeful that we can even drive greater bile acids out of the hepatocytes and the systemic circulation. Hoping that translates to greater response rates in the noncompeting BSEP2 population, and we're looking forward to see how that translates into all of the other subtypes in the 90 patients that we enrolled in the study.

[Operator]

And our final question is from the line of Steve Seedhouse of Raymond James.

[Ryan Deschner, Raymond James]

This is Ryan Deschner on for Steve. I was just wondering if you guys are still actively seeking collaborators to potentially develop candidates with alternative mechanisms like your past relationship with Vivet to broadly address PFIC -- additional PFIC genetic subtypes?

[Chris Peetz, President, CEO]

Overall, we do have, what I'd say, is an active corporate development effort. And the overall objective here is to continue to grow Mirum and really grow in a way that is back to the roots of how the company started by finding underappreciated programs that need the attention to bring them to patients.

So we look at opportunities kind of broadly across pediatric rare disease and orphan liver. That's it with the team here, the expertise that we have in-house from a development and regulatory standpoint, and then also the commercial team that has broad experience across rare and liver disease. So it's still active and looking broader than the current indications that we have.

[Operator]

And we have no further questions at this time. So my pleasure to hand back to Chris Peetz for any closing remarks.

[Chris Peetz, President, CEO]

Great. Thank you, operator, and thanks, everyone, for joining us. And thanks for your continued support of Mirum. We look forward to sharing our progress with you next quarter. Goodbye.