Mirum Pharmaceuticals, Inc. (MIRM) Q4 2021 Earnings Report, Transcript and Summary

Good afternoon and thank you for attending today's Mirum Pharmaceuticals fourth quarter business update call. My name is Amber and I will be moderator for today's call. [Operator Instructions]. It is now my pleasure to hand the conference over to our host, Ian Clements, CFO of Mirum Pharmaceuticals. Ian, please proceed.

Thanks Amber and good afternoon everyone. I would like to welcome you to Mirum Pharmaceuticals fourth quarter and year end 2021 conference call. I am 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 fourth quarter and full year ended December 31, 2021. Copies of this news release and 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 managements' 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 would like to turn the call over to Chris Peetz. Chris?

Thank you, Ian. And good afternoon to everyone joining us on the call today. 2021 was a banner year for Mirum and marked a significant turning point for both the company and the Alagille Syndrome Community. The LIVMARLI launch is off to a very strong start as we deliver on our mission to provide life changing medicines for rare diseases. Today, we will cover our accomplishments to-date and our upcoming milestones with some brief prepared remarks and then take questions. Peter will share some launch details and then Pam will discuss our pipeline. And finally, Ian will touch on a few financial highlights. To start, I'd like to remind people of the devastating need for treatment of pruritus and Alagille syndrome. This is the most burdensome effect of cholestasis and Alagille syndrome. It impacts daily life and sleep for patients and families and as a leading indication for liver transplant. The launch of LIVMARLI has introduced a crucial new treatment for cholestatic pruritus in these patients. Our label and our clinical data show the tremendous potential of LIVMARLI. And the impact of the long-term dataset with six years of treatment experience was recognized last year in The Lancet with late breaking presentations at AASLD looking at event free survival and transplant free survival. The strength of the LIVMARLI clinical data and the hard work of our dedicated team is leading to great launch success. We are pleased to report fourth quarter 2021 net product revenue of $3.1 million. And we anticipate the strength to continue throughout the year. Based on what we're seeing so far in 2022, we expect first quarter net product revenue to be at least $8 million and the full year to be at least $50 million. As a reminder, we estimate the overall total opportunity in Alagille syndrome to be more than $500 million in the U.S. alone. And the early experience in the market confirms our view of this. We have built Mirum to be a compelling business based not only on the U.S. opportunities but with global reach. As the U.S. continues to grow. We expect to see approvals in Europe later this year, and in partner markets into 2023. Also protecting the value we've built in the business, today we announced the patent grant and U.S. order book listing for LIVMARLI with coverage into 2040. Building further beyond the LIVMARLI commercialization, we have an exciting calendar of clinical readouts with data expected across all five of our additional programs over the next two years. And in short, we expect 2022 to be a truly remarkable year for Mirum and the patients we serve. Now with that, I'll turn it over to Peter who will provide an update on our LIVMARLI launch progress. Peter?

Thanks, Chris. We are proud of the initial results from our launch of LIVMARLI, the first and only FDA approved medication for this disease. Today I'll share a further color about our 3.1 million net LIVMARLI revenue, what we're seeing in the commercial business, and why we're so excited about the growth trajectory. First, it's important to note that there is no inventory in our reported product sales. Thus, the revenue number is a true representation of demand. Revenue is recognized when the patient receives drug. Also, approximately 60% of dispenses in the fourth quarter were reimbursed, which exceeded our expectations and is indicative of strong performance by our market access team. We believe the proportion of reimbursed expenses will increase throughout 2022. And in fact, we're seeing this happen already in the first quarter. And we expect to track towards approximately 90% of dispenses being reimbursed by year-end. We are very pleased with this result and attribute our success both to LIVMARLI’s strong product profile, as well as stellar execution by the entire Mirum team who brought a tremendous amount of passion, ingenuity and experience to this launch. Looking ahead, we believe LIVMARLI has significant growth potential in the United States. We're encouraged by the high level of awareness of the treatment benefits of LIVMARLI, as evidenced by the breadth of physicians who have prescribed LIVMARLI to-date. Encouragingly, we're seeing very high refill rates and treatment compliance in the commercial setting. We expected this based on the feedback we are hearing both from physicians and caregivers of LIVMARLI's rapid and robust symptomatic improvement in this highly symptomatic disease. This is further enhanced by our Mirum Access Plus Program, which is designed to maximize patient and family support to enable long-term treatment adherence. So putting all the dynamics together we're seeing in the business, we expect net revenue of LIVMARLI to be at least $8 million in the first quarter of this year. And looking at the full year, the strong start gives us confidence we'll achieve at least 50 million for 2022 LIVMARLI net product sales. Turning to our plans for LIVMARLI’s international launches, we remain on track for European approval in the fourth quarter of this year. And we have begun initiating commercial early access programs in Europe and other international markets. And markets outside of Western Europe, our seven commercialization partners are making excellent progress towards bringing LIVMARLI to patients suffering from Alagille syndrome around the world. In fact, we're excited to share that our partner GC Pharma recently filed in South Korea. And much like what we've seen in the United States, pre-launch engagements with healthcare professionals and payers in international markets revealed both a high unmet medical need in Alagille syndrome, as well as receptivity to LIVMARLI’s strong value proposition. Plus, in addition to the 2022 revenue growth, driven by launch success in the United States, we believe we are also well positioned for LIVMARLI revenue growth in 2023 and beyond as international markets come online. And now I'll hand it over to Pam to provide an update on our pipeline.

Thanks, Peter. It has been an outstanding finish to 2021, where we have presented groundbreaking data first for the publication in the Lancet from our pivotal study in Alagille syndrome, highlighting the rapid and sustained symptomatic relief provided by LIVMARLI, followed by two late breaking presentations at AASLD showing a LIVMARLI improved six-year event free and transplant free survival, as well as identifying predictive markers of event free survival. And these data have reinforced our belief that LIVMARLI is a huge step forward for patients with Alagille syndrome. And we continue our efforts on research and analyses, as we remain committed to expanding our scientific knowledge and worldwide academics collaboration. Now on the PFIC front, we're excited to have recently announced that we have completed enrollment in our MARCH Phase 3 study, and we expect top-line data in the fourth quarter of this year. As a reminder, the MARCH-PFIC study enrolled all PFIC subtypes at higher doses than previously tested and is the largest randomized PFIC Phase 3 clinical trial ever conducted, with more than 90 patients enrolled in the study. Now, this is a remarkable achievement given the size of the PFIC population. Lastly, we're pleased to share that we have opened an international extended access program for eligible patients with PFIC. Now, in Mirum's pipeline we have four other indications addressing cholestasis in both children and adults with several milestones ahead. In 2022, we're expecting two interim analyses from our volixibat program. One from our Phase 2b VISTAS study evaluating volixibat inpatients with primary sclerosing cholangitis and a second from our Phase 2b OHANA study for patients with intrahepatic cholestasis of pregnancy. In 2023, we're targeting interim data from our Phase 2b Vantage study evaluating volixibat in adults with primary biliary cholangitis as well as primary data from our Phase 2b EMBARK study evaluating LIVMARLI for children with biliary atresia. Now, all of these upcoming milestones, as well as our robust R&D pipeline and research efforts, puts us in a great position for continued growth. And on that note, I will turn the call over to Ian. Ian?

Thanks, Pam. The press release and 10-K issued and filed today provide a full financial update. I will call out a few of the highlights here. In addition to the $3.1 million of net product revenues discussed, we recorded $16 million in licensing revenue from our partners in South Korea and China, bringing our total revenue number to $19.1 million for the year. Our total operating expenses for the year were $192.6 million, which includes research and development expenses of $131.4 million, SG&A expenses of $59.2 million, and cost of sales of $1.9 million. Of note, these costs include $18.9 million of expense for the vet option agreement that will not continue into 2022. And also $23.2 million of expense from regulatory and clinical milestones related to the multiple progress points across the program's last year. Mirum remains well funded. And at the close of the fourth quarter ended December 31, 2021, we have cash, cash equivalents and investments of $261.5 million. To recall that in November of last year, we announced the sale of our priority review voucher granted by the U.S. FDA in September of 2021 with the approval of LIVMARLI, for $110 million. This with our growing top-line contribution puts us in a strong position to achieve critical milestones and expand our commercial presence over the next few years. So with that, I'll turn the call back over to Chris for any final comments, Chris?

Thank you, Ian. And thank you to everyone for joining today. To close Mirum has made remarkable progress this past year as we continue to advance treatments for devastating rare diseases. Our launch is off to a great start and the Mirum team is energized by the stories we are hearing from physicians and caregivers on the impact that LIVMARLI is having on Alagille syndrome patients. Again, based on what we're seeing in these early days of commercialization, we have confidence in achieving at least $50 million in net product revenue this year. This will provide a tremendous base for our business as our pipeline of five late-stage clinical programs matures. Thank you again for joining us. Operator, please open the line for questions.

Of course, thank you. [Operator Instructions] Our first question comes from Jessica Fye with JPMorgan. Jessica, your line is now open.

Hey guys, good afternoon. Thanks for taking my questions. Just a couple, first, can you walk through the patient and reimbursement dynamics that underpin your expectation for at least 8 million of sales in the first quarter of 2022?

Yes, thanks for the question. Quite excited about what we're seeing in the early days and let Peter speak to some of the dynamics underneath that number.

Yes, thanks for the question, Jess. So on the patient side, we're seeing really strong adoption as noted by our net revenue number. I think it's important to note that the net revenue number we're providing here doesn't have inventory. It's a really draft and transparent view into what's happening at the patient level but to be that countered is recognizes net revenue in our distribution model. The family actually is signing for LIVMARLI at their house. So it's giving you a direct view of what's happening there. And on the reimbursement side, we've been really pleased with where we've gotten to with payers, I think this is a direct reflection of us kind of getting out there early last year, educating on the burden of Alagille syndrome, having those clinical discussions, and what we expect, by the end of the year to have 90% of our dispenses reimbursed. And as we've kind of come into the year, we've seen coverage policies come down from several of the big plans that are really in line with LIVMARLI labeling, and just kind of allowing physicians to use this is in line with that labeling, which is very broad.

Okay. Couple of follow-ups, how many current LIVMARLI patients were previously on expanded access? And can you talk a little bit more about the decision to launch the expanded access program for PFIC patients? And how much use do you expect to get there in the context of [indiscernible] approved in that setting?

Well, thanks Jess for the question. I'll take the expanded access point briefly here and then pass it over to Peter. And on the PFIC expanded access program, it's important keep in mind that PFIC is more rare than Alagille syndrome. So we don't expect to see as many patients coming into that in total. But there are many countries where that is not available. And also as we've seen, response is not universal, to build. So there is a still unmet need that we're seeing demand for.

And thanks on the Alagille side, we have rolled over all of the Alagille expanded access patients in the U.S. to commercial drug. Important to note though, that in Q4, the 3.1 million net revenue number, the majority of that was actually driven by de novo prescriptions. So the really the clinical and EAP rollovers, really the minority of that. And the majority of that's just driven by new prescriptions, and really encouraged by the broad prescriber base we're seeing. We've seen broad participation prescribing from across our 120 or so key accounts as we've launched, which we think is a real indicator of health.

Great. And just a last one, can you elaborate on what the new 647 patent covers?

Yes. So, just briefly, it covers the use of LIVMARLI and Alagille syndrome at the label dose. And I'm quite excited to see that grants and get listed in the orange book.

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

Hey, thanks for having. Congratulations on all the progress. So if I'm hearing you correctly, the 8 million for this quarter and 50 for the year, is that exclusively U.S. sales? Or is there any probably adjusted European, Japanese, et cetera sales in there? And then secondarily, how should we think about modeling licensing revenue coming in from your partners will be, is it the right way to think about as a proportional relative to say net product sales, do you expect that it will be lumpy? Or like how should we be modeling that?

I can start with the first question Mani. While we are launching some of these commercial early access programs and in international markets, as I mentioned, we expect that to be very small this year. And really 2022 you should think about is substantially all of the revenue will be coming from the U.S. but really excited about that in 2023 and beyond what the international launches can mean for LIVMARLI revenue growth sustained over time.

Yes. And just to round it out on the licensing front, there will be some contribution from them, but relatively modest compared to the U.S. business so that the eight and 50 that we talked about, that's from the U.S. business exclusively.

Okay. And so what I'm hearing suggests that number is kind of a slow number of the quarter, which would suggest to me that it represents the revenue one would expect from the patients that you already have prescriptions for in hand. Is there some proportion, some assumption around new patient adds between now and the end of the quarter also baked into that 8 million or is all of that incremental?

So the way we look at -- we're looking at those numbers is, some of your language, it is in a sense of floor in what we're seeing in the business that does assume some modest growth and prescriptions as well. But we're trying to give some of that transparency to what we're seeing in the business, which is really strong here in these early days. So kind of trying to communicate here from where we stand today, really early in the year, already comfortable on hitting those numbers.

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

Hi, this is Ryan Deschner on for Steve Seedhouse. Wondered if you guys, gives a little more detail on the prescription volume split between large and small accounts for LIVMARLI interesting any super prescriber accounts so far.

Thanks, Ryan. I'll pass over to Peter to answer that one.

Yes. Thanks, Ryan. We've actually seen prescriptions from across the board. It's been really encouraging. We've seen now that some of the biggest programs in the country, be early adopters, and we've also seen at regional children's community, kind of children’s hospital we prescribed. So it's been a broad participation from across our prescriber base.

Thank you very much. And then just real quick, can you also comment on the duration of treatment that you're seeing so far?

Yes. That's, I think, one of the, as we tried to get to in our prepared remarks, that's one of the real strengths here, what we're seeing is the refills are really happening on a very kind of predictable cadence every month. And the feedback we're hearing from physicians and caregivers is just really, really positive that they're able to see a rapid and robust symptomatic improvement with LIVMARLI very quickly after initiating, which is, we think, you know, one of the major drivers of those refills kind of occurring on a very predictable cases.

Thank you, Ryan. Our next question comes from Ed Arce with H.C. Wainwright. Ed, your line is now open.

Great. Thanks for taking my questions. Congrats on the early progress here. Three questions for me. Firstly, on the reimbursement, you've noted 60% of drug dispensed has already been reimbursed and you're targeting 90% reimbursement rate by the end of this year. Firstly, so just kind of walk through the process as that improves throughout the year. What particular things need to happen and kind of walk us through that process? Secondly, just commentary around the penetration across your targeted physicians, I think you said 120 key accounts. Just some more detail around where that stands now and how you see it expanding throughout this year. And then lastly, if you have this metric it would be helpful, just thinking about the time it takes between first writing the script to drug in the hands of patients. Thanks so much.

Great, thanks. So those are all in Peter shops. I'll pass it over to, Peter walk through them.

Sure. Sure. Thanks for the questions, Ed. So yes, on the reimbursement kind of what it's going to take to get to entering the year with 90% of dispenses being reimbursed. The first step is to ensure we have reimbursable pathways in place kind of a way to get reimbursed. Generally the two categories of those either plan will write a policy or they'll handle a rare disease drug like this through mental exceptions. By the end of Q1 we expect 100% of Alagille life in the U.S. to have a pathway to get reimbursed. And then, the next step after that is ensuring high-quality of coverage. And that's kind of mentioned that the policies we've seen so far from the bigger plans I've just had been really very favorable and very much aligned with the evidence that's in the literature for LIVMARLI and the labeling by the FDA. So those are really kind of ensuring the quality of access is there now that we have a pathway for all Alagille patients in the U.S. is really the next step and our hub working to pull those through to pay dispenses. So that's really what needs to happen on the reimbursement side. I think your second question was about kind of penetration. We have seen a significant number of the 120 accounts prescribed, kind of up the pattern you can ask what is it going to have -- wasn't it just sort of expand that the pattern we're observing in early days is usually a new physician that hasn't prescribed LIVMARLI before will prescribe often to maybe one or two of their kind of most phenotypically severe patients gain comfort with the medicine based on that initial trial. And then we see kind of expansion as that experience kind of unfolds in those accounts. So that's kind of how we see those dynamics playing out. And then finally, you asked about prescription to fill, in there, we're seeing the average time from a prescription received to fill being a couple of weeks on average. In some cases, it's as fast as days we've seen some go out really fast and other cases, obviously, longer than that. And that's something that we hope to continue to be able to work on as we go through the year, but really, really happy with where we're at there as well.

Thank you, Ed. Our next question comes from Josh Schimmer with Evercore. Josh, your line is now open.

Thanks so much for taking the question. Just one on the looks about for ICP maybe can give us a sense of what we should be looking for in the interim Phase 2 analysis later this year. What do you think approvable endpoints for that indication are likely to be? Thanks.

Thanks, Josh. I will let Pam answer that.

Yes, thanks, Josh, for the question. So for ICP, we know the FDA approvable endpoints is pruritus. And so targeting that, but it's a little bit of a different disease setting. These women not only have pruritus, and as well as elevated serum bile acids, but there's also, harm to the fetus with very elevated serum bile acids. And so on that front, we know that every increase in serum bile acid micromoles per liter, is an increased risk to the fetus. And so frankly, any reduction in serum bile acids that we see in this setting is going to be meaningful for the fetus. And obviously, those reductions in serum bile acids will be meaningful for our pruritus. So we expect open label interim data later this year and looking forward to reporting that out.

Thank you, Josh. Our next question comes from Brian Skorney with Baird. Brian, your line is now open.

Hi, this is Luke on for Brian. Thanks for taking the question. For the MARCH-PFIC readout. Can you remind us of the empowering assumptions on the observed edge primary endpoint? And then is there a level of improvement on pruritis and serum bile acid reduction that you believe could provide a meaningful commercial advantage as a follower in the space?

Great. Thanks for the question. I will let Pam set some expectations on what we're thinking about for data empowering.

Yes. So with regard to this study, now, MARCH-PFIC Phase 3 study really excited about that. As mentioned, we've got 90 patients enrolled in the study across all PFIC subtypes. And I think a really important factor in this study is that we are going to much higher doses than what we've done previously in our Phase 2 INDIGO study. And in that study, if you recall, when the dose was doubled, we had an increased rate of response. And so what we're hoping for is that even with higher doses, we'll see increased response rate across PFIC subtypes. And that'll be reported out top-line data later this year. And then, yes, so I don't know anything else to add there. But that's we're really excited about that data and looking forward to reading that out.

Does that cover the question for you?

Yes. Thanks.

Thank you, Brian. Our next question comes from Yasmeen Rahimi with Piper Sandler. Yasmeen, your line is now open.

Hi, team, thanks for taking my question. I have few for you. Maybe the first one to start off. Can you comment on if you're seeing any scripts being filled off label for PFIC or other cholestasis diseases? Two, can you actually quantify sort of the compliance rate that you're seeing in the real world other than maybe describing it to the extent you can? And then, the third one is in regards to the roll back to back readouts, especially on VISTAS and OHONO that are both two due in the fourth quarter as well as I guess, MARCH-PFIC in the fourth quarter. Like, how do we really get comfortable that the data is really coming in the fourth quarter and that we're not notified, that it could push into first half of 2023. Like, just kind of provide some color or some matrix that gives us really comfort that this is the timeline in which top-line data is going to be expected. And thank you again for taking my questions.

Yes, thanks for the questions. I will touch on the first couple and then ask Pam to speak to the -- for looks about March timing. I think first on off label, it's really insignificant. So we're not seeing any notable off label prescriptions. And compliance, we put an actual number on it this early in the launch. We think it's premature. But it says it's strikingly supportive. It's really a highlight of the launch and what we're seeing so far, as we get further in, and you have more of that longer term treatment. Similar to what we see in our six years of clinical follow up that's when I think it'd be more relevant to get a view of that. So throughout the year, we expect that compliance and persistence to be a real highlight and supporting that early success in the full year numbers. And let Pam speak on pipeline timing.

Yes. Thanks, Yas for the question. So really excited about our looks about programs. I'll start there. First data will be on the PBC VISTAS study and an interim analysis expected later this year. And what we've seen so far is that patients are rolling into the long-term extension portion of the study and they're staying on drugs. So we view that as a really strong signal of the study effect and excited to share that data later this year. For ICP, we continue to push forward in this setting. There are some enrollment challenges on the backdrop as you can imagine of COVID and pregnancy, but we're working to address those by making adjustments to the protocol as necessary and operational adjustments as needed. And for PBC, interim data is expected in 2023. And on the MARCH-PFIC Phase 3 side, we have completed enrollment for this study. So it's a six-month primary endpoint. Enrollment is done so you can wind the clock forward, and certainly top-line data will be shared this year.

Thank you, Yasmeen. There are currently no additional questions waiting at this time. So I'll pass the conference back over to Chris Peetz for any additional remarks.

Great, thank you operator. And thanks everyone for joining. Your support makes the advancement of our important medicines possible. We'll talk with you next quarter. Goodbye.

That concludes the Mirum Pharmaceuticals Q4 business update call. Thank you for your patience. You may now disconnect your lines.