Rhythm(RYTM) - 2025 Q2 - Quarterly Results

Executive Summary & Business Update Company Overview & Strategic Highlights Rhythm Pharmaceuticals, a commercial-stage biopharmaceutical company, reported strong Q2 2025 results, highlighting significant progress in its MC4R agonism platform and global mission to treat rare neuroendocrine diseases - Rhythm Pharmaceuticals is a commercial-stage biopharmaceutical company focused on transforming the lives of patients living with rare neuroendocrine diseases[1] - The company has made significant progress in advancing its melanocortin-4 receptor agonism platform[2] - Global commercial sales of IMCIVREE achieved double-digit growth in Q2 2025[2] - Strengthened the balance sheet through an upsized common stock offering in July 2025[2] - Presented strong Phase 2 and Phase 3 data demonstrating potential efficacy of bivamelagon and setmelanotide for acquired hypothalamic obesity[2] Second Quarter Business Highlights Global sales of IMCIVREE reached $48.5 million for the second quarter of 2025, representing a 29% sequential increase, primarily driven by sales for Bardet-Biedl syndrome (BBS), and the company completed an upsized public offering in July, raising approximately $189.2 million in net proceeds IMCIVREE Net Product Revenue (Q2 2025) | Metric | Q2 2025 Revenue | Sequential Change (from Q1 2025) | | :----- | :-------------- | :------------------------------- | | Global Sales | $48.5 million | +29% | | U.S. Sales | $32.0 million (66% of product revenue) | +31% | | Non-U.S. Sales | $16.5 million (34% of product revenue) | +24% | - Revenue increase primarily driven by sales of IMCIVREE for the treatment of patients with Bardet-Biedl syndrome (BBS)[3] - On July 11, 2025, Rhythm closed an upsized public offering of common stock, raising approximately $189.2 million in net proceeds[4] Clinical Development & Upcoming Milestones Rhythm announced positive Phase 2 data for bivamelagon and pivotal Phase 3 TRANSCEND trial data for setmelanotide, both showing statistically significant BMI reductions in acquired hypothalamic obesity, with key upcoming milestones including regulatory submissions for setmelanotide in acquired hypothalamic obesity in Q3 2025 and further trial data disclosures in late 2025 and early 2026 - Enrolled the first patient with hypothalamic obesity in Part C of its Phase 1 trial evaluating RM-718, a weekly-administered melanocortin-4 receptor (MC4R) agonist[6] Setmelanotide Phase 3 TRANSCEND Trial Data (Acquired Hypothalamic Obesity) | Metric | Result | | :----- | :----- | | Placebo-adjusted difference in BMI reduction | -19.8% (N=120) | | Consistent BMI reductions across subgroups | Observed across age (<12, 12-17, <18, and 18+ years) and sex (-16.3% female; -16.8% male) | Bivamelagon Phase 2 Trial Data (Acquired Hypothalamic Obesity) | Cohort | BMI Reduction from Baseline (14 weeks) | p-value | | :----- | :------------------------------------ | :------ | | 600mg (n=8) | -9.3% | 0.0004 | | 400mg (n=7) | -7.7% | 0.0002 | - Bivamelagon safety and tolerability results were consistent with MC4R agonism and mechanism of action[6] - New, real-world data showed consistent improvements in BMI, BMI-Z, and hunger scores in patients with acquired and congenital hypothalamic obesity treated with setmelanotide[6] - Anticipated completion of U.S. FDA sNDA and EU EMA Type II variation request for setmelanotide in acquired hypothalamic obesity in Q3 2025[6] - Preliminary results from the setmelanotide Phase 2 trial in Prader-Willi syndrome expected in the second half of 2025[6] - Rhythm plans to host an investor event, 'Commercial Readiness for Acquired Hypothalamic Obesity,' on September 24, 2025, to review its global launch strategy for setmelanotide[7] - Upcoming milestones for Q1 2026 include completing enrollment in RM-718 Phase 1 Part C, announcing topline data for the setmelanotide Phase 3 Japanese cohort and EMANATE trial, and completing enrollment in the setmelanotide Phase 3 substudy in congenital hypothalamic obesity[12] - Pending regulatory alignment, a pivotal Phase 3 trial evaluating bivamelagon in acquired hypothalamic obesity is expected to initiate in 2026[12] Financial Results Second Quarter 2025 Financial Performance Rhythm Pharmaceuticals reported a net product revenue of $48.5 million for Q2 2025, a significant increase from Q2 2024, however, R&D and SG&A expenses also rose, leading to an increased net loss of ($48.0) million for the quarter Cash Position Cash, Cash Equivalents and Short-Term Investments | Metric | June 30, 2025 | Dec. 31, 2024 | | :----- | :------------ | :------------ | | Total | $291.0 million | $320.6 million | - The quarter-end cash position does not include approximately $189.2 million in net proceeds from a public offering of common stock that closed on July 11, 2025[8] - The cash position includes $40 million subsequently paid by the Company to LG Chem, Ltd. in July 2025 as part of the acquisition of bivamelagon[8] Revenue Net Product Revenue (Q2) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net Product Revenue | $48.5 million | $29.1 million | +66.7% | Operating Expenses (R&D, SG&A) Operating Expenses (Q2) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | R&D Expenses | $42.3 million | $30.2 million | +40.0% | | SG&A Expenses | $45.9 million | $36.4 million | +26.1% | - R&D increase primarily due to increased costs associated with drug formulation and development (CMC) for RM-718 and bivamelagon, increased clinical trial costs, and higher headcount[10] - SG&A increase primarily due to higher costs associated with additional headcount to support expanding business operations and establish international commercial operations, increased marketing and promotion costs, and increased professional services costs[11] Other income (expense), net Other Income (Expense), Net (Q2) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Other income (expense), net | ($1.0) million | $8.7 million | N/A (shift from income to expense) | - The Q2 2024 figure included a non-recurring gain of $8.9 million on settlement of a forward contract[13] - The increase in other expense was partially due to non-cash interest expense associated with the accretion of deferred royalty obligation and the liability payable to LG Chem, Ltd., offset by foreign currency gains[13] Net Loss Net Loss Attributable to Common Stockholders (Q2) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net Loss | ($48.0) million | ($33.6) million | +42.9% | | Net Loss Per Share (Basic & Diluted) | ($0.75) | ($0.55) | +36.4% | Year to Date 2025 Financial Performance For the six months ended June 30, 2025, net product revenue grew significantly to $86.2 million, and while SG&A expenses increased, R&D expenses decreased year-over-year due to a non-recurring acquisition cost in 2024, resulting in a reduced net loss of ($98.8) million Revenue Net Product Revenue (YTD) | Metric | YTD 2025 | YTD 2024 | YoY Change | | :----- | :------- | :------- | :--------- | | Net Product Revenue | $86.2 million | $55.0 million | +56.6% | Operating Expenses (R&D, SG&A) Operating Expenses (YTD) | Metric | YTD 2025 | YTD 2024 | YoY Change | | :----- | :------- | :------- | :--------- | | R&D Expenses | $79.3 million | $158.9 million | -50.1% | | SG&A Expenses | $85.0 million | $70.8 million | +20.0% | - The decrease in R&D expenses was primarily due to the non-recurrence of $92.4 million in-process research and development costs associated with the acquisition of bivamelagon in Q1 2024[16] - The increase in SG&A expenses was primarily due to higher costs associated with additional headcount to support expanding business operations and establish commercial operations in international regions, and increased marketing and promotion costs[17] Other income (expense), net Other Income (Expense), Net (YTD) | Metric | YTD 2025 | YTD 2024 | YoY Change | | :----- | :------- | :------- | :--------- | | Other income (expense), net | ($3.4) million | $7.5 million | N/A (shift from income to expense) | - The YTD 2024 figure included a non-recurring gain of $8.9 million on settlement of a forward contract[18] - The increase in other expense was partially due to non-cash interest expense associated with the accretion of the deferred royalty obligation and the liability payable to LG Chem, Ltd[18] Net Loss Net Loss Attributable to Common Stockholders (YTD) | Metric | YTD 2025 | YTD 2024 | YoY Change | | :----- | :------- | :------- | :--------- | | Net Loss | ($98.8) million | ($174.9) million | -43.6% | | Net Loss Per Share (Basic & Diluted) | ($1.56) | ($2.89) | -46.0% | Financial Guidance For the full year 2025, Rhythm anticipates Non-GAAP Operating Expenses to be between $285 million and $315 million, and the company expects its current cash position, combined with proceeds from the July 2025 offering, to fund operations for at least 24 months 2025 Financial Guidance | Metric | Range | | :----- | :---- | | Non-GAAP Operating Expenses | $285 million to $315 million | | GAAP SG&A expenses | ~$135 million to $145 million | | GAAP R&D expenses | ~$150 million to $170 million | - Non-GAAP Operating Expenses are defined as GAAP operating expenses excluding stock-based compensation and fixed consideration related to in-licensing[20][39] - Rhythm expects its cash, cash equivalents, and short-term investments as of June 30, 2025, combined with the net proceeds from the July 2025 offering, to be sufficient to fund planned operations for at least 24 months[21] Product Information & Safety About Rhythm Pharmaceuticals Rhythm Pharmaceuticals is a commercial-stage biopharmaceutical company based in Boston, MA, focused on rare neuroendocrine diseases, with its lead asset, IMCIVREE® (setmelanotide), an MC4R agonist approved in the U.S., EU, and UK for specific genetic forms of obesity, including Bardet-Biedl syndrome (BBS), POMC, PCSK1, or LEPR deficiency, and the company is also developing bivamelagon and RM-718, and preclinical small molecules for congenital hyperinsulinism - Rhythm is a commercial-stage biopharmaceutical company committed to transforming the lives of patients and their families living with rare neuroendocrine diseases[24] - Rhythm's lead asset is IMCIVREE® (setmelanotide), an MC4R agonist designed to treat hyperphagia and severe obesity[24] - Setmelanotide is approved by the FDA, European Commission (EC), and UK's MHRA for specific genetic forms of obesity (BBS, POMC, PCSK1, or LEPR deficiency)[24] - Rhythm is advancing a broad clinical development program for setmelanotide, as well as investigational MC4R agonists bivamelagon and RM-718, and a preclinical suite of small molecules for congenital hyperinsulinism[24] IMCIVREE® (setmelanotide) Indication & Usage IMCIVREE (setmelanotide) is indicated in the U.S. for reducing excess body weight and maintaining weight reduction in adult and pediatric patients (2 years and older) with syndromic or monogenic obesity due to Bardet-Biedl syndrome (BBS) or genetically confirmed POMC, PCSK1, or LEPR deficiency, with similar indications existing in the EU and UK - In the U.S., setmelanotide is indicated to reduce excess body weight and maintain weight reduction long term in adult and pediatric patients aged 2 years and older with syndromic or monogenic obesity due to Bardet-Biedl syndrome (BBS) or genetically confirmed POMC, PCSK1, or LEPR deficiency[26] - In the European Union and the United Kingdom, setmelanotide is indicated for the treatment of obesity and the control of hunger associated with genetically confirmed BBS or loss-of-function biallelic POMC, PCSK1, or LEPR deficiency in adults and children 2 years of age and above[27] - In the EU and UK, setmelanotide should be prescribed and supervised by a physician with expertise in obesity with underlying genetic etiology[27] Important Safety Information IMCIVREE has specific limitations, contraindications, warnings, and precautions, including risks of sexual arousal disturbances, depression/suicidal ideation, hypersensitivity reactions, skin hyperpigmentation, and risks associated with benzyl alcohol preservative in neonates, with common adverse reactions including skin hyperpigmentation, injection site reactions, nausea, and headache Limitations of Use & Contraindications - Setmelanotide is not indicated for obesity due to suspected POMC, PCSK1, or LEPR deficiency with variants classified as benign or likely benign[32] - Not indicated for other types of obesity not related to BBS or POMC, PCSK1, or LEPR deficiency, including general (polygenic) obesity[32] - Contraindicated in patients with prior serious hypersensitivity to setmelanotide or any of the excipients in IMCIVREE[28] Warnings and Precautions - Disturbance in Sexual Arousal: Spontaneous penile erections in males and sexual adverse reactions in females have occurred; patients should seek emergency medical attention for erections lasting longer than 4 hours[29] - Depression and Suicidal Ideation: Monitor patients for new onset or worsening depression or suicidal thoughts/behaviors; consider discontinuing IMCIVREE if clinically significant or persistent symptoms occur[30] - Hypersensitivity Reactions: Serious hypersensitivity reactions (e.g., anaphylaxis) have been reported; advise patients to promptly seek medical attention and discontinue IMCIVREE if suspected[31] - Skin Hyperpigmentation, Darkening of Pre-existing Nevi, and Development of New Melanocytic Nevi: Perform a full body skin examination prior to initiation and periodically during treatment[33] - Risk of Serious Adverse Reactions Due to Benzyl Alcohol Preservative in Neonates and Low Birth Weight Infants: IMCIVREE is not approved for use in neonates or infants[34] Adverse Reactions - Most common adverse reactions (incidence ≥20%) included skin hyperpigmentation, injection site reactions, nausea, headache, diarrhea, abdominal pain, vomiting, depression, and spontaneous penile erection[35] Use in Specific Populations - Treatment with IMCIVREE is not recommended when breastfeeding[36] - Discontinue IMCIVREE when pregnancy is recognized unless the benefits of therapy outweigh the potential risks to the fetus[36] Additional Information Forward-Looking Statements This section contains forward-looking statements regarding the safety, efficacy, and clinical progress of products, potential regulatory approvals, commercial growth, estimated market size, future data announcements, business strategy, financial performance, and sufficiency of funds, all of which are subject to numerous risks and uncertainties - Statements regarding the safety, efficacy, potential benefits, and clinical design or progress of products (setmelanotide, bivamelagon, RM-718) are forward-looking[38] - Expectations surrounding potential regulatory submissions, progress, or approvals (e.g., sNDA to FDA, Type II variation to EMA) and their timing are forward-looking[38] - The commercial growth of IMCIVREE, estimated market size, and addressable population for drug products are forward-looking[38] - Future announcement of data from ongoing clinical trials (e.g., Japanese cohort, congenital hypothalamic obesity substudy, EMANATE, RM-718, Prader-Willi syndrome) is forward-looking[38] - Anticipated financial performance, including estimated Non-GAAP Operating Expenses for 2025, and the sufficiency of cash to fund operations are forward-looking[38] - Forward-looking statements are subject to numerous risks and uncertainties, including clinical trial enrollment, regulatory approvals, competition, data analysis, pricing, reimbursement, international operations, commercialization, liquidity, and key personnel retention[38] Non-GAAP Financial Measures The press release includes Non-GAAP Operating Expenses, defined as GAAP operating expenses excluding stock-based compensation and fixed consideration related to in-licensing, presented as a supplemental performance indicator for investors and analysts, though it may not be comparable across companies and has limitations as an analytical tool, and a quantitative reconciliation to GAAP operating expenses is not provided due to the inherent uncertainty of stock-based compensation expenses - Non-GAAP Operating Expenses are defined as GAAP operating expenses excluding stock-based compensation and fixed consideration related to in-licensing[39] - This non-GAAP measure is a supplemental measure of performance, not required by or presented in accordance with U.S. GAAP, and should not be considered an alternative to GAAP operating expenses[39][40][41] - Management uses this non-GAAP financial measure for planning, evaluating operational strategies, and assessing business expansion capacity[41] - A quantitative reconciliation of forecasted Non-GAAP Operating Expenses to forecasted GAAP operating expenses is not provided due to the inability to calculate stock-based compensation expenses with confidence without unreasonable efforts[42] Conference Call Information Rhythm Pharmaceuticals hosted a live conference call and webcast on August 5, 2025, at 8:00 a.m. ET to discuss Q2 2025 financial results and business activities, with an archived webcast available on the company's investor relations website - Rhythm Pharmaceuticals hosted a live conference call and webcast on August 5, 2025, at 8:00 a.m. ET to review its second quarter 2025 financial results and recent business activities[22] - An archived webcast is available under 'Events and Presentations' in the Investor Relations section of the Rhythm Pharmaceuticals website[23] Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations and Comprehensive Loss This section presents the unaudited condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025, and 2024, detailing revenues, costs and expenses, loss from operations, other income/expense, net loss, and net loss per share Condensed Consolidated Statements of Operations and Comprehensive Loss (Selected Data) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product revenue, net | $48,502 | $29,078 | $86,220 | $55,045 | | Total revenues | $48,502 | $29,078 | $81,206 | $55,045 | | Cost of sales | $5,543 | $2,947 | $9,191 | $5,753 | | Research and development | $42,308 | $30,194 | $79,281 | $158,858 | | Selling, general, and administrative | $45,947 | $36,415 | $85,034 | $70,797 | | Total costs and expenses | $93,798 | $69,556 | $173,506 | $235,408 | | Loss from operations | ($45,296) | ($40,478) | ($92,300) | ($180,363) | | Total other (expense), net | ($999) | $8,696 | ($3,413) | $7,509 | | Net loss | ($46,632) | ($32,261) | ($96,130) | ($173,633) | | Net loss attributable to common stockholders | ($47,981) | ($33,563) | ($98,801) | ($174,935) | | Net loss per share, basic and diluted | ($0.75) | ($0.55) | ($1.56) | ($2.89) | | Weighted-average common shares outstanding | 63,684,359 | 61,011,824 | 63,373,489 | 60,577,691 | Condensed Consolidated Balance Sheets This section provides the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, convertible preferred stock, and stockholders' equity Condensed Consolidated Balance Sheets (Selected Data) | Metric (in thousands) | June 30, 2025 | Dec. 31, 2024 | | :-------------------- | :------------ | :------------ | | Cash and cash equivalents | $135,586 | $89,137 | | Short-term investments | $155,444 | $231,428 | | Total current assets | $360,680 | $374,200 | | Total assets | $372,733 | $392,273 | | Total current liabilities | $129,455 | $115,517 | | Total liabilities | $239,150 | $227,724 | | Series A convertible preferred stock | $145,491 | $142,820 | | Total stockholders' equity | ($11,908) | $21,729 | | Total liabilities, convertible preferred stock and stockholders' equity | $372,733 | $392,273 |