Mirum Pharmaceuticals target raised to $64 on drug prospects

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On Monday, Citi increased its price target for Mirum Pharmaceuticals (NASDAQ:) shares to $64 from the previous $38, while maintaining a Buy rating on the stock. The firm’s decision comes after a recent update on the company’s drug volixibat, which is being developed for the treatment of primary sclerosing cholangitis (PSC) and primary biliary cholangitis (PBC).

Mirum Pharmaceuticals recently reported that volixibat showed better-than-expected performance in trials for both PSC and PBC. Notably, the drug demonstrated early significant itch reduction in PBC, which is a promising sign for its potential market uptake. Additionally, in a blinded PSC study update, volixibat achieved a placebo-adjusted itch benefit exceeding the 1.75-point benchmark, allowing the trial to progress to a pivotal stage.

The positive developments have led to an increase in Mirum’s share price during intraday trading, contrasting with the generally flat performance of the Nasdaq Biotechnology Index (NBI). Citi’s analysis suggests that the current share price does not fully account for the potential of volixibat, especially considering that there are no competing treatments in the PSC market.

Citi has incorporated volixibat into its financial model for Mirum Pharmaceuticals, which contributed to the raised price target. The firm emphasizes the drug’s prospects in the PSC market, where it could become a best-in-disease treatment option due to the lack of alternatives. Despite the competitive landscape, the early data on volixibat’s efficacy in reducing itch in PBC patients also supports the positive outlook.

The analyst from Citi concludes that the recent clinical updates have strengthened their confidence in volixibat’s potential for PSC, a factor that has been pivotal in the decision to raise the price target and reiterate a Buy rating, albeit with a note of High Risk due to the inherent uncertainties in drug development.

In other recent news, Mirum Pharmaceuticals has been making significant strides in its clinical trials and financial performance. The company’s investigational drug, volixibat, has shown promising results in Phase 2b clinical trials for primary biliary cholangitis (PBC) and primary sclerosing cholangitis (PSC), leading to positive responses from financial firms. Morgan Stanley raised its target on Mirum Pharmaceuticals to $57, while Stifel and Citi maintained their Buy ratings, and Baird increased its target to $39.

These firms’ confidence in Mirum Pharmaceuticals is bolstered by the company’s strong financial performance, with net product sales reaching $68.9 million in the first quarter of 2024, and full-year revenue guidance projected between $310 million and $320 million.

Another noteworthy development is the positive opinion received by Mirum’s product, LIVMARLI, from the European Committee for Medicinal Products for Human Use for the treatment of Progressive Familial Intrahepatic Cholestasis, a rare genetic liver disease. All these are recent developments that highlight the company’s progress in its clinical trials and financial performance.

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