Mirum Pharmaceuticals - Q2 2023

Transcript

Operator (participant)

Good afternoon, and thank you all for joining. I would like to welcome you all to the Mirum Pharmaceuticals Report Second Quarter 2023 Financial Results and Provide Business Update. My name is Brika, and I'll be your moderator for today's call. All lines are on mute for the presentation portion of the call today, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star, then one on your telephone keypad. I would now like to turn the call over to Andrew McKibben, VP, Investor Relations and Finance. Andrew, please go ahead.

Andrew McKibben (VP of Investor Relations and Finance)

Thanks, Brika. Good afternoon, everyone. I'd like to welcome you to Mirum Pharmaceuticals Second 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 second quarter of 2023. Copies of this news release and SEC filings can be found in the investor section of our website. Full details and updates from the quarter can be found in our news release. 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.

Our pending acquisition of Travere's bile acid product portfolio and our program is based on management's current expectations, including statements regarding Mirum's current and future business and commercial plans, development programs, 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 filings with the SEC. With that said, I'll turn the call over to Chris. Chris?

Chris Peetz (President and CEO)

Thank you, Andrew. Good afternoon to everyone joining us on the call today. We are thrilled to discuss yet another quarter of strong growth at Mirum. We are on track to become a leading multi-product franchise in pediatric hepatology through the impact of LIVMARLI for patients globally, continued progress of volixibat in the clinic, and the pending acquisition of Chenodal and Cholbam. The last quarter saw substantial progress on our five-part strategy, which is to grow LIVMARLI in the U.S., launch LIVMARLI in international markets, establish new indications for LIVMARLI, advance and commercialize volixibat in adult cholestatic indications, and acquire additional high-impact medicines for rare disease. We've made great strides on all of these areas of strategic focus so far this year.

First, on growing LIVMARLI's commercial business, in the second quarter, we performed well against our guidance of 50% year-over-year net product sales growth in the U.S. in 2023, as well as growth from international markets, achieving $32.5 million of LIVMARLI revenue and $37.5 million total revenue. We are also excited about the recent progress in international markets with our approval in Canada and a growing list of countries selling LIVMARLI in distributor markets. LIVMARLI indication expansion efforts are also making great progress with our PFIC application under review with a December 13, 2023 PDUFA date. We're looking forward to the potential label expansion based on the compelling MARCH phase III data and bringing LIVMARLI to PFIC patients. In addition, the EMBARK biliary atresia study is fully enrolled, heading towards top-line data later this year.

volixibat is also progressing nicely towards interim analyses in PSC and PBC later this year, positioning those studies to expand into their potentially registrational portions. Finally, on the fifth strategic pillar of product acquisition, we are advancing towards closing the acquisition of Chenodal and Cholbam, two commercial products with over an aggregate of $100 million of annual net sales in 2022. As we've shared recently, we expect this acquisition to deepen our leadership in pediatric hepatology and accelerate our growth across our product line. We expect the transaction to close in the third quarter and are excited about the fit of these bile acid replacement medicines with LIVMARLI and the upcoming phase III readout for Chenodal and CTX. Financially, we are well positioned to execute on our strategy.

We ended the second quarter with a $330 million cash balance. Q2 was another quarter of financial growth, with relatively steady operating expense levels and a growing top line compared to the first quarter. The pending addition of Chenodal and Cholbam offers an opportunity to further accelerate our revenue with a highly synergistic business. Concurrent to this pending acquisition, we entered a private placement agreement for $210 million, supported by several existing and new investors, which we will use to fund the upfront payment in connection with the acquisition. This financing allows us to maintain the strength of our balance sheet and positions us for continued growth. 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 (COO)

Thanks, Chris. We continue to see strong demand for LIVMARLI, with $32.5 million in LIVMARLI net product sales in the second quarter of 2023, which represents 86% growth over the second quarter of 2022. Our U.S. business continues to perform well, with net product sales of $26.2 million. This growth was driven by strong underlying new patient demand. Notably, in Q2, we saw an increase in uptake by patients less than 12 months of age, consistent with the LIVMARLI label expansion to three months of age and older in March. Early treatment in Alagille syndrome is important to limit the impact of the disease, and we're pleased to see LIVMARLI addressing this need in the real-world setting. The U.S. business performance continues to track very well against our guidance of 50% growth in 2023 net product sales.

Now turning to international markets, we continue to see strong de novo demand in Germany and France launches, in line with what we saw in the U.S. launch of LIVMARLI. Pricing and reimbursement discussions are ongoing in major European markets, which we expect will continue throughout 2023, with full launches in most European countries starting in 2024. We also anticipate use of named patient programs in European and distributor markets to continue to grow throughout 2023. Overall, we are making great progress and are looking forward to our potential label expansion for PFIC in December in the United States, and the upcoming readout of the EMBARK study in biliary atresia.

We see the total opportunity for LIVMARLI across Alagille syndrome, PFIC, and BA as greater than $1 billion, and that this opportunity is strengthened by our recently announced agreement to acquire Chenodal and Cholbam, which will deepen our presence in pediatric hepatology and establish a focused multi-product franchise. There is a substantial amount of top and bottom-line synergy to unlock by putting the bile acid portfolio and LIVMARLI together in the hands of one commercial team, as the marketing efforts are similar in scope, and the approach to market access, product distribution, and patient services are quite complementary. We expect the bile acid products to continue to grow at low single-digit rates annually, with the potential indication expansion to CTX for Chenodal, providing an upside opportunity to increase patient diagnosis and treatment upon approval.

Financially, the strong second quarter net sales of $32.5 million for LIVMARLI and $27.5 million for Chenodal and Cholbam, reported today by Travere, totals approximately $60 million for the future combined franchise, with growth expected across all three products. In summary, we are building on the tremendous momentum and potential of our expanded portfolio to deliver these important medicines to patients with rare liver diseases. On that note, I'll turn the call over to Pam. Pam?

Pam Vig (Head of Research and Development)

Thanks, Peter. We are thrilled to be heading into a data-rich second half of the year. First, as Chris mentioned, we are eagerly awaiting the December 13th PDUFA date for PFIC. Secondly, we announced in May the completed enrollment for the EMBARK phase II study in biliary atresia. This study has a six-month primary endpoint assessing bilirubin, and we're on track for the top-line data readout later this year, which will be the first placebo-controlled data with an IBAT inhibitor in this setting. I'm also pleased to say that the phase II-B VISTAS study of volixibat in PSC currently has the total number of patients randomized or in screening required for the interim analysis. This interim will be triggered when 45 randomized patients have been on study for a minimum of three months and is expected around year-end.

In addition, the interim analysis for the phase II-B VANTAGE study in PBC is also expected around the same time. As a reminder, after these interim analyses, both studies will move into the potentially pivotal portion of the trial. Finally, turning toward the pending acquisition, we have high confidence in the success of the RESTORE phase III trial, evaluating Chenodal in patients with CTX, and look forward to top-line data in the fourth quarter. If positive, this study could support a label expansion for CTX with the potential for orphan exclusivity. Regarding our ongoing efforts to present the growing body of data on LIVMARLI, this summer, we presented 12 abstracts at both the EASL and European Pediatric Hepatology Congresses.

These data demonstrated LIVMARLI's significant ability to reduce bilirubin, symptoms associated with Alagille syndrome and PFIC, as well as real-world data in which patients with Alagille syndrome came off of the liver transplant waiting list after LIVMARLI treatment. We published a seminal analysis in Hepatology demonstrating that pruritus, serum bile acids, and bilirubin are significantly predictive for transplant and event-free survival in Alagille syndrome, showing that 93% of LIVMARLI-treated patients with pruritus reductions remained transplant-free after six years. In summary, the upcoming data readouts across indications, along with the ongoing robust clinical evidence of LIVMARLI in both Alagille and PFIC, cements our leadership position in pediatric hepatology, we remain committed to growing our presence in rare disease. With that, I'll turn the call back over to Chris. Chris?

Chris Peetz (President and CEO)

Thanks, Pam. Mirum is proud to be the leader in pediatric hepatology. The team continues to deliver high growth with LIVMARLI and make important advances in treatment options for cholestatic disease across our clinical programs. At the close of our acquisition of Chenodal and Cholbam, expected in the third quarter this year, we will have three approved rare disease products, an upcoming PDUFA date for label expansion for LIVMARLI, and four additional indications in development in high-need orphan settings with upcoming clinical readouts. We are exceptionally positioned to expand our leadership and impact in rare disease, look forward to bringing these important medicines to patients around the world. With that, operator, please open the call for questions.

Operator (participant)

Thank you. If you would like to ask a question, please press star, then one on your telephone keypad.

Chris Peetz (President and CEO)

Operator, do we have any questions in the queue?

Operator (participant)

I apologize. We have our first question from Steve, Steve Seedhouse of Raymond James. Your line is open.

Steve Seedhouse (Biotechnology Equity Research)

Hey, good afternoon, guys. I wanted to ask a couple questions about EMBARK. The first one is just, like, are patients screened and consented and ultimately enrolled in the study before they've had their Kasai procedure, or in the days or weeks after? I'm curious if there's a lead-in period sort of before treatment, where you track bilirubin kinetics and see sort of what the response is to the surgery before initiating treatment. I have a couple follow-ups as well.

Pam Vig (Head of Research and Development)

Right. Thanks for the question. Appreciate it. For the EMBARK study, the patients immediately post Kasai, so the discussion happens sometimes prior to the Kasai procedure, when they learn of the diagnosis after the, after the baby is born. The consent process can happen either before the Kasai surgery or immediately after the Kasai surgery, but the goal is to get these patients onto the. We're now fully enrolled, was to get these patients into the study as quickly as possible. There are no criteria for bilirubin in the study, so we're not looking at any bilirubin effects post Kasai. We're enrolling all patients. We're really excited to, to have the study read out towards the end of the year.

Steve Seedhouse (Biotechnology Equity Research)

Okay, great. Thank, thanks for that. Then just on the six-month analysis, I'm curious if there is a formal assessment of like transplant or other liver events already in that six-month time point, or, or let's say just through last follow-up of all the patients that are enrolled by the time you announce the six-month bilirubin analysis?

Pam Vig (Head of Research and Development)

Yeah. Thanks. For the six-month primary endpoint, as you note, is bilirubin, but we are assessing in other key secondary outcomes, transplant at that six-month time point, as well as other thresholds of bilirubin that are predictive of transplant. You know, these patients, at the end of the double-blind treatment period, roll over into open label extension, so we'll continue to follow those patients long term.

Steve Seedhouse (Biotechnology Equity Research)

Okay, then just the last question I had was just on that open label extension. I, I think, correct me if I'm wrong, I think it would go through 24 months total, so 18 months post the six-month analysis. The question is: Do you think you'll have the ability to leverage natural history control cohort data, you know, in similar ways that just, just based on some quality databases in, in ALGS and PFIC, for instance, here for biliary atresia? If not, is that work that you would hope to do at Mirum in the coming year? Thanks so much.

Pam Vig (Head of Research and Development)

Yeah, that's a great question. We're actually doing that right now. We're working with natural history registries, looking at, kind of, aligning those patients with the patients that are enrolled in our study and understanding a little bit more about thresholds and prognostic markers for transplant-free survival, and we'll continue to work with those registries throughout. We're looking at six-month time points, and then we'll obviously continue to look at long-term, long-term treatment versus natural history. All of that will be kind of as, as much as we can in the timeframe. The package will contain our data set plus work that we're doing supported by the natural history, and we'll have discussion with the FDA at that time.

Steve Seedhouse (Biotechnology Equity Research)

Great. Thanks so much.

Pam Vig (Head of Research and Development)

Thank you.

Operator (participant)

Your next question comes from Mani Foroohar of SVB Leerink.

Mani Foroohar (Senior Managing Director of Genetic Medicines)

Just there now, I guess. Thanks for taking the question, guys. A quick commercial question. I know we had a little bit of discussion last year around 2Q, 3Q seasonality. Can you give us a sense of where those trends are now? How should we think about modeling, and what are the key metrics we should be following or thinking about as we think about going through each season this year?

Peter Radovich (COO)

Yeah. Thanks for the question, Mani. Yeah, you know, so, you know, we feel that what we've seen in Q2 is really strong demand, that feel really good about how the business is pointed heading into Q3. You know, we're worth mentioning we're, we're just now at the, you know, beginning of August, so we'll have to see how things unfold over the next couple of months. Overall, feel really good about how the business is pointed going forward.

Mani Foroohar (Senior Managing Director of Genetic Medicines)

Great. That's helpful. Can you separately, looking forward post-presumptive deal close of the acquired, of the acquired assets, how should we think about margin evolving over time? Obviously, you're gonna have a little bit of expense that you bring on, but that's gonna be coming with a substantial amount of revenue. Is there room for further margin expansion going forward? On what time horizon might we see that as we transition from this Q4 first quarter with revenues from all the assets put together through next year?

Chris Peetz (President and CEO)

Thanks, Mani, for the question. The overall picture of bringing Chenodal and Cholbam into Mirum, we do see a tremendous amount of synergy. They will contribute substantially to margin at Mirum because of the overlap in our business. A lot of that behind some of the rationale of why we're so excited about bringing these products into our portfolio. We're not gonna be guiding towards margin, but what I can say is that this puts us on a very sound financial footing, and we do expect all three products to continue growing for the foreseeable future. That will continue to improve financial performance as we go.

Mani Foroohar (Senior Managing Director of Genetic Medicines)

Great. That's really helpful. Thanks, guys, and congrats on the quarter.

Chris Peetz (President and CEO)

Yeah. Thanks, Mani.

Operator (participant)

We now have David Lebowitz of Citibank. Please go ahead when you're ready.

Speaker 9

Hi, thanks for taking our question. This is [Debanchana] on for David. So we wanted to ask if you could update us on the timing of the closure of the Travere transaction, and also, could we have some insight as to how the operating spend might shift post-closure? Thank you.

Chris Peetz (President and CEO)

Yeah, thanks for the question. We're tracking towards closing this quarter, so we do expect a Q3 close. You know, as we move into a post-close time period, we're excited about jumping right in to bring these products over to Mirum. Overall, you know, they'll have a high impact in terms of margin and cash contribution right at the start in Q4. That synergy will play through in having these products in our hands. Expect that impact to show up with the improved performance in Q4 from having these products at Mirum.

Speaker 9

Okay. Maybe just a quick follow-up on that. How, what's your strategy on incorporating this product into your current pipeline? I mean-

Chris Peetz (President and CEO)

Yeah, thanks for that question.

Speaker 9

In terms of pharmaceutical.

Chris Peetz (President and CEO)

Absolutely. Yeah, we can, I'll have Peter speak through some of the, the planning, but these fit very well with LIVMARLI and the current LIVMARLI business. I'll let Peter get into some of the strategies we have planned.

Peter Radovich (COO)

Thanks, Chris. yeah, we're, we're really excited about bringing these products into Mirum, and excited about bringing several really talented folks from Travere into Mirum as well. you know, we have a team right now that's been out, you know, promoting LIVMARLI to pediatric hepatologists, and anticipate, you know, that team continues. Also we'll have a team that focuses on physician subspecialties that are often involved in identifying patients with bile acid synthesis disorders, Zellweger spectrum disorders, et cetera, that focus on neurology, ophthalmology, medical genetics. Have a liver-focused team and what we're calling a metabolics-focused team, and, you know, a modest expansion to our, our field footprint. Pretty, pretty excited about how that plays out going forward.

Speaker 9

Okay. That's very helpful. Thank you.

Chris Peetz (President and CEO)

Thanks for the question.

Operator (participant)

Thank you. We now have Ed Arce of H.C. Wainwright.

Thomas Yip (Research Associate)

Hi, good afternoon, everyone. This is Thomas Yip, asking a couple of questions for Ed. Thank you for taking our questions. Perhaps first question regarding the EMBARK data, regarding data positive and given LIVMARLI's orphan drug designation for biliary atresia, do you anticipate EMBARK top-line data, along with natural history data that you mentioned earlier, do you think collectively that's enough to support LIVMARLI's approval?

Chris Peetz (President and CEO)

Thanks, Thomas, for the question. Overall, that's our strategy, to take that package to FDA. It's too early to say, you know, what the determination will be. At this point, that biliverdin has not yet been fully established as an endpoint for approval, and that's the work that we're doing with the EMBARK data and the natural history work. Looking forward to putting together what we think will be a really compelling data set.

Thomas Yip (Research Associate)

Okay, got it. Then perhaps, can you go over some major differences that you know of so far between the FDA and the MAA, I mean, and the EMA, what they're looking for, for approval endpoint for biliary atresia?

Chris Peetz (President and CEO)

Thanks for the question there. I mean, we see a pretty common point of view in what we've had for our conversations. I think it's worth noting that there really is not a lot of clinical data or research that's been done in this space. The EMBARK study really is a landmark. It's going to be the largest and first study of IBAT in the setting, and, you know, one of the few studies that actually has an intervention that early after the Kasai. A really important data set to bring forward to advance care for these patients.

Thomas Yip (Research Associate)

Got it. Then perhaps one final question for volixibat. You mentioned the interim analysis for both VISTAS and VANTAGE studies, both expected later this year. Can you tell us what type of data we can expect to see?

Pam Vig (Head of Research and Development)

Yeah, thank you for the question. For the PSC VISTAS study, this is a blinded interim, so we won't be sharing any data. It is for dose selection, and then the study will upsize if need to or not, and then carry on a potentially registrational part two of the study. Wouldn't expect any top-line data out there, but would expect to be able to communicate that the study is, is carrying on and continuing on. For the PBC VANTAGE study, we will be sharing top-line data. This is an open interim analysis, and we'll be able to have a look at the data, and we'll be, we'll be sharing that with you later.

Thomas Yip (Research Associate)

Okay, understood. Thank you again for the kind of questions, and looking forward to data from the VANTAGE study.

Chris Peetz (President and CEO)

Yeah. Thanks Thomas.

Operator (participant)

Thank you. If you'd like to ask any further questions, please press star then one on your telephone keypad. Our next question comes from Brian Skorney with Baird.

Speaker 8

Hi, this is Charlie on for Brian. I wanted to ask about the SG&A. We've seen it climbing somewhat steadily over the past several quarters. Just wanted to know, particularly as you start to integrate the bile acid team from Travere, if we should expect that to keep rising, what kind of trajectory that's gonna take? Along a similar line, thinking about volixibat, as that hopefully gets closer to getting commercialized, what, what kind of regulatory strategy are you taking going forward? Considering that these are adult liver diseases, will this require a different commercial sales force, or do you think that you can also leverage the field force that you have currently? Thank you.

Chris Peetz (President and CEO)

Thanks for the questions. I'll comment a bit on SG&A and ready for a strategy, and I'll let Peter talk about the field team. For SG&A, we, we have, you know, what we see is just kind of those modest increases over prior quarters, really driven by initially the launch in the U.S. and now some of the international markets that we've brought on. Just for the base business, you know, some incremental SG&A increase over time is what we'd expect. Then, with adding in Chenodal and Cholbam, that will bring incremental SG&A expense, but really modest compared to the top-line opportunity. As, you know, Peter was mentioning earlier, there's a lot of synergy in how we approach those markets and the fit with LIVMARLI.

We are, we are bringing some people over who have great experience with those products from Travere. Excited about bringing those folks into the Mirum family. Overall, you know, the, the total contribution will be quite attractive with these products in our hands. Now, as we move forward to volixibat, which will be the, an opportunity to expand into adult hepatology. First, the, the endpoint and registration to, to comment on. These studies incorporate pruritus as the primary endpoint, similar to Alagille syndrome and the ongoing review for PFIC. The pruritus is the outcome for approval, and that's what we're using for the registration approach for the adult indications. I'll let Peter comment on the commercialization strategy.

Peter Radovich (COO)

Yeah. Thanks, Chris. Yeah, I think we would be able to leverage our commercialization team and infrastructure to, you know, launch volixibat into adults. Our current team is primarily pediatric focused, and it goes to, to the large, higher decile, larger volume adult liver doctors. We would look to expand into a broader, a broader group of adult hepatologists and gastroenterologists. I think of it as kind of an incremental build for that launch.

Speaker 8

Great. Thanks a ton for the color and congrats on the quarter.

Chris Peetz (President and CEO)

Okay. Thanks for the questions.

Operator (participant)

Thank you. I'd like to hand the call back over to Chris for any final remarks.

Chris Peetz (President and CEO)

Great. Thanks, operator, and thanks again to everyone for joining today's call. Have a great day. goodbye.