Mirum Pharmaceuticals Q3 2026 Earnings Call Transcript

Mirum Pharmaceuticals (NASDAQ:MIRM) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://events.q4inc.com/attendee/414267773

Summary

Mirum Pharmaceuticals reported $186 million in net product sales for Q3 2026 and increased full-year sales guidance to $715-$720 million.

The company highlighted significant progress in its pipeline, including positive phase three data for Verloba tug and approval of Etebriose.

Mirum expects five potential approvals and label expansions, aiming for a peak revenue potential of over $4 billion.

The launch of Etebriose in the U.S. is underway, showing strong early engagement from patients and healthcare professionals.

Mirum’s financial position is robust with cash, cash equivalents, and investments at approximately $500 million as of September 2026, supported by strong commercial sales and strategic capital restructuring.

Full Transcript

OPERATOR

Earnings conference call. My name is Joel and I will be your operator today. All lines are currently in a listen-only mode and there will be an opportunity for Q&A after management’s prepared remarks. I would now like to hand the conference over to Andrew McKibben, SVP of Strategic Finance and Investor Relations. Please go ahead.

Andrew McKibben (Senior Vice President, Strategic Finance & Investor Relations)

Thank you, Joel, and good afternoon, everyone. I’d like to welcome you to Mirum Pharmaceuticals’ third quarter 2026 conference call. I’m joined today by our Chief Executive Officer Chris Peetz, our President and Chief Operating Officer Peter Radovich, our Chief Medical Officer Rob Myers, and our Chief Financial Officer Eric Bjerkholt. Earlier today, Mirum issued a press release announcing the company’s results for the third quarter of 2026. Copies of the press release and our SEC filings are available on the Investors section of our website. Before we start, I’d like to remind you that during the course of this conference call we’ll be making certain forward-looking statements based on management’s current expectations, including statements regarding Mirum’s programs and market opportunities for its approved medicines and product candidates and financial guidance.

These statements represent our judgment and knowledge of events as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from the results discussed. We are under no duty to update these statements. Please refer to the risk factors in our latest Form 10-Q and subsequent SEC filings for more information about these risks and uncertainties. With that, I’d like to turn the call over to Chris. Chris.

Chris Peetz (Chief Executive Officer)

Thanks, Andrew. Third quarter was another strong period for Mirum, both commercially and across our clinical programs. We generated $186 million in third quarter net product sales. We are increasing our full-year net product sales guidance to $715 to $720 million. We’ve also had great progress across the portfolio since our last earnings call. Positive phase three is year one data for Verloba tug, positive EXPAND data for McMarle, the approval and launch of Etebriose, and another positive Etebrios readout in younger patients.

Our recent progress feels quite meaningful as Mirum approaches its eighth anniversary. It’s remarkable to think about what this team has accomplished in eight years. We started Mirum around a simple idea that by identifying important opportunities in rare diseases, combining great medicines with relentless execution, we could have a meaningful impact for patients and build an enduring company. Eight years later, we now have four approved medicines, a commercial business approaching three-quarters of a billion dollars in annual net product sales, and a late-stage pipeline with multiple opportunities to drive our next phase of growth.

Coming up, we have two more potentially registrational readouts approaching with the Borlova Tug04 study in HDV expected this quarter and the Bellixibat Vantage Study in PBC expected in the first quarter of next year. Together these are part of five potential approvals and label expansions ahead of us as we work towards realizing the greater than $4 billion peak revenue potential of the Mirum portfolio. So eight years in, we’re entering our next phase from a position of real strength and we’re excited to touch on some highlights and updates today.

With that, I’ll turn the call over to Peter.

Peter Radovich (President & Chief Operating Officer)

Thanks, Chris. The third quarter was another excellent quarter for Veron’s commercial business with $186 million in net product sales. Livmarli continues to be the primary growth driver with third quarter net product sales of $133 million, including $100 million in the United States. Our bile acid medicines also provided steady growth, generating $52 million in net product sales for the quarter. Continued growth across Livmarli and our bile acid medicines has allowed us to increase that outlook throughout the year and, based on our performance through the first nine months, we are increasing full-year guidance today to $715 to $720 million.

This is a testament to our high-impact medicines and the high-performing team dedicated to getting them to patients. For a little more color on Livmarli, in Alagille syndrome uptake remains steady and durable, supported by new patient starts, persistence on therapy, and weight-based dose increases. PFIC continues to be an important driver, particularly among adults, where we believe there are at least 2,000 addressable patients in the United States. Though the substantial majority of these patients remain undiagnosed, greater awareness of later-onset PFIC and increasing use of genetic testing will continue to help improve diagnosis rates, and we are expanding our commercial efforts on this front, which should lay a strong foundation for 2027.

This expansion will also enable our other upcoming potential launches for Livmarli, prolifsbat and Borlivatone. I’m also happy to say that our fourth medicine, Etebrios, was approved in September for adult and pediatric FOP patients ages 12 and older, and our U.S. launch commenced in October. Etebrios is a natural addition to our rare genetic disease business. The FOP community is uniquely engaged, and the response to the approval to date reinforces our belief that Etebrios can address a significant unmet need for patients and families living with FOP.

With the convenience of oral dosing and a mechanism designed to address the underlying cause, our near-term focus is on patient identification and access, and we’re encouraged by the strong early engagement from patients, caregivers, and healthcare professionals. Overall, I’m very happy with the progress we made this quarter. We are growing our existing medicines, launching our fourth medicine, and laying a strong foundation for multiple new potential indications and launches in 2027 and beyond. With that, I’ll turn it over to Rob.

Rob Myers (Chief Medical Officer)

Thanks, Peter. It’s been an exciting couple of months for Mirum, significant clinical progress across rare liver and rare genetic diseases. We are now working towards five potential regulatory submissions across the NDAs for Belixavad in PSC and PBC, a BLA for bilobatog in hepatitis delta, a label expansion for Etebriose in FOP, and an sNDA for Livmarli based on the EXPAND study. Starting with Valixavad in PSC, we continue to make progress toward our planned NDA submission in the first half of 2027. We remain confident in the strength of the VISTAS results and the potential for Valixavad to address an important unmet need for patients with PSC and pruritus. We look forward to submitting our NDA and will provide an update if there’s any material change in our plans or in FDA’s prior feedback.

We’ve also recently reported positive results from three important studies across the portfolio. In FOP, Cohort 2 of the pivotal Progress Study extended the encouraging Etembreos results into children ages 6 to under 12. The results were consistent with Cohort 1 with reductions in heterotopic ossification, encouraging improvements in joint mobility, and a safety profile consistent with that observed in older patients. The mobility findings are particularly encouraging in a progressive disease like FOP, where preserving function by intervening early is especially important.

Our next step is a planned sNDA submission in the first half of 2027 to potentially expand Etembreos to children ages 6 to under 12. Cohort 3, evaluating zolingocertib in even younger children, continues to enroll. Now turning to the liver portfolio, EXPAND was another positive phase three study for Livmarli, meeting its primary endpoint and all prespecified secondary endpoints, with particularly encouraging results in biliary atresia. These findings further strengthen the body of evidence supporting IBAT inhibition for pruritus across a range of underlying cholestatic liver diseases. And in hepatitis delta, the positive Phase 3 Azer 1 results provide important validation for viroloba tuk, demonstrating meaningful improvements across key measures of virologic and liver disease activity.

We’ll build on this momentum at AASLD later this week where we’ll present new data across our rare liver disease portfolio, including the full Azure 1 results and longer-term vilovitub data, as well as additional analyses from VISTAS and Livmarli data in rare cholestatic liver disease. Without getting ahead of these presentations, we’re particularly excited by the growing body of evidence with Erolvita showing deepening virologic suppression and continued improvements in ALT normalization and liver stiffness with longer treatment, including in patients with cirrhosis, a population with particularly urgent unmet medical needs.

Looking beyond AASLD, we expect the Azure 4 readout this quarter, an important next milestone for the Prologatov program and our planned BLA submission in the first half of 2027. Overall, these recent clinical successes together with the regulatory milestones ahead give us strong confidence in the potential for our portfolio to deliver meaningful new treatment options for patients. With that, I’ll turn it over to Eric to discuss the financials.

Eric Bjerkholt (Chief Financial Officer)

Thanks, Rob, and good afternoon, everyone. Our third quarter financial performance reflects our ongoing operating priority: continued top-line growth with focused investment in bringing our late-stage programs through several potential approvals and launches. As Peter mentioned, net product sales for the third quarter were approximately $186 million compared with $133 million in the third quarter last year. Through the first nine months of the year, net product sales were approximately $522 million, which I’m excited to point out already equals full year 2025 revenues.

In the third quarter, the cash contribution margin from our commercial business was in the high 50s percent of sales and cash used in operations was approximately $4 million. Total operating expenses for the quarter were approximately $245 million: cost of sales of approximately $28 million, SG&A expense of approximately $70 million, R&D expense of approximately $94 million, all on a cash basis; in-process research and development of $13 million; and stock-based compensation, depreciation and amortization expense of $40 million. Our investment in R&D reflects the breadth of activity across our expanded late-stage pipeline as well as the planned manufacturing expenses for our HDV program. On a cash basis, R&D was approximately 50% of revenues. As expected, we expect this level of R&D spend to continue for approximately two more quarters. In total, revenues this quarter exceeded expectations while expenses are on plan.

We also took steps this quarter to improve our capital structure. In September we repurchased $20 million in aggregate principal amount of our 2029 convertible notes for approximately $62 million in cash, thus further reducing both future dilution and ongoing interest expense. This follows the financing we completed in the second quarter when we issued $690 million of zero-coupon convertible notes due in 2032 and settled 75% of the outstanding 2029 notes.

Together, these transactions have reduced the outstanding balance of our 2029 notes by over 80% while preserving substantial financial flexibility. As of September, cash, cash equivalents and investments were approximately $500 million. Our commercial business continues to scale and our balance sheet gives us the resources to support our upcoming launches and late-stage clinical program. With that, I’ll turn the call back to Chris.

Chris Peetz (Chief Executive Officer)

Thanks, Eric. Taking stock of where we are today, Mirum is at a strong inflection point. Commercial business continues to outperform, driving an increase in our full-year guidance. We’ve launched Etebrios as a fourth commercial medicine and, including the Etebrios supplemental NDA for younger patients, we have five upcoming approval opportunities to further accelerate the commercial business. The strong performance commercially, paired with our pipeline advancements, positions us to be cash flow positive next year. As we wrap up our prepared remarks, I want to direct attention again to the upcoming Verlova Tech data sets being presented at AASLD this weekend. With data maturity now out two years from the early program, we’ll be able to share more of a complete picture of what Brillova TUG can achieve for patients with Hepatitis Delta.

And as we approach our 8th anniversary, I’m incredibly proud of what this team has built, but even more excited about what’s ahead as we enter a unique period of commercial growth, multiple launch opportunities, and strong financial performance. And finally, as always, I want to thank the entire Mirum team for their exceptional execution, the patients, families, and physicians whose partnership keeps us focused on what matters most. We have a lot to look forward to.

With that, operator, please open the call for questions.

OPERATOR

We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from Josh Schimmer with Cantor Fitzgerald.

Your line is now open. Please go ahead.

Josh Schimmer (Analyst)

Great, thanks for taking the questions. Just a couple of quick ones. First, were there any Takeda purchases of Livmarli this quarter or expected in the next quarter as part of the revised guidance? And then second, for the Chenodal and the Cholbam franchise, at least combined, you’re starting to get to levels that I think historically you’ve suggested might attract generic interest or competition—not necessarily breaking out the relative contribution of each—but how should we be thinking about modeling the exclusivity of that franchise?

Chris Peetz (Chief Executive Officer)

Josh, thanks for the question. First, I can hit on the bile acid franchise. We are really excited with how these have grown. Just as a quick reminder on the backdrop on exclusivity: for Cholbam, that is now beyond its orphan exclusivity time period, but Chenodal does have orphan protection. They’re both contributors here. And for both of them, we’ve not seen an entrant. That’s really all we have visibility to at this point to speak to. So we see the trends we’re seeing for the near term, in any case, to roll forward.

And I’ll ask Eric to maybe speak to Takeda dynamics.

Eric Bjerkholt (Chief Financial Officer)

Thanks, Chris. Yeah, we had very minimal revenues from Takeda this past quarter, and we don’t really expect any new orders in Q4.

Josh Schimmer (Analyst)

Got it. Thank you.

OPERATOR

Your next question is from Kalpit Patel with Wolfe Research. Your line is now open. Please go ahead. Hi there, Kalpit. Your line is now open. Please go ahead with your question. We will move on to the next question. Your next question is from Brian Scorney with Baird. Your line is now open. Please go ahead.

Luke (Analyst)

Hi, team. Could you provide a little more color on your confidence in the timing of the planned PSC submission? What’s the next regulatory touchstone we should be looking for here? This is Luke, by the way. Thank you.

Chris Peetz (Chief Executive Officer)

Hi, Luke. Thanks for the question on the PSC situation. For the time being, really nothing changed in what we can speak to and the status of the program; strategies underway. And as we spoke about previously, multiple different touch points as we work towards a potential submission in the first half of next year. I’d say we’re really confident in the data sets. Rob called out some of the abstracts at AASLD that touch on IBD safety, for example—some of that work coming out of our prep for that NDA submission.

So just to come back to it, we feel really confident in our guidance to submit an NDA in the first half of next year. Beyond that, no material updates to what we’ve seen or heard.

Luke (Analyst)

Great. And then on Etebrios, has there been any difference in the early launch experience thus far as compared to your expectations going into it?

Chris Peetz (Chief Executive Officer)

Yeah, it’s early days. I’ll hand it over to Peter to get some color.

Peter Radovich (President & Chief Operating Officer)

Yeah, Luke, Chris mentioned early days—just launched in October, so we’re a couple of weeks in—but really positive feedback from patients, caregivers, physicians. I think high receptivity to the value proposition we see with Etebrios, so we’re really excited, but obviously early days to get to any more detail than that.

OPERATOR

All right, thanks. Your next question is from Gavin Clark-Gartner with Evercore ISI. Your line is now open. Please go ahead.

Yashan (Analyst)

Hi, this is Yashan for Gavin. We were just wondering if ahead of the Q1 VANTAGE readout for PBC there were any blinded baseline or trial conduct metrics you’re expecting to share—in particular, maybe baseline itch severity, background therapies, discontinuation rates—anything along that realm. Thank you.

Chris Peetz (Chief Executive Officer)

Thank you for the question. I think maybe Rob can speak to a little bit of the trial design, but probably not too much on the actual data to speak to at this point.

Rob Myers (Chief Medical Officer)

Yeah, really not much to report at this point, and we’re still tracking towards reporting the data in the first quarter of next year. Premature to talk about baseline characteristics and aspects of the study coming back at this point.

Yashan (Analyst)

Thanks so much.

OPERATOR

Your next question is from Kalpit Patel with Wolfe Research. Your line is now open. Please go ahead.

Kalpit Patel (Analyst)

Yeah, hey, good afternoon and thanks for taking the questions. Two from us. For the guidance raise, is most of that related to the adult PFIC patients that are growing for Livmarli, or are there other areas that are contributing to that growth? And then for the second question, for the PSC IBD subgroup data that you’ll be presenting, can you comment if those data have been submitted previously to the FDA, or are these new analyses that need to be sent?

Thank you.

Chris Peetz (Chief Executive Officer)

Thanks for the question. I can just touch on the PSC one briefly and then hand the guidance question over to Peter. These are new analyses—more in-detail review of data that FDA had not seen previously.

Peter Radovich (President & Chief Operating Officer)

Yeah, Kalpit, on the guidance question, we do see strength across the portfolio—continued growth in Alagille syndrome, bile acid products doing very well—but adult PFIC is the biggest driver, and we have line of sight now after several quarters of this cadence of $10 to $15 million quarter-on-quarter step-up for that to persist through this year and through next year as well.

Kalpit Patel (Analyst)

Okay, thank you.

OPERATOR

Your next question is from Ryan Deschner with Raymond James. Your line is now open. Please go ahead.

Ryan Deschner (Analyst)

Thanks for the question, and congrats on the quarter. I’m curious on your expectations for the relative launch trajectory for Etebrios, and if you can expect at least early on any signs of a bolus coming in for that to slow down later on in the early launch. Just curious on your thoughts there. Thanks.

Chris Peetz (Chief Executive Officer)

Ryan, thanks for the question. I’ll let Peter speak to that and probably even speak to the broader portfolio as we roll into next year.

Peter Radovich (President & Chief Operating Officer)

Yeah, the Etebrios early adoption and inbound interest has been really, really strong, and we’re excited about that. I think if I were to compare the Etebrios launch trajectory and adoption curve to Livmarli, it probably will be faster. You take Livmarli: we’re in Alagille syndrome. It’s been about five years since the original FDA approval, and about 50% of addressable patients with Alagille syndrome have gone Livmarli, and we’re still seeing growth quarter over quarter.

And I think if you were to think about that as a comparator, we would expect Etebrios to be faster adoption. The one thing I’d add is, as you look at Q4 and even into next year, the cadence of growth we’ve seen for total revenue in this $10 to $15 million a quarter range—we fully expect that to continue throughout next year. Thank you very much.

OPERATOR

Next question. Your next question is from James Conjulis with Stifel. Your line is now open. Please go ahead.

James Conjulis (Analyst)

Hey, thanks for taking my question, and maybe just one on PSC, and appreciate there’s only so much you can say. But I think you’ve mentioned in the past that in the discussion with the FDA there was nothing really new you felt was new that wasn’t in the original VISTA study, and just curious if that’s still the case from your perspective. And then, in general, do you expect there to be a sort of formal alignment here ahead of filing, or is it just TBD in terms of how the discussion evolves?

Thanks so much.

Chris Peetz (Chief Executive Officer)

Yeah, James, thanks for the follow-up there. Overall, because of the situation, we’re seeking multiple different interaction points, multiple meetings. We’re not providing meeting-by-meeting updates. So really what I can say is we’re pointing towards that first-half NDA, and to remind on the goal here: given that the data set is so robust and there’s a lot to review, the goal of the interactions we’re having is to get more familiarity with the data set before submission—not necessarily, in all cases, complete alignment.

James Conjulis (Analyst)

Makes sense. Thank you.

Chris Peetz (Chief Executive Officer)

Thanks for the question.

OPERATOR

Your next question is from Jessica Fye with J.P. Morgan. Your line is now open. Please go ahead.

Jessica Fye (Analyst)

Hey guys, good afternoon. Thanks for taking my question. I was looking at the press release and it looks like there is a lot of regulatory submissions going in in the first half of 2027, and I was curious if you could just speak to the organizational bandwidth to bring in additional assets via business development during what seems a really busy time. Basically, should we expect a little breather on the BD side in the near term while you get all these things into the FDA?

Chris Peetz (Chief Executive Officer)

Yeah, Jess, thanks for the question. Yeah, it is a very busy first half of the year for submissions. You’re absolutely spot on with that. We’ve done a lot—we saw this coming—so we’ve done a lot to organize for it, and we’re in really good shape from a team standpoint on having these efforts staffed and expect that we’ll be able to manage through it without issue. In terms of what it means for BD, we continue to be opportunistic, so if the right opportunity comes, we want to be able to pursue it.

However, more of an earlier clinical-stage opportunity would be a little easier to add in at this point, but that doesn’t mean we’re not continuing to have an opportunistic lens on all opportunities.

Jessica Fye (Analyst)

Does that include commercial stage?

Chris Peetz (Chief Executive Officer)

Yeah, absolutely. I mean—

Peter Radovich (President & Chief Operating Officer)

I’d pass over to Peter to talk about our lens, again more broadly, on BD scope and targets that we like. Yeah, I mean, as Chris mentioned, I think our philosophy is you always have to be active, and we look clinical stage through commercial stage. We think about rare disease as a capability and a therapeutic area in and of itself, so we have the know-how to be successful with rare disease medicines, whether it’s development, regulatory, patient finding, patient access.

We feel really good about the capabilities we’ve built there and kind of look broadly for underappreciated rare disease assets where we think we could potentially add value.

Jessica Fye (Analyst)

Great, thank you.

Chris Peetz (Chief Executive Officer)

Thanks for the question.

OPERATOR

Your next question is from Ygal Nochomovitz from Citi. Your line is now open. Please go ahead.

Chris Peetz (Chief Executive Officer)

Thanks for the question. I’ll ask Rob to maybe recap some of Azure 4 design and rationale, then let Peter speak to the market question.

Rob Myers (Chief Medical Officer)

Yeah, thanks Chris. You know, Azure 4 is an important part of the registration package for Logan Tug in the U.S. And just as a reminder, it’s designed very similarly to A.001 with the exception of patients in the delayed treatment arm crossing over at 12 weeks instead of 24 weeks. And in terms of our expectations, of course we expect to see complementarity or consistency in the virologic responses and ALT normalization as well as safety to that which we observed in…

Peter Radovich (President & Chief Operating Officer)

Then in terms of the question on HDV diagnosis rates and kind of how we see this undeveloped market developing over time, we actually have a small team that’s pretty active now doing disease state education awareness with the providers across the country who manage hepatitis B patients and in areas where they likely have undiagnosed delta patients as well. And, you know, I think one of the things we’ve learned as we’ve been out in the field is there’s really been very little testing to date.

There’s papers that show single digit percentages of, low single digit percentages of, hep B patients have ever received a delta test. So I think one of the big pushbacks from providers historically has been lack of therapies for this condition. And I think we’re seeing that change now and look to see increased interest in testing over time and excited about the early trends we’re seeing.

OPERATOR

Your next question is from Mike Ules with Morgan Stanley. Your line is now open. Please go ahead.

Mike Ules (Analyst)

Good afternoon. Thanks for taking the question and congratulations on the strong quarter as well. Maybe just a follow up on volixibat and the upcoming Vantage data next quarter. Can you just remind us, you know, what the bar is on pruritus and then what you think is sort of a meaningful benefit there. Thanks.

Chris Peetz (Chief Executive Officer)

Thanks, Mike, for the question. I can make a couple of observations and ask Rob to maybe speak to expectations. I think the one thing that I’d point towards is for this study we have the interim readout, so we kind of, we know what’s possible for volixibat: really substantial improvements versus placebo, you know, over a two-point placebo-adjusted difference. That is really compelling and competitive if we’re anywhere in the ballpark of what we saw in the interim.

Rob, do you have anything to add to that?

Rob Myers (Chief Medical Officer)

Yeah, no, just that the interim data were quite compelling. As mentioned, we see over a two-point adjusted improvement in the volixibat arms. We’ve done a bit of work to validate the adult intro to show that this magnitude of reduction is actually clinically important. So feel very confident going into the readout next quarter.

Mike Ules (Analyst)

Great, thank you.

Chris Peetz (Chief Executive Officer)

Thanks for the question.

OPERATOR

Your next question is from Lisa Walter with RBC Capital Markets. Your line is now open. Please go ahead.

Lisa Walter (Analyst)

Oh great. Thanks for taking our question and congrats on the quarter. Maybe just given the recent challenges with the FDA and PSC, just curious if the same group of regulators will also be reviewing your filings for biliary atresia as part of the Expand study as well as a potential filing for PBC? And if so, what gives you confidence that the FDA will understand those rare diseases a little bit better and your trial designs better versus what we have seen for PSC?

Any color here would be helpful. Thanks so much.

Chris Peetz (Chief Executive Officer)

Thanks, Lisa, for the question. From a simple standpoint, these are all with the liver division. However, knowing who is assigned to the review is something we don’t have visibility to at this point in time. What I would say is for Vantage and for Expand, really clear dialogue along the way on study design, all of the choices we made in those studies, and some of it quite recent interactions. So do feel confident in our position heading into those submissions.

And the one thing I’d add on is what the contrast of that to PSC is. The interactions with PSC were really mostly in 2019 and 2020, so a bit more distance just from a time standpoint.

OPERATOR

Your next question is from Joe Schwartz with Leerink Partners. Your line is now open. Please go ahead.

Joe Schwartz (Analyst)

Thanks very much. Can you talk about what we should watch for at AASLD for Blovatug in terms of the full Azure 1 presentation, what our focus should be and will any updates from the phase two trials be presented too? And then we noticed that the Biloba Tug BLA is now described as subject to supportive Azure 4 results. Is that new caution or just standard language? And can you talk about what counts as supportive? And given that Azure 4’s control group waits only 12 weeks, would you file on Azure 1 plus the phase IIb data if Azure 4 were more mixed?

Chris Peetz (Chief Executive Officer)

Thanks for the question, Joey. On that last point, there’s nothing new here. So Azure 1 and 4 have always been the proposed phase 3 package for Griloba tag, and the simple way to think of it is the study was designed with FDA before orphan designation was granted, so they were looking for two pivotals. Really nothing different from patient population overall dynamics here that would suggest a big difference between the two. It’s just about having two pivotals.

Now we do have orphan designation so, you know, hindsight, hard to say how that would have been treated, but that’s the case and has always been the plan for the submission. And I’ll ask Rob to maybe give the highlights and directions for AASLD.

Rob Myers (Chief Medical Officer)

Yeah, we have some exciting data on verlova tug at AASLD. You know, as you mentioned, we’ll present the Azure 1 results in full: 24-week data, phase 3 data, and as well the 48-week phase 2b component of… And then lastly we have an abstract on patients with cirrhosis from the original phase two study who’ve been treated out to two years. And really that entire data package, it’s really robust. I mean it tells us that we do see excellent rates of virologic suppression and ALT normalization as early as Week 24, but that with prolonged treatment, greater virologic suppression, greater rates of ALT normalization, including in patients with advanced disease, cirrhosis, and quite significantly elevated ALT. So I think the Bilobatov package is quite strong. Looking forward to our Azure 4 data by the end of this year.

Joe Schwartz (Analyst)

Thanks for the color.

Chris Peetz (Chief Executive Officer)

Thanks for questions.

OPERATOR

Your next question is from John Wallaban with Citizens JMP. Your line is now open. Please go ahead.

John Wallaban (Analyst at Citizens JMP)

Hey, thanks for taking the question. Was hoping to get some more color on how you guys are thinking about your peak sales guidance in HTV and then PBC, PSC. Just given the relative prevalence and moving dynamics in those markets, what’s underlying that billion dollars? Or is that just a simple guidepost to think of as a starting point? I’m just wondering how granular you guys have gotten internally there.

Chris Peetz (Chief Executive Officer)

Yeah, thanks for the question, John. The one thing I’d say is overall meant to be an approach on how we give these, on giving kind of greater than a certain target, important lens to put on it as you’re thinking about it. But Peter can speak a little bit to some of the color on how we came to these numbers.

Peter Radovich (President & Chief Operating Officer)

Yeah, thanks, John. So I think in Delta the guidance of greater than a billion, there’s a lot of ways to get there quite frankly. I mean even if you just look at the U.S. market today, about 15,000 patients diagnosed with insurance under management, you don’t really need to get a few thousand of those on therapy chronically to get towards that greater than a billion guidance. Obviously we know this is an underdiagnosed disease and, as we commented, very low rates of testing have happened historically in the U.S., then not to mention there’s a substantial international opportunity for bilobatide as well.

So I think, say, the theme there is a lot of ways to get to greater than a billion. And as you move over to volixibat, PSC, PBC, you know, similar addressable patient population in the U.S. for PSC, about 20,000 patients with PSC and pruritus — you know, no competition there. And then PBC, a larger addressable market with about 50,000 addressable patients in the U.S., but a bit more competition. But I think you could kind of do the math a number of different ways to get to the kind of numbers you need to get to to get to the greater…

John Wallaban (Analyst at Citizens JMP)

That’s helpful. Thanks, guys.

Chris Peetz (Chief Executive Officer)

Thanks for the question.

OPERATOR

Your next question is from Charles Wallace with H.C. Wainwright. Your line is now open. Please go ahead.

Charles Wallace (Analyst at H.C. Wainwright)

Hi, thanks for taking my question. This is Charles. I’m from rk. So for my first question I was wondering how should we think about the R&D spend going forward in fourth quarter and then also 2027 with the placebo-controlled portion of Azure 1 and 4 studies completing. I’ll come back with my second question.

Eric Bjerkholt (Chief Financial Officer)

Speak to some of those trends. Yeah, so we like to measure both in natural terms and also as a percent of revenue. And as I alluded to in my comments, the past couple quarters we’re gaining around 50% of revenues. We think that’s going to continue at about that pace for two more quarters and then subsequently decrease quite rapidly. I think 50% of revenue should longer term.

Charles Wallace (Analyst at H.C. Wainwright)

Great. And then for my second question, beyond the Azure 4 results, what additional items remain before you can file the BLA in the first half? Thank you for bilopetag.

Chris Peetz (Chief Executive Officer)

Yeah, thanks for the question on that. For Bilobotag it really just comes down to pulling together the submission. So all of the work streams from both the clinical studies and the CMC submission, all tracking towards being ready first half. So all that’s a lot of document prep and write-up that’s left to do.

Charles Wallace (Analyst at H.C. Wainwright)

Great. Thanks for taking my questions.

Chris Peetz (Chief Executive Officer)

Thanks for the questions.

OPERATOR

Your next question is from Joseph Tome with TD Cowan. Your line is now open. Please go ahead.

Joseph Tome (Analyst)

Hi there. Good afternoon. Thank you for taking my questions. Maybe another one on HDV. We may have several agents approved for HDV, I guess currently or over the next couple years here. What do you see as sort of the main differentiating features of Vilova TUG based on the data you have in hand, that will drive adoption of below TUG over some of these others? And then second, when we think about the potential cadence of BA coming online for Livmarli, obviously the FDA did kind of ask you to do this based on requests.

Is there a pocket of patients ready to come on therapy rapidly or will it be gradual? Kind of, how should we think about the cadence of that launch? Thank you.

Chris Peetz (Chief Executive Officer)

Great. Thanks for the questions, Joe. I’ll make a couple of observations on HDV and let Peter add to it and speak to BA as well. But the one thing I’d say is when we put together the transaction with Flujay around Belovotok, what we found really exciting about this program is that you had a fully human antibody that’s single treatment that could drive continued improvement over time to some really impressive response rates both on normalizing liver inflammation and on controlling and lowering viral levels.

A lot of that data is what we’re looking forward to sharing this weekend at AASLD to show updates on what that can get to at two years. That kind of gives the answer to how we think about our positioning with HTV. Pass it over to Peter to touch up and add the BA comments.

Rob Myers (Chief Medical Officer)

I think it’s very well stated on HTV and on the BA question. These patients are at the same centers, the pediatric liver docs that prescribe LIVMARLI today for pediatric PFIC and Alagille patients. So the patients are there. As you noted in your question, the study was really started as a response to inbound interest from clinicians to use the product in this way. So it’s a pretty captive audience who are very familiar with the product, who have these patients in their clinic and under management path.

OPERATOR

Thanks for the questions. There are no further questions at this time. I will now turn the call back to Chris Peetz, CEO, for closing remarks.

Chris Peetz (Chief Executive Officer)

Great. Thanks everyone for joining today’s call. Looking forward to a strong end of the year and a busy 2027. Good afternoon everyone.

OPERATOR

This concludes today’s call. Thank you so much for attending. You may now disconnect.

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