Mirum Pharmaceuticals is Tuesday's IBD 50 Growth Stocks To Watch pick as shares of the drug developer near a buy point out of a cup base. The biotech stock exploded with powerful moves after Mirum reported positive trial results on a skin disorder treatment in mid-June.
Mirum identifies and develops treatments for children and adults with rare diseases including liver and symptomatic skin disorders. Mirum currently has three U.S. Food and Drug Administration approved medications.
In March, the FDA approved its Livmarli oral treatment for cholestatic pruritus, an itching symptom of cholestatic liver disease.
Biotech Stock Nears Buy Point
The IBD 50 stock rocketed 27.3% on June 17, in huge volume, after the company announced that its twice daily oral treatment, Volixibat, produced positive interim results for a severe itching disorder.
The drug is also in trials for use in other disorders including liver diseases. A handful of analysts raised their price targets on the stock following the release.
The biotech stock reclaimed its 200-day moving average on the rally and broke through a resistance level around 30. Mirum stock pulled back the following day, then resumed its steep climb.
The stock is trading within 3% of a 35.56 entry from an early-stage cup base, as identified by MarketSurge pattern recognition.
Profits Elusive, But Sales Rise
Mirum Pharmaceuticals reported a larger loss and lower first-quarter sales than expected on May 8. The biotech company is not yet profitable as it continues to deploy capital into research and development. Quarterly losses are trending smaller with the next four quarterly losses expected to lessen.
But sales have doubled for seven straight quarters for the biotech stock. Second-quarter sales estimates show another stellar quarter of growth, with a 101% increase, according to MarketSurge. The following two quarters show slowing revenue growth of 69% then 26%.
The company also bolstered its cash and cash equivalents at then end of March to $302.8 million from $286.3 million as of Dec. 31.
"Our commercial business is performing well, and we saw continued growth in demand for Livmarli globally putting us on track for our total revenue guidance target for the year," Mirum Chief Executive Chris Peetz said in the earnings release.
Mirum predicted full-year 2024 revenue of $310 to $320 million.
The biotech stock holds a best-possible IBD Accumulation/Distribution Rating of A+, indicating very heavy institutional buying over the last 13 weeks. In addition, its robust Up/Down Volume ratio of 2.5 shows strong demand over the last 50 days.
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