Source: sec
Source ID: 0001759425-26-000045
URL: https://www.sec.gov/Archives/edgar/data/1759425/000175942526000045/mirm-20260630.htm
Symbol: (MIRM)
Published: 2026-08-05 16:06:56 EDT
Time precision: minute
Title: 10-Q 10-Q

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Table of Content
s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________________
FORM
10-Q
_____________________________________________________________________________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 2026
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to _______________
Commission File Number
001-38981
______________________________________________________________________________________________________
Mirum Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
______________________________________________________________________________________________________
Delaware
83-1281555
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
989 East Hillsdale Boulevard
,
Suite 300
,
Foster City
,
California
94404
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (
650
)
667-4085
____________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common stock, par value $0.0001 per share
MIRM
Nasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
x
No
o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
x
No
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
o
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
o
No
x
The number of shares of registrant’s common stock, par value $0.0001 per share, outstanding as of July 31, 2026 was
64,932,203
.
Table of Content
s
Table of Contents
SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS
Page
PART I.
FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
1
Condensed Consolidated Balance Sheets
1
Condensed Consolidated Statements of Operations
2
Condensed Consolidated Statements of Comprehensive Loss
3
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity
4
Condensed Consolidated Statements of Cash Flows
5
Notes to Unaudited Condensed Consolidated Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
30
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
41
Item 4.
Controls and Procedures
42
PART II.
OTHER INFORMATION
43
Item 1.
Legal Proceedings
43
Item 1A.
Risk Factors
43
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
100
Item 3.
Defaults Upon Senior Securities
100
Item 4.
Mine Safety Disclosures
100
Item 5.
Other Information
100
Item 6.
Exhibits
101
Signatures
102
i
Table of Content
s
SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS
An investment in shares of our common stock involves a high degree of risk. Below is a list of the more significant risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.
•
The success of our business depends, in part, on our ability to market and sell our approved medicines profitably.
•
If we are unable to adequately grow, maintain and scale our marketing and sales capabilities or enter into or maintain rights pursuant to agreements with third parties to market and sell our approved medicines, we may not be able to generate viable revenues.
•
Our approved medicines or any one of our product candidates, if approved, may fail to achieve the market acceptance among physicians, patients and others in the medical community necessary for commercial success.
•
We rely completely on third parties to manufacture and distribute our clinical and commercial drug supplies, including certain sole-source suppliers and manufacturers. These third parties may fail to obtain and maintain regulatory approval for their facilities, fail to provide us with sufficient quantities of drug substance, drug product, or labeled finished product in a timely fashion, or fail to do so at acceptable quality levels or prices.
•
Our business depends, in part, on the success of our product candidates, each of which requires significant clinical testing before we can seek regulatory approval and potentially launch commercial sales.
•
We have encountered and may continue to encounter delays and difficulties enrolling patients in our clinical trials, and as a result, our clinical development activities could be delayed or otherwise adversely affected.
•
Our clinical trials may fail to adequately demonstrate the safety and efficacy of our product candidates, which could prevent or delay regulatory approval and commercialization.
•
Clinical drug development involves a lengthy and expensive process with uncertain outcomes, and results of earlier studies and trials may not be predictive of future trial results.
•
Any delays in the commencement or completion, or termination or suspension, of our clinical trials could result in increased costs for us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.
•
Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming, and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.
•
We face significant competition from other biotechnology and pharmaceutical companies with products that may directly or indirectly compete with ours, and our operating results will suffer if we fail to compete effectively.
•
We may fail to realize all of the anticipated benefits of our commercial and product candidate acquisitions or those benefits may take longer to realize than expected.
•
We depend on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business.
•
We may need substantial additional financing to continue our commercialization efforts for our approved medicines, develop our product candidates, license or acquire new product candidates and approved medicines and implement our operating plans. If we fail to obtain additional financing when needed, we may be forced to delay, reduce or eliminate our product development programs or commercialization efforts.
ii
Table of Content
s
•
We do not currently have patent protection or regulatory exclusivity for certain of our approved medicines or rely on regulatory exclusivity. If we are unable to obtain and maintain sufficient intellectual property protection for our approved medicines and our product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our approved medicines and our other product candidates, if approved, may be adversely affected.
iii
Table of Content
s
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Mirum Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share data)
June 30,
2026
December 31,
2025
(Note 2)
Assets
Current assets:
Cash and cash equivalents
$
330,728
$
296,683
Short-term investments
107,563
86,644
Accounts receivable
145,360
123,330
Inventory
25,769
24,887
Prepaid expenses and other current assets
26,890
18,140
Total current assets
636,310
549,684
Restricted cash
1,734
1,482
Long-term investments
123,030
8,105
Property and equipment, net
2,251
1,862
Operating lease right-of-use assets
12,024
8,741
Intangible assets, net
247,388
260,921
Other assets
22,244
12,018
Total assets
$
1,044,981
$
842,813
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable
$
23,427
$
9,614
Holdback liabilities, current
24,800
—
Accrued expenses and other current liabilities
174,561
196,185
Total current liabilities
222,788
205,799
Operating lease liabilities, noncurrent
10,465
7,516
Convertible notes payable, net, noncurrent
750,079
309,797
Holdback liabilities, noncurrent
61,154
—
Other liabilities
10,917
5,011
Total liabilities
1,055,403
528,123
Commitments and contingencies
Stockholders’ (deficit) equity:
Preferred stock, $
0.0001
par value;
10,000,000
shares authorized, and
no
shares issued and outstanding as of June 30, 2026 and December 31, 2025
—
—
Common stock, $
0.0001
par value;
200,000,000
shares authorized;
64,754,699
and
51,896,391
shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively
6
5
Additional paid-in capital
1,515,172
981,878
Accumulated deficit
(
1,524,926
)
(
667,544
)
Accumulated other comprehensive (loss) income
(
674
)
351
Total stockholders’ (deficit) equity
(
10,422
)
314,690
Total liabilities and stockholders’ (deficit) equity
$
1,044,981
$
842,813
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
Table of Content
s
Mirum Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue:
Product sales, net
$
176,243
$
127,785
$
336,125
$
239,370
Operating expenses:
Cost of sales
30,348
23,421
59,153
46,439
Research and development
90,528
46,067
188,438
87,111
Acquired in-process research and development
16,435
—
742,737
5,000
Selling, general and administrative
81,469
63,286
177,799
120,992
Total operating expenses
218,780
132,774
1,168,127
259,542
Loss from operations
(
42,537
)
(
4,989
)
(
832,002
)
(
20,172
)
Other income (expense):
Interest income
3,851
3,033
7,252
6,056
Interest expense
(
2,618
)
(
3,589
)
(
6,234
)
(
7,185
)
Other (expense) income, net
(
24,234
)
86
(
24,234
)
2,194
Net loss before provision for income taxes
(
65,538
)
(
5,459
)
(
855,218
)
(
19,107
)
Provision for income taxes
1,689
402
2,164
1,431
Net loss
$
(
67,227
)
$
(
5,861
)
$
(
857,382
)
$
(
20,538
)
Net loss per share, basic and diluted
$
(
1.06
)
$
(
0.12
)
$
(
14.03
)
$
(
0.42
)
Weighted-average shares of common stock used to compute net loss per share, basic and diluted
63,374,183
49,726,823
61,125,097
49,310,255
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
Table of Content
s
Mirum Pharmaceuticals, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
(In thousands)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Net loss
$
(
67,227
)
$
(
5,861
)
$
(
857,382
)
$
(
20,538
)
Other comprehensive (loss) income:
Unrealized loss on available-for-sale investments
(
379
)
(
12
)
(
606
)
(
35
)
Cumulative translation adjustments
(
267
)
622
(
419
)
760
Comprehensive loss
$
(
67,873
)
$
(
5,251
)
$
(
858,407
)
$
(
19,813
)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Table of Content
s
Mirum Pharmaceuticals, Inc.
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity
(Unaudited)
(In thousands, except share amounts)
Common Stock
Additional
Paid-In
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity (Deficit)
Shares
Amount
Balance as of December 31, 2025
51,896,391
$
5
$
981,878
$
(
667,544
)
$
351
$
314,690
Issuance of common stock and pre-funded warrants in private placement, net of issuance costs of $
8,600
3,385,149
—
259,948
—
—
259,948
Issuance of common stock in connection with asset acquisition
4,404,190
1
415,270
—
—
415,271
Stock-based compensation in connection with asset acquisition
112,872
—
10,643
—
—
10,643
Issuance of common stock in connection with equity award plans
1,127,563
—
10,131
—
—
10,131
Stock-based compensation
—
—
22,345
—
—
22,345
Net loss
—
—
—
(
790,155
)
—
(
790,155
)
Other comprehensive loss
—
—
—
—
(
379
)
(
379
)
Balance as of March 31, 2026
60,926,165
$
6
$
1,700,215
$
(
1,457,699
)
$
(
28
)
$
242,494
Issuance of common stock in connection with equity award plans
560,812
—
11,304
—
—
11,304
Issuance of common stock in connection with employee stock purchase plan
47,162
—
2,859
—
—
2,859
Conversion of convertible notes, net
31
—
1
—
—
1
Exchange and repurchase of convertible notes maturing in 2029
—
—
(
558,901
)
—
—
(
558,901
)
Shares issued in connection with the exchange and repurchase of convertible notes maturing in 2029
3,220,529
—
329,089
—
—
329,089
Stock-based compensation
—
—
30,605
—
—
30,605
Net loss
—
—
—
(
67,227
)
—
(
67,227
)
Other comprehensive loss
—
—
—
—
(
646
)
(
646
)
Balance as of June 30, 2026
64,754,699
$
6
$
1,515,172
$
(
1,524,926
)
$
(
674
)
$
(
10,422
)
Common Stock
Additional
Paid-In
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
Shares
Amount
Balance as of December 31, 2024
48,338,096
$
5
$
870,189
$
(
644,181
)
$
(
373
)
$
225,640
Issuance of common stock in connection with equity award plans
1,112,939
—
6,359
—
—
6,359
Conversion of convertible notes, net
188
—
6
—
—
6
Stock-based compensation
—
—
15,813
—
—
15,813
Net loss
—
—
—
(
14,677
)
—
(
14,677
)
Other comprehensive income
—
—
—
—
115
115
Balance as of March 31, 2025
49,451,223
$
5
$
892,367
$
(
658,858
)
$
(
258
)
$
233,256
Issuance of common stock in connection with equity award plans
547,323
—
6,575
—
—
6,575
Issuance of common stock in connection with employee stock purchase plan
59,752
—
2,113
—
—
2,113
Conversion of convertible notes, net
94
—
3
—
—
3
Stock-based compensation
—
—
18,462
—
—
18,462
Net loss
—
—
—
(
5,861
)
—
(
5,861
)
Other comprehensive income
—
—
—
—
610
610
Balance as of June 30, 2025
50,058,392
$
5
$
919,520
$
(
664,719
)
$
352
$
255,158
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Table of Content
s
Mirum Pharmaceuticals, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended June 30,
2026
2025
Operating activities
Net loss
$
(
857,382
)
$
(
20,538
)
Reconciliation of net loss to net cash (used in) provided by operating activities:
Stock-based compensation
66,775
34,271
Depreciation and amortization
13,810
12,108
Amortization of debt discount and offering costs
1,112
860
Unrealized foreign exchange loss (gain)
1,994
(
1,270
)
Non-cash lease expense
1,145
826
Inventory reserves and firm commitment losses
—
2,349
Fair value of common stock issued in connection with asset acquisition
415,271
—
Debt conversion inducement expense
11,678
—
Change in fair value of holdback liabilities
11,160
—
Other
(
577
)
(
674
)
Change in operating assets and liabilities:
Accounts receivable
(
26,630
)
(
25,901
)
Prepaid and other current assets
(
7,714
)
(
7,114
)
Inventory
(
1,525
)
(
5,007
)
Other assets
(
10,631
)
(
1,342
)
Accounts payable, accrued expenses and other liabilities
38,183
22,314
Holdback liabilities
71,529
—
Operating lease liabilities
(
1,213
)
(
803
)
Net cash (used in) provided by operating activities
(
273,015
)
10,079
Investing activities
Purchase of investments
(
195,612
)
(
65,063
)
Proceeds from maturities of investments
59,739
42,497
Purchase of property and equipment
(
687
)
(
167
)
Payments made for additions to intangible assets
(
35,000
)
—
Net cash used in investing activities
(
171,560
)
(
22,733
)
Financing activities
Proceeds from issuance of convertible notes, net of issuance costs of $
17,565
672,435
—
Exchange and repurchase of 2029 convertible notes
(
474,365
)
—
Proceeds from issuance of common stock and pre-funded warrants in private placement, net of issuance costs of $
8,600
259,948
—
Proceeds from issuance of common stock pursuant to equity plans
23,499
15,047
Net cash provided by financing activities
481,517
15,047
Effect of exchange rate on cash, cash equivalents and restricted cash
(
2,645
)
3,281
Net increase in cash, cash equivalents and restricted cash
34,297
5,674
Cash, cash equivalents and restricted cash at beginning of period
298,165
222,928
Cash, cash equivalents and restricted cash at end of period
$
332,462
$
228,602
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Mirum Pharmaceuticals, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended June 30,
2026
2025
Supplemental disclosure of cash flow information:
Operating cash flows paid for operating lease
$
1,683
$
1,147
Cash paid for interest
$
6,703
$
6,325
Cash paid for income taxes
$
1,127
$
1,647
Net operating liabilities, excluding cash acquired, assumed in connection with asset acquisition
$
9,561
$
—
Non-cash operating, investing and financing activities:
Reduction in additional paid-in capital related to the exchange and repurchase of notes maturing in 2029
$
558,901
$
—
Shares issued in connection with the exchange and repurchase of convertible notes maturing in 2029
$
329,089
$
—
Right-of-use assets obtained in exchange for lease liabilities
$
4,472
$
1,673
Decrease in ROU assets and lease liabilities due to lease modification
$
—
$
649
Stock option exercise proceeds receivable
$
795
$
—
Accrued deferred debt offering costs
$
389
$
—
Stock-based compensation capitalized to inventory
$
403
$
302
Conversion of convertible notes, net into shares of common stock
$
1
$
9
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Mirum Pharmaceuticals, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Unaudited)
1.
Organization and Description of Business
Mirum Pharmaceuticals, Inc. (the “Company”) was incorporated in the State of Delaware on
May 2, 2018
, and is headquartered in Foster City, California. The Company is a biopharmaceutical company dedicated to transforming the treatment of rare diseases.
The Company has
three
approved medicines: LIVMARLI® (maralixibat) (“Livmarli”), Cholbam® (cholic acid) capsules (“Cholbam”), and CTEXLI® (chenodiol) tablets (“Ctexli”).
Livmarli is approved for the treatment of cholestatic pruritus in patients with Alagille syndrome (“ALGS”) in the United States (“U.S.”), the European Union (“EU”) and various other countries around the world and for cholestatic pruritus in patients with progressive familial intrahepatic cholestasis (“PFIC”) in the U.S. and certain other countries and for the treatment of PFIC in the EU.
Cholbam is U.S. Food and Drug Administration (“FDA”) approved for the treatment of bile acid synthesis disorders due to single enzyme deficiencies and adjunctive treatment of peroxisomal disorders in patients who show signs or symptoms of liver disease. In February 2025, the Company received FDA approval for chenodiol tablets for the treatment of cerebrotendinous xanthomatosis in adults, which is commercialized under the brand name Ctexli. Prior to the approval of Ctexli, chenodiol tablets were commercialized under the brand name Chenodal under a medical necessity recognition from the FDA. Cholbam and Ctexli, collectively, are referred to as the “Bile Acid Medicines”.
The Company’s development pipeline consists of the clinical-stage product candidate volixibat, MRM-3379, zilurgisertib and indication expansion opportunities for Livmarli.
On January 23, 2026, the Company acquired Bluejay Therapeutics, Inc. (“Bluejay”). With the completion of the acquisition, the Company added worldwide rights to brelovitug, a late-stage, fully human monoclonal antibody for chronic hepatitis delta virus, a rare and severe liver disease.
The Company commenced significant operations in November 2018. The Company views its operations and manages its business as
one
operating segment and has determined its operating segment on the same basis that it uses to evaluate its performance internally.
Liquidity
The Company has a limited operating history, has incurred significant operating losses since its inception, and the revenue and income potential of the Company’s business and market are unproven. As of June 30, 2026, the Company had an accumulated deficit of $
1.5
billion and unrestricted cash, cash equivalents and investments of $
561.3
million. The Company’s
4.00
% convertible senior notes due 2029 (the “2029 Notes”) are convertible at the option of the holders during the third quarter of 2026. If holders of the 2029 Notes elect to convert, the Company may elect to settle such conversions in cash, common stock or a combination of the two. The Company’s
0.00
% convertible senior notes due 2032 (the “2032 Notes”) are not convertible at the option of the holders during the third quarter of 2026. The Company believes that its unrestricted cash, cash equivalents and investments of $
561.3
million as of June 30, 2026, provide sufficient capital resources to continue its operations for at least twelve months from the issuance date of the accompanying unaudited condensed consolidated financial statements.
2.
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. The unaudited interim financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The unaudited condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for complete financial statements. The operating results presented in these unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for any future periods.
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The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2025, as filed with the SEC on February 25, 2026.
Use of Estimates
The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that impact the reported amounts. These estimates and assumptions are based upon historical experience, knowledge of current events and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue and expenses that are not readily apparent from other sources. Actual results could differ materially from those estimates.
The Company’s unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2026 reflect the Company’s estimates of the impact of the geopolitical and macroeconomic environment, including the impact of inflation, tariffs and trade tensions, and foreign exchange rate fluctuations. The duration and the scope of these conditions cannot be predicted; therefore, the extent to which these conditions will directly or indirectly impact the Company’s business, results of operations and financial condition, is uncertain. The Company is not aware of any specific event or circumstance that would require an update to its estimates, judgments and assumptions or a revision of the carrying value of the Company’s assets or liabilities as of the date of this filing.
Reclassifications
Amounts related to pre-commercialization milestone payments in connection with in-process research and development projects acquired with no alternative future use in a transaction accounted for as an asset acquisition in the statement of operations for the six months ended June 30, 2025 have been reclassified to conform to the current presentation.
Significant Accounting Policies
There have been no significant changes to the Company’s accounting policies during the six months ended June 30, 2026, as compared to the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company’s audited consolidated financial statements included in the Annual Report.
Cash, Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments that are readily convertible into cash without penalty and with original maturities of three months or less at the date of purchase to be cash equivalents. The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents are valued at cost, which approximate their fair value.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets that together reflect the same amounts shown in the unaudited condensed consolidated statements of cash flows (in thousands):
As of June 30,
2026
2025
Cash and cash equivalents
$
330,728
$
228,122
Restricted cash
1,734
480
Total cash, cash equivalents, and restricted cash
$
332,462
$
228,602
Investments
The Company classifies all investments in securities as available-for-sale. Management determines the appropriate classification of its investments in securities at the time of purchase. Investments with original maturities beyond
three months
at the date of purchase and which mature at, or less than twelve months from the balance sheet date, are classified as a current asset.
Investments are recorded at fair value, with unrealized gains and losses reported as accumulated other comprehensive income (loss) until realized, with the exception of any declines in fair value below the cost basis that are a result of a credit loss, which, if any, are reported in other income (expense), net in the current period through an allowance
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for credit losses. Each reporting period, the Company evaluates whether declines in fair values of its available-for-sale securities below their cost basis are a result of credit loss or other factors and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss, the creditworthiness of the security issuers, as well as the Company’s ability and intent to hold the available-for-sale security until a forecasted recovery occurs. Additionally, the Company assesses whether it has plans to sell the security or it is more likely than not it will be required to sell any available-for-sale securities before recovery of its amortized cost basis. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion, as well as interest and dividends, are included in interest income. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis and are also included in other income (expense), net. To date, the Company has
not
identified any declines in fair value of its investments related to credit loss.
Concentrations of Credit Risk and Off-Balance Sheet Risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, accounts receivable and investments. The Company limits the amount of credit exposure by investing cash that is not required for immediate operating needs in money market funds, government obligations, corporate debt securities and/or commercial paper. Additionally, the Company has established guidelines regarding diversification of its investments and their maturities, which are designed to maintain principal and maximize liquidity. To date, the Company has not experienced any losses associated with these credit risks and continues to believe that this exposure is not significant.
The Company relies on a single third-party logistics provider (“3PL”) and a single specialty pharmacy for all of the Company’s sales of its approved medicines in each of the U.S. and Canada as well as a single 3PL outside of North America.
The Company sources materials and services through several vendors. Certain materials are sourced from a single vendor. The loss of certain vendors could result in a temporary disruption of the Company’s commercialization efforts.
As of June 30, 2026 and December 31, 2025, the Company did
not
have any customer who individually accounted for
10
% or more of accounts receivable. For the three and six months ended June 30, 2026 and 2025, the Company did not have revenue attributable to any one customer in excess of
10
% of sales.
Accounts Receivable
The Company has accounts receivable amounts due from product sales. The Company may also have accounts receivable amounts due from license agreements for milestones achieved, but not yet paid. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company estimates the allowance for credit losses using the current expected credit loss model. Under this model, the allowance for credit losses reflects the Company’s estimate of lifetime expected credit losses. The Company evaluates the collectability of the cash flows based on the risk of loss over the contractual life, even when that risk is remote, based on judgments about the creditworthiness of its customers, historical experience and other relevant information that is available to the Company. There was
no
allowance for credit losses as of June 30, 2026. Bad debt expense was
not
material for the three and six months ended June 30, 2026, and
no
bad debt expense was recognized for the three and six months ended June 30, 2025.
Convertible Notes
The Company evaluates all conversion, repurchase and redemption features contained in a debt instrument to determine if there are any embedded features that require bifurcation as a derivative. The Company accounts for its convertible notes (refer to Note 9) as a long-term liability equal to the proceeds received from issuance, including any embedded conversion features, net of the unamortized debt discount and offering costs in the accompanying consolidated balance sheets. The debt issuance and offering costs are amortized over the contractual term of the convertible notes, using the effective interest method, as interest expense in the accompanying consolidated statements of operations.
Product Sales, Net
Revenues from product sales are recorded at the net sales price, or the transaction price, which may include fixed or variable consideration for discounts, government rebates, co-pay assistance, returns and other allowances that are offered within contracts with a customer relating to the sale of the Company’s approved medicines. Estimates of variable consideration are calculated using the actual product sales each reporting period and the nature of the variable consideration related to those sales. Overall, these estimates reflect the Company’s best estimate of the amount of consideration to which the Company expects to be entitled based on the terms of the contract. The amount of variable
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consideration that is included in the transaction price may be constrained and is included in product sales, net only to the extent that it is considered probable that a significant reversal in the amount of the cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimates are reviewed and updated as additional information becomes known. Actual amounts of consideration ultimately received may differ materially from estimates. If actual results vary from estimates, the Company will adjust these estimates, which would affect product sales, net and earnings in the period such variances are adjusted. Significant categories of sales deductions are as follows:
Government Rebates
: The Company records rebates payable under Medicaid and other government programs as a reduction of revenue at the time product revenues are generated. The Company’s rebate calculations may require estimates, including estimates of customer and payor mix and revenue projections, to determine which sales will be subject to rebates and the amount of such rebates. The Company updates its estimates and assumptions on a quarterly basis and records any necessary adjustments to revenue in the period identified. Government rebate payments vary in timing depending on the nature, and are generally quarterly or annually.
Other Incentives
: Other incentives include a branded co-pay assistance program for eligible patients with commercial insurance in the U.S. The branded co-pay assistance program assists commercially insured patients who have coverage for the Company’s approved medicines and is intended to reduce each participating patient’s portion of the financial responsibility of the purchase price up to a specified dollar amount of assistance. The calculation of the accrual for co-pay assistance is based upon an identification of claims and the cost per claims associated with product that has been recognized as revenue. The Company records amounts paid under the brand specific co-pay assistance program for each patient as a reduction of revenue from product sales.
Product Returns
: The Company records revenue for product sales, net of estimated product returns. Customers have limited return rights related only to the product’s damage or defect identified upon delivery of the product. The Company estimates the amount of product sales that may be returned and records the estimate as a reduction of revenue and a liability in the period the related product revenue is recognized.
The Company relies on a specialty pharmacy for all of its sales of its approved medicines in each of the U.S. and Canada. Outside of North America, the Company’s approved medicines are sold to its authorized distributors, licensed partners or directly to government purchasers or hospitals, which act as end users. For revenues from distributors and the Company’s licensed partner in Japan, Takeda, the Company records net product sales at the time control of the product is transferred, based on the estimated variable consideration. The transaction price, which may include fixed or variable consideration, may be subject to constraint and is included in the product sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenue recognized will not occur in a future period. The Company recognizes its best estimate of the consideration expected to be received when control of the inventory is transferred. Such estimates may be complex and include estimates as to if and when the distributors and licensed partner’s sales in the market will occur. Estimates are reviewed and updated as additional information, including in-market sales information of the Company’s authorized distributors and licensed partners, becomes known. Actual amounts may ultimately differ from the Company’s estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment. The Company is entitled to payment in connection with the supply of product under standard industry payment terms. Actual consideration amounts are determined and settled generally quarterly or annually. If the consideration received or receivable exceeds the Company’s estimates of product sales, the Company recognizes a liability. If the estimated product sales exceed the payment received or receivable, the Company records a receivable or contract asset related to the amounts not yet collected, depending on the circumstances. As of June 30, 2026 and December 31, 2025, the Company did not have any contract assets and recorded a liability of $
8.1
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million and $
3.6
million, respectively, related to consideration received in excess of the Company’s estimated net product sales.
Liabilities associated with sales deductions are included in accrued expenses and other current liabilities or in other liabilities on the accompanying unaudited condensed consolidated balance sheets depending on contractual settlement timelines.
The following table represents total revenues and disaggregates Product sales, net by approved medicine (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Product sales, net:
Livmarli
$
128,721
$
88,160
$
242,525
$
161,384
Bile Acid Medicines
47,522
39,625
93,600
77,986
Total product sales, net
$
176,243
$
127,785
$
336,125
$
239,370
The following table sets forth Product sales, net by geographic area based on the ship-to location (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
United States
$
138,338
$
95,532
$
266,265
$
182,454
Rest of the world
37,905
32,253
69,860
56,916
Total product sales, net
$
176,243
$
127,785
$
336,125
$
239,370
Acquired In-Process Research and Development
Acquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed in-process research and development (“IPR&D”) projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and pre-commercialization milestone payments related to various in-licensing arrangements and the costs of rights to IPR&D projects.
Foreign Currency
The unaudited condensed consolidated financial statements are presented in U.S. dollars. The functional currency for most of the Company’s foreign subsidiaries is their local currency. Balance sheet accounts of international subsidiaries are translated at the current exchange rates as of the end of each accounting period. Income statement items are translated at average exchange rates for the period. The resulting translation adjustments are recorded as a separate component of stockholders’ equity.
Foreign currency transaction gains and losses are included in other income (expense), net in the unaudited condensed consolidated statements of operations. Transaction gains and losses result primarily from fluctuations in exchange rates when intercompany receivables and payables are denominated in currencies other than the functional currency of the Company’s subsidiary that recorded the transaction. Unrealized foreign exchange gains and losses amounted to a loss of $
0.9
million and $
2.0
million for the three and six months ended June 30, 2026, respectively, and a gain of $
0.6
million and $
1.3
million for the three and six months ended June 30, 2025, respectively. Realized foreign exchange gains and losses amounted to a gain of $
0.7
million and $
0.8
million for the three and six months ended June 30, 2026, respectively, and a loss of $
0.3
million and $
0.7
million for the three and six months ended June 30, 2025, respectively.
Net Loss Per Share
Basic net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding for the period, without consideration for potentially dilutive securities. The pre-funded warrants issued in January 2026 (refer to Note 10) were included in the calculation of basic weighted-average shares of common stock used to compute net loss per share for the three and six months ended June 30, 2026 as they are issuable for immaterial cash consideration. Diluted net loss per share is computed by dividing the net loss by the weighted-average shares of common stock and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. Diluted net loss per share excludes the potential impact of the Company’s common stock subject to repurchase, common stock options, restricted stock units, contingently issuable employee stock purchase plan shares, common stock issuable upon conversion of convertible notes and contingently issuable shares for holdback liabilities to the extent their
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effect would be anti-dilutive.
The following table sets forth the computation of basic and diluted net loss per share for the three and six months ended June 30, 2026 and 2025 (in thousands, except share and per share amounts):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Numerator:
Net loss
$
(
67,227
)
$
(
5,861
)
$
(
857,382
)
$
(
20,538
)
Denominator:
Weighted-average shares of common stock outstanding
62,837,771
49,726,823
60,653,884
49,310,255
Add: weighted average of common stock to be issued upon exercise of pre-funded warrants
536,412
—
471,213
—
Weighted average shares of common stock used to compute net loss per share, basic and diluted
63,374,183
49,726,823
61,125,097
49,310,255
Net loss per share, basic and diluted
$
(
1.06
)
$
(
0.12
)
$
(
14.03
)
$
(
0.42
)
The following outstanding potential dilutive shares have been excluded from the calculation of diluted net loss per share for each period presented due to their anti-dilutive effect:
As of June 30,
2026
2025
Options to purchase common stock and restricted stock units
11,135,862
12,477,636
Common stock issuable upon conversion of convertible notes
7,456,289
9,963,963
Indemnity holdback
522,375
—
Employee stock purchase plan contingently issuable
9,569
25,099
Total
19,124,095
22,466,698
Acquisitions, including Intangible Assets and Contingent Consideration
Acquisitions of businesses are accounted for using the acquisition method of accounting. The Company allocates the purchase price of acquired businesses to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets and acquired IPR&D assets. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill.
Intangible assets are measured at their fair values as of the acquisition date or, in the case of commercial milestone payments, the date they become due. The evaluation of intangible assets includes assessing the amortization period for which the asset is expected to contribute to the future cash flows of the Company. Intangible assets with finite useful lives are amortized over their estimated useful lives on a straight-line basis. The Company tests its finite-lived intangible assets for impairment annually or if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If it is determined that the asset is impaired, the carrying value is written down to its estimated fair value, with the related impairment charge recognized in the consolidated statements of operations in the period in which the impairment occurs.
In connection with certain acquisitions, the Company may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. Contingent consideration resulting from a business combination is recorded at its fair value on the acquisition date. Each reporting period thereafter, these obligations are revalued and increases or decreases in their fair value are recorded in the statements of operations until such time that the payment is made.
If it is determined that the net assets acquired do not meet the definition of a business combination under the acquisition method of accounting or if substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets, the transaction is accounted for as an asset acquisition using the cost accumulation method. In an asset acquisition, no goodwill is recognized and contingent consideration generally is not recognized at the acquisition date. Upfront payments allocated to IPR&D projects at the acquisition date and subsequent pre-commercialization milestone payments are expensed as incurred in the statements of operations unless there is an alternative future use.
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Recently Adopted Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-04,
Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments
(“ASU 2024-04”) which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. Transactions within the scope of ASU 2024-04 require the fair value of consideration transferred in excess of the consideration issuable under the original conversion terms of the converted debt to be recognized as an expense in the period of conversion, with the remaining consideration recognized as a reduction to equity. The guidance is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. The Company adopted this guidance as of January 1, 2026, and the impact of the adoption has been reflected in the financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05,
Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
(“ASU 2025-05”). The new guidance provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under FASB Accounting Standards Codification 606. The Company adopted the provisions of the amendments as of January 1, 2026, and elected the practical expedient provided to all companies. The adoption of this new accounting standard did not have a material impact on the Company’s consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the accompanying unaudited condensed consolidated financial statements and disclosures.
In November 2024, the FASB issued ASU 2024-03,
Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
(“ASU 2024-03”), which requires disclosure of disaggregated information about specific categories underlying certain income statement expense line items in the footnotes to the financial statements for both annual and interim periods. Subsequently in January 2025, the FASB issued ASU 2025-01,
Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date
(“ASU 2025-01”) to clarify the effective date of ASU 2024-03. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06,
Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software
(“ASU 2025-06”), to modernize the accounting guidance for the costs to develop software for internal use by aligning it with current development practices, especially agile and iterative methods. The guidance removes references to development stages and clarifies when capitalization of software costs should occur. The new guidance also clarifies disclosure requirements for all capitalized internal-use software costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.
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3.
Fair Value Measurements
Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type are presented in the following table (in thousands):
June 30, 2026
Level 1
Level 2
Level 3
Total
Financial assets:
Money market funds
$
244,714
$
—
$
—
$
244,714
U.S. treasury bills
9,883
—
—
9,883
Corporate debt securities
—
131,006
—
131,006
U.S. government bonds
—
73,273
—
73,273
Agency bonds
—
16,431
—
16,431
Commercial paper
—
17,970
—
17,970
Total financial assets
$
254,597
$
238,680
$
—
$
493,277
Financial liabilities:
Indemnification equity holdback
—
—
61,154
61,154
Total financial liabilities
$
—
$
—
$
61,154
$
61,154
December 31, 2025
Level 1
Level 2
Level 3
Total
Financial assets:
Money market funds
$
254,376
$
—
$
—
$
254,376
Corporate debt securities
—
72,277
—
72,277
U.S. government bonds
—
17,016
—
17,016
Commercial paper
—
5,456
—
5,456
Total financial assets
$
254,376
$
94,749
$
—
$
349,125
The carrying amounts of certain financial instruments such as cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses as of June 30, 2026 and December 31, 2025 approximate their related fair values due to their short-term nature.
Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments is readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.
Certain financial instruments classified within Level 2 of the fair value hierarchy include the types of instruments that trade in markets that are not considered to be active, but are valued based on quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The Company reviews trading activity and pricing for these investments as of each measurement date.
Holdback Liabilities
In January 2026, in connection with the acquisition of Bluejay (refer to Note 6 for further information), the Company recorded at fair value liabilities related to the Company’s common stock issuable upon satisfaction of certain indemnification obligations
(1)
. The Company assesses the fair value of the liabilities each reporting period until resolution of the related contingency with changes in fair value recorded in other income (expense), net in the accompanying unaudited condensed consolidated statements of operations.
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The following table provides a summary of the changes in the estimated fair value, which are classified as Level 3 of the fair value hierarchy (in thousands):
Balance at January 1, 2026
$
—
Initial recognition
49,255
Change in fair value
(
998
)
Balance at March 31, 2026
48,257
Change in fair value
12,897
Balance at June 30, 2026
$
61,154
__________________
(1)
Fair value estimated based on the value of the Company’s common stock in addition to the probability of indemnification adjustments being incurred.
The Indemnification Equity Holdback liability is included in Holdback liabilities, noncurrent in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2026.
4.
Financial Instruments
The fair value and amortized cost of cash equivalents and available-for-sale investments by major security type are presented in the following table (in thousands):
June 30, 2026
Amortized
Cost
Unrealized
Gain
Unrealized
Loss
Estimated
Fair
Value
Cash equivalents and investments:
Money market funds
$
244,714
$
—
$
—
$
244,714
U.S. treasury bills
9,887
—
(
4
)
9,883
Corporate debt securities
131,258
5
(
257
)
131,006
U.S. government bonds
73,414
1
(
142
)
73,273
Agency bonds
16,500
—
(
69
)
16,431
Commercial paper
17,970
—
—
17,970
Total cash equivalents and investments
$
493,743
$
6
$
(
472
)
$
493,277
Classified as:
Cash equivalents
$
262,684
Short-term investments
107,563
Long-term investments
123,030
Total cash equivalents and investments
$
493,277
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December 31, 2025
Amortized
Cost
Unrealized
Gain
Unrealized
Loss
Estimated
Fair
Value
Cash equivalents and investments:
Money market funds
$
254,376
$
—
$
—
$
254,376
Corporate debt securities
72,170
107
—
72,277
U.S. government bonds
16,984
32
—
17,016
Commercial paper
5,455
1
—
5,456
Total cash equivalents and investments
$
348,985
$
140
$
—
$
349,125
Classified as:
Cash equivalents
$
254,376
Short-term investments
86,644
Long-term investments
8,105
Total cash equivalents and investments
$
349,125
As of June 30, 2026, the remaining contractual maturities of available-for-sale debt securities were as follows (in thousands):
Estimated Fair Value
Due within one year
$
125,533
One to two years
123,030
Total
$
248,563
During the three and six months ended June 30, 2026 and 2025, there have been
no
material realized gains or losses on available-for-sale investments,
no
investments have been in a continuous unrealized loss position for more than 12 months, and the Company did
not
recognize any credit losses on these securities.
5.
Balance Sheet Components
Inventory
Inventory consists of the following (in thousands):
June 30,
2026
December 31,
2025
Raw materials
$
2,613
$
2,898
Work in progress
20,139
18,473
Finished goods
3,017
3,516
Total inventory
$
25,769
$
24,887
Intangible Assets, Net
The components of the Company’s intangible assets were as follows (in thousands, except for weighted-average remaining amortization period):
June 30, 2026
Gross Carrying Value
Accumulated Amortization
Net Carrying Amount
Weighted-Average Remaining Amortization Period (Years)
Commercial milestones
$
94,000
$
(
15,527
)
$
78,473
11.1
Developed technology
226,620
(
57,759
)
168,861
9.3
Assembled workforce
970
(
916
)
54
0.2
Total intangible assets
$
321,590
$
(
74,202
)
$
247,388
9.8
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December 31, 2025
Gross Carrying Value
Accumulated Amortization
Net Carrying Amount
Weighted-Average Remaining Amortization Period (Years)
Commercial milestones
$
94,000
$
(
11,660
)
$
82,340
11.5
Developed technology
226,620
(
48,255
)
178,365
9.7
Assembled workforce
970
(
754
)
216
0.7
Total intangible assets
$
321,590
$
(
60,669
)
$
260,921
10.3
Amortization expense was $
6.7
million and $
13.5
million for the three and six months ended June 30, 2026, respectively, and $
5.9
million and $
11.9
million for the three and six months ended June 30, 2025, respectively. Amortization expense was included in cost of sales in the accompanying unaudited condensed consolidated statements of operations.
The following table summarizes the estimated future amortization expense associated with the Company’s intangible assets as of June 30, 2026 (in thousands):
Amount
2026 (remaining six months)
$
13,425
2027
26,742
2028
26,742
2029
26,742
2030
26,742
Thereafter
126,995
$
247,388
Accrued Expenses
Accrued expenses consist of the following (in thousands):
June 30,
2026
December 31,
2025
Accrued sales deductions and other
$
62,501
$
51,375
Accrued compensation and related benefits
28,389
47,276
Accrued clinical trials
22,872
13,959
Accrued professional service fees
21,886
17,292
Accrued contract manufacturing and non-clinical costs
17,670
8,721
Accrued royalties payable
16,204
16,208
Operating lease liabilities, current
2,405
2,139
Accrued loss on firm purchase commitments
2,107
2,107
Accrued interest
527
2,108
Accrued milestone payment
—
35,000
Total accrued expenses and other current liabilities
$
174,561
$
196,185
Other liabilities
Other liabilities consist of the following (in thousands):
June 30,
2026
December 31,
2025
Noncurrent accrued sales deductions
$
8,882
$
3,586
Noncurrent accrued loss on firm purchase commitments
1,425
1,425
Other
610
—
Total other liabilities
$
10,917
$
5,011
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6.
Asset Acquisitions
License Agreement with Incyte Corporation
In April 2026, the Company entered into a license agreement with Incyte Corporation, under which the Company obtained the right to develop and commercialize zilurgisertib. Zilurgisertib is an oral small molecule ALK2 inhibitor in development for the treatment of fibrodysplasia ossificans progressiva. The Company made an upfront payment of $
16.0
million in April 2026. In addition, the Company is obligated to pay royalties in the mid-to-high single digit percentage range and additional regulatory milestones of up to $
48.0
million, including $
25.0
million upon FDA approval, and commercial milestones of up to $
15.0
million.
The Company accounted for the transaction as an asset acquisition as the set of acquired assets did not constitute a business and substantially all the fair value of the gross assets acquired was concentrated in a group of similar identifiable assets, namely, zilurgisertib. The Company determined that the intellectual property assets acquired did not have an alternative future use and were not deemed to be commercially viable. The Company recorded a $
16.4
million charge, representing the acquired IPR&D asset and the related transaction costs to acquired in-process research and development in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026.
Through June 30, 2026, no
milestones have been achieved.
Asset Purchase Agreement with Bluejay Therapeutics, Inc.
On January 23, 2026 (the “Closing Date”), the Company completed the acquisition of Bluejay (the “Bluejay Acquisition”). The aggregate merger consideration transferred and transferable related to the Bluejay Acquisition was comprised of (i) upfront equity consideration of
4,517,062
shares of the Company’s common stock, after deduction to satisfy applicable taxes, (ii) upfront cash consideration of $
241.2
million, net of cash acquired, (iii) equity consideration holdback of up to
522,375
shares of the Company’s common stock and cash consideration holdback of up to $
24.8
million, both payable to Bluejay security holders 12 months after the Closing Date, subject to reduction for potential indemnification and other obligations of Bluejay and, in certain cases, to satisfy applicable taxes, and (iv) up to $
1.0
million of cash consideration holdback payable to Bluejay security holders upon finalization of working capital adjustments, which are estimated to be paid approximately four months from the closing of the acquisition. Additionally, the Company is obligated to pay up to an aggregate amount of $
200.0
million upon the achievement of certain commercial milestones.
The Company accounted for the Bluejay Acquisition as an asset acquisition, as substantially all of the fair value of the gross assets acquired was concentrated in a single IPR&D asset. The net assets acquired were measured and recognized as an allocation of the transaction price based on their relative fair values as of the transaction date. The acquired IPR&D and related assembled workforce were determined to have no alternative future use and, accordingly, the cost of the acquisition of those assets were recorded as acquired in-process research and development expense as of the acquisition date. The Company estimated the fair value of the IPR&D asset using the discounted cash flow method. This approach incorporates estimates and assumptions related to the forecasted results including, but not limited to, estimates and assumptions regarding revenues, expenses, and discount rate to estimate future cash flows. During the six months ended June 30, 2026, the Company recorded a $
726.3
million charge, representing an acquired IPR&D asset with no alternative future use, to acquired in-process research and development, as well as stock-based compensation of $
34.7
million related to unvested Bluejay employee stock awards which were accelerated in contemplation of the Bluejay Acquisition, with $
19.3
million recorded in selling, general and administrative expenses and $
15.4
million in research and
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development expenses in the unaudited condensed consolidated statements of operations. In connection with the Bluejay Acquisition, the Company recorded $
44.8
million of net assets acquired.
The fair value of the consideration of approximately $
771.1
million, inclusive of the transaction costs incurred in connection with the Bluejay Acquisition, is summarized as follows (in thousands):
Equity consideration
$
415,271
Equity holdback - indemnity
47,112
Cash consideration, including cash paid in lieu of equity to satisfy taxes
274,814
Cash holdback - indemnity
23,721
Cash holdback - working capital
957
Transaction costs
9,201
Total purchase consideration
$
771,076
The cash consideration of $
274.8
million in the table above does not include the net effect of the cash and cash equivalents of $
54.3
million acquired as part of the transaction.
The above noted stock-based compensation is comprised as follows (in thousands):
Equity consideration
$
10,643
Cash consideration, including cash paid in lieu of equity to satisfy taxes
20,742
Equity holdback - indemnity
2,143
Cash holdback - indemnity and working capital
1,122
Total
$
34,650
Allocation of the consideration transferred to the net assets acquired was as follows (in thousands):
Assets acquired:
IPR&D
$
724,006
Assembled workforce
2,296
Cash and cash equivalents
54,335
Prepaid expenses and other current assets
4,258
Operating lease right-of-use asset
1,113
Other non-current assets
3,888
Total assets acquired
$
789,896
Liabilities assumed:
Accounts payable
1,589
Accrued expenses and other current liabilities
16,616
Operating lease liabilities, noncurrent
615
Total liabilities assumed
$
18,820
Net assets acquired
$
771,076
The allocated fair value of the acquired IPR&D and assembled workforce is a permanently non-deductible item for tax purposes.
Entities affiliated with Frazier Life Sciences, which are associated with a member of the Company’s board of directors, were Bluejay security holders.
Novartis License
Through the Bluejay Acquisition, the Company was assigned a license agreement with Novartis Pharma AG (“Novartis”) pursuant to which the Company obtained a worldwide license to develop and commercialize brelovitug from Novartis in June 2021. Under the terms of the license agreement, the Company is obligated to pay up to $
4.0
million in
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remaining development milestones and up to $
27.0
million in commercial milestones. The Company is also obligated to pay commercial royalties of mid-single digit percent of sales to Novartis. In addition, the license agreement contained a $
4.0
million business milestone payment in the event of a change of control which was payable upon the closing of the Bluejay Acquisition in January 2026. The accrued milestone was included in liabilities assumed at the closing of the Bluejay Acquisition. Through June 30, 2026, the Company paid the $
4.0
million change of control payment and no further milestones have been achieved.
License Agreement with Enthorin Therapeutics, LLC
In October 2024, the Company entered into a license agreement with Enthorin Therapeutics, LLC and Dart Neuroscience LLC (“Enthorin”), under which the Company acquired the worldwide rights to develop, manufacture and commercialize a compound designated as ENT-3379, renamed MRM-3379, in exchange for an upfront payment of $
7.5
million and up to an additional $
217.5
million upon the achievement of regulatory and sales-based milestones as well as mid-single digit percent royalties on any future sales of MRM-3379. Through June 30, 2026, no milestones have been achieved.
Asset Purchase Agreement with Travere Therapeutics, Inc.
On August 31, 2023, the Company completed the acquisition of assets of Travere Therapeutics, Inc. (“Travere”). In accordance with the terms and conditions of the Asset Purchase Agreement entered into with Travere, the Company purchased from Travere substantially all of the assets related to its business of development, manufacturing (including synthesis, formulation, finishing or packaging) and commercialization of the Bile Acid Medicines. The Company paid $
210.4
million upon closing of the transaction, and up to an additional $
235.0
million is payable upon the achievement of certain milestones based on specified amounts of annual net sales of the Bile Acid Medicines. As of June 30, 2026, the Company paid $
25.0
million for the achievement of product sales milestones associated with this agreement.
The Company is obligated to pay tiered royalties, based on licensing agreements acquired with the Bile Acid Medicines, with rates ranging from high single digit to mid-teens based on net sales of the Bile Acid Medicines.
Assignment and License Agreement with Shire International GmbH (Takeda)
In November 2018, the Company entered into an Assignment and License Agreement (the “Shire Agreement”) with Shire International GmbH (“Shire”), which was subsequently acquired by Takeda Pharmaceutical Company Limited (“Takeda”). Under the terms of the Shire Agreement, Shire granted the Company an exclusive, royalty bearing worldwide license to develop and commercialize its
two
product candidates, Livmarli and volixibat. As part of the Shire Agreement, the Company was assigned license agreements held by Shire with Satiogen Pharmaceuticals, Inc. (“Satiogen”), Pfizer Inc. (“Pfizer”) and Sanofi-Aventis Deutschland GmbH (“Sanofi”). The Company has the right to sublicense under the Shire Agreement and additionally has the right to sublicense under the Satiogen, Pfizer and Sanofi licenses subject to the terms of those license agreements.
The Company is obligated to pay Shire up to an aggregate of $
109.5
million upon the achievement of certain clinical development and regulatory milestones for Livmarli in certain indications and an additional $
25.0
million upon regulatory approval of Livmarli for each and every other indication. In addition, the Company is required to pay up to an aggregate of $
30.0
million upon the achievement of certain clinical development and regulatory milestones for volixibat solely for the first indication sought. Upon commercialization, the Company is obligated to pay Shire commercial milestones on total licensed products up to an aggregate of $
30.0
million. Through June 30, 2026 under this agreement, the Company paid or accrued $
101.5
million for the achievement of various clinical development, regulatory and commercial milestones.
The Company is also obligated to pay tiered royalties with rates ranging from low double-digits to mid-teens based upon annual worldwide net sales for all licensed products; however, these royalties are reduced in part by royalties due under the Satiogen and Sanofi licenses, as discussed below, related to Livmarli and volixibat, as applicable. The Company’s royalty obligations will continue on a licensed product-by-licensed product and country-by-country basis until the later to occur of the expiration of the last valid claim in a licensed patent covering the applicable licensed product in such country, expiration of any regulatory exclusivity for the licensed product in a country and
ten years
after the first commercial sale of a licensed product in such country. During the six months ended June 30, 2025, the Company achieved the $
10.0
million regulatory milestone associated with the approval of Livmarli for the treatment of cholestatic pruritus in patients with PFIC five years of age and older (now twelve months of age and older) by the FDA and the $
10.0
million regulatory milestone associated with the approval of Livmarli for the treatment of cholestatic pruritus in patients with PFIC three months and older by the European Medicines Agency, both of which were capitalized as intangible assets. During the six months ended June 30, 2025, the Company achieved a $
5.0
million development milestone related to maralixibat,
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which was recognized in acquired in-process research and development expense in the accompanying unaudited condensed consolidated statements of operations. In addition, as of December 31, 2025, the Company accrued $
10.0
million for the achievement of a commercial milestone associated with product sales, which was recognized as an intangible asset. There were
no
volixibat development and regulatory milestones achieved during the three and six months ended June 30, 2026 and 2025.
Pfizer License
Through the Shire Agreement, the Company was assigned a license agreement with Pfizer pursuant to which the Company obtained an exclusive, worldwide license to certain Pfizer know-how with a right to sublicense. Upon commercialization of any product utilizing the licensed product, the Company is required to pay to Pfizer a low single-digit royalty on net sales of product sold by the Company, its affiliates or sublicensees. The Company’s royalty obligations continue on a licensed product-by-licensed product basis until the eighth anniversary of the first commercial sale of such licensed product anywhere in the world.
Sanofi License
Through the Shire Agreement, the Company was assigned a license agreement with Sanofi pursuant to which the Company obtained an exclusive, worldwide license to certain patents and know-how with the right to sublicense to a third party subject to certain financial considerations. The Company is obligated to pay up to an aggregate of $
36.0
million upon the achievement of certain regulatory, commercialization and product sales milestones. Additionally, upon commercialization, the Company is required to pay tiered royalties in the mid to high single-digit range based upon net sales of licensed products sold by the Company and sublicensees in a calendar year, subject to adjustments in certain circumstances. The Company’s royalty obligations continue on a licensed product-by-licensed product and country-by-country basis until the later to occur of the expiration of the last valid claim in a licensed patent covering the applicable licensed product in such country and
ten years
after the first commercial sale of a licensed product in such country. Royalty obligations under the Sanofi license are creditable against the royalty obligations to Shire under the Shire Agreement. The Company has not paid milestone payments pursuant to this agreement for the periods presented. Through June 30, 2026,
no
milestones have been achieved.
7.
License Agreements
Licensing Agreement with Takeda
In September 2021, the Company entered into an exclusive licensing agreement with Takeda for the development and commercialization of Livmarli in Japan for ALGS, PFIC, and BA. Further, in October 2024, the parties entered into a commercial supply agreement. Under the terms of the agreements, Takeda is responsible for development and commercialization of Livmarli for licensed indications in Japan, while the Company is responsible for commercial supply to Takeda. In accordance with the agreements, in exchange for commercial inventory supply, the Company is eligible to receive a percentage of Takeda’s net sales, which range from high double digits declining to mid double digits over the first
four years
from commercial launch and thereafter remains at mid double digits. The Company records net product sales at the time control of the product is transferred, based on the estimated variable consideration.
8.
Leases
The Company has operating leases for office spaces in various global locations, including its headquarters in Foster City, California, the lease for which was entered into in January 2024 with an initial lease term of approximately
five years
(the “Initial Lease”). In January 2026, the Company amended the Initial Lease (the “Amended Agreement”) to expand its headquarters by approximately
19,400
square feet (the “Expanded Space”) with a lease term of approximately
five years
from the commencement date. The Amended Agreement also extends the lease term of the Initial Lease to be coterminous with the Expanded Space. The extension of the lease term of the Initial Lease resulted in the addition of $
3.4
million of right-of-use assets and lease liabilities during the six months ended June 30, 2026. The addition of the Expanded Space will result in approximately $
5.8
million of incremental base rent payments over the lease term at the time of lease commencement.
The following tables contain a summary of other information and the undiscounted future minimum payments pertaining to the Company’s operating leases that had commenced as of the end of the periods presented:
June 30, 2026
Weighted-average incremental borrowing rate
7.5
%
Weighted-average remaining lease term (in years)
4.9
years
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Undiscounted Rent Payments
as of June 30, 2026
(in thousands)
2026 (remaining six months)
$
1,557
2027
3,442
2028
2,875
2029
2,943
2030
2,719
Thereafter
1,821
Total undiscounted lease payments
15,357
Less: imputed interest
(
2,487
)
Total lease liability
$
12,870
Rent expense was $
0.8
million and $
1.6
million for the three and six months ended June 30, 2026, respectively, and $
0.6
million and $
1.2
million for the three and six months ended
June 30, 2025, respectively. Variable lease payments for operating expenses for the three and six months ended June 30, 2026 and June 30, 2025 were
not
material.
9.
Convertible Notes
As of June 30, 2026, the Company had outstanding fixed-rate convertible notes with varying maturities for an aggregate principal amount of $
769.0
million (collectively the “Notes”). The Notes are senior subordinated convertible obligations, and interest, where applicable, is payable in arrears, semi-annually. Except as described below, the 2029 Notes are described in Note 10 of the “Notes to Consolidated Financial Statements” in the Annual Report.
The Notes consisted of the following (in thousands):
June 30, 2026
December 31, 2025
4.00
% senior subordinated convertible notes due in May 2029
$
79,038
$
316,226
Unamortized debt discount and issuance costs
(
1,382
)
(
6,429
)
2029 Notes, net
77,656
309,797
0.00
% senior subordinated convertible notes due in June 2032
690,000
—
Unamortized debt discount and issuance costs
(
17,577
)
—
2032 Notes, net
672,423
—
Total convertible notes payable, net
$
750,079
$
309,797
Fair value of fixed rate convertible notes
(1)
:
2029 Notes
$
294,309
$
818,485
2032 Notes
746,815
—
Total fair value of fixed rate convertible notes
$
1,041,124
$
818,485
__________________
(1)
The fair values were determined based on the quoted price of the convertible notes in an inactive market on the last trading day of the reporting period and have been classified as Level 2 in the fair value hierarchy.
For the fourth quarter of 2024, for each of the quarters of 2025 and for the first and second quarters of 2026, the last reported sale price of the Company’s common stock exceeded
130
% of the conversion price of the 2029 Notes for more than
20
trading days during the
30
consecutive trading days ended on each respective quarter end. As a result, for the
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quarterly periods ended March 31, 2026 and June 30, 2026, respectively, the 2029 Notes were, and for the quarterly period ending September 30, 2026, the 2029 Notes are, convertible at the option of the holders of the 2029 Notes.
The Company amortizes issuance costs related to the issuance of the Notes to interest expense over the term of the Notes using the effective interest method. As of June 30, 2026, the remaining amortization period of the debt issuance costs was approximately
2.8
years and
5.9
years, respectively for the 2029 Notes and the 2032 Notes, and the effective interest rates were
4.6
% and
0.4
%, respectively for the 2029 Notes and the 2032 Notes.
The following table sets forth interest expense recognized related to the Notes (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Coupon interest expense
$
1,960
$
3,162
$
5,122
$
6,325
Amortization of debt discount and issuance costs
658
427
1,112
860
Total interest expense on convertible notes
$
2,618
$
3,589
$
6,234
$
7,185
2032 Notes
In May 2026, the Company issued $
690.0
million aggregate principal amount of its 2032 Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2032 Notes were issued pursuant to an Indenture (the “2032 Notes Indenture”), dated May 15, 2026, between the Company and U.S. Bank Trust Company, National Association, as trustee.
The Company received net proceeds of approximately $
672.0
million after deducting initial purchasers’ discounts and commissions and offering expenses.
The 2032 Notes are the Company’s senior, unsecured obligations and are (i) senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated to the 2032 Notes in right of payment; (ii) equal in right of payment to any of the Company’s indebtedness that is not so subordinated, including the 2029 Notes; (iii) effectively subordinated to any of the Company’s future secured indebtedness, to the extent of the value of the collateral securing such indebtedness; and (iv) structurally subordinated to all indebtedness and other liabilities, including trade payables, and, to the extent the Company is not a holder thereof, preferred equity, if any, of the Company’s subsidiaries.
The 2032 Notes do not bear interest and will mature on June 1, 2032, unless earlier converted by the noteholders, redeemed by the Company, or repurchased by the Company. Noteholders may convert all or a portion of their 2032 Notes only under the following circumstances:
(i)
during any calendar quarter, and only during such calendar quarter, commencing after the calendar quarter ending on September 30, 2026, if the last reported sale price per share of the Company’s common stock exceeds
130
% of the conversion price for each of at least
20
trading days, whether or not consecutive, during the
30
consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
(ii)
during the
five
consecutive business days immediately after any
10
consecutive trading day period if the trading price per $1,000 principal amount of 2032 Notes for each trading day of such period was less than
98
% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day;
(iii)
upon the occurrence of certain corporate events or distributions on the Company’s common stock, as described in the 2032 Notes Indenture;
(iv)
if the Company calls such 2032 Notes for redemption; and
(v)
at any time from March 1, 2032 until the close of business on the second scheduled trading day immediately before the maturity date.
The Company may settle conversions of the 2032 Notes by paying or delivering, as applicable, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The initial conversion rate is 7.1971 shares of common stock per $1,000 principal amount of 2032 Notes, which represents an initial conversion price of approximately $
138.94
per share of common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2032 Notes Indenture) occur, or if the Company calls any 2032 Notes for redemption, then the conversion rate will, in certain circumstances, be increased for
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a specified period of time. In no event will the conversion rate be increased to an amount that exceeds 9.3562 shares of common stock per $1,000 principal amount of 2032 Notes, subject to adjustment as provided in the 2032 Notes.
The Company may not redeem the 2032 Notes at its option at any time before June 6, 2029. The 2032 Notes are redeemable, in whole or in part, subject to the partial redemption limitation described below, at the Company’s option at any time, and from time to time, on or after June 6, 2029 and, in the case of any partial redemption, on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2032 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if (i) the 2032 Notes are freely tradable as of the date the Company sends the related redemption notice and all accrued and unpaid additional interest, if any, has been paid in full as of the first interest payment date occurring on or before the date the Company sends such notice; and (ii) the last reported sale price per share of the Company’s common stock exceeds
130
% of the conversion price on each of at least
20
trading days, whether or not consecutive, during the
30
consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice and on the trading day immediately before the date the Company sends such notice. In addition, calling any 2032 Notes for redemption will constitute a Make-Whole Fundamental Change with respect to that 2032 Notes, in which case the conversion rate applicable to the conversion of that 2032 Notes will be increased in certain circumstances if it is converted after it is called for redemption. The Company may not elect to redeem less than all of the outstanding 2032 Notes unless at least $
75.0
million aggregate principal amount of 2032 Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice.
If a “Fundamental Change”, as defined in the 2032 Notes, occurs, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their 2032 Notes at a cash repurchase price equal to the principal amount of the 2032 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.
The 2032 Notes Indenture contains customary events of default with respect to the 2032 Notes and provides that upon certain events of default occurring and continuing, the trustee may, and the trustee at the request of holders of at least
25
% in principal amount of the 2032 Notes shall, declare all principal and accrued and unpaid interest, if any, of the 2032 Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization involving the Company or a significant subsidiary, all of the principal of and accrued and unpaid interest, if any, on the 2032 Notes will automatically become due and payable.
2029 Notes
Induced conversions of the 2029 Notes
On May 12, 2026, the Company entered into privately negotiated exchange and repurchase transactions with certain noteholders of its 2029 Notes. Pursuant to these transactions, the Company paid $
474.7
million in cash, including accrued and unpaid interest of $
0.3
million, and issued
3,220,529
shares of the Company’s common stock, with such common stock having an aggregate fair value of $
329.1
million, in exchange for $
237.2
million aggregate principal amount of the 2029 Notes. The transactions were completed concurrently with the issuance of the Company’s 2032 Notes.
As part of the transactions, the Company extended limited-time inducement offers that provided noteholders with consideration, the fair value of which exceeded the value that would have been received under the original conversion terms of the 2029 Notes, resulting in incremental value to the noteholders. The fair value of the total consideration transferred was determined based on the quoted market price of the Company’s common stock on May 12, 2026, the date the inducement offers were accepted.
The transactions were accounted for as induced conversions. The Company recognized debt conversion inducement expense of $
11.7
million during the three and six months ended June 30, 2026, measured as the fair value of the incremental consideration transferred to noteholders in excess of the consideration issuable under the original conversion terms of the 2029 Notes. Debt conversion inducement expense is included in other (expense) income, net in the Company’s unaudited condensed consolidated statements of operations.
The carrying amount of the 2029 Notes subject to the transactions, including $
4.3
million of unamortized debt issuance costs, was transferred to equity with no gain or loss recognized. The exchange and repurchase transactions resulted in a decrease in additional paid-in capital of $
558.9
million.
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10.
Stockholders’ Equity
Common Stock
On January 23, 2026, immediately following the consummation of the Bluejay Acquisition, the Company completed the private placement of
3,385,149
shares of the Company’s common stock (“PIPE Shares”) and pre-funded warrants to purchase
536,412
shares of the Company’s common stock (the “Warrant Shares”) for aggregate net proceeds of approximately $
259.9
million, after estimated offering expenses of $
8.6
million. The purchase price per PIPE Share was $
68.48
and the purchase price per pre-funded warrant was $
68.4799
(which equals the purchase price of a PIPE Share, less $
0.0001
, the exercise price of each Warrant Share).
Each pre-funded warrant has an exercise price equal to $
0.0001
per underlying share of common stock. The pre-funded warrants are exercisable at any time after their original issuance and may be exercised at any time until exercised in full. The Company may not effect the exercise of any pre-funded warrants and the selling stockholder that holds pre-funded warrants (together with its affiliates and other attribution parties) may not exercise any portion of a pre-funded warrant to the extent that, immediately after giving effect to such exercise, the holder would own more than
9.99
% of the Company’s outstanding common stock, which percentage may be increased or decreased at the holder’s option (not to exceed
19.99
%) upon 61 days’ notice to the Company, subject to the terms of the pre-funded warrants. As of June 30, 2026,
none
of the Warrant Shares were exercised.
On August 12, 2025, the Company filed an automatic shelf registration statement on Form S-3 with the SEC, which became effective upon filing, pursuant to which the Company registered for sale from time to time in one or more offerings an unlimited amount of any combination of the Company’s common stock, preferred stock, debt securities and warrants, so long as the Company continues to satisfy the requirements of a “well-known seasoned issuer” under SEC rules. This automatic shelf registration statement will remain in effect for up to three years from the date it became effective. As of June 30, 2026, the Company had not issued any securities pursuant to the automatic shelf registration statement.
On November 2, 2023, the Company entered into a Sales Agreement (the “2023 Sales Agreement”) with Leerink and Cantor Fitzgerald & Co. (the “Sales Agents”), pursuant to which the Company may, from time to time, sell up to an aggregate amount of $
200.0
million of its common stock through the Sales Agents in an “at-the-market” offering. The Company is not required to sell shares under the 2023 Sales Agreement. Sales of the Company’s common stock, if any, under the 2023 Sales Agreement may be made in any transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act. The Company will pay a given designated Sales Agent a commission of up to
3.0
% of the aggregate gross proceeds of any shares of common stock sold through such Sales Agent pursuant to the 2023 Sales Agreement. As of June 30, 2026, the Company had not issued any securities pursuant to the 2023 Sales Agreement.
Common Stock Reserved for Issuance
Common stock reserved for issuance is as follows:
As of June 30,
2026
Stock options, restricted stock units and performance stock units issued and outstanding
11,135,862
Reserved for future stock awards or option grants
4,223,662
Reserved for employee stock purchase plan
2,230,820
Common stock issuable upon conversion of convertible notes including make-whole provision
9,817,659
Common stock issuable upon exercise of Warrant Shares
536,412
Common stock held back in connection with asset acquisition
522,375
28,466,790
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11.
Stock-Based Compensation
Stock Options
The following table summarizes stock option activity during the six months ended June 30, 2026 (in thousands, except share and per share data):
Number of
Awards
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life
(in Years)
Aggregate
Intrinsic
Value
Outstanding as of December 31, 2025
8,958,491
$
25.41
6.5
$
479,984
Granted
903,989
$
100.66
Exercised
(
889,942
)
$
24.09
Canceled and forfeited
(
100,784
)
$
51.08
Outstanding as of June 30, 2026
8,871,754
$
32.92
6.4
$
746,555
Vested and exercisable as of June 30, 2026
5,889,327
$
20.15
5.3
$
570,796
The weighted-average grant date fair value per share of stock options granted during the six months ended June 30, 2026 and 2025 was $
58.44
and $
31.62
per share, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2026 and 2025 was $
65.2
million and $
34.1
million, respectively. Intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the common stock for the options that had exercise prices that were lower than the per share fair value of the common stock on the date of exercise. As of June 30, 2026, the total unrecognized stock-based compensation related to unvested stock option awards granted was $
99.8
million, which the Company expects to recognize over a weighted-average period of approximately
2.8
years.
The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the expected stock price volatility was based upon the weighting of the Company’s historical volatility and the historical volatility of a peer group of publicly traded companies. The historical volatility data was computed using the daily closing prices for the Company’s and its peer companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is
zero
based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.
The following assumptions were used to estimate the fair value of stock option awards granted during the following periods:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Expected term (in years)
5.50
-
6.08
5.50
-
6.08
5.50
-
6.08
5.50
-
6.08
Expected volatility
52.68
%-
56.81
%
69.68
%-
70.37
%
52.68
%-
67.69
%
69.68
%-
71.31
%
Risk-free interest rate
4.04
%-
4.36
%
4.05
%-
4.18
%
3.68
%-
4.36
%
4.05
%-
4.65
%
Expected dividend yield
—
—
—
—
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Restricted Stock Units
The following table summarizes the activity under the Company’s restricted stock units for the six months ended June 30, 2026:
Number of
Awards
Weighted-Average Grant Date
Fair Value per Award
Unvested and outstanding as of December 31, 2025
1,415,919
$
39.08
Granted
966,258
$
100.61
Vested
(
544,154
)
$
34.06
Canceled and forfeited
(
56,443
)
$
64.44
Unvested and outstanding as of June 30, 2026
1,781,580
$
73.19
The fair value of restricted stock unit awards granted to employees and nonemployees is equal to the closing market price of the Company’s common stock on the grant date.
As of June 30, 2026, the total unrecognized stock-based compensation related to restricted stock unit awards granted was $
106.6
million, which the Company expects to recognize over a weighted-average period of approximately
2.4
years.
Performance Stock Units
The fair value of performance stock units (“PSUs”) granted to employees is equal to the closing market price of the Company’s common stock on the grant date. PSUs vest only if certain specified sales-based criteria are achieved and the employees continue service with the Company. As of June 30, 2026, certain specified sales-based criteria were deemed probable of achievement or already achieved. Stock-based compensation for PSUs is recognized over the service period beginning in the period the Company determines it is probable that the performance criteria will be achieved. PSUs generally vest over a
three-year
service period. The number of shares earned is adjusted based on the specified sales-based criteria achievement.
The following table summarizes the activity under the Company’s performance stock units for the six months ended June 30, 2026:
Number of
Awards
Weighted-Average Grant Date
Fair Value per Award
Unvested and outstanding as of December 31, 2025
353,743
$
34.91
Granted
388,034
$
73.31
Vested
(
254,279
)
$
25.75
Canceled and forfeited
(
4,970
)
$
100.85
Unvested and outstanding as of June 30, 2026
482,528
$
69.94
As of June 30, 2026, the total unrecognized stock-based compensation related to performance stock units granted was $
20.5
million, which the Company expects to recognize over a weighted-average period of approximately
1.8
years.
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Compensation Expense
Total stock-based compensation is reflected in the accompanying unaudited condensed consolidated statements of operations as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Selling, general and administrative
$
15,887
$
10,606
$
48,824
$
20,849
Research and development
14,227
7,624
38,416
12,853
Cost of sales
461
238
809
569
Total
$
30,575
$
18,468
$
88,049
$
34,271
Stock-based compensation for the six months ended June 30, 2026 includes $
19.3
million and $
15.4
million in selling, general and administrative and research and development, respectively, related to unvested Bluejay employee stock awards which were accelerated in contemplation of the Bluejay Acquisition (refer to Note 6). This amount was recognized as stock-based compensation expense of the post-combination entity immediately after closing of the Bluejay Acquisition, as the related consideration paid and payable is not subject to any future service period.
12.
Segment Reporting
The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, manages the Company’s operations and business as
one
operating
segment
and allocates resources to operations of the Company on an entity-wide basis. The CODM assesses performance of the Company and determines resource allocation primarily based on net product sales and income (loss) from operations on a consolidated basis. The CODM uses income (loss) from operations to monitor budget versus actual results and considers any adjustments and actions required for good fiscal management.
The Company’s CODM is regularly provided with entity-wide expense categories similar to those found in the consolidated statements of operations, as well as the following (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue:
Product sales, net
$
176,243
$
127,785
$
336,125
$
239,370
Less:
Cost of sales (excluding intangible amortization)
23,663
17,527
45,783
34,651
General and administrative expenses (excluding stock-based compensation)
17,378
13,090
36,553
24,771
Commercialization and Medical Affairs expenses (excluding stock-based compensation)
48,204
39,590
92,422
75,372
Research and development expenses (excluding stock-based compensation)
76,301
38,443
150,022
74,258
Acquired IPR&D
16,435
—
742,737
5,000
Stock-based compensation
30,114
18,230
87,240
33,702
Intangible amortization
6,685
5,894
13,370
11,788
Loss from operations
$
(
42,537
)
$
(
4,989
)
$
(
832,002
)
$
(
20,172
)
13.
Commitments and Contingencies
Certain of the Company’s contractual arrangements with contract manufacturing organizations require binding forecasts or commitments to purchase minimum amounts for the manufacture of drug product supply, which may be material to the Company's unaudited condensed consolidated financial statements.
The Company is subject to potential liabilities under government regulations and various claims and legal actions that are pending or may be asserted from time-to-time. These matters arise in the ordinary course and conduct of the Company’s business and may include, for example, commercial, intellectual property, and employment matters. The Company intends to defend itself vigorously in such matters and, when warranted, take legal action against others.
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Furthermore, the Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its unaudited condensed consolidated financial statements.
An estimated loss contingency is accrued in the Company’s unaudited condensed consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not accrue amounts for liabilities that it does not believe are probable. Litigation is inherently unpredictable, and unfavorable resolutions could occur. As a result, assessing contingencies is highly subjective and requires judgment about future events. During the periods presented, the Company has not recorded any accrual for loss contingencies associated with government regulations, claims or legal actions, determined that an unfavorable outcome is probable or reasonably possible, or determined that the amount or range of any possible loss is reasonably estimable.
Legal Proceedings
On December 19, 2025, the Company, along with Satiogen Pharmaceuticals, Inc. and Shire Human Genetic Therapies, Inc. as co-plaintiffs, filed
four
complaints against Sandoz Inc. (“Sandoz”); Annora Pharma Private Limited, Hetero Labs Limited, and Hetero USA Inc. (together, “Hetero”); Zenara Pharma Private Limited and Biophore India Pharmaceuticals Private Limited (together, “Biophore”); and Zydus Lifesciences Global FZE, Zydus Lifesciences Limited, and Zydus Pharmaceuticals (USA) Inc. (together, “Zydus”) (all collectively, “Defendants”) in the U.S. District Court for the District of Delaware (the “LIVMARLI Patent Litigations”), alleging infringement of certain Orange Book listed patents covering LIVMARLI (the “LIVMARLI Patents”). The LIVMARLI Patent Litigations were initiated, in accordance with the procedures set out in the Hatch-Waxman Act, following the submission by Defendants of ANDAs directed to generic versions of LIVMARLI. Defendants’ ANDAs seek approval to market generic versions of LIVMARLI prior to the expiration of one or more of the LIVMARLI Patents and allege that one or more of the LIVMARLI Patents are invalid, unenforceable, and/or not infringed. The Company is seeking, among other relief, an order that the effective date of any FDA approval of Defendants’ ANDAs be no earlier than the expiration of the asserted patents listed in the Orange Book, and such further and other relief as the court may deem appropriate. Based on the Company initiating the litigation, the Defendants are subject to a
30
-month stay of final regulatory approval through March 29, 2029, preventing them from marketing generic versions of LIVMARLI during that time. On February 20, 2026, Sandoz asserted counterclaims against the Company and its co-plaintiffs seeking declaratory judgments of non-infringement and invalidity with respect to certain LIVMARLI Patents. On March 30, 2026, Biophore asserted counterclaims against the Company and its co-plaintiffs seeking declaratory judgments of non-infringement and invalidity with respect to certain LIVMARLI Patents. On April 22, 2026, the Company had listed newly issued U.S. Patent No. 12,599,602 in the Orange Book, and on May 18, 2026, the Company, together with its co-plaintiffs filed amended complaints against Sandoz, Hetero, Biophore and Zydus asserting the ’602 patent. On June 1, 2026, Biophore asserted a counterclaim seeking declaratory judgment of non-infringement and invalidity with respect to the ’602 patent. On June 17, 2026, Sandoz asserted a counterclaim seeking declaratory judgment of non-infringement and invalidity with respect to the ’602 patent. The Company and its co-plaintiffs have denied all asserted declaratory judgment claims. On April 16, 2026, the Court ordered that the
four
pending cases against Sandoz, Hetero, Biophore and Zydus be consolidated for pretrial purposes. The Court issued a scheduling order on May 19, 2026. A Markman hearing is set for April 21, 2027. Trial in the LIVMARLI Patent Litigations is set for September 18, 2028. Discovery is ongoing. The Company cannot make any predictions about the final outcome of these matters or the timing thereof.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K (“Annual Report”) for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (“SEC”) on February 25, 2026. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “Mirum,” “we,” “us” and “our” refer to Mirum Pharmaceuticals, Inc. and its consolidated subsidiaries.
Forward-Looking Statements
In addition to historical financial information, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” under Part II, Item 1A below. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will” or the negative of these terms or other similar expressions.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements
.
Overview
We are a biopharmaceutical company dedicated to transforming the treatment of rare diseases. We have three approved medicines: LIVMARLI® (maralixibat) (“Livmarli”), Cholbam® (cholic acid) capsules (“Cholbam”), and CTEXLI® (chenodiol) tablets (“Ctexli”).
Livmarli is a novel, orally administered, minimally-absorbed ileal bile acid transporter (“IBAT”) inhibitor (“IBATi”) that is approved for the treatment of cholestatic pruritus in patients with Alagille syndrome (“ALGS”) in the United States (“U.S.”), the European Union (“EU”) and various other countries around the world and for cholestatic pruritus in patients with progressive familial intrahepatic cholestasis (“PFIC”) in the U.S. and certain other countries and for the treatment of PFIC in the EU. We market and commercialize Livmarli in the U.S., Canada and certain countries in Europe through our specialized and focused commercial team. We have also entered into license and distribution agreements with several rare disease companies for the commercialization of Livmarli in additional countries. In March 2025, our partner Takeda received approval from the Japanese Ministry of Health, Labour, and Welfare for Livmarli for the treatment of cholestatic pruritus in patients with ALGS and PFIC.
We market and commercialize Ctexli and Cholbam (also known as Kolbam) (and together with chenodiol, the “Bile Acid Medicines”) in the U.S. directly and indirectly in certain foreign markets. The U.S. Food and Drug Administration (the “FDA”) approved Cholbam in March 2015, as the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects, and for adjunctive treatment of patients with peroxisomal disorders, including peroxisome biogenesis disorder-Zellweger spectrum disorder (“PBD-ZSD”). Ctexli received FDA approval for the treatment of adults with cerebrotendinous xanthomatosis (“CTX”) in February 2025.
We are advancing our product candidate, volixibat, a novel, oral, minimally-absorbed agent designed to inhibit IBAT, for the treatment of adult patients with cholestatic liver diseases. We are developing volixibat in the setting of primary sclerosing cholangitis (“PSC”) and primary biliary cholangitis (“PBC”), and in October 2024, we announced that the FDA granted Breakthrough Therapy designation for volixibat as a potential treatment for cholestatic pruritus in patients with PBC and recently completed enrollment and expect topline data in the first quarter of 2027. We announced topline results for the VISTAS Phase 2b clinical trial in PSC in May 2026. Based on these results, FDA granted Breakthrough Therapy designation for volixibat in cholestatic pruritus due to PSC. We completed a pre-NDA meeting with FDA in which the agency recommended a Phase 3 study of volixibat in PSC. We believe the VISTAS study and supporting data can support an NDA review and we plan to discuss a potential filing package with FDA as part of our planned breakthrough therapy Type B meeting. We now expect to submit a potential New Drug Application (“NDA”) to the FDA in the first half of 2027.
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In addition, we are developing Livmarli for certain rare cholestatic conditions through the Phase 3 EXPAND study, which we initiated in the fourth quarter of 2024. We completed enrollment of the EXPAND study in the first half of 2026 with topline data expected in the fourth quarter of 2026.
In October 2024, we completed a license agreement with Enthorin Therapeutics, LLC and Dart Neuroscience LLC granting us the worldwide right to develop and commercialize MRM-3379, an allosteric inhibitor of Phosphodiesterase 4D (“PDE4D”). We are currently enrolling patients in the BLOOM Phase 2 clinical study of MRM-3379 in Fragile-X Syndrome (“FXS”) and expect topline data in 2027.
On January 23, 2026, we completed the acquisition (the “Bluejay Acquisition”) of Bluejay Therapeutics, Inc. (“Bluejay”) and its lead product candidate brelovitug (BJT-778). We are advancing brelovitug for the treatment of chronic hepatitis D virus (“HDV”) infection. Brelovitug is a fully human IgG1 monoclonal antibody that binds the hepatitis B surface antigen, thereby clearing virions and subviral particles and preventing HDV infection and replication. Brelovitug has been granted FDA Breakthrough Therapy designation, EMA Priority Medicines (“PRIME”) scheme designation and European Commission orphan medicinal product designation. Brelovitug is currently being evaluated in the global AZURE clinical program with topline results from the AZURE-1 and AZURE-4 registration-enabling clinical trials expected in the third and fourth quarter of 2026, respectively, and top-line results from the AZURE-2 and AZURE-3 registration-enabling clinical trials expected by the first half of 2028. We believe that the results from the AZURE-1 and AZURE-4 trials may support a potential biologics license application (“BLA”) submission to the FDA for brelovitug in HDV in the first half of 2027 followed by a potential approval and subsequent commercial launch, if approved, in the second half of 2027 in the U.S.
In April 2026, we entered into an agreement with Incyte Corporation (“Incyte”) whereby we obtained the right to develop and commercialize zilurgisertib. Zilurgisertib is an oral small molecule ALK2 inhibitor in development for the treatment of fibrodysplasia ossificans progressiva. The FDA has accepted for review Incyte’s NDA with a PDUFA date of September 26, 2026.
To date, we have focused primarily on acquiring and in-licensing our product candidates, organizing and staffing our company, business planning, raising capital, advancing our product candidates through clinical development, preparing for commercialization of our product candidates, commercializing our approved medicines, and conducting business development activities relating to, among other things, portfolio expansion through collaborations and acquisitions.
Financial Overview
Our net loss was $67.2 million and $5.9 million for the three months ended June 30, 2026 and 2025, respectively, and $857.4 million and $20.5 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $1.5 billion, compared to $667.5 million as of December 31, 2025. As of June 30, 2026, we had unrestricted cash, cash equivalents and investments of $561.3 million, compared to unrestricted cash, cash equivalents and investments of $391.4 million as of December 31, 2025.
We anticipate we will continue to generate net losses for the foreseeable future as we continue commercial activities for our approved medicines, conduct our ongoing and planned clinical trials, seek regulatory approvals for our product candidates and make potential milestone payments to the licensors and other third parties from whom we have in-licensed or acquired our product candidates. We expect that total product sales of our approved medicines will continue to increase on an annual basis; however, due to large periodic orders from Takeda and our distributors, our product revenue may experience quarterly fluctuations. Additionally, our product revenues from Takeda are based upon variable consideration estimates. If actual results vary from our estimates, we will make adjustments in the period when such variances become known. As a result, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year.
We expect to satisfy future cash needs through existing capital balances, revenue from our approved medicines and through a combination of equity offerings, debt financings or other capital sources, collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise additional capital when needed, we could be forced to delay, limit, reduce or terminate the development of one or more of our product candidates or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
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Components of Results of Operations
Revenue
Product Sales, Net
We have three approved medicines: Livmarli, Cholbam and Ctexli. We expect total product sales of our approved medicines will continue to increase on an annual basis.
Our U.S. revenue from product sales, net further depends on our prescription mix of commercial payors and governmental programs. We expect our prescription mix and resulting gross to net adjustment in the U.S. to remain materially consistent. Our revenue from product sales is recognized when the control of the product is transferred. Under our license agreement with Takeda as well as agreements with distributors, we may receive large periodic orders for our products. The timing of these orders can be inconsistent and can create significant quarter-to-quarter variation in product sales. In addition, we recognize our best estimate of the consideration that we expect to receive when control of the inventory is transferred to our licensed partners and distributors. Such estimates may be complex and include estimates as to if and when our distributors and licensed partner’s sales in the market will occur. Estimates are reviewed and updated quarterly as additional information, including in-market pricing and sales information of our authorized distributors and licensed partners, becomes known which may cause variability of quarterly revenue particularly during periods of product launch.
Although we expect product revenues to increase as we continue commercial activities for our approved medicines, we may not achieve commercial success. Certain of our approved medicines, including the Bile Acid Medicines, are subject to immediate competition from compounded and generic entrants, as the abbreviated new drug application (“ANDA”) and NDA for these drug products have no remaining or current patent exclusivity. Chenodiol is standard of care for the treatment of CTX in the U.S. and was commercialized with a medical necessity recognition by the FDA until February 2025. We submitted an NDA for chenodiol for the treatment of CTX in 2024 and received FDA approval for the treatment of adults with CTX in February 2025, which is now commercialized under the brand name Ctexli. The FDA has granted orphan exclusivity for chenodiol for the treatment of CTX.
Operating Expenses
Cost of Sales
Cost of sales consist of raw materials, third-party manufacturing costs, personnel, facility and other costs of manufacturing commercial products, transportation and freight, amortization of finite-lived intangible assets and royalty payments payable on net sales of our approved medicines under licensing agreements. Cost of sales may also include period costs related to certain manufacturing services and charges for inventory valuation reserves. In addition, we have firm commitments for the purchase of minimum order quantities for active pharmaceutical ingredients (“APIs”). We periodically evaluate these firm commitments to determine if these commitments are in excess of our needs. If any net loss is determined, we record a charge to cost of sales in the period identified.
For our current approved products, we expect cost of sales to increase in the future mainly due to variable costs associated with increased product sales such as royalties payable and inventory costs. We expect cost of sales to remain approximately unchanged as a percent of product sales in the future.
Research and Development Expenses
Research and development expenses primarily relate to clinical development and manufacturing activities of our product candidates. Our research and development expenses include, among other things:
•
salaries and related expenses for employee personnel, including benefits, travel and expenses related to stock-based compensation granted to personnel in development functions;
•
external expenses paid to clinical trial sites, contract research organizations (“CROs”) and consultants that conduct our clinical trials;
•
expenses related to drug formulation development and the production of clinical trial supplies, including fees paid to contract manufacturers;
•
licensing milestone payments related to development or regulatory events;
•
expenses related to non-clinical studies;
•
expenses related to compliance with drug development regulatory requirements; and
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•
other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of equipment, and other supplies.
We expense research and development costs as incurred. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. Upfront payments, research and development funding and milestone payments made to third parties in connection with licenses and research and development collaborations are expensed as incurred.
For the six months ended June 30, 2026, we recorded a one-time stock-based compensation expense within research and development expense of $15.4 million related to unvested Bluejay employee stock awards which were accelerated in contemplation of the Bluejay Acquisition.
We expect our research and development expense will increase significantly in the future, excluding the one-time stock-based compensation expense in connection with the Bluejay Acquisition discussed above, as we continue to develop our volixibat, brelovitug and MRM-3379 product candidates and execute the EXPAND label expansion study for Livmarli.
Acquired In-Process Research and Development
Acquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed in-process research and development (“IPR&D”) projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and pre-commercialization milestone payments related to various in-licensing arrangements and the costs of rights to IPR&D projects.
Selling, General and Administrative Expense
Sales and marketing expense, which is a component of selling, general and administrative expense, primarily consisted of employee-related expenses for our sales group, brand marketing, patient support groups and pre-commercialization expenses related to our product candidates. General and administrative expense, which is a component of selling, general and administrative expense, primarily consists of corporate support and other administrative expenses, including employee-related expenses.
For the six months ended June 30, 2026, we recorded a one-time stock-based compensation expense within selling, general and administrative expense of $19.3 million related to unvested Bluejay employee stock awards which were accelerated in contemplation of the Bluejay Acquisition.
We anticipate that our selling, general and administrative expenses will increase in the future, excluding the one-time stock-based compensation expense in connection with the Bluejay Acquisition discussed above, to support our continued commercialization efforts of our current approved medicines in the U.S. and internationally as well as increased costs of operating as a global commercial stage biopharmaceutical public company. Additionally, if we receive approval for any of our future product candidates, we will incur increased selling, general and administrative expenses to support those commercialization activities. These increases will likely include increased costs related to hiring of additional personnel and fees to outside consultants to support further marketing, legal, tax, planning and accounting activities.
Interest Income
Interest income consists of interest earned on our cash equivalents and investments.
Interest Expense
We incur interest expense on our convertible notes. Interest on our convertible notes consists of a 4.00% per annum fixed rate of interest on our 4.00% convertible senior notes due 2029 (the “2029 Notes”) and amortization of debt discount and issuance costs on both the 2029 Notes and our 0.00% convertible senior notes due 2032 (the “2032 Notes”). The 2032 Notes do not have coupon interest.
Other Expense, Net
Other expense, net consists of gain or loss from remeasurement of the liability associated with the common stock issuable in connection with the Bluejay Acquisition after the satisfaction of certain indemnification obligations that may arise during the 12-month period following the asset acquisition date, as well as inducement expense in connection with the exchange and repurchase of a portion of the 2029 Notes in May 2026.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and our discussion and analysis of our financial condition and operating results require
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our management to make judgments, assumptions and estimates that affect the amounts reported, including the amount of assets, liabilities, expenses and the disclosure of contingent assets and liabilities. Note 2 of the “Notes to Consolidated Financial Statements” in our audited consolidated financial statements included in our Annual Report describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. Management bases its estimates on historical experience, known trends and events, and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions.
There have been no significant changes during the three and six months ended June 30, 2026, except as described below, in our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report.
Acquisitions, including Intangible Assets and Contingent Consideration
Acquisitions of businesses are accounted for using the acquisition method of accounting. We allocate the purchase price of acquired businesses to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets and acquired IPR&D assets, particularly in the forecasts of future operating results that are used in the discounted cash flow valuation models. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill.
Intangible assets are measured at their fair values as of the acquisition date or, in the case of commercial milestone payments, the date they become due. The evaluation of intangible assets includes assessing the amortization period for which the asset is expected to contribute to our future cash flows. Intangible assets with finite useful lives are amortized over their estimated useful lives on a straight-line basis. We test our finite lived intangible assets for impairment annually or if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If it is determined that the asset is impaired, the carrying value is written down to its estimated fair value, with the related impairment charge recognized in the consolidated statements of operations in the period in which the impairment occurs.
In connection with certain acquisitions, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. Contingent consideration resulting from a business combination is recorded at its fair value on the acquisition date. Each reporting period thereafter, these obligations are revalued and increases or decreases in their fair value are recorded in the statements of operations until such time that the payment is made.
If it is determined that the net assets acquired do not meet the definition of a business combination under the acquisition method of accounting or if substantially all of the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets, the transaction is accounted for as an asset acquisition using the cost accumulation method. In an asset acquisition, no goodwill is recognized and contingent consideration generally is not recognized at the acquisition date. Upfront payments allocated to IPR&D projects at the acquisition date and subsequent pre-commercialization milestone payments are expensed as incurred in the statements of operations unless there is an alternative future use.
Recent Accounting Pronouncements
A description of recent accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
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Results of Operations for the Three Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30,
Change
2026
2025
Revenue:
Product sales, net
$
176,243
$
127,785
$
48,458
Operating expenses:
Cost of sales
30,348
23,421
6,927
Research and development
90,528
46,067
44,461
Acquired in-process research and development
16,435
—
16,435
Selling, general and administrative
81,469
63,286
18,183
Total operating expenses
218,780
132,774
86,006
Loss from operations
(42,537)
(4,989)
(37,548)
Other income (expense):
Interest income
3,851
3,033
818
Interest expense
(2,618)
(3,589)
971
Other (expense) income, net
(24,234)
86
(24,320)
Net loss before provision for income taxes
(65,538)
(5,459)
(60,079)
Provision for income taxes
1,689
402
1,287
Net loss
$
(67,227)
$
(5,861)
$
(61,366)
Product Sales, Net
Product sales, net was $176.2 million for the three months ended June 30, 2026, compared to $127.8 million for the three months ended June 30, 2025.
The following table disaggregates total Product sales, net (in thousands):
Three Months Ended June 30,
2026
2025
Change
Product sales, net:
Livmarli
$
128,721
$
88,160
$
40,561
Bile Acid Medicines
47,522
39,625
7,897
Total product sales, net
$
176,243
$
127,785
$
48,458
Livmarli product sales of $128.7 million for the three months ended June 30, 2026 represented an increase of $40.6 million from the three months ended June 30, 2025. This increase was largely driven by increased sales in the U.S. for both the ALGS and especially the PFIC indications and to a lesser extent an increase in rest of world sales from direct markets and our distributors and license partner sales.
Bile Acid Medicines sales of $47.5 million for the three months ended June 30, 2026, represented an increase of $7.9 million from the three months ended June 30, 2025. This increase was driven by new patient starts for both Cholbam and Ctexli.
Cost of Sales
For the three months ended June 30, 2026, cost of sales was $30.3 million, compared to $23.4 million for the three months ended June 30, 2025. The increase in cost of sales was primarily a result of increases in royalty expenses of $5.0 million on net sales of Livmarli and the Bile Acid Medicines under licensing agreements and $1.1 million of general supply chain support costs.
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Research and Development Expenses
The following table summarizes the period-over-period changes in research and development expenses relating to our product candidates in development for the periods indicated (in thousands):
Three Months Ended June 30,
Change
2026
2025
Product-specific costs:
Livmarli
$
2,536
$
3,321
$
(785)
Volixibat
15,175
12,550
2,625
MRM-3379
3,886
2,739
1,147
Brelovitug
28,776
—
28,776
Non product-specific costs:
Stock-based compensation
14,227
7,624
6,603
Personnel
17,562
14,604
2,958
Other
8,366
5,229
3,137
Total research and development expenses
$
90,528
$
46,067
$
44,461
Research and development expenses were $90.5 million for the three months ended June 30, 2026, an increase of $44.5 million compared to the three months ended June 30, 2025. The increase was primarily due to:
•
for brelovitug, an increase of $28.8 million primarily related to expenses associated with clinical manufacturing and BLA enabling activities and expenses associated with conduct of the AZURE clinical trials; and
•
for personnel related and stock-based compensation expenses, an aggregate increase of $9.6 million, due to increased employee headcount and equity award grants, including incremental headcount assumed in our acquisition of Bluejay, to support our development pipeline.
Acquired In-Process Research and Development
During the three months ended June 30, 2026, we recorded a $16.4 million charge, representing an acquired IPR&D asset with no alternative future use related to the license of worldwide rights to zilurgisertib.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $81.5 million for the three months ended June 30, 2026, an increase of $18.2 million compared to the three months ended June 30, 2025. The increase was primarily due to an increase of $8.2 million in personnel and other compensation related expenses, including an increase of $5.3 million in stock-based compensation, reflecting an increase in the number of our selling, marketing and administrative employees to support commercial activities for our approved medicines, $5.9 million sales, marketing and advertising expenses, $2.4 million of legal, accounting and other outside services and $1.9 million associated with the Mirum Access Plus patient services program.
Other (expense) income,net
Other (expense) income, net for the three months ended June 30, 2026 was an expense primarily related to the remeasurement of the fair value of the liability associated with stock issuable in the Bluejay Acquisition of $12.9 million and inducement expenses of $11.7 million incurred in connection with the exchange and repurchase of a portion of the 2029 Notes.
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Results of Operations for the Six Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025 (in thousands):
Six Months Ended June 30,
Change
2026
2025
Revenue:
Product sales, net
$
336,125
$
239,370
$
96,755
Operating expenses:
Cost of sales
59,153
46,439
12,714
Research and development
188,438
87,111
101,327
Acquired in-process research and development
742,737
5,000
737,737
Selling, general and administrative
177,799
120,992
56,807
Total operating expenses
1,168,127
259,542
908,585
Loss from operations
(832,002)
(20,172)
(811,830)
Other income (expense):
Interest income
7,252
6,056
1,196
Interest expense
(6,234)
(7,185)
951
Other (expense) income, net
(24,234)
2,194
(26,428)
Net loss before provision for income taxes
(855,218)
(19,107)
(836,111)
Provision for income taxes
2,164
1,431
733
Net loss
$
(857,382)
$
(20,538)
$
(836,844)
Product Sales, Net
Product sales, net was $336.1 million for the six months ended June 30, 2026, compared to $239.4 million for the six months ended June 30, 2025.
The following table disaggregates total Product sales, net (in thousands):
Six Months Ended June 30,
2026
2025
Change
Product sales, net:
Livmarli
$
242,525
$
161,384
$
81,141
Bile Acid Medicines
93,600
77,986
15,614
Total product sales, net
$
336,125
$
239,370
$
96,755
Livmarli product sales of $242.5 million for the six months ended June 30, 2026 represented an increase of $81.1 million from the six months ended June 30, 2025. This increase was largely driven by increased sales in the U.S. for both the ALGS and especially the PFIC indications and to a lesser extent an increase in rest of world sales from direct markets and our distributors and license partner sales.
Bile Acid Medicines sales of $93.6 million for the six months ended June 30, 2026 represented an increase of $15.6 million from the six months ended June 30, 2025. This increase was driven by new patients for both Cholbam and Ctexli.
Cost of Sales
For the six months ended June 30, 2026, cost of sales was $59.2 million, compared to $46.4 million for the six months ended June 30, 2025. The increase in cost of sales was primarily a result of increases in royalty expenses of $10.1 million on net sales of Livmarli and the Bile Acid Medicines under licensing agreements, $2.9 million of general supply chain support costs and amortization expense of $1.6 million associated with capitalized sales milestone payments under our license agreements. These increases were partially offset by a $2.3 million decrease primarily associated with excess purchase commitments for APIs associated with Ctexli, which were recorded during the six months ended June 30, 2025.
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Research and Development Expenses
The following table summarizes the period-over-period changes in research and development expenses relating to our product candidates in development for the periods indicated (in thousands):
Six Months Ended June 30,
Change
2026
2025
Product-specific costs:
Livmarli
$
6,187
$
8,563
$
(2,376)
Volixibat
32,894
24,656
8,238
MRM-3379
8,799
3,448
5,351
Brelovitug
49,568
—
49,568
Non product-specific costs:
Stock-based compensation
38,416
12,853
25,563
Personnel
34,910
25,988
8,922
Other
17,664
11,603
6,061
Total research and development expenses
$
188,438
$
87,111
$
101,327
Research and development expenses were $188.4 million for the six months ended June 30, 2026, an increase of $101.3 million compared to the six months ended June 30, 2025. The increase was primarily due to:
•
for volixibat programs, an increase of $8.2 million, primarily due to increased expenses associated with conduct of the PBC trial;
•
for MRM-3379, an increase of $5.4 million, primarily due to our Phase 2 study in FXS and non-clinical studies;
•
for brelovitug, which we acquired during the six months ended June 30, 2026, an increase of $49.6 million primarily related to expenses associated with clinical manufacturing and BLA enabling activities and expenses associated with conduct of the AZURE clinical trials; and
•
for personnel related and stock-based compensation expenses, an aggregate increase of $34.5 million, of which $15.4 million is due to a one-time expense relating to unvested Bluejay employee stock awards which were accelerated in contemplation of the Bluejay Acquisition and $19.1 million due to increased employee headcount and equity award grants to support our development pipeline.
Acquired In-Process Research and Development
During the six months ended June 30, 2026, we recorded a $742.7 million charge, representing an acquired IPR&D asset with no alternative future use of $726.3 million and $16.4 million related to the Bluejay Acquisition and the agreement with Incyte, respecti