Company: MIRM
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001759425-25-000054
Chunk: 419

Company: Mirum Pharmaceuticals, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 8
Chunk 419
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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. As of the date of our acquisition of the Bile Acid Medicines from Travere, inventory acquired was valued at its fair value. As a result, our cost of sales exceeded cost to manufacture the inventory and had a negative impact on our gross margin.  

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, partially offset by lower unit cost of sales for the Bile Acid Medicines, as we sold the acquired inventory valued at fair value in prior periods. 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;

•payments made for the acquisition or licensing of in-process research and development assets with no alternative future use;

•expenses related to non-clinical studies;

•expenses related to compliance with drug development regulatory requirements; and

•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.