Rhythm Pharmaceuticals Reports First Quarter 2021 Financial Results
-- Late-breaking data presentations at ENDO 2021 demonstrated continued weight loss with setmelanotide at up to nine months in HET obesity, as well as weight loss data in adults and BMI-Z reductions in adolescents with Bardet-Biedl syndrome --
-- Delivered proof-of-concept data from Phase 2 Basket Study in HET POMC, PCSK1 or LEPR deficiencies, and obesity due to SRC1 and SH2B1 deficiencies --
“This is an exciting time of growth and momentum for Rhythm, as we made several significant steps on our journey to transform the care of patients with rare genetic diseases of obesity and to expand the reach of setmelanotide,” said
First Quarter and Recent Business Highlights:
Pipeline and Business Developments:
- Late in
March 2021, Rhythm completed the first commercial sales of IMCIVREE following U.S. Food and Drug Administration(FDA) approval in November 2020. IMCIVREE was approved for chronic weight management in adult and pediatric patients six years of age and older with obesity due to proopiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1) or leptin receptor (LEPR) deficiency confirmed by genetic testing.
March 2021, Rhythm had three late-breaking data presentations from Phase 2 and Phase 3 studies of setmelanotide during the 103rd Annual Meeting and Expo of the Endocrine Society(ENDO 2021). Sadaf Farooqi, M.D., Ph.D., University of Cambridge, UK, presented proof-of-concept data from the Company’s Phase 2 study evaluating setmelanotide in individuals living with heterozygous (HET) obesity due to genetic variants in one of two alleles of the POMC, PCSK1 or LEPR gene. The oral presentation included new weight loss data that showed patients with HET obesity who were classified as setmelanotide-responsive at three months continued to lose weight as they remained on treatment, with a mean weight loss of 12.3 percent at nine months on therapy.
- Additional poster presentations at ENDO 2021 included previously disclosed topline Phase 3 data in BBS and Alström syndromes and new analyses of adverse events in Phase 2 and Phase 3 studies in POMC, PCSK1, or LEPR deficiency showing consistent safety results for setmelanotide.
- Rhythm also presented an encore poster of the topline Phase 3 BBS data at the 2021 Pediatric Endocrine Society Virtual Annual Meeting on
January 2021, Rhythm announced new proof-of-concept interim data from its ongoing Phase 2 Basket Study across individuals with HET obesity, obesity due to SRC1 deficiency or obesity due to SH2B1 deficiency. Across all three populations, setmelanotide led to meaningful weight loss in approximately 30 percent to greater than 50 percent of treated patients. Rhythm believes that these data, coupled with updated sequencing results, suggest that there are approximately 100,000-200,000 potentially setmelanotide-responsive patients with HET, SRC1 or SH2B1 obesity in the United States.
- Also in
January 2021, Rhythm announced that it has leveraged its proprietary gene curation and selection strategy to identify an additional 31 genes with strong or very strong MC4R pathway relevance, paving the way for the Company to initiate an expanded exploratory Phase 2 Basket study in these new genes.
February 2021, Rhythm completed a public offering of 5,750,000 shares of its common stock at a public offering price of $30.00per share, which included the full exercise by the underwriters of their option to purchase up to an additional 750,000 shares, for aggregate gross proceeds of approximately $172.5 million, before underwriting discounts, commissions, and offering expenses.
January 2021, Rhythm announced the sale of its Rare Pediatric Disease Priority Review Voucher (PRV) for $100 million. The PRV was granted to Rhythm by the FDA with the approval of IMCIVREE for chronic weight management in adult and pediatric patients six years of age and older with obesity due to POMC, PCSK1 or LEPR deficiency.
Key Upcoming Milestones:
Rhythm expects to achieve the following milestones in 2021:
- Complete regulatory review by the
European Commissionand, pending approval, make IMCIVREE commercially available in Europein obesity due to POMC, PCSK1 and LEPR deficiency in the second half of 2021.
- Complete regulatory submissions to both the FDA and the EMA seeking marketing authorization for setmelanotide for the treatment of obesity in patients with BBS in the second half of 2021; the Company expects to determine next steps for Alström syndrome upon completing a full analysis of the final data from the Phase 3 trial.
- Initiate a Phase 2, multi-center, open-label, proof-of-concept study designed to explore the potential of setmelanotide in people living with hypothalamic obesity, which is most often caused by trauma to the hypothalamus during surgical resection of a tumor, in the first half of 2021. The Company believes a subset of patients with hypothalamic obesity may have the potential for weight loss with setmelanotide if their MC4 receptor is sufficiently intact.
- Announce new topline data from the ongoing exploratory Phase 2 Basket Study evaluating setmelanotide in MC4R-rescuable patients in the second half of 2021.
- Announce full data from the pivotal Phase 3 trial evaluating setmelanotide in BBS and Alström syndrome at a medical meeting in the second half of 2021, following topline data presentations in March and April.
- Initiate a Phase 2 clinical trial of setmelanotide in pediatric patients aged two to six years old in the second half of 2021.
- Pending FDA feedback, initiate a pivotal Phase 3 MC4R pathway trial of setmelanotide in patients with HET obesity, as well as SRC1 and SH2B1 deficiency obesities, in the second half of 2021.
- Initiate a new exploratory Phase 2 Basket Study of setmelanotide in patients with variants in one of 31 additional genes with strong or very strong MC4R pathway relevance in the second half of 2021.
- Initiate a Phase 3 potentially registration-enabling trial for the weekly formulation of setmelanotide in the second half of 2021.
First Quarter 2021 Financial Results:
- Cash Position: As of
March 31, 2021, cash, cash equivalents and short-term investments were approximately $404.8 million, as compared to $172.8 millionas of December 31, 2020. This increase includes net proceeds of $98.4 millionreceived upon closing the sale of Rhythm’s Rare Pediatric Disease PRV in February 2021, and net proceeds of approximately $161.7 millionfrom Rhythm’s underwritten public offering of common stock, which closed in February 2021, offset by cash used to fund operating activities in the first quarter of 2021.
- Revenue: Product revenues relating to sales of IMCIVREE, which became commercially available late in March, were
$35.0 thousandfor the first quarter of 2021. Rhythm did not generate any product revenues in the first quarter of 2020.
- R&D Expenses: R&D expenses were
$19.9 millionin the first quarter of 2021, as compared to $22.5 millionin the first quarter of 2020. The year-over-year decrease was primarily related to purchases of setmelanotide API and drug product in the first quarter of 2020 for clinical trials and preparation for commercialization. The Company completed the GO-ID genotyping study, the Phase 3 studies of setmelanotide in obesity due to POMC, PCSK1 or LEPR deficiency and the weekly formulation study in early to mid 2020. These clinical trial decreases were partially offset by increases in costs associated with the expanded Phase 2 Basket Study and initiation of a new renal insufficiency pharmacokinetics study in late 2020.
- S,G&A Expenses: S,G&A expenses were
$14.5 millionfor the first quarter of 2021, as compared to $12.8 millionfor the first quarter of 2020. The year-over-year increase was primarily due to $1.6 millionin expenses incurred with the sale of Rhythm’s PRV.
- Other income, net: Other income increased by
$99.0 milliondue primarily to the sale of Rhythm’s PRV in February 2021.
- Provision for income taxes: The Company recorded a tax provision of
$22.0 millionfor the period ended March 31, 2021, primarily related to the sale of Rhythm’s PRV, offset by a tax benefit from ordinary losses. The Company expects to have sufficient tax losses in the current year to offset the income from the sale and thus no current year liability is expected.
- Net Income/(Loss): Net income was
$43.8 millionfor the first quarter of 2021, or a net income per basic and diluted share of $0.92and $0.90, respectively, as compared to a net loss of $34.2 millionfor the first quarter of 2020, or a net loss per basic and diluted share of ( $0.78).
Financial Guidance: Based on its current operating plans, Rhythm expects that its existing cash, cash equivalents and short-term investments as of
Rhythm is a commercial-stage biopharmaceutical company committed to transforming the treatment paradigm for people living with rare genetic diseases of obesity. The Company’s precision medicine, IMCIVREE™ (setmelanotide), has been approved by the FDA for chronic weight management in adult and pediatric patients 6 years of age and older with obesity due to POMC, PCSK1 or LEPR deficiency confirmed by genetic testing. IMCIVREE is the first-ever FDA approved therapy for these rare genetic diseases of obesity. Rhythm is advancing a broad clinical development program for setmelanotide in other rare genetic diseases of obesity. The Company is leveraging the Rhythm Engine and the largest known obesity DNA database - now with approximately 37,500 sequencing samples - to improve the understanding, diagnosis and care of people living with severe obesity due to certain genetic deficiencies. For healthcare professionals, visit www.UNcommonObesity.com for more information. For patients and caregivers, visit www.LEADforRareObesity.com for more information. The company is based in
IMCIVREE™ (setmelanotide) Indication
IMCIVREE is indicated for chronic weight management in adult and pediatric patients 6 years of age and older with obesity due to proopiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1), or leptin receptor (LEPR) deficiency. The condition must be confirmed by genetic testing demonstrating variants in POMC, PCSK1, or LEPR genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance (VUS).
Limitations of Use
IMCIVREE is not indicated for the treatment of patients with the following conditions as IMCIVREE 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, including obesity associated with other genetic syndromes and general (polygenic) obesity.
Important Safety Information
WARNINGS AND PRECAUTIONS
Disturbance in Sexual Arousal: Sexual adverse reactions may occur in patients treated with IMCIVREE. Spontaneous penile erections in males and sexual adverse reactions in females occurred in clinical studies with IMCIVREE. Instruct patients who have an erection lasting longer than 4 hours to seek emergency medical attention.
Depression and Suicidal Ideation: Some drugs that target the central nervous system, such as IMCIVREE, may cause depression or suicidal ideation. Monitor patients for new onset or worsening of depression. Consider discontinuing IMCIVREE if patients experience suicidal thoughts or behaviors.
Skin Pigmentation and Darkening of Pre-Existing Nevi: IMCIVREE may cause generalized increased skin pigmentation and darkening of pre-existing nevi due to its pharmacologic effect. This effect is reversible upon discontinuation of the drug. Perform a full body skin examination prior to initiation and periodically during treatment with IMCIVREE to monitor pre-existing and new skin pigmentary lesions.
Risk of Serious Adverse Reactions Due to Benzyl Alcohol Preservative in Neonates and Low Birth Weight Infants: IMCIVREE is not approved for use in neonates or infants.
- The most common adverse reactions (incidence ≥23%) were injection site reactions, skin hyperpigmentation, nausea, headache, diarrhea, abdominal pain, back pain, fatigue, vomiting, depression, upper respiratory tract infection, and spontaneous penile erection.
USE IN SPECIFIC POPULATIONS
Discontinue IMCIVREE when pregnancy is recognized unless the benefits of therapy outweigh the potential risks to the fetus.
Treatment with IMCIVREE is not recommended for use while breastfeeding.
To report SUSPECTED ADVERSE REACTIONS, contact
See Full Prescribing Information for IMCIVREE.
This 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 and our expectations surrounding potential regulatory submissions, approvals and timing thereof, our business strategy and plans, including regarding commercialization of setmelanotide, management changes, our participation in upcoming events and presentations, and the sufficiency of our cash, cash equivalents and short-term investments to fund our operations. Statements using word such as “expect”, “anticipate”, “believe”, “may”, “will” and similar terms are also forward-looking statements. Such statements are subject to numerous risks and uncertainties, including, but not limited to, the impact of our management transition, our ability to enroll patients in clinical trials, the design and outcome of clinical trials, the impact of competition, the ability to achieve or obtain necessary regulatory approvals, risks associated with data analysis and reporting, our liquidity and expenses, the impact of the COVID-19 pandemic on our business and operations, including our preclinical studies, clinical trials and commercialization prospects, and general economic conditions, and the other important factors discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
|Three months ended
|Product revenue, net||$||35||$||—|
|Costs and expenses:|
|Cost of sales||4||—|
|Research and development||19,911||22,504|
|Selling, general, and administrative||14,518||12,796|
|Total costs and expenses||34,433||35,300|
|Loss from operations||(34,398||)||(35,300||)|
|Other income (expense):|
|Interest income, net||154||1,136|
|Total other income, net||100,154||1,136|
|Income (loss) before taxes||65,756||(34,164||)|
|Provision for income taxes||22,006||—|
|Net income (loss)||$||43,750||$||(34,164||)|
|Net income (loss) per share|
|Weighted-average common shares outstanding|
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
|Cash and cash equivalents||$||87,271||$||100,854|
|Prepaid expenses and other current assets||7,384||8,876|
|Total current assets||412,134||181,668|
|Property and equipment, net||3,006||3,195|
|Intangible assets, net||5,000||—|
|Liabilities and stockholders’ equity|
|Accrued expenses and other current liabilities||7,150||12,559|
|Total current liabilities||16,850||17,994|
|Deferred tax liability||22,006||—|
|Commitments and contingencies|
|Additional paid-in capital||796,532||625,762|
|Accumulated other comprehensive (loss) income||(58||)||49|
|Total stockholders’ equity||380,947||166,528|
|Total liabilities and stockholders’ equity||$||422,209||$||187,073|
Head of Investor Relations and Corporate Communications
Stern Investor Relations, Inc.
Berry & Company Public Relations
Source: Rhythm Pharmaceuticals, Inc.