July 24, 2019 - 12:29pm EST by
2019 2020
Price: 14.20 EPS 0 0
Shares Out. (in M): 23 P/E 0 0
Market Cap (in $M): 327 P/FCF 0 0
Net Debt (in $M): -182 EBIT 0 0
TEV ($): 145 TEV/EBIT 0 0
Borrow Cost: General Collateral

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Mirum Pharmaceuticals Short Thesis 


We think Mirum Pharmaceuticals is a short.  The 9 month old company is a venture capital money grab at the expense of public equity buyers.  Mirum paid $7.5M upfront to acquire Maralixibat (Mara) from Shire. Mara has failed multiple Phase 2 trials including 3 trials in the specific indications Mirum plans to move forward.  With no new trials run in the interim and a scant $7M in R&D spend over the last 9 months, Mirum IPOed last Wednesday at a $370M market cap. Despite the slew of negative clinical data, Mirum plans to advance Maralixibat directly into Phase 3 trials with the war chest of capital raised from its crossover round and IPO.  In the unlikely outcome of clinical success, Maralixibat is heavily encumbered with hundreds of millions of milestones and 15%-25% royalties owed to a combination of Shire, Pfizer, Satigoen and Sanofi. To recap, a failed asset tossed in dumpster by Shire was purchased for $7.5M and immediately foisted on the public at a $370M valuation.  


We first came across Mara (then LUM001 or SHP625) in our work on the Albireo (see our prior Albireo write up).  At that time, it was a failed asset competing against ALBO’s odevixibat (A4250). Shire came to own Maralixibat and Volixibat through its May 2014 $260M acquisition of Lumena immediately prior to Lumena’s IPO.  By April 2016, Mara had failed 5 Phase 2 trials including 2 in ALGS (IMAGO,ITCH trials) , 1 in PFIC (INDIGO trial), 1 in PBC (CLARITY trial) and 1 in PSC (CAMEO trial). Shire reached an agreement with former Lumena shareholders to terminate all future contingent milestones in September 2015 for $90M and subsequently wrote down the assets.  Despite the failures, Mirum will continue to run at PFIC (Progressive Familila Intrahepatic Cholestasis) and ALGS (Alagille Syndrome)


Brief background on PFIC and ALGS

Cholestatic conditions (disruption of bile acid flow) in general affect an estimated 30K-50K children with no approved drugs.  PFIC is rare subset that impacts approximately 10K infants (~3,200 US and ~5,000 Europe). It is a genetic disorder where bile acid collects on the liver rather than circulated away in normal liver function.  PFIC leads to Cirrhosis and liver failure. Symptoms include pruritus (extreme itching) resulting in no sleep.  


Without PEBD surgery or a liver transplant 50% die by age 10 with effectively 100% mortality by age 20.  Partial external biliary diversion (PEBD) surgery entails drilling a hole and mechanically draining the bile acid into a permanent external stoma bag.  While it is an effective solution, it is less than ideal given the need for a stoma bag and a 25% failure rate. Transplants come with their own set of risks, complications, and lifelong medications. 


Like PFIC, ALGS is a genetic condition associated with liver, heart, eye, kidney and skeletal abnormalities. In particular, ALGS patients have fewer than normal bile ducts inside the liver, which leads to cholestasis and the accumulation of bile and causes scarring in the liver.  There are approximately 80-100 new ALGS patients per year with a prevalence of 9,000 in the US and 14,000 in Europe.  There are currently no drugs approved for the treatment of ALGS. 


Failed trials in current indications


Progressive Familila Intrahepatic Cholestasis (PFIC) prior trials

Below is how MIRM presents the Lumena/Shire Phase 2 trial in PFIC.  The chart is master class in sleight-of-hand. To begin, the primary endpoint of the trial was the change from baseline to week 13 in fasting serum bile acid (sBA) which failed and did not reach statistical significance.  However, the chart does not distinguish between primary and secondary endpoints. The primary endpoint failure is listed in the fourth bullet point--there is a reason it’s called top line results not fourth line results. The secondary endpoint of the trial was a reduction from baseline to week 13 in pruritus as measured by the ItchRO(Obs).  This metric actually did reach statistical significance for the overall group, however it is not in the chart, though neither is the p value associated with the claimed stat sig. Rather the chart highlights 48-week pruritus data which is “clinically meaningful,” code for not statistically significant in biotech land. In what appears to be a post hoc analysis, MIRM claims a subset of the PFIC2 population (which was already a subset of the total PFIC population in the trial of 25 out of n=33) led to normalization (<8.5) or significant reduction (>70%) in sBA from baseline.  The subset of PFIC2 patients with non-truncating mutation of the bile salt export pump (BSEP) appears to be 15 patients. No aggregate statistical parameters were reported on the subset.   

INDIGO trial








•  Phase 2 open-label, dose-escalation trial


•  Fully-enrolled


•  Open-label extension ongoing


•  Evaluate safety and efficacy in PFIC


•  Endpoints: Safety, pruritus and sBA





•  Disappearance or substantial reduction in pruritus in PFIC2 patients; see “—Our Clinical Trials of Maralixibat in PFIC—Phase 2 INDIGO Trial”below


•  55% of PFIC2 patients experienced a 1 point ItchRO(Obs) reduction at week 48



Serum Bile Acid



•  Normalization or substantial reduction observed in sBA levels in PFIC2 patients


•  Primary efficacy analysis of the change from baseline to week 13 in fasting sBA level did not reach statistical significance for the overall group






•  Improvement in height and weight


•  Normalization of bilirubin and liver enzymes, if elevated at baseline


•  Improvements observed in health-related quality of life scores


•  Well tolerated. Many patients on treatment for approximately 4 years. Most frequent adverse events gastrointestinal-related

Alagille Syndrome (ALGS) prior trials

In ALGS, both the ITCH trial and the and IMAGO trial failed to reach their primary endpoints of reduction in pruritus and sBA respectively.  The ICONIC trial hit its endpoints using 400ug/kg per day vs. 140 and 280ug/kg in the prior two trials. 

ITCH and IMAGO trials








ITCH (N=37)

•  Phase 2 randomized, placebo-controlled dose escalation trial


•  Completed


•  Evaluate reduction in pruritus in patients with ALGS


•  Primary Endpoint: Change from baseline to week 13 in pruritus





•  Significant reductions observed in pruritus at 70 µg/kg/d and 140 µg/kg/d


•  Reductions observed in overall treatment group in ItchRO(Obs) that did not reach statistical significance



Serum Bile Acid



•  Overall reductions in sBA observed across maralixibat treatment groups that did not reach statistical significance

IMAGINE II, Open-label extension trial of the ITCH trial (N=34)

•  Fully-enrolled


•  Ongoing


•  Evaluate long-term safety and efficacy


•  Long-term data analysis pending

IMAGO (N=20)

•  Phase 2 randomized placebo-controlled dose escalation trial


•  Completed


•  Evaluate safety and efficacy and impact on biochemical markers and pruritus


•  Primary Endpoint: Change from baseline to week 13 in fasting sBA level


Serum Bile Acid



•  Reductions in sBA in maralixibat treated groups that were not statistically significant






•  Significant improvement in quality of life, as measured by the PedsQL scale



ICONIC trial







•  Phase 2b trial with a 4-weekrandomized, placebo-controlled withdrawal period


•  Open-labelextension ongoing


•  Evaluate safety and efficacy in ALGS


•  Primary Endpoint: Mean change from week 18 to week 22 of fasting sBA levels in those with sBA response (50%) at week 12 or week 18





•  Statistically significant difference in ItchRO(Obs) with maralixibat versus placebo during randomized drug withdrawal period (p<0.0001)


•  Maralixibat significantly reduced pruritus from baseline to week 48 (p<0.0001)



Serum Bile Acids



•  Primary endpoint met (p<0.05)


•  Statistically significant difference in sBA levels with maralixibat versus placebo during the randomized drug withdrawal period (p<0.05)


•  Maralixibat significantly reduced sBA levels from baseline to week 48 (p<0.01)






•  Statistically significant 44% (p<0.01) reduction from baseline on Clinician Xanthoma Scale at week 48


•  Well tolerated with over three years of duration in some patients. Most frequent adverse events gastrointestinal-related

Safety issues

Mirum reports its safety profile for Maralixibat in its S-1 as follows: 

“The most commonly reported adverse events, or AEs, and serious adverse events, or SAEs, have been those of gastrointestinal, or GI, disorders such as diarrhea, abdominal pain and vomiting, and were mostly mild to moderate in severity and transient in nature. Reported treatment-related SAEs have consisted of abdominal pain, upper abdominal pain, diarrhea, cholangitis, increase in blood bilirubin, increase in international normalized ratio, increase in pancreatitis, ALT, autoimmune hepatitis, hematochezia, pure red cell aplasia, myelodysplastic syndrome and anemia.”


We would like to see more disclosure of frequency and severity with respect to AEs, particularly diarrhea, which we have heard was significant.  We are particularly interested to know more details on the AEs associated with the ICONIC trial which had much higher dosing than the other two ALGS trials.  While Mirum was taking victory laps on the primary endpoint data, the safety was deemphasized and less than ideal. The April 2019 press release on preliminary data for ICONIC (https://mirumpharma.gcs-web.com/news-releases/news-release-details/mirum-pharmaceuticals-presents-new-data-demonstrating-durable) was not encouraging (recall the N=31): “The Treatment-emergent adverse events (TEAEs) were reported in all patients, and in 22 of the patients, the TEAEs were considered potentially related to maralixibat. Serious TEAEs were reported in 15 patients, of which 5 of the patients experienced events considered potentially related to maralixibat. There was one TEAE that lead to discontinuation that was deemed not related to maralixibat. The most frequent TEAEs were fever, diarrhea, cough and abdominal pain.” 


Some additional clinical disclosure around diarrhea and GI issues can be found in the clinical publication of Mara in a PBC study that showed 81% GI adverse events vs 54% in the placebo group. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6396374/.  


Safety will be a front and center concern in the Phase 3 trials Mirum is running as the dosing is significantly higher than the Phase 2 trials.


Phase 3 trials


The Maralixibat PFIC Phase 3 trial plans to enroll 30 patients with nt-PFIC2.  PFIC has a very low incidence of 1 in 50-100K live births which equates to approximately 40-80 new patients per year in the US. PFIC2 accounts for roughly 60% of the total PFIC population and PFIC2 with the non-truncating mutation (nt) are 85% of PFIC2 population.   Thus the trial population incidence is consequently 20-40 new patients per year in the US. With respect to the current existing patients, there are approximately 1,500 nt-PFIC2 patients in the US and 2,500 in Europe. Albireo, which has significantly better efficacy and safety data is having a hard time enrolling its Phase 3 PFIC trial, which includes both PFIC1 and PFIC2 populations.  We think Mara will very difficult time in enrolling their phase 3 PFIC trial and have very little shot at meeting its estimated late 2020 data read out. 


With respect to dosing, the Mara Phase 3 is using 600ug/kg BID.  This is over 2x higher than their maximum dose in their Phase 2 Indigo trial that maxed dosing at 280ug/kg BID.  It is a major red flag to have a Phase 3 completely different dosing than prior trials, particularly if the dose is significantly higher. 


MIRM expects to start a Phase 3 trial in ALGS on in the first half of 2020.  The proposed trial design is similar to the ICONIC trial. MIRM thinks they have a shot at submitting an NDA based on their completed ICONIC Phase 2b trial.  They expect to have additional meeting with the FDA later this year to provide some clarity. This is perhaps the largest risk in the short thesis. However, we note the potential safety issues in the trial we detailed above. 


Encumbered asset bought for peanuts

Concurrent the initial $60M Series A round in November of 2018, Mirum management (consisting of the Lumena management team that developed Mara) licensed Maralixibat and Volixbat from Shire for nominal $7.5M upfront payment and 1.9M shares of common stock.  While the initial asset creation was very inexpensive and ready made for an IPO, the burden going forward is much more expensive. MIRM owes Shire up to $110M in clinical development milestones and an additional $25M for each approved indication across PFIC, ALGS, and BA.  Should MIRM ever make it out of the clinic it owes low double digit to mid teen royalties to Shire. MIRM will owe an additional low single digit royalty to Pfizer. Sanofi also has a piece of the pie with regulatory and other milestones totaling $36M. MIRM owes Sanofi mid to high single digit royalties though the royalty portion may partially come out of Shire’s pocket. Not to be left out, MRIM owes Satiogen Pharma upwards of $20M in milestones and low single digit royalties, though that royalty may partially come out of Shire’s pocket.  


To summarize, Mirum was able to acquire Maralixibat and IPO their company by spending $7.5M in cash but owe four different pharma companies potential milestones of $240M and net royalties ranging from 15%-25%.  This may be the fastest presto-chango, dead asset to public company creations we have witnessed. From initial creation and financing in November of $60M, a crossover round in April of another $60M followed by an $80M IPO in July creating a $370M market cap ($180M cash). 


Specious Intellectual property

MIRM does not have a composition of matter patent on Mara.  In fact it does not have a method of use patent in the US or Europe yet.  It has ownership of a MOU patent application in the hands of USPO.  It appears this has been pending since at least April 2014 as the Lumena S-1 laid out the same IP situation back then: “We do not have patents or patent applications covering LUM001 [Maralixibat] as a composition of matter. Therefore, the primary intellectual property protection for our LUM001 program will be any patents granted on the pending method-of-use and formulation patent applications” We have no reason to believe they will be denied MOU IP, but it is odd they do not have it after all these years and cold comfort for a biotech to have such tenuous intellectual property rights for its primary shot on goal.


Garbage in, garbage out

Mirum Pharmaceuticals looks like a money grab by venture capital at the expense of public equity buyers.


To recap:

  • The sole assets of the company were purchased for $7.5M in cash from Shire 9 months ago and were IPOed at a $370M market cap last week with no additional trials nor meaningful R&D executed in the interim.

  • Maralixibat failed its PFIC Phase 2 trial and 2 out of 3 ALGS trials

  • The Phase 3 trial in PFIC is utilizing a dosage 2x higher than any previous Phase 2 trial

  • Safety data is questionable with limited disclosure and Phase 3 trial enrollment may be very difficult as Albireo has demonstrated

  • Maralixibat and Volixibat are heavily encumbered by large milestone payables and 15%-25% royalties 

  • MIRM does not yet have method of use patents issued for Maralixibat in the US and Europe which has been in process for over 5 years.



Potential accelerated approval for Maralixibat in ALGS

$180M war chest of capital


I hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.


  • Continued Maralixibat clinical data failure 
  • Negative safety data
  • Cash burn
  • Positive clinical data from Albireo
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