Mirum(MIRM) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The company reported first Livmarli sales of $10.9 million, total revenue of $12.9 million, and a net loss of $36.6 million Condensed Consolidated Balance Sheets Total assets decreased to $278.1 million from $294.7 million, with a corresponding reduction in liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $46,272 | $31,340 | | Short-term investments | $93,636 | $125,201 | | Total current assets | $155,268 | $166,592 | | Total assets | $278,148 | $294,651 | | Liabilities & Equity | | | | Total current liabilities | $34,553 | $42,596 | | Revenue interest liability, net | $132,940 | $129,923 | | Total liabilities | $169,216 | $174,439 | | Total stockholders' equity | $108,932 | $120,212 | Condensed Consolidated Statements of Operations The company reported first product sales of $10.9 million, total revenue of $12.9 million, and a net loss of $36.6 million Statement of Operations Summary (in thousands, except per share data) | Line Item | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Product sales, net | $10,892 | $— | | License revenue | $2,000 | $— | | Total revenue | $12,892 | $— | | Cost of sales | $2,424 | $— | | Research and development | $24,088 | $38,134 | | Selling, general and administrative | $19,116 | $9,479 | | Total operating expenses | $45,628 | $47,613 | | Loss from operations | ($32,736) | ($47,613) | | Net loss | ($36,606) | ($50,532) | | Net loss per share, basic and diluted | ($1.17) | ($1.68) | Condensed Consolidated Statements of Cash Flows Operating cash outflow was $39.7 million, with net cash increasing by $14.9 million from investing and financing Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($39,669) | ($25,210) | | Net cash provided by (used in) investing activities | $36,500 | ($32,784) | | Net cash provided by financing activities | $18,104 | $6,594 | | Net increase (decrease) in cash | $14,932 | ($51,409) | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail business, accounting policies, FDA approval of Livmarli, liquidity, and financing arrangements - The company received FDA approval for LIVMARLI® (maralixibat) on September 29, 2021, for treating cholestatic pruritus in Alagille syndrome (ALGS) patients aged one year and older[29] - Management believes that its unrestricted cash, cash equivalents, and investments of $139.9 million as of March 31, 2022, are sufficient to fund operations for at least the next twelve months[31] - The company has a Revenue Interest Purchase Agreement (RIPA) with an affiliate of Oberland Capital, under which it has received $115.0 million in financing. In return, the Purchasers receive tiered revenue interest payments based on annual net sales of Livmarli, starting at 9.75%[63][65][66] - In January 2022, a regulatory milestone was achieved by partner CANbridge, triggering a $2.0 million milestone payment to the company, which was recorded as license revenue[81] - During Q1 2022, the company sold 995,897 shares of common stock through its "at the market" (ATM) sales agreement, raising net proceeds of approximately $17.4 million[89] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Livmarli's commercial launch, a reduced net loss of $36.6 million, and sufficient liquidity - The company's lead product, Livmarli, is approved in the U.S. for cholestatic pruritus in Alagille syndrome (ALGS) patients. The company is also developing Livmarli for Progressive Familial Intrahepatic Cholestasis (PFIC) and Biliary Atresia (BA), and its second product candidate, volixibat, for adult cholestatic liver diseases[111][112] Results of Operations Comparison (in thousands) | | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Change | | :--- | :--- | :--- | :--- | | Total revenue | $12,892 | $— | $12,892 | | Cost of sales | $2,424 | $— | $2,424 | | Research and development | $24,088 | $38,134 | ($14,046) | | Selling, general and administrative | $19,116 | $9,479 | $9,637 | | Net Loss | ($36,606) | ($50,532) | $13,926 | - The $14.0 million decrease in R&D expenses was primarily due to a $17.0 million decrease in license fees (milestone payments) compared to the prior year. This was partially offset by increased clinical trial expenses for volixibat programs and higher personnel costs[149][151] - The $9.6 million increase in SG&A expenses was driven by a $4.9 million increase in personnel costs (including $1.4 million in stock-based compensation), a $2.9 million increase in professional services for commercial launch, and a $1.8 million increase in other administrative expenses[150] - The company believes its cash, unrestricted cash equivalents, and investments will be sufficient to fund current operations for at least the next 12 months from the filing date of the report[155] Quantitative and Qualitative Disclosures About Market Risk Primary market risks include interest rate sensitivity, variable RIPA interest rates, and minor foreign currency exposure - The company's primary market risk is interest rate sensitivity on its cash and investment portfolio, but due to the short-term nature of its instruments, a 100-basis-point change in interest rates is not expected to have a material impact[174] - The effective interest rate on the Revenue Interest Purchase Agreement (RIPA) liability may vary based on forecasts of net product sales, which could materially impact interest expense recognized each period[175] - Foreign currency risk from operations in Switzerland and contracts denominated in Swiss Francs and Euros is not currently considered significant[176] Controls and Procedures Management concluded disclosure controls and procedures were effective with no material changes in internal controls - The company's management, including the CEO and CFO, concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective[178] - No changes in internal control over financial reporting occurred during the first quarter of 2022 that have materially affected, or are reasonably likely to materially affect, the company's internal controls[180] PART II. OTHER INFORMATION Legal Proceedings The company is not involved in any legal proceedings expected to materially affect its financial condition - Management believes there are currently no pending claims or actions against the company that would have a material adverse effect on its results of operations, financial condition, or cash flows[183] Risk Factors Key risks include Livmarli commercialization, manufacturing reliance, financing, and intellectual property protection - The success of the business depends on the continued successful commercialization of Livmarli, its only FDA-approved product[185] - The company has limited marketing and sales experience and relies completely on third parties for manufacturing, including sole-source suppliers[187][208] - The company has a limited operating history, has incurred significant losses since inception, and expects to continue incurring losses for the foreseeable future[217] - Substantial additional financing will be needed to continue commercialization, develop product candidates, and implement operating plans. Failure to obtain financing could force delays or elimination of programs[343] - The company is dependent on intellectual property licensed from third parties, and termination of these licenses could result in the loss of significant rights[331] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the period - None[459] Defaults Upon Senior Securities This item is not applicable - Not applicable[460] Mine Safety Disclosures This item is not applicable - Not applicable[461] Other Information No other information to report for the period - None[462] Exhibits This section lists exhibits including corporate documents, CEO/CFO certifications, and XBRL data files - The exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and Inline XBRL documents[464]