Rhythm Pharmaceuticals Q2 2024 Financial Results and Business Update

Rhythm Pharmaceuticals, Inc., a biopharmaceutical company specializing in rare neuroendocrine diseases, has announced its financial results and business highlights for the second quarter ending June 30, 2024. The company reported net revenues from global sales of IMCIVREE® (setmelanotide) amounting to $29.1 million for the quarter, a significant increase from $19.2 million in the same period the previous year. This growth reflects the company's successful execution of its strategy to make IMCIVREE available to patients with rare melanocortin-4 receptor (MC4R) diseases, addressing their hyperphagia and severe obesity.

David Meeker, M.D., the Chair, President, and CEO of Rhythm Pharmaceuticals, highlighted the company’s progress in expanding IMCIVREE's availability to younger patients. Regulatory milestones in both Europe and the United States are bringing the company closer to treating pediatric patients as young as two years old. This expansion is expected to improve long-term clinical outcomes by addressing hyperphagia and obesity at an early stage.

Rhythm Pharmaceuticals is also advancing its MC4R portfolio, focusing on treating rare MC4R diseases, particularly acquired hypothalamic obesity. The global Phase 3 trial of setmelanotide for this indication is progressing, with topline data from the pivotal cohort expected in the first half of 2025. Additionally, a supplemental cohort in Japan has begun dosing, addressing a region with a higher prevalence rate than the United States and Europe. The Phase 2 trial of an oral MC4R agonist, LB54640, has also started dosing patients with hypothalamic obesity, and the company is advancing a Phase 1 trial of a weekly RM-718.

Key business highlights for the second quarter include:

1. New Prescriptions and Reimbursement: Approximately 100 new prescriptions for IMCIVREE for Bardet-Biedl syndrome (BBS) were written by U.S. prescribers, with payor approval for reimbursement for about 70 prescriptions.

2. Japanese Cohort: The first patients in the 12-patient Japanese cohort of the global Phase 3 trial evaluating setmelanotide in hypothalamic obesity were dosed.

3. sNDA Submission: Rhythm completed the submission of a supplemental New Drug Application (sNDA) to the U.S. Food and Drug Administration (FDA) to expand IMCIVREE’s label to treat pediatric patients as young as two years old in approved indications.

4. European Commission Approval: The European Commission expanded marketing authorization for IMCIVREE to include children as young as two years old with obesity due to BBS or specific genetic deficiencies.

5. Phase 2 Trial of LB54640: The first patients were dosed in the Phase 2 clinical trial evaluating LB54640 in hypothalamic obesity.

6. Leadership Appointment: Dr. Alastair “Al” Garfield was appointed as the Chief Scientific Officer effective July 1, 2024.

7. NICE Guidance: The National Institute for Health and Care Excellence (NICE) in Great Britain issued guidance recommending IMCIVREE for treating obesity and controlling hunger in pediatric patients with BBS.

8. Investment Agreement: Rhythm entered into an investment agreement with current shareholders, including Perceptive Advisors LLC, for the sale of its series A convertible preferred stock, raising $150 million.

Financial Results:

- Cash Position: As of June 30, 2024, Rhythm had approximately $319.1 million in cash, cash equivalents, and short-term investments, compared to $275.8 million as of December 31, 2023.

- Revenue: For the first half of 2024, net product revenues were $55.0 million, compared to $30.7 million for the same period in 2023.

- R&D Expenses: Research and development expenses were $30.2 million for the second quarter, down from $33.5 million the previous year, mainly due to decreased clinical trial costs. However, the first half of 2024 saw R&D expenses rise to $158.9 million, primarily due to the acquisition of LB54640 and increased headcount.

- S,G&A Expenses: Selling, general, and administrative expenses increased to $36.4 million for the second quarter from $30.0 million the previous year, due to higher headcount and professional services expenses.

- Net Loss: The net loss attributable to common stockholders was $33.6 million for the second quarter, compared to $46.7 million the previous year. For the first half of 2024, the net loss was $174.9 million, compared to $98.9 million for the same period in 2023.

Financial Guidance:

Rhythm anticipates Non-GAAP Operating Expenses of approximately $250 million to $270 million for the year ending December 31, 2024. The company's existing cash, cash equivalents, and short-term investments are expected to support operations into 2026.

Rhythm Pharmaceuticals continues to make significant strides in treating rare neuroendocrine diseases, with a focus on expanding the use of IMCIVREE and advancing its MC4R portfolio to provide much-needed therapeutic options for patients.

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