Mirum Pharmaceuticals, Inc. — Q2 2021 Form 10-Q Summary
Business context and reporting period
Mirum is a clinical-stage biopharmaceutical company developing therapies for rare cholestatic liver diseases. Its principal candidates are maralixibat and volixibat. This unaudited Form 10-Q covers the three and six months ended June 30, 2021, with comparisons to the same periods in 2020.
Maralixibat was under FDA priority review for cholestatic pruritus associated with Alagille syndrome (ALGS), with a stated PDUFA date of September 29, 2021. The company was preparing for a potential U.S. launch in the second half of 2021 but had no approved products or product sales.
Financial performance and liquidity
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| License revenue | $11.0 million | $0 | $11.0 million | $0 |
| Research and development expense | $35.0 million | $18.6 million | $73.2 million | $35.9 million |
| General and administrative expense | $13.4 million | $5.0 million | $22.8 million | $9.7 million |
| Loss from operations | $(37.4) million | $(23.6) million | $(85.0) million | $(45.6) million |
| Net loss | $(43.9) million | $(23.3) million | $(94.4) million | $(44.6) million |
| Basic and diluted loss per share | $(1.45) | $(0.93) | $(3.13) | $(1.79) |
License revenue consisted of the $11.0 million upfront payment from CANbridge for Greater China rights to maralixibat. The filing does not provide a product-sales gross margin; the company had no product revenue.
Six-month operating cash use was $65.4 million, compared with $35.3 million in the prior-year period. Investing cash use was $57.2 million, primarily from purchases of investments. Financing cash provided was $72.5 million, including $64.6 million of net RIPA proceeds and $6.9 million from an underwriters’ option exercise. Cash and cash equivalents declined to $91.9 million from $142.1 million at December 31, 2020.
Cash, cash equivalents and investments totaled $238.8 million at June 30, 2021, compared with $231.8 million at year-end 2020. The accumulated deficit was $267.6 million. Management stated that available cash, cash equivalents and investments should fund operations for at least 12 months from issuance of the financial statements.
Debt, liquidity and capital structure
Under the revenue interest purchase agreement with Oberland Capital affiliates, Mirum received $115.0 million in total, including $50.0 million in December 2020 and $65.0 million in April 2021 following FDA acceptance of the ALGS NDA. The revenue interest liability increased to $120.6 million from $47.7 million at December 31, 2020.
The RIPA generated $8.2 million of interest expense in the first six months and includes a compound derivative liability of $2.2 million at June 30, 2021. Purchasers are entitled to tiered revenue interests on future maralixibat net sales, initially ranging from 9.75% to 2.0%, subject to specified adjustments and a maximum repayment framework. The agreement also grants the purchasers security interests and includes put-option and default provisions that could accelerate obligations or affect assets.
Mirum issued 375,654 common shares in January 2021 for $7.1 million of net proceeds and had approximately $68.4 million of remaining capacity under its at-the-market sales agreement at June 30, 2021. Shares outstanding were approximately 30.5 million as of July 30, 2021.
Material changes versus the prior comparable period
- License revenue increased by $11.0 million because of the CANbridge agreement; the company still had no product-sales revenue.
- Six-month R&D expense increased $37.3 million, driven by $19.0 million of development milestones, $10.5 million of Vivet collaboration costs, higher volixibat development spending, personnel costs and stock-based compensation.
- Six-month G&A expense increased $13.1 million, primarily from commercial preparation for maralixibat, higher personnel costs, professional fees and public-company compliance activities.
- Net loss more than doubled to $94.4 million from $44.6 million, and operating cash use increased by $30.1 million.
- The company entered into the Vivet collaboration and the CANbridge license in April 2021. It also reported a July 2021 GC Pharma license for South Korea, including a $5.0 million upfront payment and potential milestones and royalties.
- R&D included $15.0 million of April development milestones related to the ALGS NDA filing and a planned ALGS clinical trial, plus $4.0 million related to VISTAS and EMBARK milestones.
Guidance, outlook, commentary and risks
Management expects substantial additional losses as it advances clinical programs, prepares for commercialization, seeks regulatory approvals, expands staffing and makes potential license-related payments. The filing does not provide formal revenue or earnings guidance.
Key development plans included potential ALGS commercialization in the second half of 2021, topline MARCH PFIC data expected in early 2022, continued EMBARK development in biliary atresia, and ongoing volixibat trials in PSC, ICP and PBC.
- Regulatory approval of maralixibat was not assured; the FDA could delay the PDUFA date, request additional information or require additional studies.
- Clinical trial enrollment, particularly in the MARCH trial, had been affected by COVID-19. Further pandemic-related disruptions could affect enrollment, trial operations, manufacturing, supply and regulatory inspections.
- The company relies on third-party manufacturers and CROs and was switching or adding manufacturing organizations for maralixibat and volixibat.
- Potential adverse events include gastrointestinal events and elevated liver enzymes, among other disclosed safety risks.
- Mirum faces competition from Albireo, GlaxoSmithKline and other developers, including potential gene-therapy competitors.
- The company depends on third-party intellectual-property licenses and remains exposed to milestone, royalty and licensing obligations.
- Under the Vivet agreement, Mirum was obligated for up to an additional €10.7 million of research and development funding as of the filing date.
- No legal contingency was accrued; management stated that no pending claim was expected to have a material adverse effect, but litigation and regulatory contingencies remain inherently uncertain.
Most important facts for investors to verify
- FDA’s September 29, 2021 PDUFA outcome and the timing, scope and cost of any potential maralixibat launch.
- Actual cash burn and whether $238.8 million of cash, cash equivalents and investments remains sufficient under updated development and commercialization plans.
- RIPA repayment economics, revenue-interest rates, security interests, put-option triggers and the effect on future maralixibat cash flows.
- Enrollment progress and topline results for MARCH, EMBARK, VISTAS and other clinical programs.
- Manufacturing readiness, supply continuity and regulatory inspection status for potential commercial maralixibat production.
- Terms and execution of the CANbridge and GC Pharma collaborations, including milestone payments, R&D funding and royalties.
- Future dilution from the ATM facility, equity incentive plans, outstanding options and additional financing needs.