Mirum Pharmaceuticals Inc (MIRM) 2023 Q2 法說會逐字稿

Good afternoon. And thank you all for joining. I would like to welcome you all to the Mirum Pharmaceuticals Report Second Quarter 2023 Financial Results and provide business update. My name is Brika, and I'll be your moderator for today's call. (Operator Instructions)

I would now like to turn the call over to Andrew McKibben, VP, Investor Relations and Finance. So Andrew, please go ahead.

Thanks, Brika, and good afternoon, everyone. I'd like to welcome you to Mirum Pharmaceuticals Second Quarter 2023 Conference Call. I'm joined today by our President and CEO, Chris Peetz; our Chief Operating Officer, Peter Radovich, and our Head of Research and Development, Pam Vig. Earlier today, Mirum issued a news release announcing the company's results for the second quarter of 2023. Copies of this news release and SEC filings can be found in the Investors section of our website. Full details and updates from the quarter can be found in our news release.

Before we begin, I'd like to remind you that during the course of this conference call, we will be making certain forward-looking statements about Mirum, our pending acquisition of Travere's bile acid product portfolio and our program is based on management's current expectations, including statements regarding Mirum's current and future business and commercial plans, development programs, regulatory expectations, strategies, prospects, market opportunities and financial forecasts and guidance. Mirum's under no duty to update these statements, and they are subject to numerous risks and uncertainties, and actual results could differ materially from the results anticipated by these statements. Investors should read the risk factors set forth in Mirum's filings with the SEC.

With that said, I'll turn the call over to Chris. Chris?

Thank you, Andrew, and good afternoon to everyone joining us on the call today. We are thrilled to discuss yet another quarter of strong growth at Mirum. We are on track to become a leading multiproduct franchise in pediatric hepatology through the impact of LIVMARLI for patients globally, continued progress of Volixibat in the clinic and the pending acquisition of Kineta and Koban. The last quarter saw substantial progress on our 5-part strategy, which is to grow LIVMARLI in the U.S., launch LIVMARLI in international markets, established new indications for LIVMARLI, advance and commercialize Volixibat in adult cholestatic indications and acquire additional high-impact medicines for rare disease. We've made great strides on all of these areas of strategic focus so far this year. First, on growing LIVMARLI's commercial business, in the second quarter, we performed well against our guidance of 50% year-over-year net product sales growth in the U.S. in 2023. We as well as growth from international markets, achieving $32.5 million of LIVMARLI revenue and $37.5 million total revenue.

We are also excited about the recent progress in international markets with our approval in Canada and a growing list of countries selling LIVMARLI in distributor markets. With LIVMARLI indication expansion efforts are also making great progress with our PFIC application under review with the December 13, 2023 PDUFA date. We're looking forward to the potential label expansion based on the compelling March Phase III data and bringing LIVMARLI to PFIC patients. In addition, the embarking study is fully enrolled, heading towards top line data later this year.

Volixibat is also progressing nicely towards interim analyses in PSC and PBC later this year, positioning those studies to expand into their potentially registrational portions. And finally, on the fifth strategic pillar of product acquisition, we are advancing towards closing the acquisition of Chenodal and Cholbam, 2 commercial products with over an aggregate of $100 million of annual net sales in 2022. As we've shared recently, we expect this acquisition to deepen our leadership in pediatric hepatology and accelerate our growth across our product line. We expect the transaction to close in the third quarter and are excited about the fit of these bile acid replacement medicines with LIVMARLI and the upcoming Phase III readout for Chenodal and CTX.

Financially, we are well positioned to execute on our strategy. We ended the second quarter with a $330 million cash balance and Q2 was another quarter of financial growth with relatively steady operating expense levels and a growing top line compared to the first quarter. The pending addition of Chenodal and Cholbam offers an opportunity to further accelerate our revenue with a highly synergistic business. Concurrent to this pending acquisition, we entered a private placement agreement for $210 million, supported by several existing and new investors, which we will use to fund the upfront payment in connection with the acquisition. This financing allows us to maintain the strength of our balance sheet and positions us for continued growth. With that, I'll pass the call over to Peter to discuss our commercial business in more detail before Pam gives an R&D update. Peter?

Thanks, Chris. We continue to see strong demand for LIVMARLI with $32.5 million and with LIVMARLI net product sales in the second quarter of 2023, which represents 86% growth over the second quarter of 2022. Our U.S. business continues to perform well with net product sales of $26.2 million. This growth was driven by strong underlying new patient demand. Notably, in Q2, we saw an increase in uptake by patients less than 12 months of age, consistent with the LIVMARLI label expansion to 3 months of age and older in March. Early treatment in Alagille syndrome is important to limit the impact of the disease, and we're pleased to see LIVMARLI addressing this need in the real-world setting.

The U.S. business performance continues to track very well against our guidance of 50% growth in 2023 net product sales. Turning to international markets, we continue to see strong de novo demand in Germany and France launches, in line with what we saw in the U.S. launch of LIVMARLI. Pricing and reimbursement discussions are ongoing in major European markets, which we expect will continue throughout 2023, with full launches in most European countries starting in 2024. We also anticipate use of name patient programs in European and distributor markets to continue to grow throughout 2023.

Overall, we are making great progress and are looking forward to our potential label expansion for PFIC in December in the United States and the upcoming readout of the EMBARK study in biliary atresia. We see the total opportunity for LIVMARLI across alogia syndrome, PFIC and BA as greater than $1 billion and that this opportunity is strengthened by our recently announced agreement to acquire Chenodal and Cholbam, which will deepen our presence in pediatric hepatology and established a focused multiproduct franchise.

There is a substantial amount of top and bottom line synergy to unlock by putting the bile acid portfolio and LIVMARLI together in the hands of one commercial team as the marketing efforts are similar in scope and the approach to market access, product distribution and patient services are quite complementary. We expect the bile acid products to continue to grow at low single-digit rates annually with the potential indication expansion to CTX for Chenodal providing an upside opportunity to increase patient diagnosis and treatment upon approval.

Financially, the strong second quarter net sales of $32.5 million for LIVMARLI and $27.5 million for Chenodal and Cholbam reported today by Travere totals approximately $60 million for the future combined franchise with growth expected across all 3 products. In summary, we are building on the tremendous momentum and potential of our expanded portfolio to deliver these important medicines to patients with rare liver diseases. On that note, I'll turn the call over to Pam. Pam?

Thanks, Peter. We are thrilled to be heading into a data-rich second half of the year. First, as Chris mentioned, we are eagerly awaiting the December 13 PDUFA date for PFIC. Secondly, we announced in May the completed enrollment for the EMBARK Phase II study in biliary atresia. This study has a 6-month primary endpoint assessing bilirubin, and we're on track for the top line data readout later this year, which will be the first placebo-controlled data with an IBAT inhibitor in this setting. I'm also pleased to say that the Phase IIb VISTA study of Volixibat in PSC currently has the total number of patients randomized or in screening required for the interim analysis.

This interim will be triggered when 45 randomized patients have been on study for a minimum of 3 months and is expected around year-end. In addition, the interim analysis for the Phase IIb VANTAGE study in PBC is also expected around the same time. As a reminder, after these interim analyses, both studies will move into the potentially pivotal portion of the trial. And finally, turning toward the pending acquisition. We have high confidence in the success of the ReSTORE Phase III trial evaluating Chenodal in patients with CTX and look forward to top line data in the fourth quarter. If positive, this study could support a label expansion for CTX with the potential for orphan exclusivity.

Now regarding our ongoing efforts to present the growing body of data on LIVMARLI, this summer, we presented 12 abstracts at both the EASL and the European pediatric hepatology congresses. These data demonstrated LIVMARLI's significant ability to reduce bilirubin, symptoms associated with Alagille syndrome Alagille syndrome and PFIC as well as real-world data in which patients with Alagille syndrome came off of the liver transplant waiting list after LIVMARLI treatment. In addition, we published a seminal analysis in hepatology, demonstrating that pruritus, cerebleacids and bilirubin are significantly predictive for transplant and event-free survival in allege syndrome, showing that 93% of LIVMARLI treated patients with pruritus reductions remain transplant free after 6 years. So in summary, the upcoming data readouts across indications, along with the ongoing robust clinical evidence of LIVMARLI in both Alloga and PFIC, cements our leadership position in pediatric hepatology and we remain committed to growing our presence in rare disease. And with that, I'll turn the call back over to Chris. Chris?

Thanks, Pam. Bear is proud to be the leader in pediatric hepatology. The team continues to deliver high growth with LIVMARLI and make important advances in treatment options for cholestatic disease across our clinical programs. At the close of our acquisition of Chenodal and Cholbam expected in the third quarter this year, we will have 3 approved rare disease products, an upcoming PDUFA date for label expansion for LIVMARLI and 4 additional indications in development in high-need orphan settings with upcoming clinical readouts. We are exceptionally positioned to expand our leadership and impact in rare disease and look forward to bringing these important medicines to patients around the world. With that, operator, please open the call for questions.

(Operator Instructions)

Operator, do we have any questions in the queue?

I apologize. We have our first question from Steve Seedhouse from Raymond James.

I wanted to ask a couple of questions about EMBARK. The first one is just are you, like our patient screening consented and ultimately enrolled in the study before they've had their Kasai procedure or in the days or weeks after. And I'm curious if there's a lead-in period sort of before treatment where you track bilirubin Kinetic and see sort of what the response is to the surgery before initiating treatment? I have a couple of follow-ups as well.

All right. Thanks for the question. I appreciate it. So for the EMBARK study, the patients immediately post the cifo the discussion happens sometimes prior to the side procedure when they learn the diagnosis after the baby is born. And so the consent process can happen either before the concise surgery or immediately after the gases surgery, but the goal is to get these patients onto the, we're now fully enrolled with to get these patients into the study as quickly as possible. There are no criteria for bilirubin in the study. So we're not looking at any bilirubin effects post the site we're enrolling all patients. And we're really excited to have this study read out towards the end of the year.

Okay. Great. And then just on the 6-month analysis, curious if there is a formal assessment of like transplant or other liver events already in that 6-month time point or, let's say, just through last follow-up of all the patients that are enrolled by the time you announced the 6-month bilirubin analysis?

Yes. Thanks. So for the 6-month primary endpoint, as you know, is bilirubin, but we are assessing in other key secondary outcomes transplant at that 6-month time point as well as other thresholds of bilirubin that are predictive of transplant. And then these patients at the end of the double-blind treatment period roll over into open-label extension. So we'll continue to follow those patients long term.

Okay. And then just the last question I had was just on that open-label extension. So I think, correct me if I'm wrong, I think it would go through 24 months total, so 18 months post the 6-month analysis. And the question is, do you think you'll have the ability to leverage natural history control cohort data in similar ways that just based on some quality databases in legal and PFIC, for instance, here for biliary atresia or if not, is that work that you would hope to do at Mirum in the coming year?

Yes. That's a great question. We're actually doing that right now. We're working with natural history registries looking at kind of aligning those patients with the patients that are enrolled in our study and understanding a little bit more about thresholds and prognostic markets for transplant-free survival, and we'll continue to work with those registries throughout. We're looking at 6-month time points, and then we'll obviously continue to look at long-term treatment versus natural history. So all of that will be kind of as much as we can in the time frame. The package will contain our data set plus work that we're doing supported by the natural history, and we'll have a discussion with the FDA at that time.

Your next question comes from Mani Foroohar of SEB Leerink.

Thanks for taking the question, guys. A quick commercial question. I know we had a little bit of discussion last year around 2Q, 3Q seasonality. Can you give a sense of where those trends are now? How should we think about modeling and sort of what are the sort of key metrics we should be following or thinking about as we think about going through each season this year?

Thanks for the question, Mani. Yes, we feel what we've seen in Q2 is really strong demand. I feel really good about how the business is planned heading into Q3. But we're worth mentioning, we're just now beginning of August. So we'll have to see how things unfold over the next couple of months. But overall, we feel really good about how the business is pointed going forward.

Great. That's helpful. And can you separately, looking forward post presumptive deal close of the acquired assets, how should we think about margin evolving over time? Obviously, you're going to have a little bit of expense that you bring on, but that's going to be coming with a substantial amount of revenue. Is there room for further margin expansion going forward? On what time horizon might we see that as we transition from this Q4 first quarter with revenues from all the assets put together through next year.

Thanks, Mani, for the question. The overall picture on bringing Canada and Cholbam into Mirum, we do see a tremendous amount of synergies. So they will contribute substantially to margin at Mirum because of the overlap in our business. A lot of that behind some of the rationale of why we're so excited about bringing these products into our portfolio. We're not going to be guiding towards margin. But what I can say is that this puts us on a very sound financial footing, and we do expect all 3 products to continue growing for the foreseeable future. So that will continue to improve financial performance as we go.

We now have David Lebowitz from Citibank. Please, go when you're ready.

This is Debanjana, on for David. So we wanted to ask if you could update us on the timing of the closure of the Caviar transaction? And also, could we have some insight as to how the operating spend might shift post closure?

Yes. Thanks for the question. We're tracking towards closing this quarter. So we do expect a Q3 close. And then as we move into a post-close time period, we're excited about jumping right in to bring these products over to Mirum. Overall, they'll have a high impact in terms of margin and cash contribution right at the start in Q4. So see that synergy will play through in having these products in our hands. So I expect that impact to show up with improved performance in Q4 from having these products at Mirum.

Okay. So maybe just a quick follow-up on that. So what's your strategy on incorporating this product into your current pipeline? I'm not sure in terms of pharma.

Absolutely. I'll have Peter speak through some of the planning, but these fit very well with LIVMARLI and the current LIVMARLI business. I let Peter to get into some of the strategies we have planned.

Thanks, Chris. Yes, we're really excited about bringing these products into Mirum and excited about bringing several really talented both from Travere and givers well. We have a team right now that's been out promoting LIVMARLI to pediatric hepatologists and anticipate that team continues and also we'll have a team that focuses on physicians of specialties that are often involved in identifying patients with bile acid synthesis disorders, tower-specific disorders, et cetera, that focus on neurology, ophthalmology, metal genetics. So have a liver-focused team and what we're calling a metabolic focused team and a modest expansion to our field footprint. So pretty excited about how that plays out going forward.

We now have Ed Arce of H.C. Wainwright.

Good afternoon, everyone. This is Thomas Yip, asking a couple of questions for Ed. Perhaps first question regarding the EMBARK data regarding data positive and given LIVMARLI's orphan drug designation for barrier attrition, do you anticipate EMBARK top line data along with natural history data that you mentioned earlier. Do you think collectively, that's enough to support LIVMARLI's approval?

Thanks to answer the question. Overall, that's our strategy to take that package TO FDA. It's too early to say what the determination will be. At this point, that bilirubin has not yet been fully established as an endpoint for approval. And that's the work that we're doing with the EMBARK data and the natural history of work. So looking forward to putting together what we think will be a really compelling data set.

Okay. Got it. And then perhaps can you take over some major differences that you know so far between the FDA and the EMA, what they are looking for endpoint (inaudible).

Thanks for the question there. I mean we see a pretty common point of view in what we've had for our conversations. And I think it's worth noting that there really is not a lot of clinical data or research that's been done in this space. So the EMBARK study really is a landmark. It's going to be the largest and first study of IBAT in the setting. And one of the few studies that actually has an intervention that early after the Kasai so a really important data set to bring forward to advance care for these patients.

Got it. And then perhaps one final question for Volixibat, you mentioned the interim analysis for both VISTAS and VANTAGE studies both expected later this year. Can you guys tell us what type of data we can expect to see?

Yes. Thanks for the question. So for the PSC VISTA study, this is a blinded interim. So we won't be sharing any data. But it is for dose selection and then the study will upsize if you need to or not and then carry on a potentially registrational part 2 of the study. So I wouldn't expect any top line data out there but would expect to be able to communicate that the study is carrying on and continuing on. For the PBC VANTAGE study, we will be sharing top line data. This is an open interim analysis. And so we'll be able to have a look at the data, and we'll be sharing that with you later.

Okay. Understood. Thank you again for the questions and looking forward to data from the VANTAGE study.

Thank you. (Operator Instructions) Our next question comes from Brian Skorney with Baird.

This is Charlie on for Brian. So I wanted to ask about the SG&A. We've seen it climbing somewhat steadily over the past several quarters. Just wanted to know, particularly as you start to integrate the bile acid team from Travere if we should expect that to keep rising? What kind of trajectory that's going to take? And along a similar line, thinking about Volixibat, as that hopefully gets closer to getting commercialized what kind of regulatory strategy are you taking going forward? And considering that these are adult liver diseases, will this require a different commercial sales force or do you think that you can also leverage the field force that you have currently?

Thanks for the question. I'll comment a bit on SG&A and regulatory strategy. So Peter talked about the field team. And for SG&A, we have what we see as kind of this modest increases over prior quarters, really driven by initially the launch in the U.S. and now some of the international markets that we brought on. So just for the base business, some incremental SG&A increase over time is what we'd expect. And then with adding in Chenodal and Cholbam, that will bring incremental SG&A expense, but really modest compared to the top line opportunity.

As Peter was mentioning earlier, there's a lot of synergy in how we approach those markets and the fit with LIVMARLI. So we are bringing some people over who have great experience with those products from Travere excited about bringing those folks into the Mirum family. But overall, the total contribution will be quite attractive with these products in our hands.

Now as we move forward to volixibat, which will be an opportunity to expand into adult hepatology. First, the endpoint and registration to comment on these studies incorporate pruritus as the primary endpoint. Similar to alogia syndrome and the ongoing review for PFIC, pruritus is the outcome for approval, and that's what we're using for the registration approach for the adult indications. I'll let Peter comment on the commercialization strategy.

Thanks Chris. So I think we would be able to leverage our commercialization team and infrastructure to launch Volixibat to adults. Our current team is primarily pediatric focused maybe goes to the higher decile, larger volume adult liver doctors. But we would look to expand to a broader group of adult hepatologist gastroenterologists. So I think of it as kind of an incremental build for that launch.

Thank you. I'd like to hand the call back over to Chris Peetz for final remarks.

Great. Thanks, operator. And thanks again to everyone for joining today's call. Have a great day. Goodbye.

Thank you all for joining, and I can confirm this does conclude today's call. Please have a lovely rest of your day, and you may now disconnect.