Mirum Pharmaceuticals, Inc. 2022 Form 10-K Summary
Business context and reporting period
Mirum is a rare-disease biopharmaceutical company focused on cholestatic liver diseases. This Form 10-K covers the fiscal year ended December 31, 2022; it is an annual filing rather than a standalone 2022 fourth-quarter filing.
- Commercial product: Livmarli (maralixibat), approved in the United States and Europe for cholestatic pruritus associated with Alagille syndrome (ALGS).
- Pipeline: Livmarli is being developed for progressive familial intrahepatic cholestasis (PFIC) and biliary atresia (BA); volixibat is in Phase 2b development for primary sclerosing cholangitis (PSC) and primary biliary cholangitis (PBC).
- As of December 31, 2022, the company had 196 full-time employees and operated as one reportable segment.
Financial performance and liquidity
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Product sales, net | $75.1 million | $3.1 million | +$71.9 million |
| License revenue | $2.0 million | $16.0 million | -$14.0 million |
| Total revenue | $77.1 million | $19.1 million | +$57.9 million |
| Cost of sales | $12.4 million | $1.9 million | +$10.5 million |
| Research and development | $106.8 million | $131.4 million | -$24.6 million |
| Selling, general and administrative | $89.1 million | $59.2 million | +$29.8 million |
| Loss from operations | $(131.2) million | $(173.4) million | +$42.2 million |
| Net loss | $(135.7) million | $(84.0) million | -$51.7 million |
| Net loss per diluted share | $(4.02) | $(2.77) | Unfavorable |
- Calculated gross margin was approximately 83.9% in 2022 versus approximately 90.1% in 2021. The comparison is affected by pre-approval manufacturing costs that had previously been expensed through research and development.
- Calculated operating margin was approximately (170.3%); the company remained substantially unprofitable despite the increase in Livmarli sales.
- Net loss increased primarily because 2021 included a $108.0 million net gain from the sale of a priority review voucher; no comparable gain occurred in 2022.
- Net cash used in operating activities was $120.1 million, compared with $132.8 million in 2021.
- Net cash provided by investing activities was $7.7 million, and net cash provided by financing activities was $109.1 million.
- Cash, cash equivalents and restricted cash equivalents decreased to $128.0 million from $131.3 million. Cash, cash equivalents and investments totaled $251.7 million, including $100.0 million restricted under the RIPA. Unrestricted cash, cash equivalents and investments were $151.7 million.
- The company reported an accumulated deficit of $392.8 million and stockholders’ equity of $142.0 million at year-end.
Debt, financing and material changes
- The revenue interest liability under the Oberland RIPA was $140.4 million at December 31, 2022, compared with $129.9 million at December 31, 2021. The company recognized $16.0 million of related interest expense and paid $5.6 million of revenue interests during 2022.
- Under the RIPA, payments initially equal 9.75% of annual Livmarli net sales up to $350 million and 2.0% of sales above that threshold, subject to contractual adjustments and termination provisions. The arrangement is secured by certain company assets and includes a potential put option for the purchasers.
- Mirum raised $86.1 million of net proceeds in an August 2022 underwritten offering and $21.3 million of net proceeds through its at-the-market program. It also received $7.3 million from employee equity awards.
- In May 2022, Mirum acquired Satiogen for approximately $24.2 million, primarily obtaining intellectual property and reducing certain royalty obligations. The acquisition added $28.1 million of intangible assets and included share-based and contingent consideration.
- Research and development spending declined because 2021 included substantial license milestones and Vivet collaboration funding. Core Livmarli, volixibat, personnel and overhead costs increased in 2022.
- SG&A increased due to expanded commercialization, personnel, promotion, patient support, international expansion and public-company costs.
Guidance, outlook, risks and unusual items
- Management expects Livmarli product sales to increase annually, although seasonality and timing of international orders may create quarterly volatility.
- Management expects continued net losses as it commercializes Livmarli, conducts clinical trials and seeks additional regulatory approvals. The filing does not provide quantitative revenue, profitability or expense guidance.
- Management stated that unrestricted cash, cash equivalents and investments were expected to fund current operations for at least 12 months from the financial statement issuance date, but noted that additional capital may be required sooner if spending increases or market conditions deteriorate.
- Expected 2023 milestones included topline EMBARK BA data in the second half of 2023, an interim VISTAS PSC analysis in mid-2023 and interim VANTAGE PBC data in the second half of 2023. These are targets and not guaranteed outcomes.
- Mirum submitted an sNDA for Livmarli in PFIC based on positive Phase 3 MARCH-PFIC results. Regulatory authorities could require additional trials, limit approval or decline approval.
- Key risks include dependence on Livmarli as the only FDA- and EMA-approved product, limited rare-disease patient populations, reimbursement and market-acceptance uncertainty, clinical and regulatory failure, competition from odevixibat and other therapies, reliance on third-party manufacturers and distributors, intellectual-property and licensing risks, and the need for additional financing.
- Livmarli safety considerations include diarrhea, abdominal pain, vomiting, fat-soluble vitamin deficiency, nausea, gastrointestinal bleeding, bone fracture and liver transaminase elevations. In the ALGS development program, 8.1% of patients discontinued because of ALT increases.
- The company relies on a single U.S. specialty pharmacy and a single distributor for U.S. sales, creating concentration and transition risk. One customer represented approximately 23% of accounts receivable at year-end, although no customer exceeded 10% of annual revenue.
- No material pending legal proceedings or accrued loss contingencies were reported. Management concluded that disclosure controls and internal control over financial reporting were effective; the external auditor did not provide an internal-control attestation because of the company’s emerging-growth-company and non-accelerated-filer status.
Most important facts for an investor to verify
- Livmarli prescription growth, net pricing, payer mix, rebates, gross-to-net adjustments and recurring patient retention.
- Whether unrestricted liquidity and operating cash burn support the stated funding horizon after RIPA payments, clinical-trial spending and commercial expansion.
- The terms, repayment trajectory and potential put-option exposure under the RIPA, including the impact of Livmarli sales forecasts on interest expense and liability valuation.
- Regulatory outcomes for PFIC and the progress and data quality of the BA, PSC and PBC programs.
- Manufacturing capacity, supply continuity, quality compliance and dependence on single-source suppliers or distribution channels.
- The strength and duration of Livmarli’s method-of-use and formulation patent protection, since the filing states that Mirum does not hold composition-of-matter patents for maralixibat.
- The extent of future dilution from equity offerings, equity compensation and contingent consideration, including the 2023 at-the-market sales and Satiogen-related share issuance.