Business Context and Reporting Period
Mirum Pharmaceuticals, Inc. is a development-stage biopharmaceutical company focused on rare cholestatic liver diseases. The company’s lead candidates are maralixibat for pediatric Alagille syndrome (ALGS), progressive familial intrahepatic cholestasis (PFIC) and planned biliary atresia development, and volixibat for adult cholestatic diseases including primary sclerosing cholangitis (PSC) and intrahepatic cholestasis of pregnancy (ICP).
This Form 10-K covers the fiscal year ended December 31, 2019. Mirum was incorporated in May 2018 and commenced significant operations in November 2018; therefore, the prior comparable period is the stub period from May 2, 2018 through December 31, 2018.
- No product has received regulatory approval.
- The company has generated no product revenue.
- Mirum completed its IPO in July 2019 and began trading on Nasdaq under MIRM on July 18, 2019.
Financial Results and Key Metrics
| Metric | 2019 | 2018 Stub Period | Change |
|---|---|---|---|
| Revenue | $0 | $0 | No product revenue in either period |
| Research and development expense | $43.0 million | $2.3 million | +$40.7 million |
| In-process research and development expense | $0 | $14.5 million | -$14.5 million |
| General and administrative expense | $11.8 million | $0.6 million | +$11.2 million |
| Total operating expenses | $54.7 million | $17.4 million | +$37.3 million |
| Loss from operations | $54.7 million | $17.4 million | Higher operating loss |
| Net loss | $52.6 million | $17.3 million | +$35.2 million loss |
| Basic and diluted net loss per share | $4.58 | $19.29 | Not directly comparable due to IPO and share-count changes |
| Net cash used in operating activities | $39.4 million | $0.4 million | Higher cash burn |
Margins are not meaningful because the company had no revenue. Stock-based compensation was $6.1 million in 2019, compared with $34,000 in the 2018 stub period.
Cash Flow, Liquidity, Debt and Capitalization
- Cash, cash equivalents and investments totaled approximately $140.0 million at December 31, 2019, including $12.0 million of cash and cash equivalents, $104.7 million of short-term investments and $23.3 million of long-term investments.
- Net cash used in investing activities was $127.8 million, primarily reflecting $152.0 million of investment purchases partially offset by $24.5 million of investment maturities.
- Net cash provided by financing activities was $127.2 million, consisting primarily of $67.2 million of IPO proceeds and $60.0 million from the issuance of Series A preferred stock.
- At December 31, 2019, total liabilities were $16.4 million, including $3.6 million of operating lease liabilities. The filing does not disclose conventional funded debt.
- Operating lease commitments totaled $4.5 million, with $674,000 due within one year.
- Accumulated deficit was $69.9 million at year-end.
- Management stated that year-end liquidity, together with approximately $44.7 million of net proceeds from a January 2020 follow-on offering, was expected to fund current operations for at least the next 12 months.
Material Changes Versus the Prior Comparable Period
- Research and development spending increased substantially as Mirum advanced PFIC and ALGS clinical programs, initiated the Phase 3 MARCH trial, expanded personnel and manufacturing activities, and prepared for a potential NDA submission.
- The 2018 period included a $14.5 million in-process research and development charge related to acquiring maralixibat and volixibat rights from Shire; no comparable charge was recorded in 2019.
- General and administrative costs rose as the company expanded its workforce, became publicly traded and incurred additional legal, professional, insurance and compliance costs.
- Mirum raised capital through a $60.0 million preferred stock financing in April 2019 and a $67.2 million net IPO in July 2019. The preferred stock subsequently converted into common stock at the IPO.
- Mirum paid $3.0 million in July 2019 milestone payments related to initiation of the MARCH trial: $2.5 million to Shire and $0.5 million to Satiogen.
- Cash and investments increased materially from approximately $52.0 million at December 31, 2018 to approximately $140.0 million at December 31, 2019, despite operating cash burn.
Pipeline, Outlook, Risks and Unusual Items
- Management planned to initiate a rolling NDA submission for maralixibat in ALGS in the third quarter of 2020, complete the submission in the first quarter of 2021 and potentially launch in the second half of 2021, subject to successful regulatory review.
- The Phase 3 MARCH PFIC trial was expected to complete enrollment in the second quarter of 2020, with topline data expected in late 2020. The filing indicates that a positive Phase 3 result, together with natural-history data, could support an NDA, but regulatory acceptance was not assured.
- Volixibat clinical trials in PSC and ICP were planned for 2020 and early 2021, respectively.
- Maralixibat received FDA breakthrough therapy designations for ALGS-associated pruritus and PFIC2, as well as rare pediatric disease designation for ALGS. These designations do not guarantee approval or a faster review.
- Clinical evidence was encouraging in ALGS, including sustained reductions in pruritus and serum bile acids in the ICONIC study. However, the PFIC INDIGO trial’s primary analysis of serum bile acid change at week 13 did not achieve statistical significance for the overall group; responses were concentrated in patients with non-truncating PFIC2 and residual BSEP function.
- Reported adverse events were primarily gastrointestinal, including diarrhea, abdominal pain and vomiting. The company also disclosed treatment-related serious adverse events and isolated ALT increases in some ALGS patients.
- Major risks include clinical-trial failure or delay, regulatory rejection, reliance on subjective pruritus endpoints, limited rare-disease patient populations, competition from other ASBT inhibitors, third-party manufacturing and CRO dependence, intellectual-property limitations, future financing needs and potential dilution.
- Maralixibat lacks composition-of-matter patent protection; protection primarily relies on method-of-use and formulation patents, licenses and trade secrets.
- The filing identifies COVID-19 as a subsequent developing risk that could delay trial-site initiation, patient enrollment, healthcare services and clinical operations.
- The company had no material legal proceedings and no off-balance-sheet arrangements reported for the periods presented.
Most Important Facts for Investors to Verify
- Whether the MARCH Phase 3 PFIC trial met its primary pruritus endpoint and what population supports any future label.
- Whether Mirum submitted and completed the ALGS rolling NDA on the projected timeline and whether the FDA accepted the proposed ICONIC-based package.
- Current cash, investments, quarterly operating cash burn and the expected funding runway after the January 2020 offering.
- Clinical safety at planned higher doses, including gastrointestinal events and ALT or other liver-related abnormalities.
- The scope, expiration and enforceability of Mirum’s method-of-use and formulation patents and its continuing obligations to Shire, Satiogen, Pfizer and Sanofi.
- Competitive progress, particularly other ASBT inhibitors and potential gene therapies for PFIC.
- Actual commercial launch costs, reimbursement prospects and the company’s ability to build a specialty sales and medical-affairs organization.