Mirum Pharmaceuticals (MIRM -0.22%) may not sound familiar, even to biotech investors; this company only went public in July. The stock spent much of the last few months trading in the $7 to $8 range, roughly a 50% haircut from its $15 IPO price. Then came developments with the U.S. Food and Drug Administration (FDA) in December, causing the stock to jump to the mid-$20 range where it sits today.
Mirum seeks to develop new treatments for debilitating liver diseases. Its lead drug maralixibat generated statistically and clinically significant, durable responses in children with Alagille syndrome, a rare genetic disorder that causes the bile ducts to be abnormally narrow, deformed, and reduced in number. This leads to an accumulation of bile in the liver, causing decreased liver function, chronic and severe itching called pruritus, jaundice, and stunted growth of the child. Mirum's maralixibat allows for excess bile to be excreted by the body, thereby lowering toxic levels of bile responsible for the liver damage.
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What happened?
In December, Mirum announced that it held a successful meeting with the FDA regarding maralixibat as a treatment for pruritus in patients with Alagille syndrome. The drug allows the body to clear some of the excess bile, which in turn, reduces the severe symptoms like pruritus. Drug developers typically meet with the FDA prior to filing a New Drug Application (NDA) to make sure everyone is on the same page about what will be included in the submission for approval.
What appears to have transpired is that Mirum requested a Type C meeting, which is informational in nature. However, the FDA proactively changed the type of meeting from Type C to a pre-NDA meeting. To the casual observer, this may not seem like much. In reality, the distinction about which type of FDA meeting is held carries significant weight. The FDA only permits one pre-NDA meeting per drug per disease.
The fact that the FDA proactively changed the meeting type demonstrates the agency's desire to work with Mirum to bring the drug to market. Maralixibat previously garnered the FDA's Breakthrough Therapy designation, which facilitates greater interaction with the agency prior to approval. It does not guarantee that it will get approved.
Mirum still needs to prepare and complete the full NDA submission as well as demonstrate the ability to consistently manufacture the drug. Along these lines, Mirum also announced that it held a dedicated meeting with the FDA on chemistry, manufacturing, and controls, commonly referred to as CMC.
Mirum plans to submit a rolling NDA, meaning the components of the submission will be sent to the FDA as they are ready. It also allows the FDA to begin reviewing parts of the NDA sooner. The first section is slated to be submitted in the third quarter of 2020, with the CMC portion going in during the first quarter of 2021.
The FDA, in most cases, requires three separate batches of a drug to be manufactured and the documentation submitted to show that it can be reproducibly made. Mirum is likely working on one or more of these batches, resulting in the CMC filing timeline in early 2021.
Mirum targets rare liver diseases
In addition, Mirum is currently enrolling a phase 3 clinical trial with maralixibat as a treatment for progressive familial intrahepatic cholestasis (PFIC). According to the company, this rare genetic disease affects one in 50,000 to 100,000 births in the U.S. and Europe. Mirum estimates there are about 3,000 patients in the U.S. and 5,000 in Europe.
Mirum also has a second drug candidate named volixibat, which selectively inhibits a protein responsible for recycling bile acids from the intestine to the liver. In 2020, Mirum expects to start phase 2 clinical trials with volixibat for primary sclerosing cholangitis and intrahepatic cholestasis of pregnancy.
What do investors think?
As of Sept. 30, more than 70% of the stock was held by institutions. This seems reasonable considering the venture firms backing it prior to the IPO still own their positions. Healthcare investing heavyweights Baker Bros., Alyeska Investment, and Rock Springs Capital own a sizable amount. Takeda Pharmaceutical owns 8.1% due to its acquisition of Shire, which licensed the rights to develop and commercialize maralixibat and volixibat to Mirum.
Analysts tagged Mirum with buy ratings and targets from $27 to $33 per share. From today's stock price around $24.50, that implies 10% to 35% upside. The next significant catalyst will be phase 3 data at the end of 2020 for maralixibat in PFIC. The earliest time for an approval is 2021. Therefore, while Mirum's results are promising, I think investors can either slowly add on the stock during any dips or hold off buying until the second half of 2020.
