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Operator
Good afternoon and thank you for attending today's Merham Pharmaceuticals fourth quarter business update call. My name is Amber and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad at any time. It is now my pleasure to hand the conference over to our host, Ian Clements, CFO of Merham Pharmaceuticals. Ian, please proceed.
Ian Clements
Thanks, Amber, and good afternoon, everyone. I'd like to welcome you to Miriam Pharmaceuticals' fourth quarter and year-end 2021 conference call. I'm joined today by our President and CEO, Chris Peets, our Chief Operating Officer, Peter Radovich, and our Head of R&D, Pam Vig. Earlier this afternoon, Miriam issued a news release announcing the company's results for fourth quarter and full year ended December 31st, 2021. Copies of this news release and SEC filings can be found in the Investors section of our website. Before we begin, I'd like to remind you that during the course of this conference call, we will be making certain forward-looking statements about Miriam and our programs based on management's current expectations, including statements regarding Miriam's business plans, development programs, strategies, prospects, market opportunities, and financial forecasts and guidance. Miriam is under no duty to update these statements, and they are subject to numerous risks and uncertainties, and actual results could differ materially from the results anticipated by these statements. Investors should read the risk factors set forth in Miriam's 10-K for the year ended December 31st, 2021, and any subsequent reports filed with the SEC. With that said, I'd like to turn the call over to Chris Peets. Chris?
Chris Peets
Thank you, Ian. And good afternoon to everyone joining us on the call today. 2021 was a banner year for Mirim and marked a significant turning point for both the company and the Allergy Syndrome community. The Live Marley launch is off to a very strong start as we deliver on our mission to provide life-changing medicines for rare diseases. Today, we will cover our accomplishments to date and our upcoming milestones with some brief prepared remarks, and then take questions. Peter will share some last details, and then Pam will discuss our pipeline. And finally, Ian will touch on a few financial highlights. To start, I would like to remind people of the devastating need for treatment of pruritus and allogeal syndrome. This is the most burdensome effect of cholestasis and allogeal syndrome. It impacts daily life and sleep for patients and families and is a leading indication for liver transplants. the launch of Live Marley has introduced a crucial new treatment for cholestatic pruritus in these patients. Our label and our clinical data show the tremendous potential of Live Marley. And the impact of the long-term data set with six years of treatment experience was recognized last year in the Lancet and with late-breaking presentations of AASLD looking at event-free survival and transplant-free survival. The strength of the Live Marley clinical data and the hard work of our dedicated team is leading to great launch success. We are pleased to report fourth quarter 2021 net product revenue of $3.1 million. And we anticipate the strength to continue throughout the year. Based on what we're seeing so far in 2022, we expect first quarter net product revenue to be at least $8 million and the full year to be at least $50 million. As a reminder, we estimate the overall total opportunity in Allergy Syndrome to be more than $500 million in the U.S. alone. And the early experience in the market confirms our view of this. We have built Merum to be a compelling business based not only on the U.S. opportunity, but with global reach. As the U.S. continues to grow, we expect to see approvals in Europe later this year and in partner markets into 2023. Also, protecting the value we've built in the business Today, we announced the patent grant and U.S. Orange Book listing for Live Marley with coverage into 2040. Building further beyond the Live Marley commercialization, we have an exciting calendar of clinical readouts with data expected across all five of our additional programs over the next two years. And in short, we expect 2022 to be a truly remarkable year for Miriam and the patients we serve. Now, with that, I'll turn it over to Peter, who will provide an update on our Live Marley launch progress.
Ian
Peter? Thanks, Chris. We are proud of the initial results from our launch of Live Marley, the first and only FDA-approved medication for this disease. Today, I'll share further color about our 3.1 million net Live Marley revenue, what we're seeing in the commercial business, and why we're so excited about the growth trajectory. First, it's important to note that there is no inventory in our reported product sales. Thus, the revenue number is a true representation of demands. Revenue is recognized when the patient receives drug. Also, approximately 60% of dispenses in the fourth quarter were reimbursed, which exceeded our expectations and is indicative of strong performance by our market access team. We believe the proportion of reimbursed dispenses will increase throughout 2022. And in fact, We're seeing this happen already in the first quarter, and we expect to track towards approximately 90% of dispenses being reimbursed by year-end. We are very pleased with this result and attribute our success both to Ludmarli's strong product profile, as well as stellar execution by the entire Mirim team, who brought a tremendous amount of passion, ingenuity, and experience to this launch. Looking ahead, we believe Woodmarley has significant growth potential in the United States. We're encouraged by the high level of awareness of the treatment benefits of Woodmarley as evidenced by the breadth of physicians who have prescribed Woodmarley to date. Encouragingly, we're seeing very high refill rates and treatment compliance in the commercial We expected this based on the feedback we are hearing both from physicians and caregivers of Liv Marley's rapid and robust symptomatic improvement in this highly symptomatic disease. This is further enhanced by our Miriam Access Plus program, which is designed to maximize patient and family support to enable long-term treatment adherence. So putting all the dynamics together we're seeing in the business, we expect net revenue of Lidmarli to be at least $8 million in the first quarter of this year. And looking at the full year, the strong start gives us confidence we'll achieve at least $50 million for 2022 Lidmarli net product sales. Turning to our plans for Lidmarli's international launches, we remain on track for European approval in the fourth quarter of this year, and we have begun initiating commercial early access programs in Europe and other international markets. In markets outside of Western Europe, our seven commercialization partners are making excellent progress towards bringing Good Marley to patients suffering from algea syndrome around the world. In fact, we're excited to share that our partner, GC Pharma, recently filed in South Korea. And much like what we've seen in the United States, Pre-launch engagements with healthcare professionals and payers in international markets reveal both a high unmet medical need in Alex Yale syndrome, as well as receptivity to Liv Marley's strong value proposition. Thus, in addition to the 2022 revenue growth driven by launch success in the United States, we believe we are also well-positioned for Liv Marley revenue growth in 2023 and beyond as international markets come online. And now I'll hand it over to Pam to provide an update on our pipeline. Pam?
Peter
Thanks, Peter. It has been an outstanding finish to 2021, where we have presented groundbreaking data, first with a publication in The Lancet from our pivotal study in allogeal syndrome, highlighting the rapid and sustained symptomatic release provided by Liz Marley. followed by two late-breaking presentations at AASLD showing that Liv Marley improved six-year event-free and transplant-free survival, as well as identifying predictive markers of event-free survival. And these data have reinforced our belief that Liv Marley is a huge step forward for patients with Allergy Syndrome. And we continue our efforts on research and analyses as we remain committed to expanding our scientific knowledge and worldwide academic collaboration. Now on the PFIC front, we're excited to have recently announced that we have completed enrollment in our March phase three study. And we expect top line data in the fourth quarter of this year. As a reminder, the March PFIC study enrolled all PFIC subtypes at higher doses than previously tested and is the largest randomized PFIC phase three clinical trial ever conducted with more than 90 patients enrolled in the study. Now, this is a remarkable achievement, given the size of the PFIC population. Lastly, we're pleased to share that we have opened an international extended access program for eligible patients with PFIC. Now, on Miriam's pipeline, we have four other indications addressing cholestasis in both children and adults with several milestones ahead. In 2022, we're expecting two interim analyses from our Velixibat program, one from our Phase 2b VISTA study evaluating Velixibat in patients with primary sclerosis and cholangitis, and a second from our Phase IIb OHANA study for patients with intrapatic cholestasis of pregnancy. In 2023, we're targeting interim data from our Phase IIb VANTAGE study, evaluating velixibat in adults with primary biliary cholangitis, as well as primary data from our Phase IIb EMBARQ study, evaluating live marley for children with biliary atresia. Now all of these upcoming milestones, as well as our robust R&D pipeline and research efforts, puts us in a great position for continued growth. And on that note, I will turn the call over to Ian. Ian? Thanks, Pam.
Ian Clements
The best we can think of issues in file today provide a full financial update. I'll call out a few of the highlights here. In addition to the $3.1 million of net product revenues discussed, we recorded $16 million in licensing revenue from our partners in South Korea and China, bringing our total revenue number to $19.1 million for the year. Our total operating expenses for the year were $192.6 million, which includes research and development expenses of $131.4 million, SG&A expenses of $59.2 million, and cost of sales of $1.9 million. Of note, these costs include $18.9 million of expense for the Vivette option agreement that will not continue into 2022, and also $23.2 million of expense from regulatory and clinical milestones related to the multiple progress points across the programs last year. Mirren remains well funded. And at the close of the fourth quarter ended December 31, 2021, we have cash, cash equivalents and investments of $261.5 million. Recall that in November of last year, we announced the sale of our priority review voucher granted by the US FDA in September of 2021 with the approval of Liv Marley for $110 million. This, with our growing top line contribution, puts us in a strong position to achieve critical milestones and expand our commercial presence over the next few years. So with that, I'll turn the call back over to Chris for any final comments. Chris?
Chris Peets
Thank you. And thank you, everyone, for joining today. To close, Mirim has made remarkable progress this past year as we continue to advance treatments for devastating rare diseases. Our launch is off to a great start and the Miriam team is energized by the stories we are hearing from physicians and caregivers on the impact that with Marley is having on allergies and inpatients. Again, based on what we're seeing in these early days of commercialization, we have confidence in achieving at least $50 million in net product revenue this year. This will provide a tremendous base for our business as our pipeline of five late stage clinical programs matures. Thank you again for joining us. Operator, please open the line for questions.
Operator
Of course. Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, that's star 1. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We'll pause here briefly as questions are registered. Our first question comes from Jessica Fai with JP Morgan. Jessica, your line is now open.
Jessica
Hey, guys. Good afternoon. Thanks for taking my questions. Just a couple. First, can you walk through the patient and reimbursement dynamics that underpin your expectation for at least $8 million of sales in the first quarter of 2022?
Chris Peets
Yeah, thanks for the question. Quite excited about what we're seeing in the early days, and I'll let Peter speak to some of the dynamics underneath that number. Yeah, thanks for the question, Jess.
Ian
So on the patient side, we're seeing really strong adoption, as noted by our net revenue number. I think it's important to note that the net revenue number we're providing here doesn't have inventory. It's a really direct and transparent number. view into what's happening at the patient level. Because to be net counted as recognized as net revenue in our distribution model, you know, the family actually is signing for Luke Marley at their house. So it's giving you a direct view of what's happening there. And on the reimbursement side, we've been really pleased with where we've gotten to with payers. I think this is a direct reflection of us kind of getting out there early last year, educating on the burden of allergy syndrome, by the end of the year to have 90% of our dispenses reimbursed. And as we've kind of come into the year, we've seen coverage policies come down from several of the big plans that are really in line with the Live Marley labeling and just kind of allowing physicians to use this in line with that labeling, which is very broad.
Jessica
Okay. A couple of follow-ups. How many current Live Marley patients were previously on expanded access and Can you talk a little bit more about the decision to launch the Expanded Access Program for PFIC patients and how much use you expect to get there in the context of Bill Day already approved in that setting?
Chris Peets
Thanks, Jess, for the question. I'll take the Expanded Access point briefly here and then pass it over to Peter. And on the PFIC Expanded Access Program, It's important to keep in mind that PFIC is more rare than allogeal syndrome, so we don't expect to see as many patients coming into that in total. But there are many countries where BuildA is not available, and also, as we've seen, response is not universal to BuildA. So there is still unmet need that we're seeing demand for.
Ian
Thanks. On the AllerGeal side, we have rolled over all of the AllerGeal expanded access patients in the U.S. to commercial drug. Important to note, though, that in Q4, the 3.1 million net revenue number, the majority of that was actually driven by de novo prescriptions. So really the clinical and EAP rollover is really the minority of that, and the majority of that is just driven by new prescriptions. And really encouraged by the broad prescriber base we're seeing, we've seen from across our 120 or so key accounts as we've launched, which we think is a real indicator of health.
Jessica
Great. And just the last one, can you elaborate on what the new 647 patent covers?
Chris Peets
Yeah, so just briefly, it covers the use of Liv Marley and allogel syndrome at the labeled dose. And so I'm quite excited to see that grant and get listed in the Orange Book.
Jessica
Thank you. Thank you.
Operator
Thank you, Jessica. Our next question comes from Mani Forohar with SVB Securities. Mani, your line is now open.
Chris Peets
Hey, thanks, guys. Congratulations on all the progress. So if I'm hearing you correctly, the $8 million for this quarter and $50 for the year, is that exclusively U.S. sales, or is there any probably adjusted European, Japanese, et cetera, sales in there? And then secondarily, how should we think about modeling licensing revenue coming in from your partners? Is it the right way to be thinking about it as a proportional relative to net product sales? Do you expect it will be lumpier?
Ian
How should we be modeling that? I can start with the first question. While we are launching some of these commercial early access programs in international markets, as I mentioned, we expect that to be very small this year. And really, 2022, you should think about is substantially all of the revenue will be coming from the U.S., but really excited about in 2023 and beyond what the international launches can mean for Marley revenue growth sustained over time.
Chris Peets
Yeah, and just to round it out on the licensing front, there will be some contribution from them, but relatively modest compared to the U.S. business. So the 8 and 50 that we talk about, that's from the U.S. business exclusively. Okay, and apropos of that 8, So what I'm hearing suggests that number is kind of a floor number for the quarter, which suggests to me that it represents the revenue one would expect from the patients that you already have prescriptions for in hand. Is there some proportion of some assumption around new patient ads between now and the end of the quarter also baked into that $8 million, or is all of that incremental? So the way we're looking at those numbers is, I'll borrow some of your language. It is, in a sense, a floor in what we're seeing in the business that does assume some modest growth in prescriptions as well. But you're trying to give some of that transparency to what we're seeing in the business, which is really strong here in these early days. So kind of trying to communicate here from where we stand today, really early in the year, already comfortable on hitting those numbers. Great. That's helpful. Thanks, guys. Congrats again. Thanks.
Operator
Thank you, Manny. Our next question comes from Steve Seathouse with Raymond James. Steve, your line is now open.
Manny
Hi. This is Ryan Desharon for Steve Seathouse. I wanted to ask you guys to give us a little more detail on the prescription volumes between large and small accounts for the Marley. Interesting. Any super prescriber accounts so far?
Chris Peets
Thanks, Ryan. I'll pass it over to Peter to answer that one.
Ian
Yeah, thanks, Ryan. We've actually seen prescriptions from across the board. It's been really encouraging. We've seen some of the biggest programs in the country be early adopters, and we've also seen regional – So it's been a broad participation from across our prescriber base.
Manny
Thank you very much. And then just real quick, can you also comment on the duration of treatment that you're seeing so far?
Ian
Yeah, and that's, I think, one of the, you know, as we try to get to in our prepared remarks, that's one of the real strengths here. are really happening on a very kind of predictable cadence every month. And the feedback we're hearing from, uh, physicians and caregivers is just really, really positive that they're able to see a rapid and robust, uh, symptomatic improvement with, with Marley very quickly after initiating, which is, we think, you know, one of the major drivers of the, of those, uh, retails kind of occurring on a very predictable case.
Manny
Got it. Thank you very much.
Operator
Thank you, Ryan. Our next question comes from Ed Arce with HC Wainwright. Ed, your line is now open.
Ryan
Great. Thanks for taking my questions. Congrats on the early progress here. Three questions for me. Firstly, on the reimbursement, you've noted 60% of drug dispensed is already being reimbursed, and you're targeting 90% reimbursement rate by the end of this year. Firstly, so just kind of walk through the process as that improves throughout the year, you know, what particular things need to happen and kind of walk us through that process. Just commentary around the penetration across your targeted positions. I think you said 120 key accounts. Just some more detail around where that stands now and how you see it expanding throughout this year. And then lastly, if you have this metric, it would be helpful just thinking about the time it takes between first writing the script to, you know, drug in the hands of patients. Thanks so much. Great.
Chris Peets
Thanks. Those are all in Peter's shop, so I'll pass it over to Peter Walker.
Ian
Sure. Thanks for the question. So, yeah, on the reimbursement, kind of what it's going to take to get to ending the year with 90% of dispenses being reimbursed. The first step is to ensure we have reimbursable pathways in place, kind of a way to get reimbursed. You know, generally, the two categories of those, either plan or write a policy, or they'll handle a rare disease drug like this through medical exception. By the end of Q1, we expect 100% of allergy life in the U.S. to have a pathway to get reimbursed. And then the next step after that is ensuring high-quality coverage. And that's kind of mentioned that the policies we've seen so far from the bigger plans have just been really very favorable and very much aligned with the evidence that's in the literature for Lidmarli and the labeling by the FDA. So those are really kind of ensuring the quality of access is there now that we have a pathway for all eligible patients in the U.S. is really the next step and, you know, our hub working to pull those through to pay dispenses. So that's really what needs to happen on the reimbursement side. I think your second question was about kind of penetration. We have seen a significant number of the 120 accounts prescribed. And kind of the pattern, you can ask, what is it going to, how is it going to sort of expand that? The pattern we're observing in the early days is Usually a new physician that hasn't prescribed with Marley before will prescribe, often to maybe one or two of their most phenotypically severe patients, gain comfort with the medicine based on that initial trial, and then we see kind of expansion as that experience kind of unfolds in those accounts. So that's kind of how we see those dynamics playing out. And then finally, you asked about prescription to fill. And there we're seeing the average time from a prescription received to fill being a couple weeks on average. In some cases, it's as fast as days. We've seen some go out really fast. In other cases, obviously longer than that. And that's something that we hope to continue to be able to work on as we go through the year. But really, really happy that we're out there as well.
Ryan
Great. That's very helpful. Thanks so much, Peter. Yeah.
Operator
Thanks, Ed. Thank you, Ed. Our next question comes from Josh Shimmer with Evercore. Josh, your line is now open.
Ed
Thanks so much for taking the question. Just one on the looks of that for ICP. Maybe you can give us a sense of what we should be looking for in the interim Phase II analysis later this year. And what do you think approvable endpoints for that indication are likely to be? Thanks.
Chris Peets
Thanks, Josh. I'll let Pam walk through that.
Peter
Yeah, thanks, Josh, for the question. So for ICP, you know, we know the FDA approvable endpoint is pruritus, and so targeting that. But it's a little bit of a different disease setting. You know, these women not only have pruritus as well as elevated sterile bile acids, but there's also you know, harm to the fetus with very elevated serum bile acids. And so on that front, you know, we know that every increase in serum bile acid, micromole per liter, is an increased risk to the fetus. And so frankly, any reduction in serum bile acids that we see in this setting is going to be meaningful for the fetus. And obviously, those reductions in serum bile acids will be meaningful for pruritus. So we expect open-label interim data later this year and looking forward to reporting that out.
Ed
Thanks very much.
Operator
Thank you. Thank you, Josh. Our next question comes from Brian Socorny with Baird. Brian, your line is now open.
Josh
Hi, this is Luke. Hi, this is Luke on for Brian. Thanks for taking the question. For the March PPIC readout, can you remind us of the powering assumptions on the observed H primary endpoint? And then, is there a level of improvement on pruritus and serum bile acid reduction that you believe could provide a meaningful commercial advantage as a follower in the space?
Chris Peets
Great, yeah, thanks for the question. Pam set some expectations on what we're thinking about for data empowering.
Peter
Yeah, so with regard to the study, our March PFIC Phase III study, really excited about that. You know, as mentioned, we've got 90 patients enrolled in this study across all PFIC subtypes. And I think a really important factor in this study is that we are going to much higher doses than what we've done previously in our Phase II indigo study. And in that study, if you recall, when the dose was doubled, we had an increased rate of response. And so what we're hoping for is that even with higher doses, we'll see an increased response rate across PFIC subtypes, and that will be reported out top-line data later this year. And then, yeah, so I don't know anything else to add there, but we're really excited about that data and looking forward to reading that out.
Chris Peets
And did that cover the question for you? Yeah, thanks.
Ian Clements
Great, thanks.
Operator
Thank you, Brian. Our next question comes from Yasmeen Rahimini with Piper Sandler. Yasmeen, your line is now open.
Brian
Hi, team. Thanks for taking my question. I have a few for you. Maybe the first one to start off is can you comment on if you're seeing any scripts being filled off-label for PFIC or other cholestatic diseases? Two, can you actually quantify sort of the compliance rate that you're seeing in the real world, other than maybe describing it to the extent you can? And then the third one is in regards to develop back-to-back readouts, especially on VISTAs and Ohana that are both due in the fourth quarter, as well as, I guess, March PFIC in the fourth quarter. how do we really get comfortable that the data is really coming in the fourth quarter and that we're not notified that it could push into first half of 2023? Just kind of provide some color or some matrix that gives us really comfort that this is the timeline at which top line data is going to be expected. And thank you again for taking my questions.
Chris Peets
Yeah, thanks for the questions. I'll touch on the first couple and then ask Pam to speak to the looks about and March timing. I think first on off-label, it's really insignificant. So we're not seeing any notable off-label prescriptions. And compliance rate, to put an actual number on it this early in the launch, we think it's premature. But I'd say it's strikingly supportive. It's really a highlight of the launch and what we're seeing so far. As we get further in, you have more of that longer-term treatment. Similar to what we see in our six years of clinical follow-up, that's when I think it would be more relevant to get a view of that. So throughout the year, we expect that compliance and persistence to be a real highlight in supporting the early success in the four-year numbers. And let Pam speak on pipeline timing.
Peter
Yeah, thanks for the question. So really excited about our looks about programs. I'll start there. First data will be on the study and an interim analysis expected later this year. And what we've seen so far is that patients are rolling into the long term extension portion of the study and they're staying on drugs. So we view that as a really strong signal. of the study effect and excited to share that data later this year. For ICP, we continue to push forward in this setting. There are some enrollment challenges on the backdrop, as you can imagine, of COVID and pregnancy, but we're working to address those by making adjustments to the protocol as necessary and operational adjustments as needed. And for PBC, interim data is expected in 2023. And on the March PPIC Phase III side, you know, we have completed enrollment for this study. So it's a six-month primary endpoint. Enrollment is done, so you can wind the clock forward. And certainly, top-line data will be shared this year.
Operator
Okay. Thanks.
Manny
Thanks, Jess.
Operator
Thank you, Yasmin. There are currently no additional questions waiting at this time, so I'll pass the conference back over to Chris Peets for any additional remarks.
Chris Peets
Great. Thank you, operator. And thanks, everyone, for joining. Your support makes the advancement of our important medicines possible. We'll talk with you next quarter. Goodbye.
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