Mirum Pharmaceuticals (NASDAQ:MIRM) Is Carrying A Fair Bit Of Debt

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. Importantly, Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) does carry debt. But should shareholders be worried about its use of debt?

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When Is Debt Dangerous?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. If things get really bad, the lenders can take control of the business. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Mirum Pharmaceuticals's Debt?

As you can see below, Mirum Pharmaceuticals had US$308.9m of debt, at June 2025, which is about the same as the year before. You can click the chart for greater detail. However, it also had US$304.6m in cash, and so its net debt is US$4.38m.

How Strong Is Mirum Pharmaceuticals' Balance Sheet?

We can see from the most recent balance sheet that Mirum Pharmaceuticals had liabilities of US$144.8m falling due within a year, and liabilities of US$325.9m due beyond that. Offsetting these obligations, it had cash of US$304.6m as well as receivables valued at US$106.8m due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$59.3m.

Having regard to Mirum Pharmaceuticals' size, it seems that its liquid assets are well balanced with its total liabilities. So while it's hard to imagine that the US$3.68b company is struggling for cash, we still think it's worth monitoring its balance sheet. Carrying virtually no net debt, Mirum Pharmaceuticals has a very light debt load indeed. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Mirum Pharmaceuticals can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

Check out our latest analysis for Mirum Pharmaceuticals

Over 12 months, Mirum Pharmaceuticals reported revenue of US$429m, which is a gain of 62%, although it did not report any earnings before interest and tax. With any luck the company will be able to grow its way to profitability.

Caveat Emptor

While we can certainly appreciate Mirum Pharmaceuticals's revenue growth, its earnings before interest and tax (EBIT) loss is not ideal. To be specific the EBIT loss came in at US$57m. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. So we think its balance sheet is a little strained, though not beyond repair. Another cause for caution is that is bled US$1.4m in negative free cash flow over the last twelve months. So to be blunt we think it is risky. For riskier companies like Mirum Pharmaceuticals I always like to keep an eye on whether insiders are buying or selling. So click here if you want to find out for yourself.

At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.