Mirum Pharmaceuticals, Inc. — Q3 2020 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 and nine months ended September 30, 2020. The company had no approved products and generated no product revenue.
Financial condition and key metrics
| Metric | Three months ended September 30, 2020 | Nine months ended September 30, 2020 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $16.0 million | $51.9 million |
| General and administrative expense | $5.7 million | $15.5 million |
| Total operating expenses | $21.7 million | $67.3 million |
| Net loss | $21.5 million | $66.1 million |
| Net loss per share | $0.86 | $2.65 |
| Net cash used in operating activities | Not separately disclosed | $52.8 million |
- At September 30, 2020, cash and cash equivalents were $48.8 million, short-term investments were $85.0 million, and total cash, cash equivalents and investments were approximately $133.7 million.
- Accumulated deficit was $136.0 million. Total stockholders’ equity was $120.3 million.
- Total liabilities were $21.6 million, consisting primarily of accounts payable, accrued expenses and operating lease liabilities. The filing does not report outstanding debt.
- Operating cash burn increased substantially as clinical, manufacturing, regulatory and commercial-preparation activities expanded.
- Stock-based compensation was $3.4 million in the quarter and $9.0 million for the nine-month period.
Material changes versus the prior comparable period
- Third-quarter net loss increased to $21.5 million from $15.1 million; nine-month net loss increased to $66.1 million from $34.6 million.
- Third-quarter research and development expense increased $3.8 million, primarily from additional development personnel, manufacturing activities supporting NDA registration, and clinical, manufacturing and regulatory consulting.
- Year-to-date research and development expense increased $23.3 million, driven by manufacturing for clinical and NDA activities, increased personnel, clinical trials and consulting. The increase was partly offset by the absence of the prior-year $3.0 million development milestone expense related to initiation of the Phase 3 MARCH trial.
- Third-quarter general and administrative expense increased $2.0 million, mainly because of increased personnel, stock-based compensation, public-company compliance costs and commercial preparation activities.
- Operating cash use increased from $25.7 million to $52.8 million for the nine-month period.
- Cash and cash equivalents increased by $36.8 million during the first nine months, supported by investment maturities and equity financings.
- In January 2020, Mirum raised $44.7 million net through a follow-on public offering. During the third quarter, it raised approximately $2.2 million net through an at-the-market offering, leaving approximately $72.6 million of capacity under the sales agreement at quarter-end.
Guidance, outlook, commentary and risks
- Mirum initiated a rolling FDA NDA submission for maralixibat for cholestatic pruritus associated with Alagille syndrome in the third quarter and expected to complete the submission in the first quarter of 2021, with a potential ALGS launch targeted for the second half of 2021.
- The company planned to submit an MAA to the EMA for maralixibat in PFIC2 in the fourth quarter of 2020.
- Management expected substantial additional operating losses as clinical trials, regulatory filings, manufacturing, commercialization preparation, hiring and public-company costs continue.
- Management believed existing cash, cash equivalents and investments were sufficient to fund current operations for at least twelve months from the filing date, subject to assumptions about clinical timelines, regulatory approvals, commercial launch timing and spending controls.
- COVID-19 affected enrollment and conduct of the Phase 3 MARCH trial and could cause further clinical, manufacturing, supply-chain, regulatory and financing delays. Management reported no significant direct financial statement impact through September 30, 2020.
- Material contingencies include future milestone payments and royalties under licenses from Shire, Satiogen, Pfizer and Sanofi. No additional milestones were accrued because future payments were not considered probable.
- Remaining key risks include clinical-trial failure or delay, limited patient populations, regulatory non-approval or restricted labels, manufacturing dependence, reliance on third-party CROs and licensors, intellectual-property challenges, need for additional financing and potential equity dilution.
- Subsequent to quarter-end through November 12, 2020, the company sold 189,757 shares under the ATM facility for approximately $3.6 million net.
Most important facts for investors to verify
- Progress and timing of the completed ALGS NDA submission, FDA review and potential second-half 2021 launch.
- Enrollment, execution and results of the Phase 3 MARCH PFIC trial, including the continuing effects of COVID-19.
- Regulatory acceptance and scope of the planned PFIC2 EMA application.
- Cash runway relative to projected operating cash burn and the likelihood of additional equity or other financing.
- Future milestone, royalty and commercial obligations under the licensed-product agreements.
- Manufacturing readiness, clinical supply continuity and the potential impact of adverse events or expanded-access data on regulatory approval.