Mirum Pharmaceuticals, Inc. — FY2021 Form 10-K Summary
Business context and reporting period
Mirum is a rare-disease biopharmaceutical company reporting for the fiscal year ended December 31, 2021. Livmarli (maralixibat) was approved by the FDA on September 29, 2021 for cholestatic pruritus in patients with Alagille syndrome aged one year and older. The company launched Livmarli in the United States in 2021 and continued development of Livmarli for progressive familial intrahepatic cholestasis and biliary atresia, and volixibat for intrahepatic cholestasis of pregnancy, primary sclerosing cholangitis and primary biliary cholangitis.
Financial and operating metrics
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Total revenue | $19.1 million | $0 | +$19.1 million |
| Product sales, net | $3.1 million | $0 | Commercial launch |
| License revenue | $16.0 million | $0 | Upfront license payments |
| Cost of sales | $1.9 million | $0 | New in 2021 |
| Research and development | $131.4 million | $81.6 million | +$49.8 million |
| SG&A | $59.2 million | $22.7 million | +$36.5 million |
| Loss from operations | $(173.4) million | $(104.3) million | Loss widened |
| Net loss | $(84.0) million | $(103.3) million | Loss narrowed by $19.3 million |
| Net loss per share | $(2.77) | $(4.09) | Improved |
| Net cash used in operations | $(132.8) million | $(89.1) million | Use increased |
| Cash, cash equivalents and investments | $261.5 million | $231.8 million | +$29.7 million |
| Unrestricted cash, cash equivalents and investments | $161.5 million | Not clearly provided | Includes $100.0 million restricted cash |
| Revenue interest liability | $129.9 million | $47.7 million | +$82.2 million |
Gross margin was approximately 39% on reported product sales, although management cautioned that initial margins benefited from Livmarli inventory costs expensed as research and development before FDA approval. The company had an accumulated deficit of $257.2 million and total stockholders’ equity of $120.2 million at year-end.
Material changes versus the prior comparable period
- Livmarli generated its first product sales in October 2021, producing $3.1 million of FY2021 net product revenue.
- License revenue of $16.0 million was recognized from the CANbridge and GC Pharma agreements, including $11.0 million and $5.0 million upfront payments, respectively.
- R&D expense increased 61% to $131.4 million, driven by volixibat trials, collaboration funding, higher personnel and stock-based compensation costs, and milestone payments.
- SG&A increased 161% to $59.2 million as Mirum built commercial infrastructure and launched Livmarli.
- Net loss narrowed primarily because Mirum recorded a $108.0 million net gain from selling its Rare Pediatric Disease Priority Review Voucher. The voucher was sold for $110.0 million of cash proceeds before commissions.
- Operating cash burn increased to $132.8 million, despite the PRV proceeds being recorded as a non-cash gain in the operating cash flow reconciliation.
- Mirum received $65.0 million under the Oberland revenue interest financing after FDA acceptance of the Livmarli NDA and ended the year with a $129.9 million revenue interest liability.
- Mirum entered into licensing arrangements covering Livmarli in Greater China, South Korea and Japan. The company also terminated its Vivet gene-therapy collaboration in December 2021 and accrued a final $6.3 million payment due in January 2022.
Guidance, outlook, risks and unusual items
Management did not provide quantitative revenue or earnings guidance. It expects product revenue to increase as Livmarli commercialization progresses, but stated that the launch is too recent to establish a reliable trend. The company expects continued substantial losses and higher expenses as it expands commercialization, advances clinical trials, seeks international approvals and adds personnel.
- Management stated that unrestricted cash, cash equivalents and investments were sufficient to fund current operations for at least 12 months from issuance of the financial statements.
- Western European commercialization of Livmarli was planned for the fourth quarter of 2022, subject to EMA approval. Topline data from the MARCH-PFIC Phase 3 trial was expected in the fourth quarter of 2022.
- The Oberland RIPA requires revenue interest payments initially equal to 9.75% of annual Livmarli net sales up to $350 million and 2.00% on specified higher sales tiers, subject to contractual adjustments and a maximum aggregate repayment framework. It also grants the purchasers security interests and put rights upon specified events.
- Livmarli is the company’s only FDA-approved product, creating substantial dependence on one product, one rare-disease market and concentrated distribution through a specialty pharmacy and a single distributor.
- Livmarli safety risks include gastrointestinal adverse events and liver transaminase elevations. In pooled ALGS data, 8.1% of patients discontinued because of ALT increases.
- Mirum relies on third-party suppliers, contract manufacturers, clinical research organizations and distributors, including certain sole-source providers. Supply interruptions, manufacturing deficiencies or regulatory inspections could affect commercialization and trials.
- Clinical and regulatory outcomes remain uncertain. Enrollment challenges, COVID-19 impacts, subjective pruritus endpoints, competing IBAT inhibitors and potential additional FDA or EMA requirements could delay approvals or reduce market opportunity.
- Mirum has significant license-related milestone and royalty obligations, including potential payments to Shire, Pfizer, Satiogen and Sanofi. It does not own composition-of-matter patents covering Livmarli and relies primarily on method-of-use and formulation protection.
- The company reported no material pending legal proceedings and no material loss contingency accruals. Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021; the external auditor did not provide an internal-control attestation because of the emerging-growth-company exemption.
Important facts investors should verify
- Early Livmarli demand, prescription persistence, payer coverage, gross-to-net adjustments and whether product revenue scales beyond the initial $3.1 million.
- Cash runway after considering $100.0 million of restricted cash, ongoing operating cash burn, RIPA payments and potential future financing needs.
- The economic impact of the RIPA, including the revenue-interest rate, put-option triggers, security interests and potential repayment obligations.
- Results and regulatory timelines for MARCH-PFIC, EMBARK, OHANA, VISTAS and VANTAGE, including whether endpoints and safety data support approval.
- EMA review and the planned European launch, as well as progress under international licensing agreements.
- Livmarli’s long-term safety profile, particularly ALT elevations, gastrointestinal events and safety in younger children.
- Third-party manufacturing capacity, supply continuity, quality compliance and concentration among the specialty pharmacy and distributor.
- Remaining development, regulatory and commercial milestones and royalties under the Shire, Pfizer, Satiogen and Sanofi agreements.
- Potential dilution from the at-the-market facility, equity incentive plans and future capital raises; the company sold 992,389 shares for net proceeds of $17.4 million in January and February 2022.