Rhythm Pharmaceuticals Reports Third Quarter 2021 Financial Results
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-- Delivered a total of 22 presentations at three major medical conferences --
-- New presentations include first-ever data showing improvements in health-related quality of life in rare genetic diseases of obesity --
-- IMCIVREE third quarter net sales reach
-- Management to Host Conference Call at
“We continue to execute across our expanding integrated clinical and commercial strategy to deliver setmelanotide and its potential clinical benefit to patients with rare genetic diseases of obesity,” said
Third Quarter and Recent Business Highlights:
Regulatory Updates:
Bardet-Biedl Syndrome and Alström Syndrome:
- In October, Rhythm announced the completion of its Type II variation application to the
European Medicines Agency (EMA) for IMCIVREE for the treatment of obesity and control of hunger in adult and pediatric patients 6 years of age and older with BBS or Alström syndrome. - In September, Rhythm announced the completion of its supplemental New Drug Application (sNDA) to the
U.S. Food and Drug Administration (FDA) for IMCIVREE for the treatment of obesity and control of hunger in adult and pediatric patients 6 years of age and older with BBS or Alström syndrome. Rhythm requested priority review for the application, which, if granted, could provide a target FDA review period of six-months from the date the sNDA is accepted. - Also in September, Rhythm announced an Expanded Access Program (EAP) for setmelanotide for the treatment of eligible patients in
the United States with severe obesity and hyperphagia due to BBS. The FDA’s expanded access regulations are designed to facilitate access to an investigational therapy to treat patients who are unable to participate in clinical trials and have serious or immediately life-threatening diseases or conditions for which there are no comparable or satisfactory alternative treatment options.
POMC and LEPR Deficiency Obesities:
- In September, Rhythm announced that Great Britain’s
Medicines & Healthcare Products Regulatory Agency (MHRA) has granted marketing authorisation to IMCIVREE for the treatment of obesity and the control of hunger associated with genetically confirmed loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 6 years of age and above.
Clinical Development Updates
- This week at ObesityWeek, Rhythm delivered multiple data presentations including: the first-ever health-related quality of life (HRQOL) data from patients with BBS treated with setmelanotide; efficacy and safety data from its Phase 3 trial of setmelanotide in BBS and Alström syndrome; new hunger reduction data from the SRC1 and SH2B1 deficiency cohorts in its exploratory Phase 2 Basket Trial; new data on utilization of URO; an analysis of the frequency of melanocortin-4 receptor (MC4R) pathway variants in
U.S. patients with severe obesity; and a review of single minded-1 (SIM1) missense variants associated with severe obesity. - In October at the Obesity Medicine Association’s Overcoming Obesity 2021 Conference (OMA), the Company presented new HRQOL data from the Phase 3 trials evaluating setmelanotide in POMC or LEPR deficiency obesities that confirmed setmelanotide treatment led to sustained, clinically meaningful HRQOL improvements in a majority of patients; results from in-depth patient interviews conducted in POMC and LEPR patients enrolled in Rhythm’s pivotal Phase 3 trials, which highlighted that reduced hunger and improved satiety resulting from setmelanotide treatment substantially and meaningfully changed patients’ lives; and two presentations detailing updated results from Rhythm’s URO genetic testing of approximately 8,500 people in
the United States with early-onset, severe obesity. - In September at the 59th Annual
European Society for Paediatric Endocrinology (ESPE) Meeting , Rhythm and its collaborators delivered three oral and four poster presentations, including a new subgroup analysis of data from its Phase 3 clinical trial in BBS, which showed that patients treated with setmelanotide achieved statistically significant weight loss and hunger reduction compared to patients treated with placebo during a 14-week, double-blind treatment period, as well as an interim analysis from its exploratory Phase 2 Basket Trial, which showed that setmelanotide achieved clinically meaningful weight loss or BMI-Z reduction in 30% (9 of 30) of study participants with obesity due to variants of the SRC1 gene, and 43% (15 of 35) of study participants with obesity due to variants of the SH21B gene, including 16p11.2 chromosomal deletions.
Corporate
- In
September 2021 , Rhythm announced the promotion ofLinda Shapiro Manning , M.D., Ph.D., to Chief Medical Officer. She succeededMurray Stewart , M.D., who transitioned to the role of Senior Medical Advisor.
Key Upcoming Milestones:
Rhythm expects to achieve the following near-term milestones:
- Initiate DAYBREAK, an exploratory, Phase 2, two-stage, placebo-controlled trial of setmelanotide in patients with variants in one of 31 genes with strong or very strong MC4R pathway relevance in the fourth quarter of 2021.
- Initiate EMANATE, a Phase 3, randomized, double-blind, placebo-controlled trial to evaluate setmelanotide in five independent sub-studies in patients with obesity due to a heterozygous variant of POMC/PCSK1 or LEPR; certain variants of the SRC1 gene, certain variants of the SH2B1 gene, or PCSK1 N221D deletions within the MC4R pathway in the fourth quarter of 2021 or the first quarter of 2022.
- Initiate a Phase 3, randomized, double-blind trial in patients currently on daily setmelanotide therapy (“switch study”) to evaluate the efficacy of daily and weekly formulations of setmelanotide in patients with obesity due to biallelic POMC, PCSK1 or LEPR deficiency or BBS in the fourth quarter of 2021.
- Initiate multi-center, one-year, open-label Phase 3 trial in pediatric patients ages 2 to 6 years old with obesity due to biallelic POMC, PCSK1 or LEPR deficiency, or with a clinical diagnosis of BBS with genetic confirmation in the fourth quarter of 2021.
- 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 first half of 2022.
- Announce new data from the ongoing exploratory Phase 2 Basket Study evaluating setmelanotide in patients with obesity due to a variant in the MC4 receptor, as well as its study in patients with hypothalamic obesity, in the first quarter of 2022.
- Announce longer-term follow-up data from the ongoing exploratory Phase 2 Basket Study evaluating setmelanotide in patients with heterozygous POMC/PCSK1 obesity, heterozygous LEPR obesity, certain variants of the SRC1 gene and certain variants of the SH2B1 gene in the first half of 2022.
Third Quarter 2021 Financial Results:
- Cash Position: As of
September 30, 2021 , cash, cash equivalents and short-term investments were approximately$328.4 million , as compared to$172.8 million as ofDecember 31, 2020 . This increase includes net proceeds of$98.4 million received upon closing the sale of Rhythm’s Rare Pediatric Disease Priority Review Voucher (PRV) inFebruary 2021 , and net proceeds of approximately$161.7 million from Rhythm’s underwritten public offering of common stock, which closed inFebruary 2021 , partially offset by cash used to fund operating activities in 2021. - Revenue: Product net revenues relating to sales of IMCIVREE in
the United States were$1.0 million for the third quarter of 2021. Rhythm did not generate any product revenues in the third quarter of 2020 as IMCIVREE was approved for commercial use by the FDA inNovember 2020 . - R&D Expenses: R&D expenses were
$27.5 million in the third quarter of 2021, as compared to$23.0 million in the third quarter of 2020. The year-over-year increase was primarily related to a$4.4 million increase related to new and planned clinical trials, including the Phase 2 DAYBREAK and Phase 3 EMANATE trials, Phase 3 pediatrics trial, Phase 2 hypothalamic obesity study, and increased enrollment in the open-label, long-term extension study, as well as an increase of$2.7 million in salaries and benefits due to hiring additional employees to support the growth of Rhythm’s research and development programs. These increases were partially offset by a decrease of$1.4 million in reduced purchases of clinical supply materials and$0.7 million in costs associated with accessing sequencing data from third-party biobanks to further Rhythm’s genetic research efforts. - S,G&A Expenses: S,G&A expenses were
$17.5 million for the third quarter of 2021, as compared to$11.3 million for the third quarter of 2020. The year-over-year increase was primarily related to an increase of$3.0 million due to compensation and benefits related costs associated with additions to the executive leadership team, increased headcount to support expanding business operations as well as to establish commercial operations inthe United States and internationally; an increase of$1.9 million due to increased professional fees and consulting services to support the build out of commercial operations inthe United States and internationally as well as corporate legal and consulting support for international expansion; and an increase of$0.9 million related to marketing activities for IMCIVREE. - Net Loss: Net loss was
$35.1 million for the third quarter of 2021, or a net loss per basic and diluted share of$0.70 , as compared to a net loss of$33.8 million for the third quarter of 2020, or a net loss per basic and diluted share of$0.77 .
Year to Date 2021 Financial Results:
- Revenue: Product revenues relating to sales of IMCIVREE in
the United States were$1.3 million for the nine months endedSeptember 30, 2021 . Rhythm did not generate any product revenues in the nine months endedSeptember 30, 2020 as IMCIVREE was approved for commercial use by the FDA inNovember 2020 . - R&D Expenses: R&D expenses were $72.6 million for the nine months ended September 30, 2021, as compared to $68.5 million for the nine months ended September 30, 2020. The increase of
$4.1 million was primarily due to an increase of$5.9 million in compensation and benefits due to hiring additional employees to support the growth of Rhythm’s research and development programs, as well as an increase of$2.4 million in costs related to new clinical trials, including the Phase 2 DAYBREAK and Phase 3 EMANATE trials, the Phase 3 pediatrics trial, QTc study, Phase 2 hypothalamic obesity study, and increased enrollment in the open-label, long-term extension study; and an increase of$1.1 million related to costs associated with pursuing the evaluation of setmelanotide in additional indications. These increases were partially offset by a decrease in costs associated with Rhythm’s Go-ID study, which has been completed, as well as decrease of$3.0 million in milestone expense associated with the license agreement with Ipsen on filing the NDA with the FDA and filing the Marketing Authorisation Application with the EMA;$1.1 million in professional services fees related to regulatory filings;$0.8 million related to reduced purchases of clinical supply material for setmelanotide; and$0.7 million in costs associated with accessing sequencing data from third party biobanks. - S,G&A Expenses: S,G&A expenses were $47.5. million for the nine months ended September 30, 2021, as compared to $33.0 million for the nine months ended September 30, 2020. The increase of
$14.5 million was primarily related to an increase of$7.1 million due to increased compensation and benefits-related costs associated with additions to the executive leadership team, increased headcount to support expanding business operations as well as to establish commercial operations inthe United States and internationally; an increase of$4.0 million due to increased professional fees and consulting services to help support the build out of Rhythm’s commercial operations inthe United States and internationally, as well as corporate legal and consulting support for Rhythm’s international expansion; an increase of$1.6 million associated with expenses incurred on the sale of Rhythm’s PRV; an increase of$1.1 million due to increased costs associated with office support and insurance costs for Rhythm’s expanding workforce; and an increase of$0.7 million associated with expenses incurred related to marketing activities for IMCIVREE. - Other income, net: Other income increased by
$97.9 million in the nine months endedSeptember 30, 2021 due primarily to the sale of Rhythm’s PRV inFebruary 2021 . - Provision for income taxes: The Company recorded a tax provision of
$8.0 million for the nine months endedSeptember 30, 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 Loss: Net loss was $26.7 million for the nine months ended September 30, 2021, or a net loss per basic and diluted share of $0.54, as compared to a net loss of $99.1 million for the nine months ended September 30, 2020, or a net loss per basic and diluted share of $2.25.
Financial Guidance: Based on its current operating plans, Rhythm expects that its existing cash, cash equivalents and short-term investments as of
Conference Call Information
Rhythm Pharmaceuticals will host a live conference call and webcast at 8:00 a.m. ET today to discuss this update, as well as review its third quarter 2021 financial results and recent business activities. The conference call may be accessed by dialing (844) 498-0570 (domestic) or (409) 983-9726 (international) and referring to conference ID 2167009. A webcast of the call will be available under "Events and Presentations" in the Investor Relations section of the Rhythm Pharmaceuticals website at http://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 Pharmaceuticals
Rhythm is a commercial-stage biopharmaceutical company committed to transforming the treatment paradigm for people living with rare genetic diseases of obesity. Rhythm’s precision medicine, IMCIVREE (setmelanotide), was approved in November 2020 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 obesity due to POMC, PCSK1 or LEPR deficiency confirmed by genetic testing and in July and September 2021, respectively, by the European Commission (EC) and Great Britain’s Medicines & Healthcare Products Regulatory Agency (MHRA) for the treatment of obesity and the control of hunger associated with genetically confirmed loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 6 years of age and above. IMCIVREE is the first-ever FDA-approved and EC- and MHRA-authorized therapy for patients with these rare genetic diseases of obesity. The Company submitted a supplemental New Drug Application (sNDA) to the FDA in
Additionally, Rhythm is advancing a broad clinical development program for setmelanotide in other rare genetic diseases of obesity and 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. Rhythm’s headquarters is in Boston, MA.
IMCIVREE® (setmelanotide) Indication
In
In the EU, IMCIVREE is indicated for the treatment of obesity and the control of hunger associated with genetically confirmed loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 6 years of age and above. IMCIVREE should be prescribed and supervised by a physician with expertise in obesity with underlying genetic etiology.
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.
ADVERSE REACTIONS
- 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 Rhythm Pharmaceuticals at +1 (833) 789-6337 or FDA at 1-800-FDA-1088 or www.fda.gov/medwatch.
See U.S. Full Prescribing Information, EU SmPC and MHRA SmPC for IMCIVREE.
Forward-Looking Statements
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, 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 and Comprehensive Loss (in thousands, except share and per share data) (Unaudited) |
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| Three months ended |
Nine months ended |
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| 2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Product revenue, net | $ | 1,028 | $ | — | $ | 1,337 | $ | — | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of sales | 222 | — | 363 | — | ||||||||||||
| Research and development | 27,539 | 22,995 | 72,554 | 68,496 | ||||||||||||
| Selling, general, and administrative | 17,507 | 11,289 | 47,490 | 33,006 | ||||||||||||
| Total costs and expenses | 45,268 | 34,284 | 120,407 | 101,502 | ||||||||||||
| Loss from operations | (44,240 | ) | (34,284 | ) | (119,070 | ) | (101,502 | ) | ||||||||
| Other income: | ||||||||||||||||
| Other income | — | — | 100,000 | — | ||||||||||||
| Interest income, net | 138 | 466 | 313 | 2,403 | ||||||||||||
| Total other income, net | 138 | 466 | 100,313 | 2,403 | ||||||||||||
| Loss before taxes | (44,102 | ) | (33,818 | ) | (18,757 | ) | (99,099 | ) | ||||||||
| (benefit from) provision for income taxes | (8,995 | ) | — | 7,989 | — | |||||||||||
| Net loss | $ | (35,107 | ) | $ | (33,818 | ) | $ | (26,746 | ) | $ | (99,099 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.70 | ) | $ | (0.77 | ) | $ | (0.54 | ) | $ | (2.25 | ) | ||||
| Weighted-average common shares outstanding, basic and diluted | 50,246,303 | 44,142,334 | 49,374,336 | 44,097,178 | ||||||||||||
| Other comprehensive loss: | ||||||||||||||||
| Net loss | $ | (35,107 | ) | $ | (33,818 | ) | $ | (26,746 | ) | $ | (99,099 | ) | ||||
| Unrealized (loss) gain on marketable securities | — | (392 | ) | (107 | ) | 238 | ||||||||||
| Comprehensive loss | $ | (35,107 | ) | $ | (34,210 | ) | $ | (26,853 | ) | $ | (98,861 | ) | ||||
Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (Unaudited) |
||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 92,372 | $ | 100,854 | ||||
| Short-term investments | 235,982 | 71,938 | ||||||
| Prepaid expenses and other current assets | 7,282 | 8,876 | ||||||
| Total current assets | 335,636 | 181,668 | ||||||
| Property and equipment, net | 2,956 | 3,195 | ||||||
| Right-of-use asset | 1,598 | 1,807 | ||||||
| Intangible assets, net | 4,772 | — | ||||||
| Restricted cash | 328 | 403 | ||||||
| Other long-term assets | 10,533 | — | ||||||
| Total assets | $ | 355,823 | $ | 187,073 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,614 | $ | 4,900 | ||||
| Accrued expenses and other current liabilities | 18,265 | 12,559 | ||||||
| Lease liability | 588 | 535 | ||||||
| Total current liabilities | 23,467 | 17,994 | ||||||
| Long-term liabilities: | ||||||||
| Deferred tax liability | 7,989 | — | ||||||
| Lease liability | 2,104 | 2,551 | ||||||
| Total liabilities | 33,560 | 20,545 | ||||||
| Commitments and contingencies (Note 5) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred Stock, issued and outstanding at |
— | — | ||||||
| Common stock, 50,268,312 and 44,235,903 shares issued and outstanding |
50 | 44 | ||||||
| Additional paid-in capital | 808,265 | 625,762 | ||||||
| Accumulated other comprehensive income | 21 | 49 | ||||||
| Accumulated deficit | (486,073 | ) | (459,327 | ) | ||||
| Total stockholders’ equity | 322,263 | 166,528 | ||||||
| Total liabilities and stockholders’ equity | $ | 355,823 | $ | 187,073 | ||||
Corporate Contact:
Head of Investor Relations and Corporate Communications
857-264-4280
dconnolly@rhythmtx.com
Investor Contact:
Stern Investor Relations, Inc.
212-362-1200
hannah.deresiewicz@sternir.com
Media Contact:
Berry & Company Public Relations
212-253-8881
adaley@berrypr.com
Source: Rhythm Pharmaceuticals, Inc.