Mirum Pharmaceuticals, Inc. — Q1 2021 Form 10-Q Summary
Business context and reporting period
Mirum is a clinical-stage biopharmaceutical company developing maralixibat and volixibat for rare cholestatic liver diseases. The filing covers the three months ended March 31, 2021, and was filed May 6, 2021. The company had no approved products and no product revenue.
- Maralixibat was being developed for Alagille syndrome (ALGS), progressive familial intrahepatic cholestasis (PFIC) and biliary atresia.
- Volixibat was being developed for primary sclerosing cholangitis, intrahepatic cholestasis of pregnancy and primary biliary cholangitis.
- At March 31, 2021, the company had 85 full- and part-time employees and 30.2 million common shares outstanding, excluding shares subject to repurchase.
Financial performance and key metrics
| Metric | Q1 2021 | Q1 2020 | Change |
|---|---|---|---|
| Revenue | $0 | $0 | No product revenue |
| Research and development expense | $38.1 million | $17.3 million | +$20.8 million |
| General and administrative expense | $9.5 million | $4.7 million | +$4.8 million |
| Total operating expenses | $47.6 million | $22.0 million | +$25.6 million |
| Loss from operations | $(47.6) million | $(22.0) million | Higher loss |
| Net loss | $(50.5) million | $(21.3) million | $(29.2) million |
| Basic and diluted loss per share | $(1.68) | $(0.86) | Higher loss per share |
| Net cash used in operating activities | $(25.2) million | $(18.4) million | $(6.9) million |
- R&D included $17.0 million of development milestones, primarily $15.0 million related to FDA acceptance of the ALGS NDA and $2.0 million related to initiation of the volixibat VISTAS trial.
- Stock-based compensation was $5.3 million, compared with $2.6 million in the prior-year quarter.
- Interest expense was $3.4 million, entirely related to the revenue interest financing arrangement.
- Cash, cash equivalents and short-term investments totaled $213.1 million at March 31, 2021, down from $231.8 million at December 31, 2020.
- Cash and cash equivalents were $90.7 million, and short-term investments were $122.4 million.
- Total assets were $222.2 million; total liabilities were $88.4 million; and stockholders’ equity was $133.9 million.
- Accumulated deficit was $223.7 million.
- The company reported no meaningful operating margin because it had no revenue and substantial research and development spending.
Material changes versus the prior comparable period
- R&D expense increased 120%, primarily because of milestone payments, higher personnel and stock-based compensation costs, and expanded volixibat clinical activity. Maralixibat-specific spending decreased $1.6 million because prior-year NDA-related manufacturing activity had been completed.
- G&A expense increased 102%, reflecting higher staffing, public-company compliance costs and commercial preparation for a potential maralixibat launch.
- Net loss increased to $50.5 million from $21.3 million, while weighted-average shares increased to 30.1 million from 24.7 million.
- Operating cash burn increased to $25.2 million from $18.4 million.
- Investing cash flow changed from $33.8 million provided in Q1 2020 to $32.8 million used in Q1 2021, primarily because the company purchased $83.4 million of investments.
- Financing cash inflow was $6.6 million, mainly from the January 2021 partial exercise of underwriters’ stock option, versus $44.7 million from a public offering in Q1 2020.
Guidance, outlook, risks and unusual items
- The FDA accepted the maralixibat ALGS NDA in March 2021, granted priority review and set a PDUFA target date of September 29, 2021. Management was planning for a potential U.S. launch in the second half of 2021.
- The company expected topline data from the Phase 3 MARCH PFIC trial in early 2022, planned to dose the first PBC patient in the second half of 2021 and had begun enrollment in several volixibat trials.
- Management stated that existing cash, cash equivalents and investments were sufficient to fund operations for at least 12 months from the issuance date of the financial statements, while also warning that substantial future losses and additional financing needs were expected.
- Under the revenue interest purchase agreement, the company received $50.0 million in December 2020 and received an additional $65.0 million in April 2021 after FDA acceptance of the ALGS NDA. The arrangement provides the purchaser with tiered rights to future maralixibat net sales and includes senior security interests, covenants and put-option provisions.
- The RIPA liability was $50.9 million at March 31, 2021. The company may receive up to approximately $85.0 million in additional installments, subject to regulatory and purchaser conditions.
- COVID-19 had not caused a significant financial impact during Q1 2021, but it had affected enrollment in the MARCH trial and could delay trials, regulatory reviews, manufacturing, supply chains and financing.
- Subsequent to quarter-end, Mirum entered agreements with Vivet Therapeutics and CANbridge. The Vivet agreement required upfront and research funding payments totaling approximately $10.6 million based on the exchange rate at payment. The CANbridge agreement provides for an $11.0 million upfront payment, development funding, potential milestones and royalties for Greater China rights to maralixibat.
- Material risks include clinical-trial failure or delay, regulatory non-approval, limited patient populations, competition, dependence on third-party manufacturers and licensors, market acceptance and reimbursement uncertainty, future dilution or financing constraints, and obligations under the RIPA.
- No material legal proceedings or accrued loss contingencies were reported. Management concluded that disclosure controls and procedures were effective and that there were no material changes in internal control over financial reporting.
Most important facts for investors to verify
- FDA review status and the September 29, 2021 PDUFA date for maralixibat in ALGS, including any requests for additional information or review extensions.
- Actual launch timing, commercial infrastructure, pricing, reimbursement and early prescription demand if maralixibat is approved.
- Enrollment progress and topline results for the MARCH PFIC trial and volixibat studies.
- Quarterly cash burn, investment balances and the expected duration of liquidity under updated operating plans.
- Economic terms, covenants and potential repayment or revenue-sharing obligations under the RIPA, including the effect of future maralixibat sales.
- Milestone payments, royalties and other obligations under the Shire, Vivet and other license or collaboration agreements.
- Potential dilution from the shelf registration, remaining at-the-market capacity, stock options and other equity plans.
- Effects of COVID-19 and third-party manufacturing or clinical-trial disruptions on development timelines.