Mirum Pharma Readies $75 Million IPO Plan

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About: Mirum Pharmaceuticals (MIRM)
by: Donovan Jones
Summary

Mirum Pharmaceuticals has filed proposed terms for its $75 million IPO.

The firm is developing drug treatment candidates for liver diseases.

MIRM has done well to get to its current stage of development, but there is a long wait time before a meaningful catalyst.

The IPO may be more suited to long-term hold institutional shareholders.

Quick Take

Mirum Pharmaceuticals (MIRM) has filed to raise gross proceeds of $75.0 million from a U.S. IPO, according to an S-1 registration statement.

The firm is developing therapeutics for debilitating liver diseases.

MIRM is a mid-stage biopharma but next meaningful data publishing milestones will likely occur until 2021.

Company & Technology

Foster City, California-based Mirum Pharmaceuticals was founded in 2018 and is developing therapeutics for debilitating liver diseases with high unmet clinical needs.

Management is headed by Co-Founder, CEO and Director Christopher Peetz, who is also the CEO of Flashlight Therapeutics.

Mirum’s lead drug candidate is ‘maralixibat’, an oral, minimally-absorbed ileal bile acid transporter [ASBT] inhibitor, currently in development for the treatment of pediatric patients with progressive familial intrahepatic cholestasis [PFIC] and alagille syndrome [ALGS].

ASBT’s function is recycling bile acids from the intestine back to the liver and its inhibition results in more bile acids being excreted in the feces, leading to lower levels of bile acids systemically, thus reducing bile acid-mediated liver damage.

In Q2 2019, the company commenced enrollment in a Phase 3 MARCH clinical trial in children with PFIC, based on positive results from Phase 2 trial, with a Phase 3 clinical trial in patients with ALGS planned for H1 2020.

Management claims that ‘maralixibat possesses an extensive safety dataset, having been evaluated in more than 1,500 human subjects.’

Mirum’s second drug candidate is ‘volixibat’ is currently in development for the treatment of adult patients with cholestatic liver diseases as management expects to initiate Phase 2 clinical trials in H1 2020.

Below is the current status of the company’s drug development pipeline:

Source: Company registration statement

Investors in Mirum include Deerfield Capital Management, Rock Springs Capital, RiverVest, Pappas Capital, Novo Holdings, Frazier Healthcare Partners, and New Enterprise Associates. Source: Crunchbase

Market & Competition

Management estimates that there are about 3,000 patients with PFIC in the US and about 5,000 in Europe, while it is estimated that PFIC affects one in every 50,000 to 100,000 births in both regions.

There are 6 identified types of PFIC while the company is focusing on PFIC type 2 [PFIC2] that is caused by a mutation in the ABCB11 gene, resulting in the buildup of bile salts in liver cells, damaging these cells and causing liver disease.

Management claims that PFIC2 accounts for approximately 60% of the PFIC patient population.

It is estimated that ALGS affects one in every 30,000 to 50,000 births in the US and Europe, while management estimates that there are about 9,000 patients in the US as well as 14,000 in Europe.

As liver transplantation and partial external biliary diversion [PEBD] are often the only options for patients, there remains a high unmet clinical need for an effective treatment for PFIC and ALGS.

Financial Status

MIRM’s recent financial results are typical of a development stage biopharma firm in that they feature no revenue and significant R&D and G&A expenses associated with advancing its drug treatment pipeline.

Below are the company’s financial results since inception on May 2, 2018 to present:

Source: Company registration statement

As of March 31, 2019, the company had $49.5 million in cash and $7.7 million in total liabilities. (Unaudited, interim)

IPO Details

MIRM intends to raise $75.0 million in gross proceeds from an IPO of five million shares of its common stock at a midpoint price of $15.00 per share, not including customary underwriter options.

Certain existing shareholders have indicated an interest to purchase shares of up to $35.0 million in the aggregate at the IPO price. This is typical of successful life science IPOs and is a positive signal to prospective IPO participants.

Per the firm’s latest filing, it plans to use the net proceeds from the IPO and cash on hand as follows:

approximately $95.0 million to $105.0 million to further the clinical development of maralixibat, including our planned Phase 3 clinical trials in PFIC and ALGS and our anticipated clinical program in BA;

approximately $30.0 million to $40.0 million to further the clinical development of volixibat, including our planned Phase 2 clinical trials in ICP and PSC; and

the remainder for other ongoing research and development activities, and for general corporate purposes, including working capital, operating expenses and capital expenditures.

Management’s presentation of the company roadshow is not available.

Listed underwriters of the IPO are Citigroup, Evercore ISI, Guggenheim Securities, Raymond James, and Roth Capital Partners.

Commentary

MIRM is seeking public capital to achieve its next forecasted milestones for lead programs for the treatment of rare liver diseases.

The company is backed by top tier life science venture capital firms.

Its lead candidate is preparing to enter Phase 3 trials, so most of the IPO proceeds will be used for conducting those trials.

The market opportunity for its lead candidates is difficult to quantify, although the number of affected patients in a typical year is relatively small.

Management has disclosed no commercial collaborations, so the firm is following a ‘go-it-alone’ approach.

The company has done well to get its lead programs well into Phase 2 trials. However, interested investors would need to have a long hold timeframe, as next milestones for data publishing will not come until at least 2021 at the earliest.

Expected IPO Pricing Date: July 17 , 2019.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.