Rhythm(RYTM) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue from sales of IMCIVREE was $57.3 million for Q4 2025, representing a quarter-over-quarter increase of 12% and $194.8 million for the full year, an increase of approximately 50% from 2024 [30][31] - Gross to net for US sales was approximately 84.6%, generally in line with previous quarters [33] - GAAP EPS for Q4 2025 was a net loss per basic and diluted share of $0.73, including $0.02 per share from accrued dividends on convertible preferred stock [36] Business Line Data and Key Metrics Changes - In Q4 2025, $39 million, or 68% of product revenue, was generated in the United States, and $18.3 million, or 32% of product revenue, was generated outside the United States [31] - The volume of vials shipped to specialty pharmacy in the US was approximately 1.7 million greater than the vials dispensed to patients, resulting in a negative $1.3 million inventory swing from Q3 to Q4 [32] - Research and development expenses were $42 million for Q4, compared to $41.2 million in the same quarter last year [34] Market Data and Key Metrics Changes - The company identified approximately 40 priority medical centers in the US based on significant concentrations of Acquired Hypothalamic Obesity (AHO) patients [21] - The estimated prevalence of Acquired HO in the US is around 10,000 patients, representing a significant opportunity for the company [19] Company Strategy and Development Direction - The company is preparing for the launch of Acquired Hypothalamic Obesity pending regulatory approval, with a PDUFA goal date of March 20 [19] - The company plans to run the Phase 3 trial for bivamelagon largely in countries where setmelanotide will not be available for acquired HO in the near future [14] - The company anticipates launching in Japan within the next 12 months, with a strong leadership team already in place [80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the BBS opportunity, highlighting the steady rate of growth in both US and ex-US markets [6] - The management team noted that the FDA meeting regarding bivamelagon was highly constructive, confirming readiness to move to Phase 3 [13] - Management acknowledged the challenges in the PWS study but remains optimistic about the potential for positive outcomes [51] Other Important Information - The company ended 2025 with approximately $389 million in cash equivalents and short-term investments, expected to fund planned operations for at least 24 months [36] - The company anticipates non-GAAP operating expenses for 2026 to be approximately $385 million-$415 million, reflecting a year-over-year increase driven by clinical program success [39] Q&A Session Summary Question: Update on bivamelagon phase 3 trial - Management confirmed that the trial will largely mimic the phase 3 of setmelanotide, with no specific changes to enrollment criteria [43] Question: Guidelines for HO treatment - Management indicated that while current guidelines suggest a 6-month wait post-surgery, feedback suggests earlier intervention may be beneficial [46] Question: Update on PWS study - Management stated that they are on track for a mid-year update and are looking for a minimum of 5% BMI change as a goal [51] Question: Trends in IMCIVREE sales - Management noted potential dampening of sales in Q1 due to inventory dynamics but did not provide specific growth estimates [55] Question: Dosing in bivamelagon phase 3 trial - Management confirmed that dosing will escalate from 200 mg to 600 mg, with 600 mg as the target dose [74] Question: Opportunity in Japan - Management estimated the prevalence of AHO in Japan to be between 5,000 and 8,000 patients, with plans for a launch within 12 months [80]