MARINUS PHARMACEUTICALS, INC. (MRNS)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 net product revenue (ZTALMY) was $8.0M, up 87% year over year; total revenue was $8.1M as BARDA contract revenue declined; GAAP net loss per share was $(0.63) versus $(0.61) in Q2 2023 and $(0.68) in Q1 2024 .
• Full‑year 2024 guidance was maintained: ZTALMY net product revenue $33–$35M and combined SG&A+R&D $135–$140M; cost actions are expected to cut H2 SG&A+R&D ~30% versus H1 (to $55–$60M), extending cash runway to Q2 2025 on $64.7M cash at 6/30/24 .
• Key pipeline update: TrustTSC (Phase 3 in TSC) enrollment completed; topline data expected in 1H Q4 2024 with sNDA targeted for April 2025 (priority review requested). IV ganaxolone (RAISE) met the rapid onset co‑primary but missed the durability co‑primary; company will seek a Type C FDA meeting on next steps .
• Global expansion: ZTALMY approved in China (launch early 2025 via Tenacia); EU launches by Orion expected H2 2024; managed access programs activated in MENA, Russia, and Canada with ex‑U.S. revenue expected to begin in Q3 2024 .
• Consensus (S&P Global) estimates were unavailable via our SPGI tool for MRNS; therefore, beat/miss vs Street cannot be assessed. Management reiterated guidance and disclosed H2 revenue implied by guidance of $17.5–$19.5M (deck), a potential intra‑year catalyst alongside TSC topline results in early Q4 .
  Values retrieved from S&P Global were unavailable for MRNS via our tool.

What Went Well and What Went Wrong

• What Went Well

  • ZTALMY revenue growth remained strong: $8.0M in Q2 (+87% YoY), with management reiterating the $33–$35M 2024 target and noting U.S. commercial investment reached profitability in Q1 2024 .
  • TrustTSC progress: enrollment complete, discontinuations <7%, >90% rollover to OLE; topline 1H Q4 2024; sNDA targeted April 2025 with priority review request .
  • Strengthened liquidity profile: removal of $15M minimum liquidity covenant, reduced 2024 amortization, cost reductions to lower H2 SG&A+R&D to $55–$60M; cash runway guided into Q2 2025 on $64.7M cash at 6/30 .

• What Went Wrong

  • RAISE (IV ganaxolone in RSE) missed one co‑primary (no progression to IV anesthesia at 36 hours), creating regulatory uncertainty despite strong EEG seizure burden reduction; company now pursuing a Type C meeting to align on endpoints/design .
  • BARDA revenue dropped to $0.1M from $1.8M YoY due to completion of base period funding, dampening total revenue growth vs product revenue strength .
  • Operating loss widened QoQ with restructuring expense ($2.0M) and higher SG&A, despite lower R&D; net loss per share still sizable at $(0.63) .

Financial Results

Revenue, expenses, EPS (USD Millions except per‑share and shares). Columns oldest→newest.

Additional KPIs and Balance Sheet (as of quarter end unless noted):

• Cash and cash equivalents: $64.7M (6/30/24) .
• Total liabilities $134.4M; stockholders’ deficit $(47.3)M (6/30/24) .
• Cost actions expected to reduce H2 2024 combined SG&A+R&D ~30% vs H1 from $80.3M to $55–$60M .
• Product gross margin (% of product revenue) – derived: Q2 2023 ~90.9% , Q1 2024 ~89.9% , Q2 2024 ~90.8% .
  Calculated as (Product revenue – Cost of product revenue) / Product revenue using reported figures .

Revenue composition (USD Millions):

• ZTALMY net product revenue: $7.951 (Q2’24) vs $7.509 (Q1’24) vs $4.249 (Q2’23) .
• Non‑product revenue (BARDA + Collaboration): $0.105 (Q2’24) vs $0.170 (Q1’24) vs $1.832 (Q2’23) .

Estimates vs Actuals:

• S&P Global consensus for MRNS was unavailable via our SPGI tool; no beat/miss analysis can be provided. Management reiterated FY revenue guidance and disclosed implied H2 2024 ZTALMY revenue of $17.5–$19.5M (deck) .
  Values retrieved from S&P Global were unavailable for MRNS via our tool.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Since launching ZTALMY in the U.S. two years ago, we have seen significant growth and adoption with strong revenue for the second quarter…” – Scott Braunstein, CEO .
• “We are…preparing for the upcoming Phase III readout in tuberous sclerosis complex…Pending a positive outcome…we plan to leverage the existing ZTALMY infrastructure to hit the ground running.” – CEO .
• “Cost reduction plans…are expected to reduce combined SG&A and R&D expenses by approximately 30%…The Company expects that cash and cash equivalents of $64.7 million…will be sufficient…into the second quarter of 2025.” – Press release .
• “Onset of effect was rapid with 80%…having status epileptic association within 30 minutes…[but] lack of progression to IV anesthesia within 36 hours failed to achieve statistical significance.” – CMO on RAISE ; deck corroborates .

Q&A Highlights

• TSC Phase 3 confidence: >90% of completers entered OLE; discontinuations <7%; Phase 2 subgroup signals (focal seizures; concomitant mTOR/CBD) informed Phase 3 design and expectations .
• RAISE next steps: Company targeting a Type C meeting in early Q4 to align on more objective durability endpoints (e.g., EEG) and stratification; exploring strategic/BARDA support for any future trial .
• Commercial durability and persistence: >70% of patients remain on therapy since launch; management sees stronger second‑half prescription trends tied to medical meeting cadence .
• Ex‑U.S./milestones: EU (Orion) commercialization payment potential (~€10M on CDD launch milestones); China milestones later; minimal current TSC off‑label exposure .
• Manufacturing readiness: Confident in capacity to support a potential TSC launch in 2025; second site in build‑out to de‑risk supply .

Estimates Context

• Street consensus (S&P Global) for Q2 2024 revenue/EPS was unavailable via our tool; we therefore cannot determine beat/miss against consensus. Management maintained FY ZTALMY revenue guidance of $33–$35M; with $15.5M reported in H1, the company’s deck implies H2 ZTALMY revenue of $17.5–$19.5M .
  Values retrieved from S&P Global were unavailable for MRNS via our tool.

Key Takeaways for Investors

• ZTALMY growth remains robust (+87% YoY in Q2), supporting unchanged FY revenue guidance and providing a base ahead of potential TSC label expansion in 2025 .
• TrustTSC is the principal near‑term catalyst: topline expected in 1H Q4 2024; favorable tolerability and design learnings from Phase 2 increase probability of success in a larger, readily identifiable market .
• RAISE delivered a clear rapid‑onset efficacy signal but missed durability by clinical practice‑driven endpoint; regulatory path depends on Type C dialogue to validate objective durability measures (e.g., EEG) .
• Cash runway extended into Q2 2025 with material H2 cost reductions; financing overhang moderated by covenant removal and amortization relief, though continued losses underscore need for execution on revenue/catalysts .
• Ex‑U.S. optionality is building (EU launches; China approval) with managed access revenue expected beginning Q3 2024, providing incremental revenue streams ahead of TSC .
• Trading setup: early‑Q4 TSC topline and September 20 investor day are key stock catalysts; clarity on IV path post‑FDA meeting is a secondary driver .
• Risk factors: ongoing GAAP losses, dependency on TSC data for medium‑term growth, and BARDA revenue wind‑down; however, commercial execution in CDD and cost actions mitigate near‑term liquidity risk .

Appendix: Additional KPIs

• Active patients on therapy ~200; persistence >70% since launch (commercial durability) .
• China approval (CDD), launch early 2025; EU launches H2 2024; managed access (MENA, Canada, Russia) with ex‑U.S. revenue expected starting Q3 2024 .
• Debt/financing: Oaktree principal reduced to ~$50M after $15M prepayment; minimum liquidity covenant removed; 2024 Oaktree amortization halved .