Rhythm Pharmaceuticals Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 7, 2025
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Operator

Good day and thank you for standing by. Welcome to the Rhythm Pharmaceuticals First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question and answer session.

Operator

I would now like to hand the conference over to your speaker today, David Connolly, Investor Relations at Rhythm.

David Connolly
David Connolly
Executive Director, Investor Relations and Corporate Communications at Rhythm Pharmaceuticals

Thank you, Josh. I'm Dave Connolly here at Rhythm Pharmaceuticals. For those of you participating on the conference call, our slides can be accessed and controlled by going to the Investors section of our website, ir.rhythmtx.com. This morning, we issued our press release that provides our Q1 twenty twenty five financial results and a business update, and that press release is available on our website. Our agenda is listed on slide two.

David Connolly
David Connolly
Executive Director, Investor Relations and Corporate Communications at Rhythm Pharmaceuticals

On the call today are David Meeker, our Chairman and Chief Executive Officer and President Jennifer Lee, Executive Vice President, Head of North America Hunter Smith, Chief Financial Officer and Jan Masabro, Executive Vice President, Head of International is on the line and joining us from Europe. On slide three, I'll remind you that this call contains remarks concerning future expectations, plans and prospects, which constitute forward looking statements. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed on our most recent annual or quarterly reports on file with the SEC. In addition, any forward looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent dates. We specifically disclaim any obligation to update such statements.

David Connolly
David Connolly
Executive Director, Investor Relations and Corporate Communications at Rhythm Pharmaceuticals

With that, I'll turn the call over to David Meeker, who will begin on slide five.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Thank you, Dave. So good morning, and thank you for joining. So we're about one month since our call highlighting the top line results from our Phase III trial in acquired hypothalamic obesity. We remain on track for Q3 filing, including having an in person Type D meeting scheduled with the FDA. I will say the FDA is responsive and I would characterize our interactions as completely normal.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

We have reviewed all the data, which we will present at upcoming meetings. The more we dig into the data, the more convinced we and I are that cetmelanotide has the potential to transform the life of both the patient and their families. I will remind you of the top line data with a little additional color in the next few slides. Commercially, with BBS, we had a very good first quarter. In The US, demand, as reflected in vials dispensed to patients, continues to grow.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

The team, as Jennifer will describe, is making good progress on multiple fronts addressing the challenges of this complex disease. The growth in demand is obscured this quarter by the inventory shifts, which Hunter will walk you through. The international team continues to execute on its country by country BBS launch strategy and the HO contribution to revenues predominantly from France and Italy continues to grow, supporting our view of the unmet need and the level of interest in cetmelanotide as a solution. As we have highlighted, we're looking forward to the Bivomelagon Phase II readout in Q3 and having something to say about the ongoing DWS study, Prader Willi, and the seven eighteen weekly study in HO by the end of the year. And we remain well capitalized with a projected cash runway in 2027.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

On slide six, this is data from a publication by Professor Mueller from Germany, a renowned expert in the field of hypothalamic obesity. It provides some numbers behind what we are learning as we get to know this community and review the data from this trial. The medical complexity and severity that these patients and their families are dealing with is unlike any disease I have worked on in my industry career. There are diseases with higher mortality rates, but very few with higher medical complexity. You can see that from the numbers on the slide.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Three point seven hospitalizations in the first two years after the injury, of which twenty three percent required an ICU admission, 12 visits to their general practitioner, and on average 20 visits to a specialist. And even more strikingly, the average number of prescriptions written per month is 5.5, the average number of unique medications prescribed in the first two years is twenty two, and eighty nine percent of these patients require three or more therapies for neuroendocrine dysfunction. As the data from this trial shows us, including the exit interviews with patients and caregivers, the untreated hypothalamic obesity with its associated hyperphagia and fatigue represent a significant part of the medical burden they are dealing with. The fact that patients were willing to commit to this fifty two week placebo controlled trial, given the incremental burden of testing and clinic visits, which are part of any trial, speaks to the motivation of this community to find solutions. We at Rhythm are highly motivated to do not let them do that.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

On slide seven, I'll now provide you with little additional color around the results of the phase three study. First the top line, and we're showing again, with a 16.5% reduction in BMI in the cetmelanotide cohort, as opposed to a 3.3% increase in BMI in the placebo group, for a placebo adjusted difference of 19.8%. As we showed you last time, moving to slide eight, there was no difference in effect between patients 18 and those 18, but we have broken this out further. So on slide nine, we did stratify patients between three age groups, breaking out the 18 to those between 12 and 18, and those 12. Adults may be a relatively homogeneous population, but there's a big difference between a four year old and a 17 year old.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Here you can see the three age cohorts, and remarkably, they are similar again, with placebo adjusted BMI percent changes ranging from 19.2% to 21%. On slide 10, a hallmark of the trials of semolantide in this disease has been the consistency of response. And as we showed you last call, eighty percent of the patients lost more than five percent suggesting some response. As always, the patients of greatest interest, at least to me, are the apparent non responders. And I gave three patient examples last call of patients who did not reach the five percent but had other data suggesting a response to drug.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

A more complete summary of that analysis is as follows. There were seventeen out of eighty one cetamylanotide treated patients who were not considered responders by virtue of reaching five percent or more in this analysis. Eight of these patients discontinued treatment prematurely and had their data imputed. Three of these eight patients actually had reductions in BMI greater than or equal to 5% at their last time point assessed, but were counted as non responders due to the conservative nature of the multiple imputation method, which uses the placebo patient data to generate the imputation values. Of the nine non responders who did complete the trial, six of the nine patients either had a response greater than 5% at some point during the trial, and or for the pediatric patients had a BMI Z score decrease greater than or equal to 0.2, which is clinically significant.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Two of the three patients with no response and no other explanation had drug blood levels consistent with significant noncompliance. So in summary, the consistency we saw in the Phase II trial and the consistency response we're seeing in the real world French experience is evident here. This further analysis supports the thesis that the biology in this disease is driven by impaired signaling through the MC4R pathway with a consequent deficit in alpha melanocyte stimulating hormone. The consistency of the response to cetmelanotide we see across this highly heterogeneous and medically complex patient population suggests we are helping to correct a fundamental biologic deficit. On slide 11, I remind you of the disposition in this trial.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

The vast majority of the one hundred and forty three patients enrolled, consisting of 120 in the pivotal cohort, 11 supplemental, and 12 in the Japanese cohort have moved to the open label extension trial. A total of 120 patients remain on treatment that's one hundred and eight patients who transition to the open label extension and the 12 Japanese patients who remain in the blinded portion of the study. And importantly, there were no new safety signals related to cetamlanotide observed, which of course is in line with cetamlanotide's well established and well understood safety profile. Consistent with prior experience, cetamlanotide is also generally well tolerated in the study. And on slide 12, which you've seen before, to remind you of the very significant opportunity in acquired Ho.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

The unmet need is there, these patients are accessible, they're diagnosed, and this cetmelanotide data looks extremely promising. We believe we can make a significant difference in this disease. So with that, I'll turn the call over to Jennifer.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

Thank you, David. Beginning on slide 14, we are pleased to report that the demand for emsivri as the only treatment that addresses the root cause of hyperphagia and obesity associated with Bartleby DEL syndrome remained strong in the first quarter of twenty twenty five. Overall, we have seen continued increasing demand for OMCifri with a consistent number of new prescriptions received over the past several quarters, resulting in ongoing growth in patients on reimbursed therapy. During the first quarter, we did see an increase in the number of patients that transitioned to new insurance plans, which happens at the beginning of every year. This resulted in an increase in the number of patients that temporarily transitioned from receiving commercial drug to receiving free drug from our Bridge program.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

I am pleased to report that we secured access for the vast majority of these patients and exited Q1 with the overall percentage of Bridge patients back to normal levels experienced at the end of twenty twenty four. On the next slide, I will update you additional positive trends relating to improved Medicaid coverage and improvements in the breadth and depth of prescribers. Next slide. We continue to see increased breadth and depth of prescribers. In Q1, we saw the highest number of total prescribers within the quarter since the launch of OMSIVRI and saw a 13% growth in the total number of prescribers this quarter compared to Q4 of twenty twenty four.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

This growth was driven by an increase in new prescribers, which is an important driver of the business. Since launch to date, approximately a third of new prescribers become repeat prescribers. This demonstrates that when a physician is educated to look for the clinical manifestations of BBS in their patients, they begin to find more BBS patients. Second positive trend is Medicaid access on the next slide. The last time we shared this metric was a year ago, when the breakdown between states with positive coverage from CIVRA versus no coverage was approximately 85 to 15.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

We continue to work persistently to expand access. And in recent months, we have secured ENSIVRI specific policies in three additional states. We now have ENSIVRI specific policies or positive coverage decisions for Emsivri in states that account for greater than 95% of covered Medicaid lives, leaving less than five percent in states with no positive coverage for Emsivri to date. This success in securing access for Encevery from Medicaid, as well as commercial payers, will serve as a strong foundation for our next potential launch in acquired hypothalamic obesity. We are excited by the potential to bring INCIVRI to HO patients, since our market research, both with physicians and patients and caregivers, points to a significant need for a therapy for this devastating disease.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

Next slide. We know endocrinologists remain critical for patients with hypothalamic obesity, enabling us to focus our efforts on this one specialty, which is the same specialty that accounts for about half of prescribers for BBS. Weight gain, lack of energy, and hyperphagia were outlined by endos to have a significant negative impact on patients' day to day lives, with current treatment options insufficient in addressing these symptoms for patients. As expressed by one endo, we need a treatment that is going to be more effective, well tolerated, and safe to continue long term because this problem is not going to go away. These patients are going to be on this treatment for their lifetime.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

Once you withdraw the treatment, they will regain the weight and more. When shared a blinded target product profile, all physicians outlined they would prescribe cetamolantide for HO. On my next and my last slide, our research with patients and caregivers illustrates just how significant the impact of hunger and hyperphagia, decreased energy or fatigue, and weight gain are for patients. As seen in the first quote, I was just feeling like a different person after the tumor, and the hunger rules your life. These patients know what life was before the onset of these symptoms associated with HO, and they want their lives back.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

With that, let me hand it over to Jan.

Yann Mazabraud
Yann Mazabraud
Executive VP & Head of International at Rhythm Pharmaceuticals

Thank you, Jennifer. We are available to reimburse access in patient sales or early access programs now in more than 15 countries outside The United States. We are seeing steady global growth in the number of patients on paid therapy, our global strategy patients and treatment country by country. From CLN lipar BLLA, the patient population that is better identified in Europe than anywhere, remain an important contributor in the international. DBS, however, remains the main driver of revenue outside The United States with steady growth in reimbursed therapy.

Yann Mazabraud
Yann Mazabraud
Executive VP & Head of International at Rhythm Pharmaceuticals

And Germany and France also more patients with hypothalamic obesity are getting access to in theory through early access programs and also named in six months. Of course, we are seeing growth with the paid DME approval for our brands, both acquired and congenital hypothalamic ability. But the early access for our initial growth we are now seeing online in Spain and even in Europe where our first started therapy. Next slide. We are looking forward to major European medical at which we have 10% including five orals.

Yann Mazabraud
Yann Mazabraud
Executive VP & Head of International at Rhythm Pharmaceuticals

The first ever joint conference of the European Society of Technology and the European Technology in Copenhagen. The thirty second in Malagascar. We are particularly looking forward to presenting real world data from the French polypropylene glycolemic obesity. Recall in the fall of twenty twenty four, French presented real world data demonstrating the potential efficacy of sethanolotide in eight patients with acquired hypothalamic obesity, who achieved 12.8% BMI reduction at three months and five patients with greater than 21% BMI registered at three months onset. Week, we will set up with acquired or congenital after that facility will reach 20 or more.

Yann Mazabraud
Yann Mazabraud
Executive VP & Head of International at Rhythm Pharmaceuticals

Also, there will be a presentation of oral therapy for German BBS patients, which points program contribute to the daybreak trial as they are present on patients HIP. Altogether, we have 10 presentations at these two conferences, plus two symposia for our pathway. This level of activity okay, this level of support and the very strong interest we enjoy from European experts. I would follow-up.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Jan, you were breaking up a little bit there, so I think we lost some of your communication there. I'm just going to read briefly from your script just so everybody has the last part. I think I'll summarize briefly. Things are going incredibly well in Europe, as Jan highlighted, hopefully people got that. And the VBS launch is progressing across countries.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

The ENDO SP meeting, which is coming up and this is what he was speaking to at the end, is we're excited about that, and we have multiple abstracts that are being presented there, and just to summarize what he said, want to make sure everybody heard it. So we previously presented data on the from the initial eight patients in the French real world experience, and next week we'll see data from twenty four patients with acquired congenital obesity who have reached at least three months or more on Stetmelanotide. And then there will also be a presentation of real world evidence of incivri for German BBS patients, which will point to the benefit of reducing hyperphagia and obesity, as well as details on how this specialized nursing support program contributes to patient and caregiver satisfaction. And then there will be a publication or an abstract on the genetic rare MC4 pathway indication studied in Daybreak, including presenting findings on patients with this PHIP variant, which one of the variants which had particularly strong results in our initial phase two DAYBREAK study, and we look forward to doing more work there, so that will be there. And I think I'll just comment that on the HO data, the 24 patients you're going to see, we're embargoed now so we can't present that data, but you won't be surprised, there's nothing about that data set that's inconsistent with what we've seen so far.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

So with that, I'll turn it over to Hunter.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

Thank

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

you, David, thank you, Jan. Rhythm had a very good first quarter, let me walk you through the components on slide 23. Revenue from global sales of Omsivri was 37,700,000.0 in the first quarter of twenty five. The number of patients on reimbursed therapy increased fourteen percent globally during the quarter. The biggest driver of the Q4 to Q1 change in revenue was an inventory swing of 8,300,000 at the specialty pharmacy that dispenses IMCIVI to patients in The US.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

As we discussed in our Q4 call, the specialty pharmacy had purchased approximately $4,100,000 more than it dispensed to patients in that quarter. This resulted in an increase in the specialty pharmacies inventory to more than twenty two days on hand, effectively pulling forward orders from Q1 into Q4. In the first quarter of twenty twenty five, this ordering and shipment pattern more than reversed itself. The specialty pharmacy ordered 4,200,000 less than it dispensed to patients, reducing inventory days on hand to less than nine. Typically, the specialty pharmacy inventory runs between ten and fifteen days on hand.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

The value of Encevery dispensed to patients in The US, the best measure of demand for Encevery increased 1,100,000 sequentially over Q4. Major drivers of this included a 4% price increase taken in January, an increase in the number of reimbursed BBS patients on therapy, an increase in the number of patients on bridge therapy at the start of the quarter, as Jennifer described earlier, that resolved itself by the end of the quarter, and a modest decrease in patient compliance. Outside The United States, sequential revenue growth was strong at 3,100,000, primarily driven by France, Germany and Italy. Taken together, the 8,300,000 inventory swing, the increase of 1,100,000 in product dispensed to patients in The US and the 3,100,000 increase ex US resulted in a net revenue decrease of 4,100,000 compared to the fourth quarter of twenty twenty four, reflecting timing difference from inventory shipment patterns in what was an otherwise strong period of growth. Looking ahead, we don't expect such significant swings in ancillary inventory at the specialty pharmacies we experienced in the last two quarters, but if we do experience that we will continue to highlight any significant impacts as we have done in the past.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

Now I'll move to slide '24 with our financial snapshot in Q1 twenty twenty five. In comparison to Q1 twenty twenty four, net product revenues increased 11,700,000.0 or 45% over the first quarter of twenty twenty four. For some additional color on the P and L, gross to net for US sales was 84.2 percent, generally in line with the 85% GTM we've reported previous quarters. R and D expenses were 37,000,000 for Q1 twenty twenty five, compared to 128,700,000.0 during the first quarter of last year, when we incurred R and D costs of 92,400,000.0 associated with the acquisition of Bivomelagon from LG Chem. On a sequential basis, R and D expenses are down by approximately 10% from the 41,200,000.0 we reported in the fourth quarter of twenty four, due to increased spending on the pediatrics phase three trial, Daybreak and M and A trials and decreased costs associated with the RM718 phase one trial.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

Also, are seeing lower costs related to post trial access due to a more efficient design for our open label extensions. SG and A expenses were 39,100,000.0 for the first quarter twenty twenty five, as compared to 34,400,000.0 for the first quarter of twenty twenty four. Sequentially, SG and A expenses increased modestly by less than 3% compared to Q4. For the first quarter of twenty twenty five, the weighted average common shares outstanding were 63,100,000.0 compared to 60,100,000.0 for the first quarter of twenty four, and 61,600,000.0 weighted average common shares outstanding in Q4. The increase quarter over quarter primarily reflects the approximately 1,300,000 shares sold under the ATM program in December and January, which we announced in conjunction with our Q4 earnings.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

Cash used in operations was approximately 40,400,000.0 compared to 19,000,000 in the fourth quarter. This change represents an expected seasonal increase that occurs in the first quarter each year with the payment of annual bonuses companywide. In addition, the 6,300,000.0 cash consideration paid to reacquire the rights to Observi in China was recorded this quarter. Looking at cash flow going forward, final four in going forward into Q2, just to remind everyone, the final 40,000,000 portfolio, final 40,000,000 portion of the license fee payable to LG as part of that Bibimelagon transaction will be paid during the coming quarter. It was expensed in the first quarter of twenty twenty four, as previously mentioned.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

On slide 25, we ended the quarter with 314,500,000.0 in cash on hand, which we believe will be sufficient to cover all planned operations into 2027. As we touched on earlier, US revenues were affected by an inventory swing from Q4 to Q1, which decreased the percentage, The US percentage of overall product revenue to 65% in Q1 from 74% in Q4. OpEx for Q1 twenty twenty five includes 12,900,000.0 of stock based compensation. We noted previously about reacquiring our rights in China for 6,300,000.0 during Q1. This transaction was recorded as a reduction of license revenue of 5,000,000 due to the termination of our licensing agreement with Rarestone and a reduction of deferred revenue on our balance sheet of 1,300,000.0.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

Our GAAP EPS for the first quarter of twenty twenty five was a net loss per basic and diluted share of $0.81 This includes 8¢ per share for the rare stone repayment and 2¢ per share from accrued dividends on convertible preferred stock of 1,300,000.0. Lastly, on slide 26, our OpEx guidance remains unchanged. We anticipate approximately $285,000,000 to $315,000,000 in non GAAP OpEx comprised of non GAAP SG and A expenses of 135,000,000 to $145,000,000 and non GAAP R and D expenses of 150,000,000 to 170,000,000 With that, I'll turn the call back over to David for Q and A.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Thanks, Hunter. So in summary, again, hopefully what you're hearing, Rhythm continues to grow by all metrics, I'll give you one additional metric. We're about 300 people now employed at Rhythm to manage the diverse set of activities we have going on and as I look across everything, our commercial efforts as you've heard, BBS launching progressively around the world, global expansion efforts, and then our development efforts, we're in a really good place. And I've been in this industry, again as you all know, for a very long time, much of that time spent in clinical development. And I have to say, I don't know if I've had another phase three set of data that has been more rewarding in terms of the fun you have analyzing that data set and realizing the impact that it is having and will have, hopefully for a much larger number of patients going forward.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

So we feel good about where we are, look forward to your questions, and with that we'll turn it over to Q and A.

Operator

Thank you. Our first question comes from John Woolaban with Citizens. You may proceed.

Jon Wolleben
Managing Director at JMP Securities LLC

Hey, thanks for taking the question and congrats on the update. David, I

Jon Wolleben
Managing Director at JMP Securities LLC

hope you could talk a little

Jon Wolleben
Managing Director at JMP Securities LLC

bit more about those non responders you highlighted. It sounded like several of them were having good responses but dropped out. So what were the reasons for those discontinuations?

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, I mean, again, were a variety, and they were across some, both placebo and treated. They mix from just patients withdrawing because they couldn't keep up with the clinical trial, either themselves or the family managing it, so that was about half of the group. And then the other, including some of the small number in the placebo group, due to reactions, so GI, injection site overall, the patient who had the seizure disorder preexisting had uncontrolled seizures during the trial and ended up actually dying of uncontrolled seizures at the end of the trial, that patient did not complete, so that's a patient who's included in the dropout. I think as I've explained, what I was trying to explain with, when patients dropout, their data does get imputed and the way companies are guided to handle that is done in the most conservative way, which is not surprising, the FDA wants to make sure that they're not in any way getting to a robust result here. So the imputation is done by using data from the placebo group in terms of their trajectory over the course of the trial, and that value is used to generate the amputation values, and obviously the placebo patient group here gained weight, so if you're using data from that data set it's going in the opposite direction of what might support evidence of an effect.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

So that's why I was just highlighting that three of the patients out of the eight who dropped out had already reached a point of response at the point they dropped out, but the amputation then took them down below that five percent level.

Jon Wolleben
Managing Director at JMP Securities LLC

And can you talk just a minute about real world persistence and understanding of expectations for adverse events and how that understanding keeps patients on drugs or not? What's the real world experience, and how does that translate from the clinical data?

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, I mean, we can talk to this more. What we talked about generally across all of our patient populations treated, our commercial experiences, globally with a number around thirty percent -ish of patients who discontinue. In the HO world, and we've gotten this question, are we going to see fewer DISCONS there? And the number is still relatively small, but I think the answer is yes. I mean the discontinuation rate in this trial again was a little less than ten percent off the total one hundred and forty three patients that were enrolled.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Compliance looks like it was extremely high overall and so part of my goal in giving you the background around the medical complexity is, yeah that's the world they're living in, despite all of that, the importance of continuing cetmelanotide and the relief they're getting from that, it seems to be incredibly high, so I think we're going to do better, maybe quite well in the HO population with regard to both DISCONS and compliance.

Jon Wolleben
Managing Director at JMP Securities LLC

That's helpful, thanks for the color.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Thanks.

Operator

Thank you. Our next question comes from Derek Archila with Wells Fargo. You may proceed.

Derek Archila
Derek Archila
Managing Director, Biotechnology Equity Research Analyst at Wells Fargo

Hey, good morning and thanks for taking the questions. Congrats on the progress here. Just two quick ones from us. Just for Part C for RM718, I know you highlighted enrollment will complete by the end of the year, but we just wanted to confirm whether you actually plan to share any efficacy data for patients reaching sixteen weeks before the end of the year. And then the second question for Hunter, noted some changes on compliance during the quarter.

Derek Archila
Derek Archila
Managing Director, Biotechnology Equity Research Analyst at Wells Fargo

So I was wondering if you could just elaborate on that and I guess how we should be thinking about that trending for the rest of the year? Thanks.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yes, I'll take the first one and turn it over to Hunter. So yeah, Part C is just getting underway. As you know, true obviously, it's hard to guide until the trial is really up and running and you're enrolling at a more consistent rate here, so we're just at the beginning. The reason we're guiding to hopefully being able to say something by the end of the year is that we're not targeting necessarily a specific number of patients. So for example, for the Bivomelagon trial, that's a blinded forearm trial, 28 patients, you've got to enroll 28 and get them to the end.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

But in the open label effort here for seven eighteen, it's also true for Prater Willi, with the open label, we just want to get to a robust number, which is why my hope and expectation is that we will have enough patients treated for a long enough period of time that we will have something to say by the end of the year.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

Derek, on compliance, we generally have seen compliance sort of in the low 80% zip code. And we had a very strong compliance rate in Q4, which was a bit of a tailwind in Q4, and it returned to a more normalized level in Q1.

Derek Archila
Derek Archila
Managing Director, Biotechnology Equity Research Analyst at Wells Fargo

Understood. Okay. Thank you.

Operator

Thank you. Our next question comes from Tazeen Ahmad with Bank of America. You may proceed.

Tazeen Ahmad
Tazeen Ahmad
MD - US Equity Research at Bank of America

Hi, good morning. Thanks for taking my question. I'm sorry if this was part of Yen's comments. Couldn't hear him clearly. But can you just talk to us about the importance of these continual data updates that you're expecting to make now at conferences going forward?

Tazeen Ahmad
Tazeen Ahmad
MD - US Equity Research at Bank of America

You know, it's our understanding from companies that we've spoken to, or doctors that we've spoken to, that they think that the data is pretty much perfect. So what additional data do you think is necessary?

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yann, if it's right, I'll take that one. Also, I'm not sure if your connection's back is solid. Yeah, no, it's a fair question. I think my view of particularly the rare disease world is every patient is incremental and news in a sense, particularly when you're early on. So the French patient data that we presented last fall, there was only eight patients, but it was incredibly important data, as we all realized, because it highlighted a group that we hadn't studied in our phase two, meaning these were all adults, and with a mean age of 30, and they were also out about eleven years from the time of their insult.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

So it addressed, based on small numbers, an important question there, which now this phase three trial is also highlighted or answered I think, which is it doesn't matter whether you're an adult or pediatric patient, you're going to respond well. What is the value of now having a 24 patient update as opposed to an eight? Again, it's just, 24 is a lot more than eight, it's still a small number of patients, so it's not that we're going to have every quarter an update on how many patients are treated in France and Italy and some of these other countries, which you may have missed, I mean we do have individual patients, of main patient settings and a few other countries as well treated for HO. So we'll do that for a little while, but not endlessly, so I don't if that answers your question.

Tazeen Ahmad
Tazeen Ahmad
MD - US Equity Research at Bank of America

Yeah, and then just on questions around seasonality, I just want to clarify, are you expecting to see any seasonality for the remaining quarters of the year?

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

I mean, Jennifer, you want take that?

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

I think like overall, like Q1 is probably the biggest impact based off of what we outlined in terms of those insurance changes that happen just across the board for any patient population. And the ability for us to work through with the new payer to regain insurance, That is what really hit us from a Q1 perspective. I think Q4, we don't have a real control in terms of what the specialty pharmacy orders, so that may be something that happens in the very last couple of orders of the month in December. But beyond that, we haven't really experienced a lot of other seasonality throughout the year.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

Just to add to that, if we look at our pattern of prescriptions written and approvals for reimbursement received, with the exception of the impact on change in the calendar year, we don't see a significant difference between the quarters.

Tazeen Ahmad
Tazeen Ahmad
MD - US Equity Research at Bank of America

Okay, thank you.

Operator

Thank Our next question comes from Phil Nadeau with D. D. Cowen. You may proceed.

Phil Nadeau
Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen

Good morning. Congrats on progress and thanks for taking our questions. A few from us. First, David, you mentioned in your prepared remarks that you have an FDA meeting scheduled. Can you discuss what elements of the filing need to be ironed out with the FDA at this point?

Phil Nadeau
Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen

Any uncertainties or is the meeting more a formality?

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

I can just say, probably for the past five years, I'm thrilled anytime we can get more meaningful interactions with the FDA, meaning just they're busy and have a lot to do. What I was excited about here is we got an in person meeting and this will be my first in person meeting in about five years, so looking forward to that. In terms of why the meeting, yeah, this is a invariably have, and they get called different things, but a meeting before a filing, and it is to clarify what we're presenting in the filing, how we look to present the data, make sure they're all aligned with how that's going to come through. So that's it.

Phil Nadeau
Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen

Got it. Second question is on the Q4. Hunter, you noted that there was somewhat of an impact because of the time to get insurance reauthorizations and the bridging of patients on for drug. Could you quantify that impact in the quarter? Do you have a sense of how much revenue was hit by

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

was about a $700,000 effect.

Phil Nadeau
Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen

Perfect. And then last question is on the payer mix. Can remind us what the payer mix is for BBS between Medicare and Medicaid and private pay? And where do you expect that to go for the HO population?

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

So the commercial as well as the Medicaid population accounts for about eighty percent, with approximate equal split between the two, with Medicare being a smaller portion in terms of impact of the BPS patient population. And we are currently still evaluating the HO opportunity to better understand what that payer mix looks like.

Phil Nadeau
Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen

Great. Thanks for taking our questions.

Operator

Thank you. Our next question comes from Seamus Fernandez with Guggenheim Securities. You may proceed.

Seamus Fernandez
Senior Managing Director at Guggenheim Partners

Great. Thanks for the question. Really kind of focused in on the BIVIMELIGON opportunity and how you see this advancing and the pace at which you can kind of bring that product forward should the Phase II program deliver the profile that you anticipate, which again, if you could just remind us the profile that you're expecting, I recall David you saying that your hope for that product is that it would deliver efficacy comparable to what we've seen in HO with semilanotide, but excluding the impacts of MCR-one and the hyperpigmentation? So that's my first question.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, so you put the right emphasis on my hope, see what the data shows. The way I'm now answering that question, and these answers evolve a little bit, but they've evolved since I've seen the phase three data, I think given the efficacy of setmelanotide, as shown in phase three, the threshold here is really to be better than ten percent. So I was, you know, what's clinically meaningful, that's certainly clinically meaningful, does it have to be the same as what we saw with cetmelanotide, meaning if we ended up short of the sixteen point five percent without the placebo correction part, does that mean you don't have a drug? And I say no, I mean, I think you can have different formulations, oral versus a sub q, many patients might prefer an oral, I think the GLP-one world is a good example of where everybody's getting tied up in knots about two or 3% differences in GLP-one outcomes when clinically makes absolutely no difference at all, I mean they're all robust results responses to that drug. So internally I think our threshold would be, we're looking for something north of ten percent, I think if we get that we have a drug, and then how quickly we can develop it.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

We are developing new formulations which are going to be critical, most specifically for the pediatric population, we'll have both a liquid and a chewable tablet. So that's going be a little bit gating in terms of getting forward, I can't put quite a timeline on that, but what I will say is if we have positive data, we will move aggressively to get into a phase three effort, specifically in HO, and in parallel we'll look at our strategies for doing BVS and POMC, but we will certainly move quickly to get into HO, and maybe we have to stagger it a little bit in terms of how peds come into that, depending on availability of product.

Seamus Fernandez
Senior Managing Director at Guggenheim Partners

Great, and a follow-up to kind of pipeline opportunity and questions there. The PWS opportunity, can you talk a little bit more about how you see that opportunity potentially emerging for MZ4R specifically targeted agents largely because we know that the first effort kind of missed the mark, but I know you're testing higher doses. Just trying to get a better sense of the PWS opportunity that you see for the product and if there are additional learnings that have kind of brought you forward to the willingness to kind of pursue a higher dose here. Thanks.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, so let me just remind you a bit on the original study. So yes, I think we used too low a dose, but it wasn't just dosing in that first trial, it was too short a trial and it was a complicated design with crossover and the like. So as we've said and I've said, I don't think we learned much of anything from that original effort, number one. Two, I think we maybe have some increased level of confidence in the biology here. I mean this pathway is absolutely part of what is impaired in patients with Prader Willi.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Now that's a very complex disease, there's a lot of other things going on, other genes which are deleted and may be impacting things like behavior and the like, which makes it more challenging to study. So with the context that this is a tough disease, I've always thought you could have a drug which works and maybe your trial fails just because the disease in the background is so challenging. That said, yeah, I put our sort of general probability of success here, which is kind of a non answer, you know, sort of the fiftyfifty range, but it's a legitimate fiftyfifty, and I have to say, so what are we looking for? The bar is lower in Prader Willi, so I think HO, we came in and we had the phase two data, we're looking for something north of 10, we ended up with 16, placebo adjusted of almost 20. That's not what we're looking for in Prader Willi.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Prader Willi, nothing helps those patients lose weight. Know, Solano's drug just got approved for decreasing their hunger, but there's a big unmet medical need which remains there. So anything that moves the needle there, that's going to be interesting, and something I think we'll seriously look to take forward.

Seamus Fernandez
Senior Managing Director at Guggenheim Partners

Great, thanks so much.

Operator

Thank you.

Operator

Our next question comes from Whitney Ijem with Canaccord Genuity. You may proceed.

Whitney Ijem
Managing Director at Canaccord Genuity Inc

Hey, all. Thanks for taking the question. Just wanted to follow-up on HO and kind of the launch trajectory versus VBS. I know you've talked a lot about the specifics of the HO patient population that hopefully will lead to kind of faster uptake or a different launch trajectory. I think most of those comments have been thinking about The US or contemplating The US, but it seems those same things should be the case in Europe with potential for maybe even more momentum just given some of the early access progress that's been made on the HO front there.

Whitney Ijem
Managing Director at Canaccord Genuity Inc

So just curious if you can talk a little bit more about how to think about HO uptake in Europe, specifically relative to what we've seen in DBS so far.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yep. Jan, you want give it another shot and we'll just see how your connection is? If not, I'll take it back.

Yann Mazabraud
Yann Mazabraud
Executive VP & Head of International at Rhythm Pharmaceuticals

Yeah, will try. So the first thing that, as I said, the engagement with the

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Hey Jan, Jan, Jan, I'm going to stop you just because we're losing too much of what you said there. So I'll give you my answer, Whitney. There's a lot of things about Europe, Rare Diseases in general, HO specifically, which are of course advantageous from a launch standpoint in that the Centers of Excellence aspect of this, patients tend to be more concentrated. That said, I think the dynamic in Europe, which is going be similar to The US, is heavily concentrated in the endocrinologist. These patients, they have a very high percentage of them have pituitary insufficiency and they are chronically managed by endocrinologists.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

And so to that extent it will be very similar between The US and Europe in terms of our approach to that market, and then the rate at which they come on, I don't know if it's going to be different, I mean they have different reasons for why it may go faster or slower either in The US or Europe, and I think what we've seen, BBS for example, has not been so different, and I think that may be the case here. I do think, as we've said and will continue to say, HO is a very different opportunity than BBS, so some of that will be reflected in our launch trajectory of course.

Whitney Ijem
Managing Director at Canaccord Genuity Inc

Got it, that's helpful. And then thinking about the label, can you just remind us how you are thinking about that currently? I know I think we're expecting an acquired HO specific label, but should we be thinking about BMI requirements, or age, or time from injury, any other kind of parameters that we should be thinking about?

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

So, don't know, we have had zero interaction around label to date, so I don't have any insight there. In general, FDA labels your drug based on how your inclusionexclusion criteria are written in the trial. The VMI criteria, FDA is moving away from that, so I'm actually not expecting that to be part of it, meaning this threshold of 30 being a magical number whereby above and below it you're obese or not obese, so I don't expect hopefully that that will not be a bit because it's not helpful. The other thing for HO, which I think they will understand, this is about the change in trajectory, it's not about an absolute level of weight or BMI, it's about you were at a level of relative normality before you had your injury or your insult, and then following the injury, then you have a rapid acceleration of your weight gain, increasing your BMI. So long story short, don't think it's going to be there.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Age wise, we went down to four, we've gone down to, we're approved for two and above for BBS and POMC. I think this trial only studied four, so four and above, and we had a four year old in the trial, so I would expect minimally we'll get a four and above in terms of age, so not really an age restriction on what we're seeing here. And then we have hunger in the label in Europe. We have tried to get it in here that we have the ability to promote. We have data on hunger in the label.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

We'd like to get it in the indication statement. To me, that's been more about our inclusionexclusion criteria, it's a key secondary in this trial, we hit hunger, we're going to go back and try again. And I think that's an important part of the indication statement, so we'll work hard to get it, but to be seen.

Whitney Ijem
Managing Director at Canaccord Genuity Inc

Awesome, thanks so much.

Operator

Great, thank you. Our next question comes from Dennis Ding with Jefferies. You may proceed.

Dennis Ding
Dennis Ding
Vice President - Equity Research Analyst at Jefferies Financial Group

Hi, good morning, thanks for taking the question. Just one for me. So consensus has HO revenue ramping from around $115,000,000 in 2026 to 1,000,000,000 plus in 02/1930. So there's quite a steep ramp in just four to five years of launch. Can you talk about your level of confidence that the launch will be solid and what are the different moving parts that could drive revenue higher or lower than consensus?

Dennis Ding
Dennis Ding
Vice President - Equity Research Analyst at Jefferies Financial Group

Thank you.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, Dennis, thanks. So I think consensus and ourselves, we're all continuing to work a problem, none of us know exactly, so I'm not going to guide on the revenue piece of it specifically, I'll reinforce the elements, try to answer the other parts of your question. Fundamentally different, and I've talked before, the numbers here, five to ten thousand in The US, numbers in Europe, arguably that much larger than BBS, four to five thousand in BBS, but of that five to ten thousand, a much, much higher percentage of those patients are diagnosed, they're visible, they have complex, and they're actively being managed by specialists, and that specialist is endocrinologists. And about fifty percent of the patients, of the writers, script writers in The US for BBS happen to be endocrinologists. So this is a world we're in, HO will be even more concentrated in the endocrinology world, and as Jennifer and her team continue to work to develop the plans for launch, we will approach this in a different way than we did with BBS.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

In a rare disease world where the majority of patients are not diagnosed, you're trying to build a system that helps them get to a diagnosis. You don't find the patients by knocking on doors, you really find it by working with a system, and then a patient gets to the diagnosis, and often they find us, some of them we find them. And this, which is much more specialty like, if they're concentrated in a specialty, you can cover that specialty. And our goal will be in a tiered way to cover certainly those endocrinologists, which is a significant number, where the majority of these patients sit. So all of that says it should be a different ramp than we're seeing with BBS.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Now that said, it's still a $375,000 a year price point, there'll be no change in price. That puts a natural drag on any launch, you have a prior authorization as you go through, and so there'll be a balance between some of this. We have a huge advantage of having been out there around BBS, it's not like we're new to this community, they know us, increasingly people know the drug, and increasingly people are seeing the importance of MC4R pathway as being a, this is a critical fundamental underlying biology. So all of that, and how that nets out, I don't know, but I'll summarize and leave it with, yes, it's gonna be different trajectory, can't comment on whether those numbers and consensus are gonna be the ones we're gonna hit.

Dennis Ding
Dennis Ding
Vice President - Equity Research Analyst at Jefferies Financial Group

Great, thanks for the color.

Operator

Thank you. Our next question comes from Leland Gershell with Oppenheimer. You may proceed.

Leland Gershell
MD & Senior Biotechnology Analyst at Oppenheimer & Co. Inc.

Hi. Good morning. Great to see the consistency across the age subgroups in the HO study. A couple of questions from us. First question for Hunter, apologies if I missed it in the discussion about inventories, but should we expect lumpiness this year as we model quarterly revenue?

Leland Gershell
MD & Senior Biotechnology Analyst at Oppenheimer & Co. Inc.

Should we think about another fourth quarter kind of inventory stocking? And then also a question for Jennifer. Just on your comment about a third of first time prescribers turning to repeat prescribers, is that principally limited by simply the number of patients who fall under ancillary screening indications? Are there other factors that may be limiting the prescribers becoming repeat prescribers? Thank you.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

So on the lumpiness, there are factors that are a normal pattern. SPs do tend to do a little bit of stocking during the fourth quarter. It's a way they try to manage their we believe it's a way they try to manage their gross margins because they think there may be price increases coming in the New Year. It's not isolated to rhythm. Obviously, it's a very common factor across the industry.

Hunter Smith
Chief Financial Officer at Rhythm Pharmaceuticals

Some of the lumpiness occurs by things as arcane as the fact that the quarter ended on a Monday, which is the day Monday, the March 31, which is the day when SPs usually place their order, but they don't receive it until the next day. So that type of thing, if you would like to try and forecast that level of minutiae, I wish you luck. I can't do it. Again, overall, we don't think the moves in days on hand are going to be this significant. We think in general, they will sit in sort of the ten to fifteen day range on average, And the rest around that will just be the vagaries of timing and to some extent ways they may try to manage their own gross margin.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

And to the other question just regarding the repeat prescribers, I think in a disease like BBS, and if I compare BBS to HO and follow on to what David has been outlining, I think for an indication like BBS, we sort of have smaller little breadcrumbs where the teams are really scouring to get to a physician who may have this type of patient population and educating them so that they are aware so that when that patient comes to them, they are able to get that patient to a diagnosis. For HO in contrast, I think the breadcrumbs are much larger that will lead us to the right physician more quickly in terms of being able to educate and engage with that physician population. Once a physician actually gets a patient to a diagnosis, then they realize that this is something that they should be aware of as this patient with all these different symptoms comes to them, and it just becomes more of a piece of these patients could be anywhere, and sometimes they go to a physician who has already had experience with a VBS patient, and other times they're in the hands of someone who that is the first patient diagnosed.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

I will say that once that physician diagnoses and has a great experience on M. Civri, then they are more likely to also prescribe this drug for those particular patient populations. So it's a bit of a mix of that in terms of where the patients land in terms of care, and also the positive experience after touching and seeing what M. Civri can do for the PBS population that results in a repeat prescriber.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

And so Leila, just to reinforce again what Jennifer said, why don't the one third of patients all prescribe another drug? As a rule, she said, if you get one patient on, you have that experience, you're a believer, then it's more a question of do you have other patients?

Leland Gershell
MD & Senior Biotechnology Analyst at Oppenheimer & Co. Inc.

That's very helpful. Thanks very much.

Operator

Thank you. Our next question comes from Michael Ulls with Morgan Stanley. You may proceed.

Selena Zhang
Selena Zhang
Global capital markets at Morgan Stanley

Hello. This is Selena on for Mike. Thanks for taking our question. For the congenital HO sub study, could you describe the patient mix that you're seeing among the different pituitary deficiency disorders included, and any learnings on reliably diagnosing congenital HO? Thank you.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, know we're way too early to answer that in any kind of meaningful way, I mean I think the list we've talked about of SOD, septal optic dysplasia, pituitary stock interruption syndrome, multiple pituitary deficiency, I mean we're going to see all of those. Right now I would say the SOD, pituitary stock maybe interruption, maybe two of the more common, but we're so early, I just can't answer that in a meaningful way about how it will break out across the different categories.

Selena Zhang
Selena Zhang
Global capital markets at Morgan Stanley

Thank you.

Operator

Thank you. Our next question comes from Joseph Stringer with Needham and Company. You may proceed.

Joseph Stringer
Senior Analyst at Needham & Company

Hi, thanks for taking our questions. For the Encevery launch of BBS, can you disclose the number of written TRx and reimbursed TRx in The U. S. In the first quarter?

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, not breaking those out, Johay, I mean we did in the beginning just to give everybody a sense because we didn't have revenues that spoke meaningfully to where we are, I think now we're very much relying on the revenues which are a more holistic view of how the market's doing. That's right. So we gave you color around it, but we're not going to break out the exact numbers.

Joseph Stringer
Senior Analyst at Needham & Company

Okay, thank you.

Operator

Right, yeah, thanks. Thank you, and as a reminder, to ask a question please press Our next question comes from Raghuram Selvaraju with H. C. Wainwright. You may proceed.

Raghuram Selvaraju
Managing Director, Senior Healthcare Analyst at H.C. Wainwright & Co., LLC

Thanks so much for taking our questions. Firstly, I was wondering if you could comment on any qualitative differences that you expect to see and implement in the context of the commercial rollout in hypothalamic obesity relative to the other indications for which in Civri is already approved. And I'm just trying to look here for any changes in broader marketing and promotional strategy that you might utilize in this specific indication.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

I think there are similar aspects in terms of any rare disease where the trajectory is really based off of how quickly you can identify the patients because usually, and is the case here, for both BBS and HO, there was a need for an additional therapy. We have done market research, we've gathered feedback from our field teams to have started engaging with physicians just around better understanding the HO market. The pieces that make us feel very positive about the opportunity is that consistently the comments expressed about the unmet need in this particular population is so incredibly high. We hear that from patients and caregivers as well, as I outlined just in terms of our blinded TPP, we went out with slightly less efficacy than what we actually saw from a top line data perspective. The reaction to Encevery's efficacy as well as overall profile has been very overwhelming in terms of positive feedbacks from the physician population.

Jennifer Lee
Jennifer Lee
Executive Vice President, Head of North America at Rhythm Pharmaceuticals

So those two pieces are ripe in terms of the need that exists. And the other comment that David had outlined, for HO, these patients, because of all of the other clinical manifestations due to what they went through from a treatment perspective, they are in the hands of these endocrinologists, the vast majority of them, like could be 80% of them are still seeing endocrinologists. So that specialty call and that ability to go to that particular physician set with the data that we have to be able to hone us down to which of those even within the specialty is much higher than, like I said, the bread crumbs that we started with in BBS where there was no ICD-ten code, they are scattered amongst various different physicians. So I think those dynamics make it a more interesting and exciting potential launch for us.

Raghuram Selvaraju
Managing Director, Senior Healthcare Analyst at H.C. Wainwright & Co., LLC

Great, and then secondly, very quickly, in the wake of the Rarestone termination, I was just wondering in the context of the broader international strategy, how you intend to go forward in China, if you are looking at the possibility of bringing in a replacement partner or if your assessment of the China commercial opportunity, has kind of signaled an evolution in your thinking about how best to penetrate that opportunity, thanks.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, no thanks, so one, we're thrilled to have that, the rights to China back, I just feel good about having global rights here, number one. Number two, we absolutely are expanding globally, we're really excited about the Japan opportunity, we haven't talked about that on this fall, that's going be a very meaningful opportunity in HO. China itself, we learned a lot in our partnership with Rarestone and it was incredibly helpful in that sense, in that they did some good work, other work had been done. The genetic side of this opportunity is probably less in China, not that it's not there, but HO is absolutely there. And I don't have numbers for you today, but we know it's there.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

So we will have a China strategy. Today I wouldn't say we're committed to any particular course of action, meaning would we go alone, which I think is, we can go alone in Japan, much more challenging perhaps to go alone in China, so that would suggest we'd need a partner, but all that's to come. But I think China and Asia, in a larger sense, Taiwan, South Korea, those are meaningful opportunities and we'll work our way through that and keep thinking about what's the right strategy for China.

Raghuram Selvaraju
Managing Director, Senior Healthcare Analyst at H.C. Wainwright & Co., LLC

Thank you.

Operator

Thank you. Our next question comes from Paul Matteis with Stifel. You may proceed.

Paul Matteis
Paul Matteis
Managing Director, Head of Therapeutics Research at Stifel Financial Corp

Hey, sorry about that. I think I saw this here earlier. Appreciate you fitting me in. Just going back to Bismolgon really quickly. Anything you guys can say about safety from the study given that it's pretty far along now?

Paul Matteis
Paul Matteis
Managing Director, Head of Therapeutics Research at Stifel Financial Corp

Anything just on the idiosyncratic safety side related to liver or anything else that you're seeing that would give you more comfort in the molecule? And then I just wanted to clarify, David, on the bar. Mean, 10% makes sense, but this study is meaningfully shorter than the semilanotide Phase III. So how do you think about the bar for the shorter Phase II? Thanks.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Yeah, that's a great question, thank you. So on the safety side, again, it's blinded, but obviously you follow the safety in a blinded sense. All I will say, there's no significant safety signals here that we're concerned about. You know, I don't have fine detail in terms of looking at individual patients' LFT data, but if there was a serious adverse event related to LFTs we would see that. So we're not seeing any of that, so I would categorize blinded view of all that as quite reassuring, number one.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

And then two, your question on the barb, it's a good one, I don't like being boxed in, know, particularly around data, there's always context around data and particularly in a rare disease, mean the means areI'm not at all interested in the mean value so much, I'm very much interested in patient by patient and if the mean doesn't get to ten percent but you can explain the couple of patients that were dragging the mean down, you've still got a drug. So we'll look at the data that way. One way of looking at this is our Phase II data, if you remember, with cetmelanotide was sixteen weeks, and they did hit, almost all of those patients had ten percent or greater or were on track to lose ten percent or greater. So I think ten percent is not an unreasonable target here in terms of using SET as the bar, semelanotide as the bar, but there'll be context that we'll have to take into consideration. And sixteen weeks is relatively short.

Paul Matteis
Paul Matteis
Managing Director, Head of Therapeutics Research at Stifel Financial Corp

Makes sense. Thanks a lot.

Operator

Thank you. I would now like to turn the call back over to David Meeker for any closing remarks.

David Meeker
David Meeker
Chairman, President & CEO at Rhythm Pharmaceuticals

Okay. Well, thanks, everybody. A long call this morning, a lot of questions. I appreciate that, and we look forward to our next update.

Operator

Thank

Operator

you. This concludes the conference. Thank you for your participation. You may now disconnect.

Executives
    • David Connolly
      David Connolly
      Executive Director, Investor Relations and Corporate Communications
    • David Meeker
      David Meeker
      Chairman, President & CEO
    • Jennifer Lee
      Jennifer Lee
      Executive Vice President, Head of North America
    • Yann Mazabraud
      Yann Mazabraud
      Executive VP & Head of International
Analysts
    • Hunter Smith
      Chief Financial Officer at Rhythm Pharmaceuticals
    • Jon Wolleben
      Managing Director at JMP Securities LLC
    • Derek Archila
      Managing Director, Biotechnology Equity Research Analyst at Wells Fargo
    • Tazeen Ahmad
      MD - US Equity Research at Bank of America
    • Phil Nadeau
      Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen
    • Seamus Fernandez
      Senior Managing Director at Guggenheim Partners
    • Whitney Ijem
      Managing Director at Canaccord Genuity Inc
    • Dennis Ding
      Vice President - Equity Research Analyst at Jefferies Financial Group
    • Leland Gershell
      MD & Senior Biotechnology Analyst at Oppenheimer & Co. Inc.
    • Selena Zhang
      Global capital markets at Morgan Stanley
    • Joseph Stringer
      Senior Analyst at Needham & Company
    • Raghuram Selvaraju
      Managing Director, Senior Healthcare Analyst at H.C. Wainwright & Co., LLC
    • Paul Matteis
      Managing Director, Head of Therapeutics Research at Stifel Financial Corp
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Key Takeaways

  • Phase III HO trial results: Cetmelanotide achieved a 16.5% BMI reduction versus a 3.3% increase on placebo (19.8% placebo-adjusted) with consistent responses across age cohorts and no new safety signals.
  • Strong BBS commercial growth: Global OMSIVRI patients on reimbursed therapy increased 14% in Q1, US prescriber numbers grew 13%, and Medicaid coverage now spans over 95% of covered lives.
  • Pipeline catalysts: BIVIMELAGON Phase II readout is expected in Q3, with Prader-Willi and once-weekly HO (7–18) study updates due by year-end, supported by a cash runway into 2027.
  • International execution: OMSIVRI is in paid or early access in 15+ countries outside the US, with forthcoming real-world HO data from France (24 patients) and German BBS experience set to be presented at major European conferences.
  • Q1 financials: OMSIVRI revenue was $37.7 million, including an $8.3 million US specialty pharmacy inventory swing, and non-GAAP OpEx guidance for 2025 remains $285–315 million.
AI Generated. May Contain Errors.
Earnings Conference Call
Rhythm Pharmaceuticals Q1 2025
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