liver disease specialist’s stock poised for growth By Investing.com

Mirum Pharmaceuticals, Inc. (NASDAQ:), a biopharmaceutical company focused on developing and commercializing therapies for debilitating liver diseases, has been making significant strides in expanding its product portfolio and market reach. The company’s recent FDA-approved label expansion for its flagship drug LIVMARLI (maralixibat) and the ongoing development of its promising candidate volixibat have positioned Mirum as a key player in the treatment of rare liver diseases.

Livmarli Performance and Expansion

LIVMARLI, Mirum’s lead product for the treatment of cholestatic pruritus in patients with Alagille syndrome (ALGS), has recently received an important label expansion from the FDA. The drug is now approved for use in patients with progressive familial intrahepatic cholestasis (PFIC) aged 12 months and older, a significant expansion from the previous label that covered PFIC patients five years and older. This expansion follows the European Commission’s marketing authorization for PFIC patients three months of age and older.

The label expansion is expected to drive sales growth in 2024 as reimbursement is secured. In the first quarter of 2024, LIVMARLI generated revenue of $43 million, aligning with consensus expectations. Analysts anticipate that the expanded label will allow for treatment initiation at an earlier age, potentially increasing the patient base and driving further revenue growth.

Volixibat Development and Market Potential

Mirum’s pipeline candidate volixibat, an iBAT inhibitor, is currently being developed for the treatment of Primary Sclerosing Cholangitis (PSC) and Primary Biliary Cholangitis (PBC). The company is expected to provide updates on interim Phase 2 studies for both indications in June 2024.

Analysts view volixibat as a strong candidate for treating pruritus associated with PBC and PSC, with a differentiated profile compared to competitors. The FDA has approved pruritus as an endpoint for drug approval, which supports the potential for volixibat’s success. Some analysts have increased their probability of success (POS) for volixibat in PBC to 60% (from 30%) and in PSC to 50% (from 30%), reflecting a derisking following recent data.

The market potential for volixibat is significant, with peak sales estimates reaching approximately $1 billion combined for PSC and PBC, with $800 million from PBC alone. Analysts note that there is limited competition in PSC, potentially making volixibat the first approved treatment for this indication. This could allow Mirum to set the pricing for PSC treatments, addressing a high unmet medical need.

Financial Overview

Mirum Pharmaceuticals has provided revenue guidance of $310-320 million for the fiscal year 2024, which analysts believe is attainable. The company’s strong cash position of $303 million is expected to support its path to profitability, with some analysts projecting quarterly profitability as early as 2025.

Despite the positive revenue outlook, Mirum reported a net loss in the first quarter of 2024. However, the company’s substantial cash reserves are seen as sufficient to support future profitability and ongoing research and development efforts.

Future Outlook and Catalysts

Several key catalysts are on the horizon for Mirum Pharmaceuticals:

1. Interim data from volixibat PSC and PBC trials expected in June 2024

2. European Medicines Agency (EMA) decision on LIVMARLI for PFIC in the first half of 2024

3. Planned New Drug Application (NDA) filing for CHENODAL for Cerebrotendinous Xanthomatosis (CTX) in the first half of 2024

4. Potential U.S. launches for volixibat in 2027 for PSC and 2028 for PBC

These upcoming events could provide significant momentum for the company’s stock and validate the potential of its pipeline candidates.

Bear Case

How might increased competition in the PBC market affect Mirum’s growth prospects?

The PBC market is becoming increasingly crowded, which could pose challenges for Mirum’s volixibat. Competitors such as Gilead Sciences (NASDAQ:), which recently acquired CymaBay Therapeutics (NASDAQ:) for its PBC candidate seladelpar, are advancing in the space. Additionally, GSK is expected to read out their Phase 3 study results for an iBAT inhibitor in the second half of 2024. This heightened competition could potentially limit volixibat’s market share and pricing power in the PBC indication.

What risks does Mirum face in achieving statistical significance in its volixibat trials?

The upcoming interim analyses for volixibat in PSC and PBC are based on small sample sizes, which may present challenges in achieving statistical significance. These trials are not designed to show statistical significance but rather to inform dose selection for future confirmatory analysis. There is a risk that the interim data may not provide sufficiently robust evidence to support advancing to larger, more definitive trials. This could potentially delay the development timeline and increase costs for Mirum.

Bull Case

How could the label expansion for Livmarli drive revenue growth in the near term?

The recent FDA approval for LIVMARLI’s label expansion to include PFIC patients aged 12 months and older presents a significant opportunity for near-term revenue growth. This expansion allows for earlier treatment initiation, potentially increasing the eligible patient population. As reimbursement is secured and awareness grows among healthcare providers, Mirum could see an acceleration in LIVMARLI sales throughout 2024 and beyond. The expanded label, coupled with the European authorization for patients as young as three months, positions LIVMARLI for strong market penetration in both the U.S. and EU markets.

What potential does volixibat have in the underserved PSC market?

Volixibat holds substantial promise in the PSC market, which currently has no approved therapies. As potentially the first approved treatment for PSC, volixibat could address a significant unmet medical need and capture a large market share. The high unmet need in PSC could lead to favorable pricing and rapid adoption upon approval. Additionally, the lack of competition in this space could allow Mirum to establish volixibat as the standard of care for PSC-associated pruritus, potentially leading to long-term market dominance and substantial revenue growth.

SWOT Analysis

Strengths:

• Strong cash position of $303 million
• Expanding label for LIVMARLI in PFIC
• Potential first-mover advantage in PSC with volixibat
• Diversified pipeline addressing multiple liver diseases

Weaknesses:

• Current net loss position
• Dependence on clinical trial success for future growth
• Limited commercial portfolio with heavy reliance on LIVMARLI

Opportunities:

• Large untapped market in PSC with no approved therapies
• Potential for volixibat in multiple indications (PSC and PBC)
• Expansion into international markets for LIVMARLI
• Possible additional indications for existing and pipeline products

Threats:

• Increasing competition in the PBC market
• Regulatory risks associated with drug approvals
• Potential pricing pressures in rare disease markets
• Dependence on successful execution of clinical trials and commercialization strategies

Analysts Targets

• H.C. Wainwright & Co (July 26th, 2024): $66 price target, “Affirm Buy” rating
• JMP Securities (June 18th, 2024): $68 price target, “Market Outperform” rating
• Cantor Fitzgerald (May 23rd, 2024): $45 price target, “Overweight” rating
• Cantor Fitzgerald (May 9th, 2024): $40 price target, “Overweight” rating
• JMP Securities (May 9th, 2024): $66 price target, “Market Outperform” rating
• JMP Securities (April 15th, 2024): $72 price target, “Market Outperform” rating

This analysis is based on information available up to September 30, 2024.

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