Mirum Pharmaceuticals, Inc. (MIRM) Earnings Call Transcript & Summary

Good afternoon, and welcome to Mirum Pharmaceuticals Second Quarter 2026 Earnings Conference Call. My name is Alexandra, and I will be your operator today. [Operator Instructions] I would now like to hand the conference over to Andrew McKibben, SVP of Strategic Finance and Investor Relations. Please go ahead.

Thank you, Alexandra, and good afternoon, everyone. I'd like to welcome you to Mirum Pharmaceuticals Second Quarter 2026 Conference Call. I'm joined today by our Chief Executive Officer, Chris Peetz; our President and Chief Operating Officer, Peter Radovich; and Eric Bjerkholt, our Chief Financial Officer. Lara Longpre, our Chief Development Officer, will be joining us for the Q&A portion of the call. Joanne Quan, our Chief Medical Officer, could not be with us today due to a family matter. Earlier today, Mirum issued a press release announcing the company's results for the second quarter of 2026. Copies of the press release and our SEC filings are available on the Investors section of our website. Before we start, I'd like to remind you that during the course of this conference call, we will be making certain forward-looking statements based on management's current expectations, including statements regarding Mirum's programs and market opportunities for its approved medicines and product candidates and financial guidance. These statements represent our judgment and knowledge of events as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from the results discussed. We are under no duty to update these statements. Please refer to the risk factors in our latest Form 10-Q and subsequent SEC filings for more information about these risks and uncertainties. With that said, I'd like to turn the call over to Chris. Chris?

Thanks, Andrew, and good afternoon, everyone. At Mirum, we're growing a rare disease leader focused on delivering high-impact medicines for often overlooked diseases. This quarter demonstrates continued progress with strong commercial execution on our approved medicines as we head into the potential launch of our fourth commercial medicine later this year. We have a busy pipeline with multiple pivotal readouts in the quarters ahead, all delivered with a strengthened capital structure and overall financial performance, giving us greater capacity to invest throughout the business. In the second quarter, our commercial business generated $176 million in net product sales, reflecting strong demand across the portfolio and excellent execution by our team. Based on this performance, we are increasing our full year 2026 net product sales guidance to $680 million to $700 million. Fueled by the strong commercial performance, we're driving towards the next phase of Mirum's growth with multiple milestones over the coming months. Our next commercial milestone will be the potential launch of zilurgisertib for FOP with a PDUFA date next month. This is fast progress for a program added to our rare genetic business only in the second quarter. Peter will cover more of the launch profile in his remarks. Moving to the pipeline for our rare liver business. It's important to spend some time today on volixibat in PSC, which just had some key U.S. regulatory interactions. First, as a reminder of the background of the VISTAS study of volixibat in cholestatic pruritus and PSC, we designed this adaptive study with input from the FDA as a pivotal trial for this difficult clinical setting, including alignment on study duration, endpoints and analysis plan. As we've announced previously and presented at EASL this year, VISTAS met its primary endpoint, showing highly significant improvements in pruritus in the primary cohort with consistent significant results also observed in a second cohort of patients with milder baseline pruritus. We are excited to share that the FDA has now granted breakthrough therapy designation for volixibat in cholestatic pruritus due to PSC based on these strong results. We see this as recognition of the potential for volixibat to address a serious unmet need in PSC. As planned, we recently held a pre-NDA discussion with the agency about the submission of an NDA based on the VISTAS study. In the meeting, the FDA recommended conducting a Phase 3 study. We believe the VISTAS study provides a robust and clear data set to characterize the use of volixibat in patients with pruritus due to PSC and is a clinically and statistically highly persuasive study. VISTAS is the largest randomized clinical study conducted in patients with pruritus due to PSC with an extensive overall data package that includes more than 180 PSC patients randomized, one year safety exposure data for over 100 PSC patients and growing results from an independent committee evaluating liver safety, all totaling over 600 subjects across the clinical program to date. So while we are not currently aligned on the NDA submission package, we will be engaging in discussions with the FDA on how to further supplement our planned submission based on the VISTAS study. This engagement will delay the planned timing of our NDA submission, which we are now targeting for the first half of next year. We're positioned to move quickly once we have further clarity from the agency. We'll provide updates as we work towards our goal of bringing a much-needed therapy to this unaddressed clinical setting. In parallel, the VANTAGE study in PBC is progressing well and has completed enrollment, reaching over 330 patients randomized. In PBC, our earlier breakthrough therapy designation has enabled more dialogue with the agency during the conduct of the study. We have recent feedback from FDA for VANTAGE to serve as a pivotal study of volixibat in pruritus due to PBC if the study is successful at its first quarter top line readout next year. Our next clinical readout for the rare liver business is expected to be the brelovitug AZURE-1 top line results later this quarter. This is the readout of the Phase 3 portion following strong results of the Phase 2b portion earlier this year, and we also continue to expect the year four data in the fourth quarter, which keeps us on track for a potential BLA submission for this breakthrough therapy designated program in the first half of next year. And rounding out the rare liver pipeline highlights, the Phase 3 EXPAND study of LIVMARLI an additional rare cholestatic conditions remain on track for top line data in the fourth quarter. So putting this all together, we are advancing these clinical programs from a position of financial strength. Our commercial business continues to generate meaningful cash, providing the capacity to invest in potential launches, clinical development and opportunistic business development where we see a compelling strategic fit and the potential to create value. I'm proud of the team's progress and the promise of our current medicines and pipeline, and I'm excited about what lies ahead for Mirum. And with that, I'll turn the call over to Peter to discuss our commercial performance and launch readiness in more detail. Peter?

Thanks, Chris. The second quarter was another strong quarter for Mirum's commercial business with total net product sales of $176 million. LIVMARLI and the bile acid medicines both continue to perform well. And based on the demand we see, we are increasing our full year 2026 net product sales guidance to $680 million to $700 million. Second quarter net product sales for LIVMARLI were $129 million, with the U.S. contributing $92 million. Alagille growth remains durable, supported by continued new patient starts, sustained persistence on therapy and weight-based dose increases. PFIC continues to be an important driver of growth, fueled by new diagnosis. We're particularly encouraged by the growing contribution from adult PFIC patients. We're seeing an increase in prescriptions from adult liver providers as awareness of later onset PFIC grows and genetic testing becomes more routine. Based on claims data as well as insights from two years in market, we now estimate an addressable adult PFIC population of at least 2,000 patients in the United States with likely a similar number in Europe. And because genetic testing remains less established in adult practices than in pediatric, we believe the vast majority of the estimated 2,000 addressable patients don't yet have a PFIC diagnosis, and we see a meaningful opportunity to continue expanding diagnosis through education. Internationally, LIVMARLI continues to grow across our direct and partner markets, contributing $37 million for the quarter. We are seeing contributions from established markets and expanding reimbursement in additional geographies. On the rare genetic disease side of the business, our bile acid medicines continue to provide a steady contribution, generating $48 million in net product sales for the quarter. Like our rare liver business, our rare genetics business is also poised for growth with the recent addition of zilurgisertib for FOP. Data from the pivotal Phase 2 PROGRESS study of zilurgisertib presented at ENDO showed a compelling clinical profile in FOP patients ages 12 and older. Based on the strong efficacy observed and the convenience of oral dosing, we believe zilurgisertib has the potential to offer an attractive profile to patients with this severely debilitating disease. If approved by the FDA, the initial launch opportunity is expected to focus on patients ages 12 and older with potential future expansion into younger patients supported by additional cohorts in the PROGRESS study. And following a recent late cycle meeting with the FDA, we believe the NDA is proceeding as expected towards the September PDUFA date, and we are preparing for potential U.S. launch in the fourth quarter. The U.S. launch will heavily leverage the rare genetics team we have in place now that currently markets our bile acid medicines as the physicians who manage FOP are largely concentrated in the same specialized centers where CetEXI and Clavam are prescribed, building on the efficiency of our rare genetics business. Also, a marketing application for zilurgisertib has been submitted in Europe, and we will provide updates as this filing progresses. Overall, we are pleased with the continued execution across the commercial organization. We're seeing strong demand throughout the existing portfolio while making the investments necessary to support the next wave of potential launches. We believe that we are well positioned for the remainder of the year and beyond. With that, I'll turn it over to Eric to discuss the financial results. Eric?

Thanks, Peter, and good afternoon, everyone. Today, I'll walk through the financials of another excellent quarter for Mirum. Net product sales for the second quarter were $176 million compared to net product sales of $128 million in the second quarter of last year. Cash, cash equivalents and investments as of June 30 were $561 million compared with $391 million at the beginning of the year. In the second quarter and first half of 2026, the cash contribution margin from our commercial business was in the high 50s percent approximately a 5 percentage point improvement over the year before. Total operating expense for the quarter ended June 30 was $219 million, which includes $16 million of in-process R&D expense associated with the upfront payment of licensing zilurgisertib, R&D expense of $76 million, including $29 million related to the development of brelovitug, SG&A expense of $66 million and cost of sales of $23 million, all excluding stock-based compensation expense and intangible amortization. Stock-based compensation, intangible amortization and other noncash expenses totaled $37 million for the quarter. Operating cash flow was positive in the second quarter despite the expected increase in R&D expense. During the quarter, we significantly improved our capital structure through the issuance of $690 million aggregate principal amount of 0% coupon convertible notes due in June 2032. Net proceeds from the offering were $672 million. In conjunction with this financing, we settled 75% of the outstanding 2029 notes, added $197 million of cash to the balance sheet and significantly reduced our interest expense. These transactions further strengthen our balance sheet and extend our financial flexibility to execute our strategy. Our commercial business continues to scale, and our pipeline includes multiple near-term value drivers. With that, I'll turn the call back to Chris for closing remarks.

Thanks, Eric. Taking stock of where we are, we are continuing to drive our strategy to bring important medicines to underserved rare disease patients. Commercial business is thriving, now tracking towards $680 million to $700 million in net product sales for the year. LIVMARLI is well on its way to realizing its over $1 billion peak revenue potential. And our rare genetics team is thrilled about the potential launch of zilurgisertib for FOP patients in the coming months. On the pipeline, we are focused on a collaborative discussion with FDA on the VISTAS study in PSC. Clinical results are clear and breakthrough therapy designation gives us further opportunity to engage with FDA. All said, we have a plan to advance volixibat to PSC patients. The balance of the pipeline is firing on all cylinders. Recapping our upcoming clinical milestones, we expect clinical readouts from the Phase 3 AZURE-1 and AZURE-4 studies of brelovitug over the balance of the year, which will enable our planned BLA submission in the first half of next year. Next quarter, we also expect to announce top line results from the EXPAND study of LIVMARLI and additional rare cholestatic diseases, setting up the potential for an sNDA next year as well. And into 2027, we expect top line results from the VANTAGE study of volixibat in PBC first quarter. And finally, we're on track with MRM-3379 for proof-of-concept data in Fragile X syndrome next year. Importantly, we're building an organization capable of reaching many more people living with overlooked rare diseases while delivering strong financial performance. I want to thank the Mirum team for their continued focus and execution, the patients, families and physicians who continue to partner with us in this work. With that, operator, please open the call for questions.

[Operator Instructions] Your first question comes from the line of Ryan Deschner with Raymond James.

Congrats on the strong results. Curious what your overall take is on the potential read-through from the BOLD study evaluating odevixibat in patients with biliary atresia. And I have a follow-up question.

Thanks, Ryan, for the question. The BOLD study and the study of note in our pipeline that includes biliary atresia patients, the EXPAND study, I mean to put it simply are asking very different questions. I would equate the BOLD study more to what we ran previously with EMBARK, looking at patients in the very acute setting, trying to reduce bilirubin or extend transplant-free survival. The question we're asking in EXPAND ties much more to where we've seen IBAT perform quite well in other settings, where we're looking at older patients than what was in BOLD and EMBARK and evaluating pruritus changes. It's something that we've seen an impact from IBAT therapy over and over again now in different clinical settings. So we feel there's not really a read-through or connection between BOLD and what we're looking at in the upcoming EXPAND readout.

Appreciate it. And then just on the PSC regulatory discussions, what key topics do you anticipate sort of addressing with these future discussions?

Yes. Thanks for the follow-up on that. I mean just kind of to -- reiterate some of the background here, we did extensively discuss the VISTAS study design with FDA. Back in the pre-IND setting, the FDA acknowledged the pivotal intent, described the design as reasonable, gave direct feedback on duration analysis plan, all these things that designed the study that we read out so successfully earlier this year. And frankly, the situation now that we've seen is in the meeting, there was a new team from FDA. And so we think there's a lot of work to kind of get them up to speed on the backdrop here. So the history designing and conducting VISTAS and what this study means in a PSC setting. So we think it's going to be an iterative approach to kind of get them up to speed, not only with the current data package, but with the history of the program.

Your next question comes from the line of Gavin Clark-Gartner with Evercore ISI.

First, what was this new FDA's team's rationale to conduct an additional Phase 3? Like was it more of a safety database question? Or was it more around the efficacy side?

For a follow-up, Gavin, the comments about Phase 3 recommendation from them really were not specific. So we don't have great clarity on what specifically they're looking for. There were comments across the board on -- more general on efficacy, which we think VISTAS very clearly addresses and they actually commented on that in the meeting. On the safety side, the discussion -- the couple of things that were brought up were IBD safety in the backdrop with IBAT GI effects and liver safety. Those were designed into VISTAS as key things to evaluate. So we think it's all there in the VISTAS study, and it's more -- this is more about familiarity with study design and some of the questions that were asked. Another thing I'd point out is that the breakthrough designation actually was issued after the meeting. So I think that gives us a great opportunity to go back in and build up familiarity with this data set and work us towards an NDA.

Okay. That makes sense. And just a quick follow-up. Is this a team that you have engaged with before on any of your other programs? Do you have any experience working with them? And kind of on a similar point, what other regulatory precedents would support approval based on the similar type of Phase 2b setting?

Thanks for the follow-up. In terms of the team, a lot of times, the correspondence is written. And so you're not -- you don't have perfect clarity on who's behind some of the written correspondence. So it's difficult to answer that question, to be honest. And in terms of precedent, I mean, we really have looked across all the IBAT settings where you've seen in Alagille, where the first approval was based on four week randomized withdrawal data, all the way to the more recent Lynavoy approval in PBC pruritus with a six month placebo-controlled study that, frankly, looks a lot like VISTAS. It's a little bit larger because PBC is a more prevalent indication. So there's pretty clear precedent for IBAT in cholestatic pruritus settings that line up with VISTAS. [indiscernible] goes back to the whole way that we designed the study and the prior conversations with the agency.

I'm sorry, I may have misheard something. Did you say that this was only happening via written correspondence? Or was this pre-NDA in person with the FDA or virtually?

The pre-NDA was in person. So when you were asking about prior and other interactions, some of those have been written. So we don't know who is behind some of the other written correspondence. This meeting was in person.

Your next question comes from the line of Mike Ulz with Morgan Stanley.

This is Rohit on for Mike. Just based on your conversation with the FDA, do you see any read-through to the PBC VANTAGE study? Is it possible to request a Phase 3 trial for that one? And also, in terms of commercial prep for FOP, can you talk about where you currently stand and what's outstanding?

Thanks, Rohit. I'll speak to PBC and then pass it over to Peter to talk about FOP. On the VANTAGE study, as you may recall, we were granted breakthrough designation after the interim analysis in 2024. So that actually gave us a great opportunity to have conversations similar to what we expect to go through here with VISTAS. And so in the correspondence after the breakthrough designation on VANTAGE, we actually received a pretty clear feedback from FDA on what we should do to consider VANTAGE a pivotal study. And we were able to address those. So primarily, the comments related to the overall size, that's part of why we've ended up with over 330 patients in VANTAGE and also the analysis plan and some of the specifics on how the pruritus endpoint is analyzed.

And Rohit, yes, with regards to the commercial prep for the zilurgisertib potential approval and launch in Q4, that's going really well. As I mentioned, we did -- we were able to drop that in the bags of our rare genetics team and had a couple of territories there. Lot of typical prelaunch activity and profiling accounts and understanding where the treaters are. These patients are well identified. There's about 300 or so diagnosed and managed in the U.S. and highly specialized centers, had a good presence at the ENDO meeting earlier this summer as well. So excited about the progress of the NDA review and working towards launch readiness in Q4.

Your next question comes from the line of Brian Skorney with Baird.

I'm going to be annoying and also ask a little bit on FDA's issues with VISTAS just given that it seems like a pretty straightforward data set. Can you just refresh our memories as the review team here is within the division of hepatology. Is Katie Donohue still the Office Director? Was she involved in the meeting? Is Frank Anania still the Division Director and was he in the meeting? And I mean, I hear that they weren't very specific about why they wanted Phase 3, but I mean, did they sort of mention like a need for replication? It just seems like the p-value here is so robust that there's not really another question that could be answered with a Phase 3 other than maybe longer-term follow-up. So any sort of guidance there is helpful.

Thanks, Brian, for the question. On some of the specifics of people kind of in the room, what I would say the office leadership, we think maybe has changed and leadership was not in the room in our review meeting. And kind of getting into some of the -- I mean, specifically on efficacy the -- I think it's -- like you're pointing out, I think it's very easily addressed by the VISTAS data and getting breakthrough afterwards, I think, is a nod in that direction. So given some of the discussion in the room, I think that's something that we can readily address through iterative conversation with FDA. I don't know if that helps.

Yes. Maybe if I could just ask one thing on the PDUFA with zilurgisertib. I think you would have had probably the late cycle review meeting in the last month or so. Just any commentary on how that went and your level of confidence going into labeling discussions?

Yes. Thanks for the question, Brian. Yes, we did have the late cycle meeting. Meeting went very well. So we feel the application is progressing quite well towards the PDUFA date. So full systems go to prepare for a potential launch in Q4.

Your next question comes from the line of Kalpit Patel with Wolfe Research.

One more on the regulatory interaction here. In your communication with the agency, has there been any dialogue so far on potentially running a post-approval confirmatory study instead of running a Phase 3? Or should investors assume that the Phase 3 is what's in the works right now?