Rhythm Pharmaceuticals, Inc. (Nasdaq: RYTM), a global
commercial-stage biopharmaceutical company focused on transforming
the lives of patients and their families living with hyperphagia
and severe obesity caused by rare melanocortin-4 receptor (MC4R)
pathway diseases, today reported financial results and provided a
business update for the first quarter ended March 31, 2023.
“Rhythm is off to a strong start in 2023 with IMCIVREE®
(setmelanotide) commercial progress with more than 300 new U.S.
prescriptions for Bardet-Biedl syndrome (BBS) since launch.
Internationally, we are excited about our first European launch for
BBS in Germany with federal reimbursement and looking forward to
further expansion into additional global markets this year,” said
David Meeker, M.D., Chair, President and Chief Executive Officer of
Rhythm.
Dr. Meeker added, “We also are pleased to announce that we dosed
the first patients in our pivotal Phase 3 trial in hypothalamic
obesity, and we anticipate completing enrollment in the first
quarter of 2024. With an identified and engaged patient population
and encouraging data from our Phase 2 trial, hypothalamic obesity
represents a meaningful opportunity for Rhythm. In addition, we are
advancing our newly acquired program from Xinvento in congenital
hyperinsulinism (CHI), a natural strategic fit for our
portfolio.”
First Quarter and Recent Business
Highlights
Commercial Update
- Today, Rhythm announced that more than 300 new prescriptions
for IMCIVREE for BBS have been written from more than 175
physicians in the United States since U.S. Food and Drug
Administration (FDA) approval on June 16, 2022 through March 31,
2023. The Company also announced that it had received payor
approval for reimbursement for more than 160 of those
prescriptions, as of March 31, 2023. More than 100 new
prescriptions were written in the first quarter of 2023.
- On April 24,
2023, the Company announced the commercial launch of IMCIVREE in
Germany for the treatment of obesity and control of hunger
associated with BBS with federal reimbursement. The German Federal
Joint Committee (G-BA) ruled that IMCIVREE is eligible for
reimbursement by Statutory Health Insurances for BBS based on its
unanimous vote to exclude IMCIVREE from its lifestyle exemption
list for patients with BBS.
Clinical Development Updates
Hypothalamic Obesity
- Today, Rhythm announced that the first patients have been dosed
in its pivotal Phase 3 trial evaluating setmelanotide in patients
with acquired hypothalamic obesity. The Phase 3 clinical trial
incorporates FDA feedback and is designed to enroll 120 patients
aged 4 years or older randomized 2:1 to setmelanotide therapy or
placebo for a total of 60 weeks, including up to eight weeks for
dose titration. The primary endpoint is the percent change in Body
Mass Index (BMI) after approximately 52 weeks on a therapeutic
regimen of setmelanotide versus placebo.
Additional Updates
- In March 2023, Rhythm published research in the peer-reviewed
journal Advances in Therapy that demonstrated setmelanotide
improved hyperphagia and reduced obsessive focus on food and
reduced body weight in patients with BBS.
- Also in March, Rhythm announced the publication of an
assessment of the substantial impact of severe hyperphagia on
patients’ quality of life in the open-access journal Obesity
Science and Practice. This study was the first to estimate the
impact of hyperphagia on health state utilities independently of
any specific underlying indication.
Anticipated Upcoming Milestones
Rhythm expects to achieve the following near-term
milestones:
- Present data analysis from the Phase 2 and long-term extension
trials in hypothalamic obesity at a medical conference in the fall
of 2023;
- Complete regulatory review by Health Canada and,
pending approval, make IMCIVREE commercially available
in Canada for the treatment of BBS, or POMC, PCSK1 or
LEPR deficiencies in the second half of 2023;
- Initiate a Phase 3, randomized, double-blind trial in patients
naïve to setmelanotide therapy (“de novo study”) to evaluate the
weekly formulation of setmelanotide in patients with BBS in the
second half of 2023;
- Announce preliminary data from the open-label part of the Phase
2 DAYBREAK trial from one or more genetically-defined cohorts in
the second half of 2023;
- Announce topline data from the ongoing Phase 3, open-label
pediatrics trial evaluating one year of setmelanotide therapy in
patients with MC4R pathway deficiencies between the ages of 2 and 6
years old in the second half of 2023;
- Announce topline data from the ongoing Phase 3 switch trial
evaluating a weekly formulation of setmelanotide in the second half
of 2023;
- Unveil lead development candidate for the treatment of CHI and
provide updates on early-stage R&D efforts in the fourth
quarter of 2023; and
- Complete patient enrollment in the pivotal Phase 3 clinical
trial in hypothalamic obesity in the first quarter of 2024.
First Quarter 2023 Financial
Results:
- Cash Position: As of March 31, 2023, cash,
cash equivalents and short-term investments were approximately
$294.6 million, as compared to $333.3 million as of December 31,
2022.
- Revenue: Net product revenues relating to
global sales of IMCIVREE were $11.5 million for the first quarter
of 2023, as compared to $1.5 million for the first quarter of 2022.
For the first quarter ended March 31, 2023, 83% of the Company’s
product revenue was generated in the United States.
- R&D Expenses: R&D expenses were $37.9
million in the first quarter of 2023, as compared to $32.5 million
in the first quarter of 2022. The year-over-year increase of
approximately $5.4 million was due to the $5.4M acquisition of
Xinvento B.V.’s in-process research & development assets. In
addition, there were decreased clinical trial costs, clinical trial
manufacturing costs and milestone payments, which were partially
offset by increased costs due to additional headcount and gene
sequencing.
- S,G&A Expenses: S,G&A expenses were
$24.6 million for the first quarter of 2023, as compared to $21.4
million for the first quarter of 2022. The year-over-year increase
was primarily due to investments in North America and International
commercial activities and headcount.
- Net Loss: Net loss was $52.2 million for the
first quarter of 2023, or a net loss per basic and diluted share of
$0.92, as compared to a net loss of $52.8 million for the first
quarter of 2022, or a net loss per basic and diluted share of
$1.05.
Financial
Guidance: For the year ending December 31, 2023,
Rhythm continues to anticipate approximately $200 million to $220
million in Non-GAAP Operating Expenses (see below under "Non-GAAP
Financial Measures" for more details), comprised of $120 million to
$130 million from R&D expenses and $80 million to $90 million
from S,G&A expenses. Based on its current operating plans,
Rhythm expects that its existing cash, cash equivalents and
short-term investments as of March 31, 2023 will be sufficient
to fund its operating expenses and capital expenditure requirements
into 2025.
Conference Call
InformationRhythm Pharmaceuticals will host a live
conference call and webcast at 8:00 a.m. ET today to review its
first quarter 2023 financial results and recent business
activities. Participants may register for the conference call here.
While not required, it is recommended that participants join the
call ten minutes prior to the scheduled start.
A live webcast of the call will also be available under "Events
and Presentations" in the Investor Relations section of the Rhythm
Pharmaceuticals website at https://ir.rhythmtx.com/. The archived
webcast will be available on Rhythm Pharmaceuticals’ website
approximately two hours after the conference call and will be
available for 30 days following the call.
About Rhythm PharmaceuticalsRhythm is a
commercial-stage biopharmaceutical company committed to
transforming the lives of patients and their families living with
hyperphagia and severe obesity caused by rare melanocortin-4
receptor (MC4R) diseases. Rhythm’s lead asset, IMCIVREE
(setmelanotide), an MC4R agonist designed to treat hyperphagia and
severe obesity caused by rare MC4R pathway diseases, is approved by
the U.S. Food and Drug Administration (FDA) for chronic
weight management in adult and pediatric patients 6 years of age
and older with monogenic or syndromic obesity due to
pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin
type 1 (PCSK1) or leptin receptor (LEPR) deficiency confirmed by
genetic testing, or patients with a clinical diagnosis of
Bardet-Biedl syndrome (BBS). Both the European
Commission (EC) and the UK’s Medicines & Healthcare
Products Regulatory Agency (MHRA) have authorized
setmelanotide for the treatment of obesity and the control of
hunger associated with genetically confirmed BBS or genetically
confirmed loss-of-function biallelic POMC, including PCSK1,
deficiency or biallelic LEPR deficiency in adults and children 6
years of age and above. Additionally, Rhythm is advancing a broad
clinical development program for setmelanotide in other rare MC4R
pathway diseases, as well as a preclinical suite of small molecules
for the treatment of congenital hyperinsulinism. Rhythm’s
headquarters is in Boston, MA.
Setmelanotide IndicationIn the United
States, setmelanotide is indicated for chronic weight management in
adult and pediatric patients 6 years of age and older with
monogenic or syndromic obesity due to POMC, PCSK1 or LEPR
deficiency as determined by an FDA-approved test demonstrating
variants in POMC, PCSK1 or LEPR genes that are interpreted as
pathogenic, likely pathogenic, or of uncertain significance (VUS)
or BBS.
In the European Union, setmelanotide is indicated for the
treatment of obesity and the control of hunger associated with
genetically confirmed Bardet-Biedl syndrome (BBS) or genetically
confirmed loss-of-function biallelic proopiomelanocortin (POMC),
including PCSK1, deficiency or biallelic leptin receptor (LEPR)
deficiency in adults and children 6 years of age and above.
Limitations of UseIn the United
States and Europe, Setmelanotide should be prescribed and
supervised by a physician with expertise in obesity with underlying
genetic etiology.
Setmelanotide is not indicated for the treatment of patients
with the following conditions as setmelanotide would not be
expected to be effective:
- Obesity due to suspected POMC, PCSK1 or LEPR deficiency
with POMC, PCSK1 or LEPR variants
classified as benign or likely benign.
- Other types of obesity not related to POMC, PCSK1 or LEPR
deficiency, or BBS, including obesity associated with other genetic
syndromes and general (polygenic) obesity.
WARNINGS AND PRECAUTIONS
Skin Monitoring: Setmelanotide may lead to
generalized increased skin pigmentation and darkening of
pre-existing naevi because of its pharmacologic effect. Full body
skin examinations should be conducted annually to monitor
pre-existing and new skin pigmentary lesions before and during
treatment with setmelanotide.
Heart rate and blood pressure
monitoring: Heart rate and blood pressure should be
monitored as part of standard clinical practice at each medical
visit (at least every 6 months) for patients treated with
setmelanotide.
Prolonged penile erection: Spontaneous
penile erections have been reported in clinical trials with
setmelanotide. Patients who have a penile erection lasting longer
than 4 hours should be instructed to seek emergency medical
attention for potential treatment of priapism.
Depression: In clinical trials, depression
has been reported in patients treated with setmelanotide. Patients
with depression should be monitored at each medical visit during
treatment with setmelanotide. Consideration should be given to
discontinuing setmelanotide if patients experience suicidal
thoughts or behaviors.
Pediatric Population: The prescribing
physician should periodically assess response to setmelanotide
therapy. In growing children, the impact of weight loss on growth
and maturation should be evaluated. The prescribing physician
should monitor growth (height and weight) using age- and
sex-appropriate growth curves.
Excipients: This medicinal product
contains 10 mg benzyl alcohol in each ml. Benzyl alcohol may cause
allergic reactions. Patients who are pregnant or breastfeeding
should be advised of the potential risk from the excipient benzyl
alcohol, which might accumulate over time and cause metabolic
acidosis. This medicinal product should be used with caution in
patients with hepatic or renal impairment, because of the potential
risk from the excipient benzyl alcohol which might accumulate over
time and cause metabolic acidosis.
Sodium: This medicinal product contains
less than 1 mmol sodium (23 mg) per dose, that is to say
essentially “sodium-free.”
ADVERSE REACTIONSThe most frequent adverse
reactions are hyperpigmentation (51%), injection site reaction
(39%), nausea (33%), and headache (26%).
USE IN SPECIFIC POPULATIONS
PregnancyThere are no data from the use of
setmelanotide in pregnant women. Animal studies do not indicate
direct harmful effects with respect to reproductive toxicity.
However, administration of setmelanotide to pregnant rabbits
resulted in decreased maternal food consumption leading to
embryo-fetal effects. As a precautionary measure, setmelanotide
should not be started during pregnancy or while attempting to get
pregnant as weight loss during pregnancy may result in fetal harm.
If a patient who is taking setmelanotide has reached a stable
weight and becomes pregnant, consideration should be given to
maintaining setmelanotide treatment as there was no proof of
teratogenicity in the nonclinical data. If a patient who is taking
setmelanotide and still losing weight gets pregnant, setmelanotide
should either be discontinued, or the dose reduced while monitoring
for the recommended weight gain during pregnancy. The treating
physician should carefully monitor weight during pregnancy in a
patient taking setmelanotide.
Breast-feedingIt is unknown whether
setmelanotide is excreted in human milk. A nonclinical study showed
that setmelanotide is excreted in the milk of nursing rats. No
quantifiable setmelanotide concentrations were detected in plasma
from nursing pups. A risk to the newborn/infant cannot be excluded.
A decision must be made whether to discontinue breastfeeding or to
discontinue/abstain from setmelanotide therapy taking into account
the benefit of breastfeeding for the child and the benefit of
therapy for the mother.
FertilityNo human data on the effect of
setmelanotide on fertility are available. Animal studies did not
indicate harmful effects with respect to fertility.
To report SUSPECTED ADVERSE REACTIONS, contact Rhythm
Pharmaceuticals at +1 (833) 789-6337. See Summary of
Product Characteristics’ APPENDIX V for a list of
European national reporting systems to communicate adverse
reactions.
Please see the full Prescribing Information for
additional Important Safety Information.
Forward-Looking
StatementsThis press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking statements, including without limitation
statements regarding the potential, safety, efficacy, and
regulatory and clinical progress of setmelanotide, including the
anticipated timing for initiation of clinical trials and release of
clinical trial data, our expectations surrounding potential
regulatory submissions, approvals and timing thereof, our business
strategy and plans, including regarding commercialization of
setmelanotide in certain international regions, expectations
surrounding sales and reimbursement of IMCIVREE, the potential
financial impact, growth prospects and benefits of our acquisition
of Xinvento B.V., expectations surrounding lead development
candidate selection for the treatment of CHI and related timing,
our anticipated financial performance and financial position,
including estimated Non-GAAP Operating Expenses for the year ending
December 31, 2023, and the sufficiency of our cash, cash
equivalents and short-term investments to fund our operations, and
our participation in upcoming events and presentations. Statements
using word such as “expect”, “anticipate”, “believe”, “may”,
“will”, "aim" and similar terms are also forward-looking
statements. Such statements are subject to numerous risks and
uncertainties, including, but not limited to, risks relating to our
liquidity and expenses, our ability to enroll patients in clinical
trials, the design and outcome of clinical trials, the ability to
achieve necessary regulatory approvals, risks associated with data
analysis and reporting, failure to identify and develop additional
product candidates, unfavorable pricing regulations, third-party
reimbursement practices or healthcare reform initiatives, risks
associated with the laws and regulations governing our
international operations and the costs of any related compliance
programs, the impact of competition, risks relating to product
liability lawsuits, inability to maintain our collaborations, or
the failure of these collaborations, our reliance on third parties,
risks relating to intellectual property, our ability to hire and
retain necessary personnel, the impact of the COVID-19 pandemic and
general economic conditions on our business and operations,
including our preclinical studies, clinical trials and
commercialization prospects, failure to realize the anticipated
benefits of our acquisition of Xinvento B.V. or significant
integration difficulties related to the acquisition, and the other
important factors discussed under the caption “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2022 and
our other filings with the Securities and Exchange Commission.
Except as required by law, we undertake no obligations to make any
revisions to the forward-looking statements contained in this
release or to update them to reflect events or circumstances
occurring after the date of this release, whether as a result of
new information, future developments or otherwise.
Non-GAAP Financial
MeasuresThis press release includes Non-GAAP Operating
Expenses, a supplemental measure of our performance that is not
required by, or presented in accordance with, U.S. GAAP and should
not be considered as an alternative to operating expenses or any
other performance measure derived in accordance with GAAP.
We define Non-GAAP Operating Expenses
as GAAP operating expenses excluding stock-based compensation.
We caution investors that amounts
presented in accordance with our definition of Non-GAAP Operating
Expenses may not be comparable to similar measures disclosed by our
competitors because not all companies and analysts calculate this
non-GAAP financial measure in the same manner. We present this
non-GAAP financial measure because we consider it to be an
important supplemental measure of our performance and believe it is
frequently used by securities analysts, investors, and other
interested parties in the evaluation of companies in our industry.
Management believes that investors’ understanding of our
performance is enhanced by including this non-GAAP financial
measure as a reasonable basis for comparing our ongoing results of
operations.
Management uses this non-GAAP
financial measure for planning purposes, including the preparation
of our internal annual operating budget and financial projections;
to evaluate the performance and effectiveness of our operational
strategies; and to evaluate our capacity to expand our business.
This non-GAAP financial measure has limitations as an analytical
tool, and should not be considered in isolation, or as an
alternative to, or a substitute for operating expenses or other
financial statement data presented in accordance with GAAP in our
consolidated financial statements.
Rhythm has not provided a quantitative
reconciliation of forecasted Non-GAAP Operating Expenses to
forecasted GAAP operating expenses because the Company is unable,
without making unreasonable efforts, to calculate the reconciling
item, stock-based compensation expenses, with confidence. This
item, which could materially affect the computation of
forward-looking GAAP operating expenses, is inherently uncertain
and depends on various factors, some of which are outside of
Rhythm's control.
Corporate
Contact:David ConnollyHead of Investor Relations and
Corporate CommunicationsRhythm Pharmaceuticals,
Inc.857-264-4280dconnolly@rhythmtx.com
Investor
Contact:Hannah DeresiewiczStern Investor Relations,
Inc.212-362-1200hannah.deresiewicz@sternir.com
Media Contact:Adam
DaleyBerry & Company Public
Relations212-253-8881adaley@berrypr.com
Rhythm
Pharmaceuticals, Inc.Condensed Consolidated
Statements of Operations and Comprehensive Loss(in
thousands, except share and per share
data)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
2023 |
|
|
2022 |
|
Revenues: |
|
|
|
|
|
Product revenue, net |
$ |
11,469 |
|
|
$ |
1,498 |
|
Costs and expenses: |
|
|
|
|
|
Cost of sales |
|
1,421 |
|
|
|
230 |
|
Research and development |
|
37,945 |
|
|
|
32,510 |
|
Selling, general, and administrative |
|
24,634 |
|
|
|
21,449 |
|
Total costs and expenses |
|
64,000 |
|
|
|
54,189 |
|
Loss from operations |
|
(52,531 |
) |
|
|
(52,691 |
) |
Other income: |
|
|
|
|
|
Other expense, net |
|
(27 |
) |
|
|
(233 |
) |
Interest expense |
|
(3,061 |
) |
|
|
— |
|
Interest income |
|
3,440 |
|
|
|
160 |
|
Total other income (expense), net |
|
352 |
|
|
|
(73 |
) |
Net loss |
$ |
(52,179 |
) |
|
$ |
(52,764 |
) |
Net loss per share, basic and diluted |
$ |
(0.92 |
) |
|
$ |
(1.05 |
) |
Weighted-average common shares outstanding, basic and diluted |
|
56,708,975 |
|
|
|
50,326,627 |
|
|
|
|
|
|
|
Other comprehensive loss: |
|
|
|
|
|
Net loss |
$ |
(52,179 |
) |
|
$ |
(52,764 |
) |
Foreign currency translation adjustment |
|
21 |
|
|
|
— |
|
Unrealized gain (loss), net on marketable securities |
|
65 |
|
|
|
(628 |
) |
Comprehensive loss |
$ |
(52,093 |
) |
|
$ |
(53,392 |
) |
Condensed
Consolidated Balance Sheets(in thousands, except
share and per share data)(Unaudited)
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
109,661 |
|
|
$ |
127,677 |
|
Short-term investments |
|
184,921 |
|
|
|
205,611 |
|
Accounts receivable, net |
|
8,117 |
|
|
|
6,224 |
|
Inventory |
|
5,487 |
|
|
|
2,917 |
|
Prepaid expenses and other current assets |
|
9,652 |
|
|
|
11,807 |
|
Total current assets |
|
317,838 |
|
|
|
354,236 |
|
Property and equipment,
net |
|
2,001 |
|
|
|
2,197 |
|
Right-of-use asset |
|
1,088 |
|
|
|
1,182 |
|
Intangible assets, net |
|
7,669 |
|
|
|
7,883 |
|
|
|
|
|
|
|
Restricted cash |
|
328 |
|
|
|
328 |
|
Other long-term assets |
|
16,754 |
|
|
|
16,655 |
|
Total assets |
$ |
345,678 |
|
|
$ |
382,481 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
13,347 |
|
|
$ |
4,797 |
|
Accrued expenses and other current liabilities |
|
30,549 |
|
|
|
32,894 |
|
Deferred revenue |
|
1,428 |
|
|
|
1,434 |
|
Lease liability |
|
705 |
|
|
|
684 |
|
Total current liabilities |
|
46,029 |
|
|
|
39,809 |
|
Long-term liabilities: |
|
|
|
|
|
Deferred royalty obligation |
|
77,520 |
|
|
|
75,810 |
|
Lease liability |
|
1,076 |
|
|
|
1,260 |
|
Derivative liability |
|
1,290 |
|
|
|
1,340 |
|
|
|
|
|
|
|
Total liabilities |
|
125,915 |
|
|
|
118,219 |
|
Stockholders’ equity: |
|
|
|
|
|
Preferred Stock, $0.001 par value: 10,000,000 shares authorized; no
shares issued and outstanding at March 31, 2023 and
December 31, 2022 |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value: 120,000,000 shares authorized;
56,852,404 and 56,612,429 shares issued and outstanding at
March 31, 2023 and December 31, 2022,
respectively |
|
56 |
|
|
|
56 |
|
Additional paid-in capital |
|
981,950 |
|
|
|
974,356 |
|
Accumulated other comprehensive loss |
|
(6 |
) |
|
|
(92 |
) |
Accumulated deficit |
|
(762,237 |
) |
|
|
(710,058 |
) |
Total stockholders’ equity |
|
219,763 |
|
|
|
264,262 |
|
Total liabilities and stockholders’ equity |
$ |
345,678 |
|
|
$ |
382,481 |
|
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