Rhythm(RYTM) - 2024 Q1 - Quarterly Results

Overview and Key Highlights Rhythm Pharmaceuticals reported strong Q1 2024 results, with $26.0 million IMCIVREE net revenue, pipeline advancements, and $150 million financing extending operations into 2026 | Metric | Value | | :--- | :--- | | Q1 2024 IMCIVREE Net Revenue | $26.0 million | - The company is on track to submit a supplementary New Drug Application (sNDA) to the FDA in Q2 2024 to expand IMCIVREE's label to pediatric patients aged 2 to younger than 6[1][3] - Phase 3 trial for setmelanotide in hypothalamic obesity progressing, with topline data expected in H1 2025 and first patients in Japan anticipated in Q2 2024[1][3] - Secured $150 million in convertible preferred stock financing, expected to fund operations into 2026[1][6] Business and Operational Updates The company reported strong IMCIVREE commercial performance and anticipates key clinical milestones, including new trial initiations and data readouts through early 2025 Recent Business Highlights (Q1 2024) Rhythm achieved significant commercial traction for IMCIVREE, presented positive setmelanotide data, secured $150 million financing, and initiated a Phase 1 trial for RM-718 - Approximately 100 new prescriptions for IMCIVREE for Bardet-Biedl syndrome (BBS) written by U.S. prescribers, with about 70 receiving payor approval during Q1 2024[4] - Phase 2 study of setmelanotide in hypothalamic obesity published, showing mean BMI reduction of 15% at 16 weeks and approximately 26% at one year in long-term extension[6] - Investment agreement for sale of series A convertible preferred stock for gross proceeds of $150 million announced, closing on April 15, 2024[6] - First patients dosed in Phase 1 clinical trial of RM-718, an investigational weekly MC4R agonist[6] Anticipated Upcoming Milestones Rhythm anticipates key milestones including sNDA submission for IMCIVREE, new trial initiations, and data readouts from multiple studies through H1 2025 - sNDA Submission: Plan to submit an sNDA to the FDA for pediatric patients (2 to <6 years old) in Q2 2024, with potential EMA approval in Q4 2024[6] - Clinical Trial Initiations: Begin dosing in Japanese cohort of Phase 3 hypothalamic obesity trial in Q2 2024 and Phase 2 SIGNAL trial for LB54640 in Q3 2024[6] - Upcoming Data Readouts: Phase 2 DAYBREAK study data in Q3 2024, Phase 1 RM-718 trial data in H1 2025, and top-line data from Phase 3 hypothalamic obesity trial in H1 2025[6] Financial Performance Rhythm reported increased Q1 2024 revenue and a higher net loss driven by R&D expenses, with a strong cash position bolstered by recent financing and clear FY2024 guidance Q1 2024 Financial Results Q1 2024 saw net product revenues more than double to $26.0 million, while R&D expenses surged to $128.7 million due to an acquisition, resulting in a $141.4 million net loss | Financial Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Product Revenues | $26.0M | $11.5M | +126% | | R&D Expenses | $128.7M | $37.9M | +239% | | S,G&A Expenses | $34.4M | $24.6M | +40% | | Net Loss | $(141.4)M | $(52.2)M | +171% | | Net Loss per Share | $(2.35) | $(0.92) | +155% | - Significant year-over-year increase in R&D expenses primarily due to $92.4 million in-process R&D costs for LG Chem's compound LB54640 acquisition[7] - Cash, cash equivalents, and short-term investments approximately $201 million as of March 31, 2024, a decrease from $275.8 million at year-end 2023[5] Financial Guidance (FY 2024) and Capital Position Rhythm projects FY2024 Non-GAAP Operating Expenses between $250 million and $270 million, with current cash and $150 million financing expected to fund operations into 2026 | FY 2024 Guidance | Amount | | :--- | :--- | | Non-GAAP Operating Expenses | $250M - $270M | - Existing cash as of March 31, 2024, combined with $150 million from preferred stock, expected to fund operations and capital expenditures into 2026[9] Financial Statements Condensed consolidated statements show a $141.4 million net loss for Q1 2024, driven by higher R&D, and a balance sheet reflecting $258.7 million total assets as of March 31, 2024 Condensed Consolidated Statements of Operations (in thousands) | | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Total revenues | $25,967 | $11,469 | | Total costs and expenses | $165,854 | $64,000 | | Loss from operations | $(139,887) | $(52,531) | | Net loss | $(141,372) | $(52,179) | | Net loss per share, basic and diluted | $(2.35) | $(0.92) | Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $53,428 | $60,081 | | Short-term investments | $147,771 | $215,765 | | Total assets | $258,651 | $332,745 | | Total current liabilities | $54,160 | $55,203 | | Total liabilities | $197,070 | $162,986 | | Total stockholders' equity | $61,581 | $169,759 | Product Information: IMCIVREE (setmelanotide) IMCIVREE (setmelanotide) is an MC4R agonist approved for chronic weight management in specific rare genetic obesity disorders, with detailed indications, limitations, and safety information - IMCIVREE indicated for chronic weight management in adult and pediatric patients (6 years and older) with obesity due to genetically confirmed POMC, PCSK1, LEPR deficiency, or Bardet-Biedl syndrome (BBS)[12][13][14] - Drug not indicated for other types of obesity, including general (polygenic) obesity or those not related to the MC4R pathway[21] - Key warnings include potential for increased skin pigmentation requiring annual full-body skin examinations, and need to monitor heart rate and blood pressure[15][16] - Most common adverse reactions: hyperpigmentation (51%), injection site reaction (39%), nausea (33%), and headache (26%)[20] Other Information This section includes standard disclosures on forward-looking statements, defines Non-GAAP Operating Expenses, and provides conference call and investor relations contact information - Press release contains forward-looking statements concerning clinical trial progress, regulatory submissions, and financial performance, subject to risks[25] - Non-GAAP Operating Expenses defined as GAAP operating expenses excluding stock-based compensation and fixed in-licensing consideration, used for internal planning[26][28] - Company hosted a conference call and webcast on May 7, 2024, at 8:00 a.m. ET to review financial results[10]