Mirum Pharmaceuticals, Inc. — Q3 2021 Form 10-Q Summary
Business Context and Reporting Period
Mirum is a biopharmaceutical company developing and commercializing therapies for rare cholestatic liver diseases. This unaudited Form 10-Q covers the three and nine months ended September 30, 2021, filed November 15, 2021.
- FDA approved LIVMARLI (maralixibat) on September 29, 2021, for cholestatic pruritus in patients with Alagille syndrome (ALGS) age one and older. It was Mirum’s only FDA-approved product.
- Pipeline programs included maralixibat for progressive familial intrahepatic cholestasis (PFIC) and biliary atresia, and volixibat for primary sclerosing cholangitis, intrahepatic cholestasis of pregnancy and primary biliary cholangitis.
- Mirum had not generated product sales revenue as of September 30, 2021; management expected product revenue to begin in the fourth quarter of 2021.
Financial Performance and Liquidity
| Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 |
|---|---|---|---|---|
| License revenue | $5.0 million | $0 | $16.0 million | $0 |
| Research and development expense | $30.5 million | $16.0 million | $103.7 million | $51.9 million |
| General and administrative expense | $17.4 million | $5.7 million | $40.2 million | $15.5 million |
| Total operating expenses | $47.8 million | $21.7 million | $143.8 million | $67.3 million |
| Loss from operations | $(42.8) million | $(21.7) million | $(127.8) million | $(67.3) million |
| Net loss | $(47.1) million | $(21.5) million | $(141.5) million | $(66.1) million |
| Basic and diluted loss per share | $(1.55) | $(0.86) | $(4.68) | $(2.65) |
| Net cash used in operating activities | Not separately provided | Not separately provided | $(99.6) million | $(52.8) million |
- License revenue consisted of upfront payments under the CANbridge and GC Pharma agreements, not product sales.
- Cash, cash equivalents and investments totaled approximately $205.0 million at September 30, 2021, compared with $231.8 million at December 31, 2020.
- Cash and cash equivalents were $55.8 million, short-term investments were $134.2 million and other investments were $15.0 million.
- Accumulated deficit was $314.7 million; total stockholders’ equity was $56.4 million.
- Revenue interest liability under the Oberland Capital transaction was $126.3 million, compared with $47.7 million at December 31, 2020. Related interest expense was $5.7 million in Q3 and $13.8 million year-to-date.
- Cash provided by financing activities was $72.9 million year-to-date, including $64.6 million of net RIPA proceeds, $6.9 million from the January 2021 equity issuance and $1.4 million from employee equity plans.
Material Changes Versus the Prior Comparable Period
- Q3 net loss increased by $25.6 million, or approximately 119%, and nine-month net loss increased by $75.5 million, or approximately 114%.
- Research and development expense increased by $14.5 million in Q3 and $51.8 million year-to-date. Drivers included higher volixibat trial costs, $6.3 million of Vivet collaboration funding in Q3, increased personnel and stock-based compensation, and development milestone expense.
- General and administrative expense increased by $11.6 million in Q3 and $24.7 million year-to-date, primarily because of Livmarli commercial launch activities, additional personnel, professional fees, legal and public relations expenses, and stock-based compensation.
- License revenue increased from zero to $5.0 million in Q3 and to $16.0 million year-to-date due to the CANbridge and GC Pharma transactions.
- Operating cash use increased by $46.8 million year-to-date, while investing activities shifted to a $59.5 million cash use, primarily reflecting purchases of investments.
- Mirum recorded a $19.0 million accrued milestone obligation associated with FDA approval and first commercial sale of Livmarli; the amount was paid in October 2021. A $19.0 million intangible asset was also recorded for the FDA approval-related contractual milestone and is being amortized over an estimated 11-year useful life.
Guidance, Outlook, Commentary and Risks
- Management stated that cash, cash equivalents and investments were expected to fund current operations for at least the next 12 months, while also warning that substantial additional losses and financing needs were expected.
- Management expected continued increases in expenses from clinical trials, research and development, Livmarli commercialization, hiring, intellectual-property protection and potential milestone payments.
- Expected development milestones included MARCH PFIC topline data in the second quarter of 2022, EMBARK biliary atresia topline data in 2023, potential EMA approval for ALGS in the second half of 2022, and 2022 interim analyses for volixibat trials. These are forward-looking expectations and may be delayed.
- The MARCH PFIC trial had experienced enrollment impacts from COVID-19, creating a risk to the expected data timeline. The pandemic could also affect clinical sites, manufacturing, supply chains, regulatory reviews and access to capital.
- The RIPA provides funding but requires future revenue-interest payments based on maralixibat sales, initially ranging from 9.75% of specified annual net sales at the lowest tier to 2.0% at higher tiers. It also includes covenants, a senior security interest in certain assets and put-option rights that could accelerate obligations under specified events.
- Mirum relied on third parties for manufacturing, distribution, specialty-pharmacy access and clinical research. Supply interruptions, manufacturing deficiencies, reimbursement limitations, limited patient populations, competition or adverse safety findings could impair Livmarli commercialization.
- Other material risks included regulatory approval and clinical-trial uncertainty, intellectual-property and licensing risks, future dilution or financing constraints, product liability, healthcare-pricing reform, cybersecurity and privacy risks, and continued operating losses.
- 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 during the quarter.
Most Important Facts for Investors to Verify
- Actual fourth-quarter 2021 Livmarli product revenue, prescription volume, reimbursement coverage, gross-to-net adjustments and launch economics.
- Cash runway relative to the company’s projected commercialization and clinical-development spending, including any subsequent financing.
- Terms, covenants, repayment economics and revenue-interest obligations under the RIPA, including the effect of future maralixibat sales.
- Payment and accounting treatment of the $19.0 million Livmarli approval and first-commercial-sale milestones paid in October 2021.
- Enrollment progress and topline-data timing for the MARCH, EMBARK, VISTAS, OHANA and VANTAGE trials.
- EMA review progress for ALGS and the planned PFIC resubmission strategy.
- Livmarli safety, manufacturing capacity, supply continuity, payer coverage and reliance on a specialty pharmacy and single distributor.
- Potential dilution from 7.0 million outstanding options, additional equity issuance capacity and other equity awards.