0001558370-24-002181 | 10-K | XBRL Viewer | Rhythm Pharmaceuticals INC

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Stock-based Compensation - 2017 Employee Stock Purchase Plan (Details) - shares				12 Months Ended
	Jan. 01, 2023	Jan. 01, 2022	Jan. 01, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Stock-based Compensation
Number of common stock options granted				1,053,888
Expected term				6 years 1 month 9 days	6 years 1 month 9 days	6 years 1 month 9 days
2017 Employee Stock Purchase Plan
Stock-based Compensation
Common stock reserved for issuance				1,323,026
Percentage increase in authorized shares under the plan				1.00%
Number of additional shares added	0	502,835	0
Number of shares issued				49,819	92,932	38,051
Purchase price of ESPP meeting certain criteria as of the offering period (as a percent)				85.00%
Discount recognized as compensation expense				15.00%

Fair Value of Financial Assets and Liabilities

12 Months Ended

Dec. 31, 2023

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

5. Fair Value of Financial Assets and Liabilities

The following tables present information about the Company's financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:


	Fair Value Measurements as of
	December 31, 2023 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	40,868	$	4,979	$	—	$	45,847
Marketable securities:
Corporate debt securities and commercial paper		—		215,765		—		215,765
Total	$	40,868	$	220,744	$	—	$	261,612
Liabilities:
Derivative liability	$	—	$	—	$	1,150	$	1,150
Total	$	—	$	—	$	1,150	$	1,150


	Fair Value Measurements as of
	December 31, 2022 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Commercial paper	$	—	$	8,484	$	—	$	8,484
Money market funds		99,962		—		—		99,962
Marketable securities:
Corporate debt securities and commercial paper		—		205,611		—		205,611
Total	$	99,962	$	214,095	$	—	$	314,057
Liabilities:
Derivative liability	$	—	$	—	$	1,340	$	1,340
Total	$	—	$	—	$	1,340	$	1,340

As of December 31, 2023 and 2022, the carrying amount of cash and cash equivalents and short-term investments was $275,846 and $333,288, respectively, which approximates fair value. Cash and cash equivalents and short-term investments includes investments in U.S. treasury securities and money market funds that invest in U.S. government securities that are valued using quoted market prices. Accordingly, money market funds and government funds are categorized as Level 1. The financial assets valued based on Level 2 inputs consist of corporate debt securities and commercial paper, which consist of investments in highly-rated investment-grade corporations.

The embedded derivative liability associated with our deferred royalty obligation, as discussed further in Note 11, “Long-Term Obligations”, is measured at fair value using an option pricing Monte Carlo simulation model and is included as a component of the deferred royalty obligation. The embedded derivative liability is subject to remeasurement at the end of each reporting period, with changes in fair value recognized as a component of other (expense) income, net. The assumptions used in the option pricing Monte Carlo simulation model include: (1) our estimates of the probability and timing of related events; (2) the probability-weighted net sales of IMCIVREE, including worldwide net product sales, upfront payments, milestones and royalties; (3) our risk-adjusted discount rate that includes a company specific risk premium; (4) our cost of debt; (5) volatility; and (6) the probability of a change in control occurring during the term of the instrument.

The RareStone equity was valued at a de minimis amount and as such written-off during the third quarter of 2022. The Company determined the estimated fair values using a discounted cash flow model under the income approach and an option pricing allocation model. Inherent in discounted cash flow and option pricing allocation models are assumptions related to the equity value of the entity, expected equity volatility, holding period, risk-free interest rate and discount for lack of marketability. The Company estimated equity volatility based on historical volatility of guideline public companies. The risk-free interest rate was based on the U.S. Treasury rates for a maturity similar to the expected holding period.

The following tables set forth a summary of the changes in the estimated fair value of our embedded derivative liability and RareStone equity (in thousands):


	Year ended
	December 31,
	2023		2022
Beginning aggregate estimated fair value of Level 3 liabilities	$	1,340	$	—
Initial recording of embedded derivative		—		1,590
Change in fair value of embedded derivative		(190)		(250)
Ending aggregate estimated fair value of Level 3 liabilities	$	1,150	$	1,340

	Year ended
	December 31,
	2023		2022
Beginning aggregate estimated fair value of Level 3 securities	$	—	$	—
Initial recording of RareStone equity		—		1,040
Realized loss included in other expense		—		(1,040)
Ending aggregate estimated fair value of Level 3 securities	$	—	$	—

The estimated fair value of the shares of RareStone equity as of our initial recording date and September 30, 2022, as well as the estimated fair value of the derivative liability related to our Royalty Interest Financing Agreement (RIFA) with HealthCare Royalty were determined using Level 3 inputs. The fair value measurement of the derivative liability and RareStone equity are sensitive to changes in the unobservable inputs used to value the financial instrument. Changes in the inputs could result in changes to the fair value of each financial instrument.

Marketable Securities

The following tables summarize the Company's marketable securities:


	December 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate debt securities and commercial paper (due within 1 year)	$	215,491	$	282	$	(7)	$	215,765
	$	215,491	$	282	$	(7)	$	215,765


	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate debt securities and commercial paper (due within 1 year)	$	205,702	$	—	$	(91)	$	205,611
	$	205,702	$	—	$	(91)	$	205,611

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Intangible Assets, Net - Amortization expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Definite-lived intangible assets
2024	$ 855
2025	855
2026	855
2027	855
2028	855
Thereafter	2,753
Total	7,028	$ 7,883
Amortization expense	$ 855	$ 774	$ 342
Finite-Lived Intangible Assets, Remaining Amortization Period	11 years

Stock-based Compensation - 2017 Equity Incentive Plan (Details) - 2017 Equity Incentive Plan - shares				12 Months Ended
	Jan. 01, 2024	Jan. 01, 2023	Jan. 01, 2022	Dec. 31, 2023
Stock-based Compensation
Percentage increase in authorized shares under the plan				4.00%
Number of additional shares added	2,377,062	2,264,497	2,011,343
Authorized shares				11,729,382
Shares available for future grant				4,187,953
Common stock reserved for issuance				7,541,429
Exercise Price Not Less Than 100% Of Fair Market Value
Stock-based Compensation
Exercise price of incentive stock options over fair market value of the common stock				100.00%
Voting power of stock				10.00%
Exercise Price Not Less Than 110% Of Fair Market Value
Stock-based Compensation
Exercise price of incentive stock options over fair market value of the common stock				110.00%
Voting power of stock				10.00%

Segment and Geographic Information - Revenues (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Segment and Geographic Information
Total revenues	$ 77,428	$ 23,638	$ 3,154
United States
Segment and Geographic Information
Total revenues	62,425	21,078	$ 3,154
Germany
Segment and Geographic Information
Total revenues	6,075	954
Other
Segment and Geographic Information
Total revenues	$ 8,928	$ 1,606

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

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+ Details

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies

Basis of Presentation

The Company's consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. Significant estimates relied upon in preparing these financial statements include estimates related to determining our net product revenue, license revenue, accruals related to research and development expenses, assumptions used to record stock-based compensation expense, interest expense on our deferred royalty obligation, assumptions used to value the embedded derivative in our deferred royalty obligation, assumptions used to value the common stock received from RareStone Group Ltd., or RareStone, and the valuation allowance on the Company's deferred tax assets. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of Rhythm Pharmaceuticals, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Segment Information

Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company currently operates in one business segment, which is the development and commercialization of therapies for patients with rare diseases. A single management team that reports to the Chief

Executive Officer comprehensively manages the entire business. The Company does not operate separate lines of business with respect to its product or product candidates. Accordingly, the Company has one reportable segment.

Off-Balance Sheet Risk and Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to significant concentration of credit risk, consist primarily of cash and cash equivalents and short-term investments, which are maintained at two federally insured financial institutions. The deposits held at these two institutions are in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.

The Company is exposed to risks associated with extending credit to customers related to the sale of products. The Company does not require collateral to secure amounts due from its customers. For the years ended December 31, 2023 and 2022, approximately 77% and 85%, respectively, of all of the Company’s revenue was generated from a single customer in the United States. As of December 31, 2023 and 2022, approximately 67% and 80%, respectively, of the Company’s accounts receivable was outstanding from a single customer in the United States.

The Company relies on third-party manufacturers and suppliers for manufacturing and supply of its product. The inability of the suppliers or manufacturers to fulfill supply requirements of the Company could materially impact future operating results. A change in the relationship with the suppliers or manufacturer, or an adverse change in their business, could materially impact future operating results.

The Company relies on separate third parties to perform genetic testing in the United States and Europe, respectively. The inability of the vendor to fulfill testing services for the Company could materially impact future operating results and adversely impact our ability to further develop setmelanotide. A change in the relationship with the genetic testing service providers, or an adverse change in their business, could materially impact future operating results.

Cash and Cash Equivalents

The Company considers all highly liquid investments with remaining maturity from the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents includes bank demand deposits, U.S. treasury bills and money market funds that invest primarily in U.S. government treasuries.

Short-Term Investments

Short-term investments consist of investments with maturities greater than 90 days, as of the date of purchase. The Company has classified its investments with maturities beyond one year as short term, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The Company considers its investment portfolio available-for-sale. Accordingly, these investments are recorded at fair value, which is based on quoted market prices. Unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. To the extent the amortized cost basis of the available-for-sale debt securities exceeds the fair value, management assesses the debt securities for credit loss; however, management considers the risk of credit loss to be minimized by the Company's policy of investing in financial instruments issued by highly-rated financial institutions. When assessing the risk of credit loss, management considers factors such as the severity and the reason of the decline in value (i.e., any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security) and management's intended holding period and time horizon for selling. During the years ended December 31, 2023, 2022, and 2021, the Company did not recognize any credit losses related to its available-for-sale debt securities. Further, as of December 31, 2023 and 2022, the Company did not record an allowance for credit losses related to its available-for-sale debt securities.

Restricted Cash

Restricted cash consists of security deposits in the form of letters of credit placed in separate restricted bank accounts as required under the terms of the Company’s lease arrangement for its corporate office in Boston, Massachusetts and the Company’s corporate travel credit card.

Accounts Receivable, net

Accounts receivable consists of amounts due from customers, net of customer allowances for cash discounts and any estimated expected credit losses. The Company's measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. To date, the Company has not experienced any credit losses. The Company's contracts with its customers have customary payment terms that generally require payment within 90 days. The Company analyzes amounts that are past due for collectability, and periodically evaluates the creditworthiness of its customer. At December 31, 2023 and 2022, the Company determined an allowance for doubtful account was not required based upon our review of contractual payments and our customer circumstances.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, or ASC 606. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

Product Revenue, Net

In the United States (the “U.S.”), which accounts for the largest portion of our total revenues, the Company sells its product to a limited number of specialty pharmacies. The product is distributed through a third-party logistics, or 3PL, distribution agent that does not take title to the product. Once the product is delivered to the Company’s specialty pharmacy provider, our customer in the U.S., the customer (or “wholesaler”) takes title to the product. The wholesaler then distributes the product to patients. In our distribution agreement with the 3PL company, the Company acts as principal because we retain control of the product. Internationally, we make sales primarily to specialty distributors and retail pharmacy chains, as well as hospitals, many of which are government-owned or supported. The Company generally does not offer returns of product sold to the customer.

Revenue from product sales is recognized when the customer obtains control of our product, which occurs at a point in time, upon transfer of title to the customer because at that point in time we have no ongoing obligations to the customer. There are no other performance obligations besides the sale of product. We classify payments to our customers or other parties in the distribution channel for services that are distinct and priced at fair value as selling, general and administrative expenses in our consolidated statements of operations and comprehensive (loss) income. Otherwise, payments to a customer or other parties in the distribution channel that do not meet those criteria are classified as a reduction of revenue, as discussed further below. Taxes collected from the customer relating to product sales and remitted to governmental authorities are excluded from revenue. Because our payment terms are generally ninety days or less, the Company concluded there is not a significant financing component because the period between the transfer of a promised good or service to the customer and when the customer pays for that good or service will be one year or less. The Company expenses incremental costs of obtaining a contract as and when incurred since the expected amortization period of the asset that we would have recognized is one year or less.

Reserves for Variable Consideration

Revenues from product sales are recorded at the net sales price, or the transaction price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns, chargebacks, rebates, co-pay assistance and other allowances that are offered within contracts between us and our customers, health care providers and other indirect customers relating to the sale of IMCIVREE. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the

customer) or a current liability (if the amount is payable to a party other than a customer). Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is considered probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.

The following are the components of variable consideration related to product revenue:

Chargebacks: The Company estimates obligations resulting from contractual commitments with the government and other entities to sell products to qualified healthcare providers and patients at prices lower than the list prices charged to our customers. The government and other entities charge us for the difference between what they pay for the product and the selling price to our customers. The Company records reserves for these chargebacks related to product sold to our customers during the reporting period, as well as our estimate of product that remains in the distribution channel at the end of the reporting period that we expect will be sold to qualified healthcare providers and patients in future periods.

Government rebates: The Company is subject to discount obligations under government programs, including Medicaid programs, Medicare and Tricare in the United States as well as certain government rebates and pricing adjustments in certain international markets that we operate. We estimate Medicaid, Medicare and Tricare rebates based upon a range of possible outcomes that are probability-weighted for the estimated payer mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability that is included in accrued expenses and other current liabilities on our consolidated balance sheets. For Medicare, we also estimate the number of patients in the prescription drug coverage gap for whom we will owe an additional liability under the Medicare Part D program. On a quarterly basis, we update our estimates and record any adjustments in the period that we identify the adjustments.

Trade discounts and allowances: The Company provides customary invoice discounts on IMCIVREE sales to certain of our customers for prompt payment that are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, we receive and pay for various distribution services from our customers in the distribution channel. For services that are either not distinct from the sale of our product or for which we cannot reasonably estimate the fair value, such fees are classified as a reduction of product revenue.

Product returns: Our customers have limited return rights related to the product’s damage or defect. The Company estimates the amount of product sales that may be returned and records the estimate as a reduction of revenue and a refund liability in the period the related product revenue is recognized. Based on the distribution model for IMCIVREE and the price of IMCIVREE, the Company believes there will be minimal returns.

Other incentives: Other incentives include co-payment assistance the Company provides to patients with commercial insurance that have coverage and reside in states that allow co-payment assistance. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that we expect to receive associated with product that has been recognized as revenue. The estimate is recorded as a reduction of revenue in the same period the related revenue is recognized.

The table below summarizes balances and activity in each of the product revenue allowance and reserve categories as follows:



	Provision for Cash Discounts		Fees, Rebates and Other Incentives		Total
Beginning Balance at December 31, 2021	$	21	$	453	$	474
Provision related to sales in the current year		367		3,299		3,666
Credit and payments made		(289)		(1,042)		(1,331)
Ending balance December 31, 2022	$	99	$	2,710	$	2,809
Provision related to sales in the current year		1,672		17,351		19,023
Credit and payments made		(1,572)		(10,586)		(12,158)
Ending balance December 31, 2023	$	199	$	9,475	$	9,674

Provision for cash discounts are recorded as reductions of accounts receivable, and fees, rebates, and other incentives are recorded as a component of accrued expenses.

License Agreements

We generate revenue from license or similar agreements with pharmaceutical companies for the development and commercialization of certain of our products and product candidates. Such agreements may include the transfer of intellectual property rights in the form of licenses, transfer of technological know-how, delivery of drug substances, research and development services, and participation on certain committees with the counterparty. Payments made by the customers may include non-refundable upfront fees, payments upon the exercise of customer options, payments based upon the achievement of defined milestones, and royalties on sales of products and product candidates if they are approved and commercialized.

If a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize the transaction price allocated to the license as revenue upon transfer of control of the license. We evaluate all other promised goods or services in the agreement to determine if they are distinct. If they are not distinct, they are combined with other promised goods or services to create a bundle of promised goods or services that is distinct. Optional future services where any additional consideration paid to us reflects their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations. If optional future services are priced in a manner which provides the customer with a significant or incremental discount, they are material rights, and are accounted for as separate performance obligations.

We utilize judgment to determine the transaction price. In connection therewith, we evaluate contingent milestones at contract inception to estimate the amount which is not probable of a material reversal to include in the transaction price using the most likely amount method. Milestone payments that are not within our control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore the variable consideration is constrained. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, we re-evaluate the probability of achieving development milestone payments that may not be subject to a material reversal and, if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license and other revenue, as well as earnings, in the period of adjustment.

We then determine whether the performance obligations or combined performance obligations are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. We evaluate the measure of progress, as applicable, for each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded within deferred

revenue. Contract liabilities within deferred revenue are recognized as revenue after control of the goods or services is transferred to the customer and all revenue recognition criteria have been met.

For arrangements that include sales-based royalties, including sales-based milestone payments, and a license of intellectual property that is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of when the related sales occur or when the performance obligation to which some or all of the royalties have been allocated has been satisfied (or partially satisfied). Refer to Note 10 “Significant Agreements”, for discussion related to the Company’s accounting for the RareStone Group, Ltd. agreement.

Deferred Royalty Obligation

We treat the debt obligation to HealthCare Royalty Management, LLC as discussed further in Note 11, “Long-term Obligations”, as a deferred royalty obligation, amortized using the effective interest rate method over the estimated life of the revenue streams. We recognize interest expense thereon using the effective rate, which is based on our current estimates of future revenues over the life of the arrangement. In connection therewith, we periodically assess our expected revenues using internal projections, impute interest on the carrying value of the deferred royalty obligation, and record interest expense using the imputed effective interest rate. To the extent our estimates of future revenues are greater or less than previous estimates or the estimated timing of such payments is materially different than previous estimates, we will account for any such changes by adjusting the effective interest rate on a prospective basis, with a corresponding impact to the reclassification of our deferred royalty obligation. The assumptions used in determining the expected repayment term of the deferred royalty obligation and amortization period of the issuance costs requires that we make estimates that could impact the classification of such costs, as well as the period over which such costs will be amortized.

Inventory

Prior to receiving approval from the FDA in November 2020 to sell IMCIVREE in the United States, the Company expensed all costs incurred related to the manufacture of IMCIVREE as research and development expense because of the inherent risks associated with the development of a drug candidate, the uncertainty about the regulatory approval process and the lack of history for the Company of regulatory approval of drug candidates. Subsequent to receiving FDA approval in November 2020, the Company has capitalized inventory related costs that were incurred subsequent to FDA approval. In connection therewith, the Company values inventories at the lower of cost or estimated net realizable value. The Company determines the cost of inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. Raw materials and work in process includes all inventory costs prior to packaging and labelling, including raw materials, active pharmaceutical ingredient, and drug product. Finished goods include packaged and labelled products. Raw materials and work in process that may be used for either research and development or commercial sale are classified as inventory until the material is consumed or otherwise allocated for research and development. If the material is intended to be used for research and development, it is expensed as research and development once that determination is made.

Inventory consists of the following:


	December 31,		December 31,
	2023		2022
Raw Materials	$	4,625	$	2,722
WIP		1,104		—
Finished Goods		2,895		195
Total Inventory	$	8,624	$	2,917

Cost of Product Sales

Cost of product sales consists of manufacturing costs, transportation and freight, amortization of capitalized intangibles, royalty payments and indirect overhead costs associated with the manufacturing and distribution of IMCIVREE. Cost of product sales may also include periodic costs related to certain manufacturing services and inventory

adjustment charges. Finally, cost of sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances.

Intangible Assets, net

Definite-lived intangible assets related to capitalized milestones under license agreements are amortized on a straight-line basis over their remaining useful lives, which are estimated to be the remaining patent life. If our estimate of the product’s useful life is shorter than the remaining patent life, then a shorter period is used. Amortization expense is recorded as a component of cost of sales on the consolidated statements of operations and comprehensive loss.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets, which consist primarily of property and equipment and finite lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. The Company measures recoverability of assets to be held and used by comparing the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the Company measures the impairment to be recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset, less the cost to sell. No events or changes in circumstances existed to require an impairment assessment during the years ended December 31, 2023, 2022 and 2021.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist primarily of costs incurred in advance of services being received, including services related to clinical trial programs. Prepaid expenses and other current assets consists of the following:


	December 31,
	2023		2022
Prepaid research and development costs	$	2,259	$	4,392
Other current assets		6,672		7,415
Prepaid expenses and other current assets	$	8,931	$	11,807

Other Long-Term Assets

Other long-term assets consist primarily of costs incurred in advance of services being received, including services related to clinical trial programs. Since the Company will not receive services within one year of the balance sheet date, these assets are considered long-term. Other long-term assets consists of the following:


	December 31,
	2023		2022
Long-term research and development costs	$	12,594	$	14,556
Other long-term assets		2,405		2,099
Other long-term assets	$	14,999	$	16,655

Property and Equipment

Property and equipment consists of the following:


	Useful	December 31,
	Life	2023		2022
Leasehold improvements	*	$	2,705	$	2,705
Office equipment	5 years		155		107
Computers and software	3 years		1,291		1,291
Furniture, fixtures and equipment	5 years		1,249		1,249
			5,400		5,352
Less accumulated depreciation and amortization			(4,059)		(3,155)
Property and equipment, net		$	1,341	$	2,197

*Shorter of asset life or lease term.

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2023, 2022 and 2021 was $903, $896, and $816 respectively.

Property and equipment are recorded at cost. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets. Upon disposal, retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations. Expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred.

Acquired IPR&D and Milestones Expenses

Acquired IPR&D and Milestone Expense

In an asset acquisition, payments incurred prior to regulatory approval to acquire rights to in-process research and development projects are expensed as acquired IPR&D and recorded as a component of research and development expense in the consolidated statements of operations and comprehensive net loss unless the project has an alternative future use. These costs include upfront and development milestone payments related to licensing arrangements, or other asset acquisitions that provide rights to develop, manufacture and/or sell pharmaceutical products. Where contingent development milestone payments are due to third parties, prior to regulatory approval, the payment obligations are expensed when the milestone results are achieved. Regulatory and commercial milestone payments made to third parties subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of products sold over the remaining useful life of the related product.

Foreign Currency Translation

The majority of the Company’s operations occurs in subsidiaries that have the U.S. dollar denominated as its functional currency. The assets and liabilities of the Company’s subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Revenue and expense amounts for these subsidiaries are translated using the average exchange rates for the period. Changes resulting from foreign currency translation are included in accumulated other comprehensive income (loss) on the Company’s consolidated statement of stockholders’ equity. Net foreign currency exchange transaction gains (losses), which are included in other (expense) income, net on our consolidated statements of operations, were immaterial for the years ended December 31, 2023, 2022 and 2021.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1 — Quoted market prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s cash equivalents and marketable securities and derivative liability at December 31, 2023 and 2022 were carried at fair value, determined according to the fair value hierarchy. See Note 5 for further discussion.

The carrying amounts reflected in the consolidated balance sheets for accounts payable and accrued expenses and other current liabilities approximate their fair values due to their short-term maturities at December 31, 2023 and 2022, respectively.

Research and Development Expenses

Costs incurred in the research and development of the Company’s products are expensed to operations as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including salaries and benefits, facilities costs, overhead costs, contract services and other outside costs. The value of goods and services received from contract research organizations, or CROs, or contract manufacturing organizations, or CMOs, in the reporting period are estimated based on the level of services performed and progress in the period for which the Company has not yet received an invoice from the supplier. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.

Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses, and expensed as the related goods are delivered or the services are performed.

Income Taxes

The Company is taxed as a C corporation for federal income tax purposes. Income taxes for the Company are recorded in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. Income taxes have been calculated on a separate tax return basis.

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that

it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits as provision for income taxes in the accompanying consolidated statements of operations. As of December 31, 2023 and 2022, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheets.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of potential dilutive securities. Diluted net loss per share is computed by adjusting the weighted-average shares outstanding for the potential dilutive effects of common stock equivalents outstanding during the period calculated in accordance with the treasury stock method. For purposes of the diluted net loss per share calculation, stock options, restricted stock units and performance stock units are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share were the same for all periods presented.

The following table includes the potential common shares, presented based on amounts outstanding at each period end, that were excluded from the computation of diluted net loss per share due to their anti-dilutive effect, for the periods indicated:


	Year Ended
	December 31,
	2023		2022		2021
Stock options		6,551,025		6,354,544		5,737,599
Restricted stock units		1,079,382		774,166		435,589
Performance stock units		581,246		804,797		956,145
Potential common shares		8,211,653		7,933,507		7,129,333

Comprehensive Loss

Comprehensive loss represents the net change in stockholders’ equity during a period from sources other than transactions with shareholders. As reflected in the accompanying consolidated statements of operations and comprehensive loss, our comprehensive loss is comprised of net losses and unrealized gains and losses on marketable debt securities. These changes in equity are reflected net of tax.

Patent Costs

Costs to secure and defend patents are expensed as incurred and are classified as general and administrative expenses. Patent costs were $555, $406 and $332 for the years ended December 31, 2023, 2022 and 2021, respectively.

Subsequent Events

Application of New or Revised Accounting Standards

From time to time, new accounting pronouncements are issued by the FASB and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU 2023-09. The new guidance requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendments in the ASU are intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update are effective for us beginning in fiscal year ending December 31, 2025. We are currently evaluating the impact of the new standard on our consolidated financial statements which is expected to result in enhanced disclosures, however, we do not otherwise expect the adoption of the new guidance to have a material impact on our financial condition or results of operations.

Long-Term Obligations (Details) - USD ($) $ in Thousands					12 Months Ended
Long-Term Obligations (Details) - USD ($) $ in Thousands	Sep. 12, 2023	Sep. 29, 2022	Jun. 29, 2022	Jun. 16, 2022	Dec. 31, 2023	Dec. 31, 2022	Jun. 30, 2022
Long-Term Obligations
Deferred royalty obligation					$ 106,143	$ 75,810
Revenue Interest Financing Agreement
Long-Term Obligations
Remaining Investment Amount	$ 24,370	$ 37,500	$ 37,500		100,000
Repayment of debt					7,398
Revenue interest payment period				12 years
Fair value of embedded derivative liability					1,150	1,340	$ 1,590
Remeasurement of the embedded derivative liability					190	$ 250
Deferred royalty obligation					$ 106,143
Effective interest rate					15.12%
Debt issuance costs					$ 3,287
Revenue Interest Financing Agreement \| Annual net revenues up to 125 million
Long-Term Obligations
Royalty interest (as a percent)				11.50%
Threshold annual net revenues				$ 125,000
Revenue Interest Financing Agreement \| Annual net revenues between 125 million and 300 million
Long-Term Obligations
Royalty interest (as a percent)				7.50%
Revenue Interest Financing Agreement \| Annual net revenues exceeding 300 million
Long-Term Obligations
Royalty interest (as a percent)				2.50%
Threshold annual net revenues				$ 300,000
Revenue Interest Financing Agreement \| March 31, 2027
Long-Term Obligations
Threshold cumulative minimum payments (as a percent)				60.00%
Revenue Interest Financing Agreement \| March 31, 2029
Long-Term Obligations
Threshold cumulative minimum payments (as a percent)				120.00%
Revenue Interest Financing Agreement \| Minimum
Long-Term Obligations
Revenue interest cap (as a percent)				185.00%
Revenue Interest Financing Agreement \| Minimum \| Annual net revenues between 125 million and 300 million
Long-Term Obligations
Threshold annual net revenues				$ 125,000
Revenue Interest Financing Agreement \| Maximum
Long-Term Obligations
Aggregate investment amount				$ 100,000
Revenue interest cap (as a percent)				250.00%
Revenue Interest Financing Agreement \| Maximum \| Annual net revenues between 125 million and 300 million
Long-Term Obligations
Threshold annual net revenues				$ 300,000

Segment and Geographic Information (Details)	12 Months Ended
Segment and Geographic Information (Details)	Dec. 31, 2023 segment
Segment and Geographic Information
Number of operating segments	1

Stock-based Compensation - Black Scholes option pricing (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Weighted average assumptions
Risk-free interest rate	2.35%	2.19%	0.79%
Expected term (in years)	6 years 1 month 9 days	6 years 1 month 9 days	6 years 1 month 9 days
Expected volatility	76.11%	69.16%	69.80%

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 60,081	$ 127,677
Short-term investments	215,765	205,611
Accounts receivable, net	14,867	6,224
Inventory	8,624	2,917
Prepaid expenses and other current assets	8,931	11,807
Total current assets	308,268	354,236
Property and equipment, net	1,341	2,197
Right-of-use asset	781	1,182
Intangible assets, net	7,028	7,883
Restricted cash	328	328
Other long-term assets	14,999	16,655
Total assets	332,745	382,481
Current liabilities:
Accounts payable	4,885	4,797
Accrued expenses and other current liabilities	48,262	32,894
Deferred revenue	1,286	1,434
Lease liability	770	684
Total current liabilities	55,203	39,809
Long-term liabilities:
Deferred royalty obligation	106,143	75,810
Lease liability, non-current	490	1,260
Derivative liability	1,150	1,340
Total liabilities	162,986	118,219
Stockholders' equity:
Preferred Stock, $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2023 and December 31, 2022
Common stock, $0.001 par value: 120,000,000 shares authorized; 59,426,559 and 56,612,429 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively	59	56
Additional paid-in capital	1,064,302	974,356
Accumulated other comprehensive income (loss)	134	(92)
Accumulated deficit	(894,736)	(710,058)
Total stockholders' equity	169,759	264,262
Total liabilities and stockholders' equity	$ 332,745	$ 382,481

Income Taxes - Components of income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Components of loss before income taxes
United States	$ (178,669)	$ (181,119)	$ (69,612)
Foreign	(5,445)
Loss before taxes	$ (184,114)	$ (181,119)	$ (69,612)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479557/942-235-S99-1

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 25
-Paragraph 1
-SubTopic 20
-Topic 940
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481913/940-20-25-1

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

Asset Acquisition (Details) - Xinvento B.V. - USD ($) $ in Thousands		12 Months Ended
	Feb. 27, 2023	Dec. 31, 2023	Mar. 31, 2024
Asset Acquisition
Aggregate Payment Upon Achievement Of Development And Commercial Milestones	$ 206,000
Clinical development milestone payments	6,000
Regulatory approval and commercial milestones milestone payments	125,000
Sales milestone payments	75,000
Purchase consideration	5,667
Cash consideration	4,520
Holdback, payable on the one-year anniversary of the acquisition			$ 500
Acquisition related costs	$ 647
Research and development
Asset Acquisition
Purchase consideration		$ 5,667

Stock-based Compensation - RSU and PSU activity (Details)	1 Months Ended	12 Months Ended
	Nov. 30, 2021 USD ($)	Dec. 31, 2023 USD ($) $ / shares shares
Weighted Average Grant Date Fair Value
Number of shares of common stock shares issued upon vesting \| $	956,145
Restricted stock units
Number of Units
Outstanding unvested at beginning of the period \| shares		774,166
Granted \| shares		643,028
Vested \| shares		(214,837)
Cancelled \| shares		(97,750)
Outstanding unvested at end of the period \| shares		1,104,607
Weighted Average Grant Date Fair Value
Outstanding unvested at beginning of the period \| $ / shares		$ 12.18
Granted \| $ / shares		24.97
Vested \| $ / shares		14.30
Cancelled \| $ / shares		15.61
Outstanding unvested at end of the period \| $ / shares		$ 17.44
Aggregate intrinsic value \| $		$ 50,779,000
Performance Shares [Member]
Number of Units
Outstanding unvested at beginning of the period \| shares		804,797
Cancelled \| shares		(223,451)
Outstanding unvested at end of the period \| shares		581,346
Weighted Average Grant Date Fair Value
Outstanding unvested at beginning of the period \| $ / shares		$ 13.24
Cancelled \| $ / shares		13.24
Outstanding unvested at end of the period \| $ / shares		$ 13.24
Estimated percentage of payment awards granted eligible to vest		90.00%

Summary of Significant Accounting Policies - Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Summary of Significant Accounting Policies
Prepaid research and development costs	$ 2,259	$ 4,392
Other current assets	6,672	7,415
Prepaid expenses and other current assets	$ 8,931	$ 11,807

Common Stock (Details) - USD ($)					12 Months Ended
Common Stock (Details) - USD ($)	Oct. 18, 2022	Sep. 19, 2022	Nov. 02, 2021	Feb. 09, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Common Stock
Issuance of stock (in shares)	580,000	4,800,000		5,750,000
Issuance of stock						$ 131,112,000	$ 161,726,000
Price per share	$ 26.00	$ 26.00		$ 30.00
Net proceeds from issuance of common stock	$ 14,175,000	$ 116,887,000		$ 161,550,000	$ 48,875,000	$ 131,112,000	$ 161,726,000
Period for option to purchase additional shares by underwriter		30 days
2017 Equity Incentive Plan
Common Stock
Common stock reserved for issuance					7,541,429
Shares available for future grant					4,187,953
2017 Employee Stock Purchase Plan
Common Stock
Common stock reserved for issuance					1,323,026
2022 Employment Inducement Plan
Common Stock
Vesting period					4 years
Shares available for future grant					179,925
Underwriter option to purchase
Common Stock
Issuance of stock (in shares)		720,000
Issuance of stock				$ 750,000
At-the-market offering
Common Stock
Issuance of stock					$ 48,875,000
Common stock \| At-the-market offering
Common Stock
Issuance of stock			$ 2,000,000		$ 48,900,000
Maximum \| 2022 Employment Inducement Plan
Common Stock
Expiration period					10 years
Maximum \| At-the-market offering
Common Stock
Aggregate proceeds			$ 100,000,000.0
Employee Stock Option \| Maximum
Common Stock
Vesting period					4 years

Nature of Business

12 Months Ended

Dec. 31, 2023

Nature of Business

Nature of Business

1. Nature of Business

Rhythm Pharmaceuticals, Inc. (the “Company” or “we”) is a global, commercial-stage biopharmaceutical company dedicated to transforming the lives of patients and their families living with rare neuroendocrine diseases. We are focused on advancing our melanocortin-4 receptor agonists, including our lead asset, IMCIVREE^® (setmelanotide), as a precision medicine designed to treat hyperphagia and severe obesity caused by MC4R pathway diseases. While obesity affects hundreds of millions of people worldwide, we are developing therapies for a subset of individuals who have hyperphagia, a pathological hunger, and severe obesity due to an impaired MC4R pathway, which may be caused by traumatic injury or genetic variants. The MC4R pathway is an endocrine pathway in the brain that is responsible for regulating hunger, caloric intake and energy expenditure, which consequently affect body weight. IMCIVREE, an MC4R agonist for which we hold worldwide rights, is the first-ever therapy developed for patients with certain rare diseases that is approved or authorized in the United States, European Union (EU), Great Britain, Canada and other countries and regions.

The Company is a Delaware corporation organized in February 2013 under the name Rhythm Metabolic, Inc., and as of October 2015, under the name Rhythm Pharmaceuticals, Inc. The Company has wholly owned subsidiaries in the US, Ireland, the United Kingdom, the Netherlands, France, Germany, Italy, Spain and Canada.

The Company is subject to risks and uncertainties common to commercial-stage companies in the biotechnology industry, including but not limited to, risks associated with the commercialization of approved products, completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Commercialization of approved products will require significant resources and in order to market IMCIVREE, the Company must continue to build its sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even though the Company has an approved product, and even if the Company’s further product development efforts are successful, it is uncertain when, if ever, the Company will realize sufficient revenue from product sales to fund operations.

Liquidity

The Company has incurred operating losses and negative cash flows from operations since inception. As of December 31, 2023, the Company had an accumulated deficit of $894,736. The Company has primarily funded these losses through the proceeds from the sales of common and preferred stock, asset sales, royalty financing, out-license arrangements, as well as capital contributions received from the former parent company, Rhythm Holdings LLC. To date, the Company has minimal product revenue and management expects operating losses to continue for the foreseeable future. The Company has devoted substantially all of its resources to its drug development efforts, comprising of research and development, the acquisition of in process research and development assets, manufacturing, conducting clinical trials for its product candidates, protecting its intellectual property, commercialization activities and general and administrative functions relating to these operations. The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain profitable operations.

At December 31, 2023, the Company had $275,846 of cash and cash equivalents and short-term investments on hand. In the future, the Company will be dependent on obtaining funding from third parties, such as proceeds from the

issuance of debt, sale of equity, proceeds from out license arrangements, product sales and funded research and development programs to maintain the Company's operations and meet the Company's obligations. There is no guarantee that additional equity or other financings will be available to the Company on acceptable terms, or at all. If the Company fails to obtain additional funding when needed, the Company would be forced to scale back, terminate its operations or seek to merge with or be acquired by another company. Management believes that the Company's existing cash resources will be sufficient to fund the Company's operations through at least the next twelve months from the filing of this Annual Report on Form 10-K with the SEC.

Right of Use Asset and Lease Liability (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	May 31, 2019	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2019	Dec. 31, 2018
Right of Use Asset and Lease Liability
Remaining term of operating lease (in years)		1 year 7 months 6 days
Operating lease discount rate		10.00%
Transition relief package					true
Lease term (in years)	6 years
Lease renewal term (in years)	5 years					5 years
Option to extend	true
Rent expense, or operating lease costs		$ 551	$ 551	$ 551
Cash payments in the measurement of operating lease liability		$ 834	$ 818	$ 802

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2023

Accrued Expenses

Schedule of accrued expenses


	December 31,		December 31,
	2023		2022
Research and development costs	$	12,925	$	11,379
Professional fees		3,833		4,502
Payroll related		15,439		11,444
Royalties		1,180		440
Sales Allowances		9,475		2,710
Other		5,410		2,419
Accrued expenses and other current liabilities	$	48,262	$	32,894

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Principles of Consolidation

Reclassifications

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations or cash flows. Specifically, in the consolidated statement of cash flows for the year ended December 31, 2022, the Company has reclassified $2,314 from changes in prepaid expenses and other current assets to non-cash accretion and amortization of short-term investments.

Segment Information

Off-Balance Sheet Risk and Concentrations of Credit Risk

Cash and Cash Equivalents

Short-Term Investments

Restricted Cash

Accounts Receivable, net

Revenue Recognition

Product Revenue, Net

Reserves for Variable Consideration

The following are the components of variable consideration related to product revenue:

The table below summarizes balances and activity in each of the product revenue allowance and reserve categories as follows:



	Provision for Cash Discounts		Fees, Rebates and Other Incentives		Total
Beginning Balance at December 31, 2021	$	21	$	453	$	474
Provision related to sales in the current year		367		3,299		3,666
Credit and payments made		(289)		(1,042)		(1,331)
Ending balance December 31, 2022	$	99	$	2,710	$	2,809
Provision related to sales in the current year		1,672		17,351		19,023
Credit and payments made		(1,572)		(10,586)		(12,158)
Ending balance December 31, 2023	$	199	$	9,475	$	9,674

Provision for cash discounts are recorded as reductions of accounts receivable, and fees, rebates, and other incentives are recorded as a component of accrued expenses.

License Agreements

Deferred Royalty Obligation

Inventory

Inventory consists of the following:


	December 31,		December 31,
	2023		2022
Raw Materials	$	4,625	$	2,722
WIP		1,104		—
Finished Goods		2,895		195
Total Inventory	$	8,624	$	2,917

Cost of Product Sales

Intangible Assets, net

Impairment of Long-Lived Assets

Prepaid Expenses and Other Current Assets


	December 31,
	2023		2022
Prepaid research and development costs	$	2,259	$	4,392
Other current assets		6,672		7,415
Prepaid expenses and other current assets	$	8,931	$	11,807

Other Long-Term Assets


	December 31,
	2023		2022
Long-term research and development costs	$	12,594	$	14,556
Other long-term assets		2,405		2,099
Other long-term assets	$	14,999	$	16,655

Property and Equipment

Property and equipment consists of the following:


	Useful	December 31,
	Life	2023		2022
Leasehold improvements	*	$	2,705	$	2,705
Office equipment	5 years		155		107
Computers and software	3 years		1,291		1,291
Furniture, fixtures and equipment	5 years		1,249		1,249
			5,400		5,352
Less accumulated depreciation and amortization			(4,059)		(3,155)
Property and equipment, net		$	1,341	$	2,197

*Shorter of asset life or lease term.

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2023, 2022 and 2021 was $903, $896, and $816 respectively.

Acquired IPR&D and Milestone Expense

Foreign Currency Translation

Fair Value Measurements

Level 1 — Quoted market prices in active markets for identical assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Research and Development Expenses

Income Taxes

Net Loss Per Share


	Year Ended
	December 31,
	2023		2022		2021
Stock options		6,551,025		6,354,544		5,737,599
Restricted stock units		1,079,382		774,166		435,589
Performance stock units		581,246		804,797		956,145
Potential common shares		8,211,653		7,933,507		7,129,333

Comprehensive Loss

Patent Costs

Subsequent Events

Application of New or Revised Accounting Standards

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Total revenues	$ 77,428	$ 23,638	$ 3,154
Costs and expenses:
Cost of sales	9,302	2,133	599
Research and development	134,951	108,630	104,128
Selling, general, and administrative	117,532	92,032	68,486
Total costs and expenses	261,785	202,795	173,213
Loss from operations	(184,357)	(179,157)	(170,059)
Other income (expense):
Other income (expense), net	190	(790)	100,000
Interest expense	(13,892)	(5,201)
Interest income	13,945	4,029	447
Total other income (expense), net	243	(1,962)	100,447
Loss before taxes	(184,114)	(181,119)	(69,612)
Provision for income taxes	564
Net loss	$ (184,678)	$ (181,119)	$ (69,612)
Net loss per share, basic (in dollars per share)	$ (3.20)	$ (3.47)	$ (1.40)
Net loss per share, diluted (in dollars per share)	$ (3.20)	$ (3.47)	$ (1.40)
Weighted-average common shares outstanding, basic (in shares)	57,673,128	52,120,701	49,600,294
Weighted-average common shares outstanding, diluted (in shares)	57,673,128	52,120,701	49,600,294
Other comprehensive loss:
Net Income (Loss)	$ (184,678)	$ (181,119)	$ (69,612)
Foreign currency translation adjustment	(140)
Unrealized gain (loss), net on marketable securities	366	(91)	(1)
Comprehensive loss	(184,452)	(181,210)	(69,613)
Product revenue
Total revenues	77,428	16,884	3,154
License revenue
Total revenues	$ 0	$ 6,754	$ 0

Right of Use Asset and Lease Liability (Tables)

12 Months Ended

Dec. 31, 2023

Right of Use Asset and Lease Liability

Schedule of operating lease maturities


	Operating Lease
2024		851
2025		502
Total operating lease payments		1,353
Less: imputed interest		(93)
Total operating lease liability	$	1,260

Asset Acquisition

12 Months Ended

Dec. 31, 2023

Asset Acquisition

Asset Acquisition

3. Asset Acquisition

Xinvento B.V.

On February 27, 2023, the Company, through its wholly-owned Dutch subsidiary, Rhythm Pharmaceuticals Netherlands B.V., a Dutch private limited liability company (“Rhythm BV”), entered into a Share Purchase Agreement (the “Purchase Agreement”) with Xinvento B.V., a Dutch private limited liability company based in the Netherlands (“Xinvento”), and the other parties named therein, pursuant to which, and concurrently with the execution thereof, Rhythm BV acquired all of the issued and outstanding shares of Xinvento. The aggregate consideration at closing was approximately $5,667, inclusive of transaction costs, as adjusted pursuant to the terms of the Purchase Agreement and subject to the distribution and payment terms set forth therein (the “Closing Purchase Price”).

In addition to the Closing Purchase Price, the Purchase Agreement provides for the payment of additional contingent consideration totaling up to $206,000 upon achievement of certain development, regulatory and commercial milestones by Xinvento, as follows: (i) up to an aggregate of $6,000 in clinical development milestones; (ii) up to an aggregate of $125,000 in regulatory approval and commercial milestones; and (iii) up to an aggregate of $75,000 in sales milestones in the event a second molecule is selected, developed and approved.

The total purchase consideration of $5,667 was composed of $4,520 of cash paid at closing, a $500 holdback, payable on the one-year anniversary of the acquisition, and $647 of acquisition-related costs. The $500 holdback will be paid in the quarter ended March 31, 2024. The Company determined that substantially all of the value as of acquisition date related to Xinvento’s In-Process Research and Development. As a result, the Company determined this transaction should be accounted for as an asset acquisition.

The assets acquired were In-Process Research and Development (IPR&D) assets. However, since the IPR&D assets were determined to have no alternative future use, the Company recognized the $5,667 of purchase consideration as research and development expense in the year ended December 31, 2023.

The Company determined that the additional contingent consideration did not meet the definition of a derivative as of the acquisition date. Therefore, the Company did not record a contingent consideration liability on the acquisition date. The Company will recognize any future contingent consideration payments related to the Xinvento transaction in the period in which the achievement of the underlying milestones becomes probable.

Xinvento's results of operations are included in the consolidated financial statements from the date of acquisition. For the year ended December 31, 2023, the net loss associated with the operations of Xinvento was de minimis in the Company’s consolidated statements of operations.

Income Taxes - Components of provision for income taxes (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Current:
U.S. State and Local	$ 1
Foreign	563
Current Income Tax Expense (Benefit)	$ 564

Stock-based Compensation

12 Months Ended

Dec. 31, 2023

Stock-based Compensation

Stock-based Compensation

9. Stock-based Compensation

2017 Equity Incentive Plan

The Rhythm Pharmaceuticals, Inc. 2017 Equity Incentive Plan (the “2017 Plan”) provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, performance units, restricted stock awards, restricted stock units and stock grants to employees, consultants, advisors and directors of us or our affiliates, as determined by the board of directors. The number of shares authorized under the 2017 Plan increases on the first day of each calendar year, commencing on January 1, 2018 and ending on (and including) January 1, 2027, by an amount equal to 4% of the outstanding shares of stock outstanding as of the end of the immediately preceding fiscal year. On January 1, 2024, 2023 and 2022, 2,377,062, 2,264,497, and 2,011,343 shares, respectively, were added to the 2017 Plan. Notwithstanding the foregoing, the board of directors may act prior to January 1 for a given year to provide that there will be no such January 1 increase in the number of shares authorized under the 2017 Plan for such year, or that the increase in the number of shares authorized under the 2017 Plan for such year will be a lesser number than would otherwise occur pursuant to the preceding sentence.

Shares of common stock issued upon the exercise of stock options are generally issued from new shares of the Company. The 2017 Plan provides that the exercise price of incentive stock options cannot be less than 100% of the fair market value of the common stock on the date of the award for participants who own less than 10% of the total combined voting power of stock of the Company, and not less than 110% for participants who own more than 10% of the Company's voting power. Awards granted under the 2017 Plan will vest over periods as determined by the Company's board of directors. For options granted to date, the exercise price equaled the fair value of the common stock as determined by the board of directors on the date of grant.

As of December 31, 2023, an aggregate of 11,729,382 shares of common stock were authorized for issuance under the 2017 Plan, of which a total of approximately 4,187,953 shares of common stock remained available for future awards. In addition, a total of 7,541,429 shares of common stock reserved for issuance were subject to currently outstanding stock options, performance share units and restricted stock units granted under the Plan.

2022 Inducement Plan

On February 9, 2022, the Company’s board of directors adopted the Rhythm Pharmaceuticals, Inc. 2022 Employment Inducement Plan (the “2022 Inducement Plan”), which became effective on such date without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules (“Rule 5635(c)(4)”). The 2022 Inducement Plan provides for the grant of non-qualified stock options, stock appreciation rights, performance units, restricted stock awards, restricted stock units and stock grants. In accordance with Rule 5635(c)(4), awards under the 2022 Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s

board of directors, or an employee who is being rehired following a bona fide period of non-employment by the Company or a subsidiary, as a material inducement to the employee’s entering into employment with the Company or its subsidiary. An aggregate of 1,000,000 shares of the Company’s common stock have been reserved for issuance under the 2022 Inducement Plan.

The exercise price of stock options granted under the 2022 Inducement Plan will not be less than the fair market value of a share of the Company’s common stock on the grant date. Other terms of awards, including vesting requirements, are determined by the Company’s board of directors and are subject to the provisions of the 2022 Inducement Plan. Stock options granted to employees generally vest over a four-year period but may be granted with different vesting terms. Certain options may provide for accelerated vesting in the event of a change in control. Stock options granted under the 2022 Inducement Plan expire no more than 10 years from the date of grant. As of December 31, 2023, there were 526,177 stock option awards outstanding, 233,719 restricted stock unit awards outstanding and 179,925 shares of common stock available for future grant under the 2022 Inducement Plan.

2017 Employee Stock Purchase Plan

The Company maintains the Rhythm Pharmaceuticals, Inc. 2017 Employee Stock Purchase Plan, (the “2017 ESPP”), which became effective in connection with the completion of the Company’s IPO in October 2017. As of December 31, 2023, a total of 1,323,026 shares of common stock were reserved for issuance under the 2017 ESPP. In addition, the number of shares authorized under the 2017 ESPP increases on the first day of each calendar year, commencing on January 1, 2019 and ending on (and including) January 1, 2027, by an amount equal to the lesser of 1% of outstanding shares as of the end of the immediately preceding fiscal year. On January 1, 2023, 2022 and 2021, 0, 502,835 and 0 shares, respectively, were added to the 2017 ESPP. Notwithstanding the foregoing, the board of directors may act prior to January 1 of a given year to provide that there will be no such January 1 increase in the number of shares authorized under the 2017 ESPP for such year, or that the increase in the number of shares authorized under the 2017 ESPP for such year will be a lesser number than would otherwise occur pursuant to the preceding sentence. The board of directors elected not to increase the number of shares available under the 2017 ESPP on January 1, 2024 and 2023. During the years ended December 31, 2023, 2022 and 2021, shares of 49,819, 92,932, and 38,051 were issued under the 2017 ESPP.

The purchase price of common stock under our ESPP is equal to 85.0% of the lower of (i) the market value per share of the common stock on the first business day of an offering period or (ii) the market value per share of the common stock on the purchase date. The fair value of the discounted purchases made under our ESPP is calculated using the Black-Scholes model. The fair value of the look-back provision plus the 15.0% discount is recognized as compensation expense over the 6 month purchase period.

Stock Options

The Company estimates the fair value of stock option awards to employees and non-employees using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including (a) the expected volatility of the underlying common stock, (b) the expected term of the award, (c) the risk-free interest rate, and (d) expected dividends. The Company bases its estimate of expected volatility using a blend of its stock price history for the length of time it has market data for its stock and using the historical volatility of a group of companies in the pharmaceutical and biotechnology industries in a similar stage of development as the Company that are publicly traded. For these analyses, the Company selected companies with comparable characteristics to its own including enterprise value, risk profiles and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies' shares during the equivalent period of the calculated expected term of its stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

The Company estimated the expected life of its employee stock options using the “simplified” method, whereby, the expected life equals the average of the vesting term and the original contractual term of the option. The risk-free interest

rates for periods within the expected life of the option are based on the U.S. Treasury yield curve in effect during the period the options were granted. We have elected to account for forfeitures as they occur.

The grant date fair value of awards subject to service-based vesting is recognized ratably over the requisite service period, which is generally the vesting period of the respective awards. The Company's stock option awards typically vest over a service period that ranges from one to four years and includes awards with one year cliff vesting followed by ratable monthly and quarterly vesting thereafter and ratable monthly and quarterly vesting beginning on the grant date.

During the years ended December 31, 2023, 2022 and 2021, the Company granted 842,528, 1,929,345, and 1,678,230 stock option awards pursuant to the 2017 Plan to certain directors, employees and non-employees, respectively. Using the Black-Scholes option pricing model, the weighted-average grant date fair value relating to outstanding stock options granted under the 2017 Plan during the years ended December 31, 2023, 2022 and 2021 was $17.72, $4.14, and $15.69, respectively.

During the years ended December 31, 2023, 2022 and 2021, the Company granted 229,360, 347,985, and 0 stock option awards pursuant to the 2022 Inducement Plan. Using the Black-Scholes option pricing model, the weighted-average grant date fair value relating to outstanding stock options granted under the Company’s stock option plan during the years ended December 31, 2023, 2022 and 2021 was $15.30, $13.05, and $0, respectively.

The fair value of stock options granted to employees and directors was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


	Year ended
	December 31,
	2023		2022		2021
Risk‑free interest rate	2.35	%	2.19	%	0.79	%
Expected term (in years)	6.11		6.11		6.11
Expected volatility	76.11	%	69.16	%	69.80	%
Expected dividend yield	—		—		—

A summary of the Company's stock option activity for the year ended December 31, 2023 is as follows:


				Weighted‑
		Weighted-		Average
		Average		Remaining		Aggregate
	Number of	Exercise		Contractual		Intrinsic
	Options	Price		Term		Value
Outstanding as of December 31, 2022	6,374,544	$	17.85	7.73	$	73,994
Granted	1,053,888	$	25.42	—	$	—
Exercised	(529,854)	$	14.09	—	$	9,225
Cancelled	(347,553)	$	21.23	—	$	—
Outstanding as of December 31, 2023	6,551,025	$	19.19	7.23	$	175,419
Options exercisable at December 31, 2023	3,936,040	$	19.77	6.54	$	103,122

Restricted Stock Units

The Company may grant restricted stock units (“RSUs”) to employees and nonemployee directors under the 2017 Plan and to employees under the 2022 Inducement Plan. Each RSU represents a right to receive one share of the Company's common stock upon the completion of a specific period of continued service. RSU awards granted are valued at the market price of the Company's common stock on the date of grant. The Company recognizes stock-based compensation expense for the fair values of these RSUs on a straight-line basis over the requisite service period of these awards.

A summary of the Company's restricted stock unit activity for the year ended December 31, 2023 is as follows:




		Weighted-
		Average
	Number of	Grant Date
	RSUs	Fair Value
Unvested as of December 31, 2022	774,166	$	12.18
Granted	643,028		24.97
Vested	(214,837)		14.30
Cancelled	(97,750)		15.61
Unvested as of December 31, 2023	1,104,607	$	17.44

As of December 31, 2023, the aggregate intrinsic value of unvested RSUs was $50,779.

Performance Stock Units

In November 2021, the Company granted up to a maximum of 956,145 performance stock units (“PSUs”) to employees under the 2017 Plan. Each PSU represents a right to receive one share of the Company's common stock upon vesting. The performance-based stock units granted in 2021 will vest on December 31, 2023 based upon i) continued service through the vesting date and (ii) the achievement of specific clinical development and regulatory performance events, as approved by the compensation committee. PSU awards granted are valued at the market price of the Company's common stock on the date of grant. The Company recognizes stock-based compensation expense for the fair value of these PSUs for the awards that are probable of vesting over the service period. During each financial period, management estimates the probable number of PSU’s that would vest until the ultimate achievement of the performance goal is known. At December 31, 2023, the Company estimates that 90.0% of the PSUs granted will be eligible to vest in the quarter ended March 31, 2024.

A summary of the Company's performance stock unit activity for the year ended December 31, 2023 is as follows:




		Weighted-
		Average
	Number of	Grant Date
	PSUs	Fair Value
Unvested as of December 31, 2022	804,797	$	13.24
Granted	—		—
Vested	—		—
Cancelled	(223,451)		13.24
Unvested as of December 31, 2023	581,346	$	13.24

The following table summarizes the classification of the Company's stock-based compensation expenses related to stock options, restricted stock units, performance stock units and the employee stock purchase plan recognized in the Company's consolidated statements of operations and comprehensive loss.



	Year Ended
	December 31,
	2023		2022		2021
Research and development	$	8,449	$	5,814	$	7,687
Selling, general, and administrative		24,104		14,017		13,117
Total	$	32,553	$	19,831	$	20,804

Stock-based compensation expense by award type recognized during the years ended December 31, 2023, 2022 and 2021 was as follows:



	Year Ended
	December 31,
	2023		2022		2021
Stock options	$	17,671	$	15,477	$	17,988
Employees stock purchase plan		581		408		310
Restricted stock units		5,998		2,918		1,924
Performance stock units		8,303		1,028		582
Total	$	32,553	$	19,831	$	20,804

As of December 31, 2023, the Company has unrecognized compensation cost of $27,322 related to non-vested employee, non-employee and director stock option awards under all equity plans that are expected to be recognized over a weighted-average period of 2.07 years. The Company has unrecognized compensation cost of $16,880 related to non-vested employee restricted stock unit and performance stock unit awards under all equity plans that are expected to be recognized over a weighted-average period of 2.63 years.

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2023

Intangible Assets, Net

Schedule of finite-lived intangible assets


2024	$	855
2025		855
2026		855
2027		855
2028		855
Thereafter		2,753
Total	$	7,028

Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Summary of Significant Accounting Policies
Raw Materials	$ 4,625	$ 2,722
WIP	1,104
Finished Goods	2,895	195
Total Inventory	$ 8,624	$ 2,917

Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies

Commitments and Contingencies

12. Commitments and Contingencies

Legal Proceedings

The Company, from time to time, may be party to various litigation arising in the ordinary course of business. The Company is not presently subject to any pending or threatened litigation that it believes, if determined adversely to

the Company, individually, or taken together, would reasonably be expected to have a material adverse effect on its business or financial results.

Other

The Company is party to various agreements, principally relating to licensed technology, that require future payments relating to milestones that may be met in subsequent periods, or royalties on future sales of specified products. See Note 10 for discussion of these arrangements. Additionally, the Company is party to various contracts with CROs and CMOs that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement.

Based on the Company’s current development plans as of December 31, 2023, the Company does not expect to make milestone payments due to third parties during the next 12 months from the filing of this Annual Report on Form 10-K, in connection with our license agreements. These milestones generally become due and payable upon achievement of such milestones or sales and achievement of development milestones. When the achievement of these milestones or sales have not occurred, such contingencies are not recorded in the Company’s consolidated financial statements.

Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value of Financial Assets and Liabilities

Schedule of financial assets and liabilities measured at fair value on a recurring basis


	Fair Value Measurements as of
	December 31, 2023 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	40,868	$	4,979	$	—	$	45,847
Marketable securities:
Corporate debt securities and commercial paper		—		215,765		—		215,765
Total	$	40,868	$	220,744	$	—	$	261,612
Liabilities:
Derivative liability	$	—	$	—	$	1,150	$	1,150
Total	$	—	$	—	$	1,150	$	1,150


	Fair Value Measurements as of
	December 31, 2022 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Commercial paper	$	—	$	8,484	$	—	$	8,484
Money market funds		99,962		—		—		99,962
Marketable securities:
Corporate debt securities and commercial paper		—		205,611		—		205,611
Total	$	99,962	$	214,095	$	—	$	314,057
Liabilities:
Derivative liability	$	—	$	—	$	1,340	$	1,340
Total	$	—	$	—	$	1,340	$	1,340

Schedule of estimated fair value of embedded derivative liability


	Year ended
	December 31,
	2023		2022
Beginning aggregate estimated fair value of Level 3 liabilities	$	1,340	$	—
Initial recording of embedded derivative		—		1,590
Change in fair value of embedded derivative		(190)		(250)
Ending aggregate estimated fair value of Level 3 liabilities	$	1,150	$	1,340

	Year ended
	December 31,
	2023		2022
Beginning aggregate estimated fair value of Level 3 securities	$	—	$	—
Initial recording of RareStone equity		—		1,040
Realized loss included in other expense		—		(1,040)
Ending aggregate estimated fair value of Level 3 securities	$	—	$	—

Schedule of marketable securities


	December 31, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate debt securities and commercial paper (due within 1 year)	$	215,491	$	282	$	(7)	$	215,765
	$	215,491	$	282	$	(7)	$	215,765


	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate debt securities and commercial paper (due within 1 year)	$	205,702	$	—	$	(91)	$	205,611
	$	205,702	$	—	$	(91)	$	205,611

Income Taxes - Operating loss carryforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating loss carryforwards
Increase in valuation allowance	$ 49,901	$ 59,046
Federal net operating loss carryforwards	555,563
State net operating loss carryforwards	597,952
Net operating loss indefinite carryforwards	482,396
Foreign net operating loss carryforwards	1,342
Federal orphan drug credit related to qualifying research	25,484
Unremitted earnings of foreign subsidiaries	730
Accrued interest or penalties related to uncertain tax positions	0	$ 0
Research tax credits \| Federal
Operating loss carryforwards
Research tax credits	13,142
Research tax credits \| State
Operating loss carryforwards
Research tax credits	$ 3,794

Subsequent Events

12 Months Ended

Dec. 31, 2023

Subsequent Events

Subsequent Events

17. Subsequent Events

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure, other than as disclosed within the above notes to these consolidated financial statements, and except as described below.

License Agreement

On January 4, 2024, the Comapny entered into a license agreement and share issuance agreement with LG Chem, Ltd. (“LGC”). Under the terms of the license agreement, the Company obtained worldwide rights to LGC’s proprietary compound LB54640 and will assume sponsorship of two ongoing LGC Phase 2 studies designed to evaluate safety, tolerability, pharmacokinetics and weight loss efficacy of LB54640.

At closing, we paid LGC $40 million in cash and issued shares of our common stock with an aggregate value of $20 million. The shares were issued at a per share price equal to the ten-day volume weighted average closing price for our common stock, calculated as of the trading day immediately prior to January 4, 2024. We also agreed to make a $40 million payment in cash 18 months after the effective date of the license agreement.

In addition, under the terms of the license agreement, we agreed to pay LGC up to $205 million in cash upon achieving various regulatory and sales milestones based on net sales of LB54640. In addition and subject to the completion of Phase 2 development of LB54640, the Company has agreed to pay LGC royalties of between low-to-mid single digit percent of net revenues from its MC4R portfolio, including LB54640, commencing in 2029 and dependent upon achievement of various regulatory and indication approvals, and subject to customary deductions and anti-stacking. Royalties may further increase to a low double digit percent royalty, though such royalty would only be applicable on net sales of LB54640 in a region if LB54640 is covered by a composition of matter or method of use patent controlled by LGC in such region and the Company’s MC4R portfolio is not covered by any composition of matter or method of use patents controlled by the Company in such region. Such increased rate would only apply on net sales of LB54640 for the limited remainder of the royalty term in the relevant region.

Significant Agreements

12 Months Ended

Dec. 31, 2023

Significant Agreements

Significant Agreements

10. Significant Agreements

License Agreements

RareStone Group Ltd.

In December 2021, the Company entered into an Exclusive License Agreement with RareStone Group Ltd., or the RareStone License. Pursuant to the RareStone License, we granted to RareStone an exclusive, sublicensable, royalty-bearing license under certain patent rights and know-how to develop, manufacture, commercialize and otherwise exploit any pharmaceutical product that contains setmelanotide in the diagnosis, treatment or prevention of conditions and diseases in humans in China, including mainland China, Hong Kong and Macao. RareStone has a right of first negotiation in the event that the Company chooses to grant a license to develop or commercialize the licensed product in Taiwan. The arrangement includes a license and an additional performance obligation to supply product upon the request of RareStone.

According to the terms of the RareStone License, RareStone has agreed to seek local approvals to commercialize IMCIVREE for the treatment of obesity and hyperphagia due to biallelic POMC, PCSK1 or LEPR deficiency, as well as Bardet-Biedl and Alström syndromes. Additionally, RareStone has agreed to fund efforts to identify and enroll patients from China in the Company’s global EMANATE trial, a Phase 3, randomized, double-blind, placebo-controlled trial to evaluate setmelanotide in four independent sub-studies in patients with obesity due to a heterozygous variant of POMC/PCSK1 or LEPR; certain variants of the SRCI gene, and certain variants of the SH2B1 gene. In accordance with the terms of the RareStone License, RareStone made an upfront payment to Rhythm of $7,000 and issued Rhythm 1,077,586 ordinary shares. The Company is eligible to receive development and commercialization milestones of up to $62,500, as well as tiered royalty payments on annual net sales of IMCIVREE.

The Company initially estimated the fair value of the RareStone equity to be $2,440 based on a preliminary valuation during the first quarter of 2022. Upon completion of the valuation procedures during the second quarter of 2022, the Company concluded the initial fair value of the RareStone equity to be $1,040. During the third quarter of 2022, the Company estimated the fair value of the RareStone equity to be de minimis based upon the results of an updated valuation and recorded an other-than-temporary impairment of $1,040 related to the decline in fair value as a component of other expense in our consolidated statements of operations and other comprehensive loss for the year ended December 31, 2022. The other-than-temporary impairment of $1,040 included the reclassification of a $300 unrealized loss previously recorded as a component of accumulated other comprehensive income (loss) in our consolidated statement of stockholders’ equity during the second quarter of 2022.

The Company received total upfront consideration of $8,040 comprised of an upfront payment of $7,000, and the estimated fair value of the RareStone equity of $1,040. The Company determined that the RareStone License contains two performance obligations, the delivery of the license and the supply of clinical and commercial product. The Company further determined the supply of commercial product to RareStone contains a significant future discount and estimates the discount to be $1,286, which is recorded as a component of deferred revenue on the consolidated balance sheet at December 31, 2022.

Based on a relative fair-value allocation between the license and the manufacture of clinical and commercial product, the Company recognized $6,754 of license revenue in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2022. The discount related to commercial manufacturing supply will be deferred and recognized over the commercial supply period or upon termination of the agreement. No license revenue was recognized during the years ended December 31, 2023 or 2021.

On October 28, 2022, we delivered written notice, or the October Notice, to RareStone that we have terminated the RareStone License for cause. In accordance with the Notice, we maintain that RareStone has materially breached its obligations under the RareStone License to fund, perform or seek certain key clinical studies and waivers, including with respect to our global EMANATE trial, among other obligations. On December 21, 2022, RareStone provided written notice to us that it objects to the claims in the Notice, including our termination of the RareStone License for cause. On March 16, 2023, we provided written notice, or the March Notice, to RareStone reaffirming our position that RareStone has materially breached its obligations under the RareStone License and that we have terminated the RareStone License for cause, and also requested documentation supporting RareStone’s purported dispute notice objecting to the claims in the Notice.

On May 10, 2023, RareStone provided written notice to the Company reaffirming its objections to the claims in our October Notice and March Notice, including to the Company’s termination of the RareStone License for cause. On November 29, 2023, RareStone wrote to us seeking to negotiate and execute a commercial supply agreement as contemplated under the Exclusive License Agreement, and on January 19, 2024, we responded in writing again reaffirming our position that RareStone has materially breached its obligations under the RareStone License and that we have terminated the RareStone License for cause.

Ipsen Pharma S.A.S.

Pursuant to a license agreement with Ipsen Pharma, S.A.S., or Ipsen, the Company has an exclusive, sublicensable, worldwide license to certain patents and other intellectual property rights to research, develop, and commercialize compounds that were discovered or researched by Ipsen in the course of conducting its MC4R program or that otherwise were covered by the licensed patents. Under the terms of the setmelanotide Ipsen license agreement, assuming that setmelanotide is successfully developed, receives regulatory approval and is commercialized, Ipsen may receive aggregate payments of up to $40,000 upon the achievement of certain development and commercial milestones and royalties on future product sales in the mid-single digits. Substantially all of such aggregate payments of up to $40,000 are for milestones that may be achieved no earlier than first commercial sale of setmelanotide. In the event that the Company executes a sublicense agreement, it shall make payments to Ipsen, depending on the date of such sublicense agreement, ranging from 10% to 20% of all revenues actually received under such sublicense agreement.

The Company capitalized a $5,000 and $4,000 commercial milestone as a finite-lived intangible asset, as a result of the first commercial sales of IMCIVREE in the U.S. and Europe during March 2021 and March 2022, respectively. There were no research and development expenses related to milestones recorded in each of the years ended December 31, 2023, 2022 and 2021.

Camurus

In January 2016, the Company entered into a license agreement with Camurus AB, or Camurus, for the use of Camurus' drug delivery technology. The contract includes a non-refundable and non-creditable signing fee of $500. The Camurus agreement also includes up to $7,750 in one-time, non-refundable development milestones achievable upon

certain regulatory successes. The Company is also required to pay to Camurus, mid to mid-high single digit royalties, on a product-by-product and country-by-country basis of annual net sales, until the later of (i) 10 years after the date of first commercial sale of such product in such country; or (ii) the expiration of the last to expire valid claim of all licensed patent rights in such country covering such product. The Company is also required to pay one-time, non-refundable, non-creditable sales milestones upon the achievement of certain sales levels for such product that cannot be in excess of $57,000. The Company recorded development milestone expenses related to this license agreement of $1,000 during the year ended December 31, 2022. The expenses were recorded as research and development expenses when the milestone criteria were met in full during 2022. There are no research and development expenses related to milestones recorded in 2023 or 2021.

Takeda

In March 2018, the Company entered into a license agreement with Takeda, for the rights of a program that includes the clinical candidate RM-853, which is a GOAT inhibitor, which is currently in preclinical development for PWS. Pursuant to the license agreement the Company was required to pay a non-refundable and non-creditable signing fee, which the Company settled by issuing on April 3, 2018, 223,544 shares of common stock valued at $4,448. Under the terms of the license agreement, assuming that RM-853 is successfully developed, receives regulatory approval and is commercialized, the Company is also required to pay up to $70,000 in one-time, non-refundable development milestone payments upon the achievement of certain clinical and regulatory milestones. The Company is also required to pay up to $70,000 in one-time, non-refundable, non-creditable sales milestone payments upon the achievement of certain sales levels. The Company is also required to pay to Takeda, mid to mid-high single digit royalties (subject to certain potential reductions over time), on a product-by-product and country-by-country basis of annual net sales, of each product in such country, beginning on the first commercial sale of a product in such country, and continuing until the latest of (i) 10 years after the date of first commercial sale of such product in such country; or (ii) the expiration of the last to expire valid claim of a Takeda patents covering the composition or use of such product in such country; or (iii) the expiration of all regulatory exclusivity for such product in such country. The Company recorded the fair value of the common stock to be issued to the licensors as research and development expense, as the license does not have a future alternative use, in accordance with ASC Topic 730, Research and Development. There were no milestone expenses related to this license for the years ended December 31, 2023, 2022 and 2021, respectively. We have notified Takeda that the Company has halted development activities related to RM-853.

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accrued Expenses
Research and development costs	$ 12,925	$ 11,379
Professional fees	3,833	4,502
Payroll related	15,439	11,444
Royalties	1,180	440
Sales Allowances	9,475	2,710
Other	5,410	2,419
Accrued expenses and other current liabilities	$ 48,262	$ 32,894

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Operating activities
Net loss	$ (184,678)	$ (181,119)	$ (69,612)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	32,553	19,831	20,804
Gain on sale of priority review voucher			(100,000)
Depreciation and amortization	1,758	1,672	1,158
Non-cash interest expense and amortization of debt issuance costs	13,360	5,389
Non-cash accretion & amortization of short-term investments	(9,835)	(2,314)
Non-cash rent expense	401	(267)	(250)
Loss on RareStone equity investment		1,040
Change in fair value of embedded derivative liability	(190)	(250)
Acquired IPR&D assets classified as investing activities	5,667
Changes in operating assets and liabilities:
Accounts receivable	(8,643)	(5,199)	(1,250)
Inventory	(5,707)	(2,806)	(11)
Prepaid expenses and other current assets	2,876	498	(3,339)
Deferred revenue	(148)	(6,606)
Other long-term assets, net	1,656	(4,840)	(11,815)
Accounts payable, accrued expenses and other liabilities	14,773	1,543	18,312
Net cash used in operating activities	(136,157)	(173,428)	(146,003)
Investing activities
Purchases of short-term investments	(354,918)	(251,937)	(524,972)
Maturities of short-term investments	354,967	284,247	361,247
Proceeds from sale of priority review voucher			100,000
Proceeds from out-license agreement			7,000
Payment of milestone obligation under license agreement		(4,000)	(5,000)
Acquisition of IPR&D assets, including transaction costs	(5,667)
Purchases of property and equipment	(47)	(281)	(434)
Net cash (used in) provided by investing activities	(5,665)	28,029	(62,159)
Financing activities
Repayment of deferred royalty obligation	(7,398)
Net proceeds from issuance of common stock	48,875	131,112	161,726
Proceeds from the exercise of stock options	7,468	9,752	4,134
Proceeds from issuance of common stock from ESPP	1,053	626	621
Proceeds from royalty financing agreement, net of issuance costs	24,370	72,338
Net cash provided by financing activities	74,368	213,828	166,481
Effect of exchange rates on cash	(142)
Net (decrease) increase in cash, cash equivalents and restricted cash	(67,596)	68,429	(41,681)
Cash, cash equivalents and restricted cash at beginning of period	128,005	59,576	101,257
Cash, cash equivalents and restricted cash at end of period	$ 60,409	$ 128,005	$ 59,576

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock At-the-market offering	Common Stock	Additional Paid-In Capital At-the-market offering	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	At-the-market offering	Total
Beginning balance at Dec. 31, 2020		$ 44		$ 625,762	$ 49	$ (459,327)		$ 166,528
Beginning balance (in shares) at Dec. 31, 2020		44,235,903
Increase (Decrease) in Stockholders' Equity
Stock compensation expense				20,804				20,804
Issuance of common stock in connection with ESPP				621				621
Issuance of common stock in connection with ESPP (in shares)		38,051
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units				4,134				4,134
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units (in shares)		259,620
Issuance of common stock, net of offering costs		$ 6		161,720				161,726
Issuance of common stock, net of offering costs (in shares)		5,750,000
Net unrealized loss on marketable securities					(50)			(50)
Net Income (Loss)						(69,612)		(69,612)
Ending balance at Dec. 31, 2021		$ 50		813,041	(1)	(528,939)		284,151
Ending balance (in shares) at Dec. 31, 2021		50,283,574
Increase (Decrease) in Stockholders' Equity
Stock compensation expense				19,831				19,831
Issuance of common stock in connection with ESPP				626				626
Issuance of common stock in connection with ESPP (in shares)		92,932
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units		$ 1		9,751				9,752
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units (in shares)		855,923
Issuance of common stock, net of offering costs		$ 5		131,107				131,112
Issuance of common stock, net of offering costs (in shares)		5,380,000
Net unrealized loss on marketable securities					(91)			(91)
Net Income (Loss)						(181,119)		(181,119)
Ending balance at Dec. 31, 2022		$ 56		974,356	(92)	(710,058)		264,262
Ending balance (in shares) at Dec. 31, 2022		56,612,429
Increase (Decrease) in Stockholders' Equity
Stock compensation expense				32,553				32,553
Issuance of common stock in connection with ESPP				1,053				1,053
Issuance of common stock in connection with ESPP (in shares)		49,819
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units		$ 1		7,467				7,468
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units (in shares)		745,066
Foreign currency translation adjustment					(140)			$ (140)
Issuance of common stock in connection with exercise of stock options (in shares)								529,854
Net unrealized gain on marketable securities					366			$ 366
Issuance of common stock, net of offering costs	$ 2		$ 48,873				$ 48,875
Issuance of common stock, net of offering costs (in shares)	2,019,245
Net Income (Loss)						(184,678)		(184,678)
Ending balance at Dec. 31, 2023		$ 59		$ 1,064,302	$ 134	$ (894,736)		$ 169,759
Ending balance (in shares) at Dec. 31, 2023		59,426,559

Stock-based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Stock-based Compensation
Number of common stock options granted	1,053,888
Total intrinsic value of stock options exercised	$ 9,225
Employees stock purchase plan
Stock-based Compensation
Grant cliff vesting period	1 year
Employees stock purchase plan \| Minimum
Stock-based Compensation
Vesting period of stock option awards	1 year
Employees stock purchase plan \| Maximum
Stock-based Compensation
Vesting period of stock option awards	4 years
2017 Equity Incentive Plan
Stock-based Compensation
Number of common stock options granted	842,528	1,929,345	1,678,230
Weighted average grant date fair value relating to outstanding stock options	$ 17.72	$ 4.14	$ 15.69
2022 Employment Inducement Plan
Stock-based Compensation
Vesting period of stock option awards	4 years
Number of common stock options granted	229,360	347,985	0
Weighted average grant date fair value relating to outstanding stock options	$ 15.30	$ 13.05	$ 0

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
CONSOLIDATED BALANCE SHEETS
Preferred stock par value per share	$ 0.001	$ 0.001
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, authorized	120,000,000	120,000,000
Common stock, issued	59,426,559	56,612,429
Common stock, outstanding	59,426,559	56,612,429

Intangible Assets, Net

12 Months Ended

Dec. 31, 2023

Intangible Assets, Net

Intangible Assets, Net

7. Intangible Assets, Net

As of December 31, 2023, the Company’s definite-lived intangible assets, which totaled $7,028, resulted from the capitalization of certain milestone payments made to Ipsen Pharma, S.A.S., or Ipsen, in accordance with the terms of the Company’s license agreement with Ipsen, in connection with the Company’s first commercial sale of IMCIVREE in the U.S. in March 2021.

As of December 31, 2023, amortization expense for the next five years and beyond is summarized as follows:


2024	$	855
2025		855
2026		855
2027		855
2028		855
Thereafter		2,753
Total	$	7,028

The Company began amortizing its finite-lived intangible assets in April 2021 over an 11 year period based on IMCIVREE’s expected patent exclusivity period. Amortization expense totaled $855, $774 and $342 for the years ended December 31, 2023, 2022 and 2021, respectively. Amortization expense is recorded as a component of cost of sales on the consolidated statements of operations and comprehensive loss.

Retirement Plan

12 Months Ended

Dec. 31, 2023

Retirement Plan

Retirement Plan

15. Retirement Plan

The Company has a 401(k) defined contribution plan for the benefit for all US employees and permits voluntary contributions by employees subject to IRS-imposed limitations. Beginning in 2021, the Company matched 100% of eligible employee contributions on the first 4% of employee salary (up to the IRS maximum). Contributions for the years ended December 31, 2023, 2022 and 2021 were $1,460, $1,195 and $886, respectively.

Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Net operating loss carryforwards	$ 153,685	$ 135,470
Research and development credits	16,139	14,380
Orphan drug credit	25,484	19,281
Capitalized license fee	2,311	2,776
Stock-based compensation	13,159	11,074
Section 174 Costs	50,688	29,663
Deferred revenue	350	438
Accrued Expenses & Other	5,680	4,536
Total deferred tax assets	267,496	217,618
Valuation allowance	(267,158)	(217,257)
Net deferred tax assets	338	361
Deferred tax liabilities:
Operating lease right-of-use asset and other	(338)	(361)
Total deferred tax liabilities:	$ (338)	$ (361)

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2023	Feb. 23, 2024	Jun. 30, 2023
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2023
Entity File Number	001-38223
Entity Registrant Name	RHYTHM PHARMACEUTICALS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-2159271
Entity Address, Address Line One	222 Berkeley Street
Entity Address, Address Line Two	12th Floor
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02116
City Area Code	857
Local Phone Number	264-4280
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	RYTM
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 887.0
Entity Common Stock, Shares Outstanding		60,140,495
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Entity Central Index Key	0001649904
Amendment Flag	false
Auditor Firm ID	42
Auditor Name	Ernst & Young LLP
Auditor Location	Boston, Massachusetts
Document Financial Statement Error Correction [Flag]	false

Related-Party Transactions (Details) - Consultants and vendors - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Related-Party Transactions
Net costs	$ 1,141	$ 1,868	$ 1,961
Accounts payable
Related-Party Transactions
Due to related party	$ 1	$ 13

Retirement Plan (Details) - USD ($) $ in Thousands	12 Months Ended
Retirement Plan (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Retirement Plan
Percentage Company matches of eligible employee contributions	100.00%
Percentage of employee contributions matched by company	4.00%
Company contributions to retirement plan	$ 1,460	$ 1,195	$ 886

Fair Value of Financial Assets and Liabilities - Changes in Embedded Derivative Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Embedded Derivative Financial Instruments \| Level 3
Fair value of embedded derivative liability
Beginning aggregate estimated fair value of Level 3 liabilities	$ 1,340
Initial recording of embedded derivative		$ 1,590
Change in fair value of embedded derivative	(190)	(250)
Ending aggregate estimated fair value of Level 3 liabilities	1,150	1,340
Revenue Interest Financing Agreement
Fair value of embedded derivative liability
Beginning aggregate estimated fair value of Level 3 liabilities	1,340
Change in fair value of embedded derivative	190	250
Ending aggregate estimated fair value of Level 3 liabilities	$ 1,150	$ 1,340

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

Stock-based Compensation

Schedule of significant assumptions used to compute the fair values of employee and director stock options awarded


	Year ended
	December 31,
	2023		2022		2021
Risk‑free interest rate	2.35	%	2.19	%	0.79	%
Expected term (in years)	6.11		6.11		6.11
Expected volatility	76.11	%	69.16	%	69.80	%
Expected dividend yield	—		—		—

Summary of common stock option activity


				Weighted‑
		Weighted-		Average
		Average		Remaining		Aggregate
	Number of	Exercise		Contractual		Intrinsic
	Options	Price		Term		Value
Outstanding as of December 31, 2022	6,374,544	$	17.85	7.73	$	73,994
Granted	1,053,888	$	25.42	—	$	—
Exercised	(529,854)	$	14.09	—	$	9,225
Cancelled	(347,553)	$	21.23	—	$	—
Outstanding as of December 31, 2023	6,551,025	$	19.19	7.23	$	175,419
Options exercisable at December 31, 2023	3,936,040	$	19.77	6.54	$	103,122

Summary of restricted stock unit activity




		Weighted-
		Average
	Number of	Grant Date
	RSUs	Fair Value
Unvested as of December 31, 2022	774,166	$	12.18
Granted	643,028		24.97
Vested	(214,837)		14.30
Cancelled	(97,750)		15.61
Unvested as of December 31, 2023	1,104,607	$	17.44

Summary of performance stock unit activity




		Weighted-
		Average
	Number of	Grant Date
	PSUs	Fair Value
Unvested as of December 31, 2022	804,797	$	13.24
Granted	—		—
Vested	—		—
Cancelled	(223,451)		13.24
Unvested as of December 31, 2023	581,346	$	13.24

Summary of stock-based compensation expense



	Year Ended
	December 31,
	2023		2022		2021
Research and development	$	8,449	$	5,814	$	7,687
Selling, general, and administrative		24,104		14,017		13,117
Total	$	32,553	$	19,831	$	20,804

Summary of stock-based compensation expense by award type



	Year Ended
	December 31,
	2023		2022		2021
Stock options	$	17,671	$	15,477	$	17,988
Employees stock purchase plan		581		408		310
Restricted stock units		5,998		2,918		1,924
Performance stock units		8,303		1,028		582
Total	$	32,553	$	19,831	$	20,804

Summary of Significant Accounting Policies - Net loss per share (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Shares excluded from the computation of diluted net loss per share
Potential common shares	8,211,653	7,933,507	7,129,333
Employee Stock Option
Shares excluded from the computation of diluted net loss per share
Potential common shares	6,551,025	6,354,544	5,737,599
Restricted stock units
Shares excluded from the computation of diluted net loss per share
Potential common shares	1,079,382	774,166	435,589
Performance stock units
Shares excluded from the computation of diluted net loss per share
Potential common shares	581,246	804,797	956,145

Fair Value of Financial Assets and Liabilities - Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value of Financial Assets
Amortized Cost	$ 215,491	$ 205,702
Gross Unrealized Gains	282
Gross Unrealized Losses	(7)	(91)
Fair Value	215,765	205,611
Corporate Debt Securities and Commercial Paper
Fair Value of Financial Assets
Amortized Cost	215,491	205,702
Gross Unrealized Gains	282
Gross Unrealized Losses	(7)	(91)
Fair Value	$ 215,765	$ 205,611

Summary of Significant Accounting Policies - Product revenue allowance and reserve categories (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Product revenue allowance and reserve categories
Beginning Balance	$ 2,809	$ 474
Provision related to sales in the current year	19,023	3,666
Credit and payments made	(12,158)	(1,331)
Ending balance	9,674	2,809
Provision for Cash Discounts
Product revenue allowance and reserve categories
Beginning Balance	99	21
Provision related to sales in the current year	1,672	367
Credit and payments made	(1,572)	(289)
Ending balance	199	99
Fees, Rebates and Other Incentives
Product revenue allowance and reserve categories
Beginning Balance	2,710	453
Provision related to sales in the current year	17,351	3,299
Credit and payments made	(10,586)	(1,042)
Ending balance	$ 9,475	$ 2,710

Right of Use Asset and Lease Liability - Operating Lease Maturities (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Right of Use Asset and Lease Liability
2024	$ 851
2025	502
Total operating lease payments	1,353
Less: imputed interest	(93)
Total operating lease liability	$ 1,260
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Operating Lease, Liability, Current, Capital Lease Obligations, Noncurrent

Stock-based Compensation - Compensation expense by award type (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Stock-based Compensation
Stock based compensation expense	$ 32,553	$ 19,831	$ 20,804
Research and development
Stock-based Compensation
Stock based compensation expense	8,449	5,814	7,687
Selling, general and administrative
Stock-based Compensation
Stock based compensation expense	24,104	14,017	13,117
2017 Equity Incentive Plan \| Employee
Stock-based Compensation
Unrecognized compensation expense related to non-vested portion of awards	$ 16,880
Weighted average period for recognition of unrecognized compensation expense	2 years 7 months 17 days
2017 Equity Incentive Plan \| Employees, directors and nonemployees
Stock-based Compensation
Unrecognized compensation expense related to non-vested portion of awards	$ 27,322
Weighted average period for recognition of unrecognized compensation expense	2 years 25 days
Stock options.
Stock-based Compensation
Stock based compensation expense	$ 17,671	15,477	17,988
Employees stock purchase plan
Stock-based Compensation
Stock based compensation expense	581	408	310
Restricted stock units
Stock-based Compensation
Stock based compensation expense	5,998	2,918	1,924
Performance stock units
Stock-based Compensation
Stock based compensation expense	$ 8,303	$ 1,028	$ 582

Long-Term Obligations

12 Months Ended

Dec. 31, 2023

Long-Term Obligations

Long-Term Obligations

11. Long-Term Obligations

On June 16, 2022, we entered into a RIFA with entities managed by HealthCare Royalty Management, LLC, collectively referred to as the Investors. Pursuant to the RIFA and subject to customary closing conditions, the Investors have agreed to pay the Company an aggregate investment amount of up to $100,000, or the Investment Amount. Under the terms of the RIFA, we received $37,500 on June 29, 2022 upon FDA approval of IMCIVREE in BBS, referred to as the Initial Investment Amount, and we received an additional $37,500 on September 29, 2022 of the Investment Amount upon EMA approval for BBS. On September 12, 2023, we received the remaining $24,370 of the Investment Amount, net of debt issuance costs, following the achievement of a specified amount of cumulative net sales of IMCIVREE between July 1, 2022 and September 30, 2023.

As consideration for the Investment Amount and pursuant to the RIFA, we agreed to pay the Investors a tiered royalty on our annual net revenues, or Revenue Interest, including worldwide net product sales and upfront payments and milestones. The applicable tiered percentage will initially be 11.5% on annual net revenues up to $125,000, 7.5% on annual net revenues of between $125,000 and $300,000 and 2.5% on annual net revenues exceeding $300,000. If the Investors have not received cumulative minimum payments equal to 60% of the amount funded by the Investors to date by March 31, 2027, or 120% of the amount funded by the Investors to date by March 31, 2029, we must make a cash payment immediately following each applicable date to the Investors sufficient to gross the Investors up to such minimum amounts after giving full consideration of the cumulative amounts paid by us to the Investors through each date, referred to as the Under Performance Payment. As the repayment of the funded amount is contingent upon worldwide net product sales and upfront payments, milestones, and royalties, the repayment term may be shortened or extended depending on actual worldwide net product sales and upfront payments, milestones, and royalties. As of December 31, 2023 we have made $7,398 of payments.

The Investors’ rights to receive the Revenue Interests will terminate on the date on which the Investors have received payments equal to a certain percentage of the funded portion of the Investment Amount including the aggregate of all payments made to the Investors as of such date, each percentage tier referred to as the Hard Cap, unless the RIFA is earlier terminated. The total Revenue Interests payable by us to the Investors is capped between 185% and 250% of the Investment Amount paid, dependent on the aggregate royalty paid between 2028 and 2032. If a change of control of occurs, the Investors may accelerate payments due under the RIFA up to the Hard Cap plus any other obligations payable under the RIFA.

The repayment period commenced on July 8, 2022 for the Initial Investment Amount, and expires on the earlier of (i) the date at which the Investors received cash payments totaling an aggregate of a Hard Cap ranging from 185% to 250% of the Initial Investment Amount or (ii) the legal maturity date of July 8, 2034. If the Investors have not received payments equal to 250% of the Investment Amount by the twelve-year anniversary of the initial closing date, we will be required to pay an amount equal to the Investment Amount plus a specific annual rate of return less payments previously received by Investors. In the event of a change of control, we are obligated to pay Investors an amount equal to the Hard Cap in effect at the time, ranging from 185% to 250% plus any Under Performance Payment of the Investment Amount less payments previously received by Investors. In addition, upon the occurrence of an event of default, including, among others, our failure to pay any amounts due to Investors under the deferred royalty obligation, insolvency, our failure to pay indebtedness when due, the revocation of regulatory approval of IMCIVREE in the U.S. or our breach of any covenant contained in the RIFA and our failure to cure the breach within the prescribed time frame, we are obligated to pay Investors an amount equal to the Hard Cap in effect at the time of default ranging from 185% to 250% plus any Under Performance Payment of the Investment Amount less payments previously received by Investors. In addition, upon an event of default, Investors may exercise all other rights and remedies available under the RIFA, including foreclosing on the collateral that was pledged to Investors, which consists of all of our present and future assets relating to IMCIVREE.

We have evaluated the terms of the RIFA and concluded that the features are similar to those of a debt instrument. Accordingly, we have accounted for the transaction as long-term debt and presented it as a deferred royalty obligation on our consolidated balance sheets. We have further evaluated the terms of the RIFA and determined that the repayment of the Hard Cap in effect at the time which ranges from 185% to 250% of the Investment Amount, less any payments made to date, upon a change of control is an embedded derivative that requires bifurcation from the debt instrument and fair value recognition. We determined the fair value of the derivative using an option pricing Monte Carlo simulation model taking into account the probability of change of control occurring and potential repayment amounts and timing of such payments that would result under various scenarios, as further described in Note 5, “Fair Value of Financial Instruments” to our consolidated financial statements. During the second quarter of 2022, the Company recorded $1,590 for the initial fair value of the embedded derivative liability. The fair value of the embedded derivative liability was $1,150 and $1,340 as of December 31, 2023 and December 31, 2022, respectively. We will remeasure the embedded derivative to fair value each reporting period until the time the features lapse and/or termination of the deferred royalty obligation. For the years ended December 31, 2023 and December 31, 2022, we recognized other income in the amount of $190 and $250, due to the remeasurement of the embedded derivative liability. The carrying value of the deferred royalty obligation at December 31, 2023 was $106,143 based on $100,000 of proceeds, net of the initial fair value of the bifurcated embedded derivative liability upon execution of the RIFA, and debt issuance costs incurred. The carrying value of the deferred royalty obligation approximated fair value at December 31, 2023. The effective interest rate as of December 31, 2023 was 15.12%. In connection with the deferred royalty obligation, we incurred debt issuance costs totaling $3,287. Debt issuance costs have been netted against the debt and are being amortized over the estimated term of the debt using the effective interest method, adjusted on a prospective basis for changes in the underlying assumptions and inputs. The assumptions used in determining the expected repayment term of the debt and amortization period of the issuance costs requires that we make estimates that could impact the classification of these costs, as well as the period over which these costs will be amortized.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Paragraph 1C
-Subparagraph (c)
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes

Schedule of reconciliation of the income tax benefit at the federal statutory tax rate to effective income tax rate


	As of
	December 31,
	2023		2022		2021
Statutory tax rate	21.00	%	21.00	%	21.00	%
State tax, net of federal benefit	10.24		9.83		7.45
Research and development credit	0.65		0.78		2.94
Orphan drug credit	3.37		2.15		7.58
Stock compensation	(1.37)		(0.29)		(1.05)
Other	(0.48)		(0.04)		(0.47)
Rate changes	(6.52)		—
Change in valuation allowance	(27.10)		(33.44)		(37.45)
Effective tax rate	(0.21)	%	—	%	—	%

Schedule of principal components of deferred tax assets


	As of
	December 31,
	2023		2022
Deferred tax assets:
Net operating loss carryforwards	$	153,685	$	135,470
Research and development credits		16,139		14,380
Orphan drug credit		25,484		19,281
Capitalized license fee		2,311		2,776
Stock-based compensation		13,159		11,074
Section 174 Costs		50,688		29,663
Deferred revenue		350		438
Accrued Expenses & Other		5,680		4,536
Total deferred tax assets		267,496		217,618
Valuation allowance		(267,158)		(217,257)
Net deferred tax assets		338		361
Deferred tax liabilities:
Operating lease right-of-use asset and other		(338)		(361)
Total deferred tax liabilities	$	(338)	$	(361)

Stock-based Compensation - Common stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Number of Options
Outstanding at beginning of the period	6,374,544
Granted	1,053,888
Exercised	(529,854)
Cancelled	(347,553)
Outstanding at end of the period	6,551,025	6,374,544
Options exercisable at end of the period	3,936,040
Weighted-Average Exercise Price
Outstanding at beginning of the period	$ 17.85
Granted	25.42
Exercised	14.09
Cancelled	21.23
Outstanding at end of the period	19.19	$ 17.85
Options exercisable at end of the period	$ 19.77
Weighted-Average Remaining Contractual Term
Outstanding at end of the period	7 years 2 months 23 days	7 years 8 months 23 days
Options exercisable at end of the period	6 years 6 months 14 days
Aggregate Intrinsic Value
Outstanding balance		$ 73,994
Exercised	$ 9,225
Options vested and expected to vest	175,419
Options exercisable	$ 103,122
2017 Equity Incentive Plan
Number of Options
Granted	842,528	1,929,345	1,678,230

Common Stock

12 Months Ended

Dec. 31, 2023

Common Stock.

Common Stock

8. Common Stock

Common Stock

On September 19, 2022, the Company completed a public offering of 4,800,000 shares of common stock at a price to the public of $26.00 per share. The Company received $116,887 in net proceeds after deducting underwriting discounts, commissions and offering expenses. In addition, the Company granted the underwriters a 30-day option to purchase up to an additional 720,000 shares of its common stock at the price to the public, less underwriting discounts and commissions. On October 18, 2022, the Company completed the sale of an additional 580,000 shares of common stock at

a price to the public of $26.00 per share pursuant to the partial exercise of the underwriters’ option to purchase additional shares, for aggregate net proceeds of approximately $14,175, after deducting underwriting discounts, commissions and offering expenses.

On November 2, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”), pursuant to which the Company may issue and sell shares of its common stock, having an aggregate offering price of up to $100.0 million, from time to time through an “at the market” equity offering program under which Cowen acts as sales agent (the “ATM Program”). Between August 10, 2023 and August 21, 2023, the Company sold approximately two million shares of its common stock in the ATM Program for net proceeds of approximately $48.9 million.

On February 9, 2021 the Company completed a public offering of 5,750,000 shares of common stock at an offering price of $30.00 per share, which included the exercise in full by the underwriters of their option to purchase up to 750,000 additional shares of common stock. The Company received approximately $161,550 in net proceeds after deducting underwriting discounts, commissions and estimated offering expenses.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Pay vs Performance Disclosure
Net Income (Loss)	$ (184,678)	$ (181,119)	$ (69,612)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies

Schedule of product revenue allowance and reserve categories



	Provision for Cash Discounts		Fees, Rebates and Other Incentives		Total
Beginning Balance at December 31, 2021	$	21	$	453	$	474
Provision related to sales in the current year		367		3,299		3,666
Credit and payments made		(289)		(1,042)		(1,331)
Ending balance December 31, 2022	$	99	$	2,710	$	2,809
Provision related to sales in the current year		1,672		17,351		19,023
Credit and payments made		(1,572)		(10,586)		(12,158)
Ending balance December 31, 2023	$	199	$	9,475	$	9,674

Schedule of inventory


	December 31,		December 31,
	2023		2022
Raw Materials	$	4,625	$	2,722
WIP		1,104		—
Finished Goods		2,895		195
Total Inventory	$	8,624	$	2,917

Schedule of prepaid expenses and other current assets


	December 31,
	2023		2022
Prepaid research and development costs	$	2,259	$	4,392
Other current assets		6,672		7,415
Prepaid expenses and other current assets	$	8,931	$	11,807

Schedule of property, plant and equipment


	Useful	December 31,
	Life	2023		2022
Leasehold improvements	*	$	2,705	$	2,705
Office equipment	5 years		155		107
Computers and software	3 years		1,291		1,291
Furniture, fixtures and equipment	5 years		1,249		1,249
			5,400		5,352
Less accumulated depreciation and amortization			(4,059)		(3,155)
Property and equipment, net		$	1,341	$	2,197

*Shorter of asset life or lease term.

Schedule of potential common shares, presented based on amounts outstanding at each period end, excluded from computation of diluted net loss per share attributable to common stockholders


	Year Ended
	December 31,
	2023		2022		2021
Stock options		6,551,025		6,354,544		5,737,599
Restricted stock units		1,079,382		774,166		435,589
Performance stock units		581,246		804,797		956,145
Potential common shares		8,211,653		7,933,507		7,129,333

Stock-based Compensation - Compensation expense in Consolidated Statements of Operations and Comprehensive Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Stock-based Compensation
Stock based compensation expense	$ 32,553	$ 19,831	$ 20,804
Research and development
Stock-based Compensation
Stock based compensation expense	8,449	5,814	7,687
Selling, general and administrative
Stock-based Compensation
Stock based compensation expense	24,104	14,017	13,117
Stock options.
Stock-based Compensation
Stock based compensation expense	17,671	15,477	17,988
Restricted stock units
Stock-based Compensation
Stock based compensation expense	$ 5,998	$ 2,918	$ 1,924

Summary of Significant Accounting Policies - Other Long-Term Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Summary of Significant Accounting Policies
Long-term research and development costs	$ 12,594	$ 14,556
Other long-term assets	2,405	2,099
Other long-term assets	$ 14,999	$ 16,655

Fair Value of Financial Assets and Liabilities - Changes in Level 3 Securities (Details) - Level 3 - RareStone Group Ltd. - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Fair Value of Financial Assets
Initial recording of RareStone equity		$ 1,040
Realized loss included in other expense		$ (1,040)
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)

Summary of Significant Accounting Policies - Property and equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property and equipment
Property and equipment, gross	$ 5,400	$ 5,352
Less accumulated depreciation and amortization	(4,059)	(3,155)
Property and equipment, net	1,341	2,197
Depreciation and amortization expense	903	896	$ 816
Leasehold improvements
Property and equipment
Property and equipment, gross	$ 2,705	2,705
Office equipment
Property and equipment
Useful Life	5 years
Property and equipment, gross	$ 155	107
Computer and software
Property and equipment
Useful Life	3 years
Property and equipment, gross	$ 1,291	1,291
Furniture, fixtures and equipment
Property and equipment
Useful Life	5 years
Property and equipment, gross	$ 1,249	$ 1,249

Income Taxes - Reconciliation of income tax rate (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of the income tax benefit
Statutory tax rate	21.00%	21.00%	21.00%
State tax, net of federal benefit	10.24%	9.83%	7.45%
Research and development credit	0.65%	0.78%	2.94%
Orphan drug credit	3.37%	2.15%	7.58%
Stock compensation	(1.37%)	(0.29%)	(1.05%)
Other	(0.48%)	(0.04%)	(0.47%)
Rate changes	(6.52%)
Change in valuation allowance	(27.10%)	(33.44%)	(37.45%)
Effective tax rate	(0.21%)

Right of Use Asset and Lease Liability

12 Months Ended

Dec. 31, 2023

Right of Use Asset and Lease Liability

Right of Use Asset and Lease Liability

6. Right Of Use Asset and Lease Liability

The Company has a material operating lease for its head office facility and other immaterial operating leases for certain equipment. The Company’s office lease has a remaining lease term of 1.6 years. The Company measured the lease liability associated with the office lease using a discount rate of 10% at inception. The Company estimated the incremental borrowing rate for the leased asset based on a range of comparable interest rates the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment. As of December 31, 2023, the Company has not entered into any lease arrangements classified as a finance lease.

Under FASB ASC Topic 842, Leases, the Company determines, at the inception of the contract, whether the contract is or contains a lease based on whether the contract provides the Company the right to control the use of a physically distinct asset or substantially all of the capacity of an asset. Leases with an initial noncancelable term of twelve months or less that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise are classified as short-term leases. The Company has elected as an accounting policy to exclude from the consolidated balance sheets a right of use asset and lease liability for short-term leases.

Upon adoption of ASC 842, the Company elected the transition relief package, permitted within the standard, pursuant to which the Company did not reassess the classification of existing leases, whether any expired or existing contracts contain a lease, and whether existing leases have any initial direct costs. The Company also elected the practical expedient of not separating lease components from non-lease components for all leases. There was no cumulative-effective adjustment to the opening balance of retained earnings. The Company reviews all material contracts for embedded leases to determine if they have a right-of-use asset.

The Company recognizes rent expense on a straight-line basis over the lease period. The depreciable life of assets and leasehold improvement are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

The Company’s office lease includes both lease and non-lease components. Non-lease components relate to real estate taxes, insurance, operating expenses and common area maintenance, which are usually billed at actual amounts incurred proportionate to the Company’s rented square feet of the building. These non-lease components are expensed by the Company as they are incurred and are not included in the measurement of the lease liability.

The Company’s corporate headquarters is located in Boston, Massachusetts. This facility houses the Company’s research, clinical, regulatory, commercial and administrative personnel. The Company’s lease agreement commenced May 2019 and has a term of six years with a five-year renewal option to extend the lease. As of January 1, 2019, the Company did not included the five-year renewal option to extend the lease in its measurement of the ROU asset or lease liability. Rent expense, or operating lease costs, was $551 for each of the years ended December 31, 2023, 2022 and 2021.

Supplemental cash flow information related to the Company’s lease for the years ended December 31, 2023 and 2022, includes cash payments of $834, $818 and $802, respectively used in the measurement of its operating lease liability.

The following table presents the maturities of the Company’s operating lease liability related to office space as of December 31, 2023, all of which is under a non-cancellable operating lease:


	Operating Lease
2024		851
2025		502
Total operating lease payments		1,353
Less: imputed interest		(93)
Total operating lease liability	$	1,260

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes

Income Taxes

14. Income Taxes

The components of loss before income taxes are as follows:


	Year Ended
	December 31,
	2023		2022		2021
United States	$	(178,669)	$	(181,119)	$	(69,612)
Foreign		(5,445)		—		—
Loss before income taxes	$	(184,114)	$	(181,119)	$	(69,612)

Components of provision for income taxes are as follows:


	Year Ended
	December 31,
Current:	2023		2022		2021
U.S. Federal	$	—	$	—	$	—
U.S. State and Local		1		—		—
Foreign		563		—		—
Total Current Expense	$	564	$	—	$	—

Deferred:
U.S. Federal	$	—	$	—	$	—
U.S. State and Local		—		—		—
Foreign		—		—		—
Total Deferred Expense	$	—	$	—	$	—

A reconciliation of the income tax benefit at the federal statutory tax rate to the Company's effective income tax rate is as follows:


	As of
	December 31,
	2023		2022		2021
Statutory tax rate	21.00	%	21.00	%	21.00	%
State tax, net of federal benefit	10.24		9.83		7.45
Research and development credit	0.65		0.78		2.94
Orphan drug credit	3.37		2.15		7.58
Stock compensation	(1.37)		(0.29)		(1.05)
Other	(0.48)		(0.04)		(0.47)
Rate changes	(6.52)		—
Change in valuation allowance	(27.10)		(33.44)		(37.45)
Effective tax rate	(0.21)	%	—	%	—	%

The principal components of the Company's deferred tax assets and liabilities are as follows:


	As of
	December 31,
	2023		2022
Deferred tax assets:
Net operating loss carryforwards	$	153,685	$	135,470
Research and development credits		16,139		14,380
Orphan drug credit		25,484		19,281
Capitalized license fee		2,311		2,776
Stock-based compensation		13,159		11,074
Section 174 Costs		50,688		29,663
Deferred revenue		350		438
Accrued Expenses & Other		5,680		4,536
Total deferred tax assets		267,496		217,618
Valuation allowance		(267,158)		(217,257)
Net deferred tax assets		338		361
Deferred tax liabilities:
Operating lease right-of-use asset and other		(338)		(361)
Total deferred tax liabilities	$	(338)	$	(361)

ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, the Company has recorded a full valuation allowance against its deferred tax assets at December 31, 2023 and 2022, because the Company's management has determined that is it more likely than not that these assets will not be realized. The increase in the valuation allowance of $49,901 in 2023 and $59,046 in 2022 primarily relates to the net loss incurred by the Company during each period.

As of December 31, 2023, the Company had federal and state net operating loss carryforwards of approximately $555,563 and $597,952, respectively, which are available to reduce future taxable income. The net operating loss carryforwards expire at various times beginning in 2033 for federal and state purposes. Of the federal net operating loss carryforwards at December 31, 2023, $482,396 can be carried forward indefinitely. As of December 31, 2023, the Company had gross foreign net operating loss carryforwards of approximately $1,342 which have an indefinite carryforward period.

As of December 31, 2023, the Company had federal and state research tax credits of approximately $13,142 and $3,794, respectively, which may be used to offset future tax liabilities. Additionally, as of 2023, the Company had a federal orphan drug credit related to qualifying research of $25,484. These tax credit carryforwards will begin to expire at various times beginning in 2033 for federal purposes and 2028 for state purposes.

The net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions and other provisions within the Internal Revenue Code. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.

The Company has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries of approximately $730 as such amounts are considered to be indefinitely reinvested in these jurisdictions. The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations and to fund future foreign acquisitions. The amount of any unrecognized deferred tax liability related to undistributed foreign earnings is immaterial.

The Company has not recorded any reserves for uncertain tax positions as of December 31, 2023 and 2022. The Company has not, as yet, conducted a study of research and development credit carryforwards. This study may result in an adjustment to the Company's research and development credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company's research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheets or statements of operations and comprehensive loss if an adjustment were required.

Interest and penalty charges, if any, related to unrecognized tax benefits will be classified as provision for income taxes in the accompanying statements of operations and comprehensive loss. As of December 31, 2023 and 2022, the Company had no accrued interest or penalties related to uncertain tax positions.

The Company is subject to examination by the U.S. federal, state and local income tax authorities for tax years 2013 forward. The Company is not currently under examination by the Internal Revenue Service or any other jurisdictions for any tax years.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

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-Topic 740
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-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Topic 740
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-Paragraph 17
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Segment and Geographic

12 Months Ended

Dec. 31, 2023

Segment and Geographic Information

Segment and Geographic Information

16. Segment and Geographic Information

Disclosure requirements about segments of an enterprise and related information establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial reports issued to shareholders. Operating segments are defined as components of an enterprise about which separate discrete financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its business as one operating segment.

Geographic Data

The Company allocates, for the purpose of geographic data reporting, its revenue based upon the location of its customers. Total revenue by geographic area was as follows:


	December 31,
	2023		2022		2021
United States	$	62,425	$	21,078	$	3,154
Germany		6,075		954		—
Other		8,928		1,606		—
Total revenues	$	77,428	$	23,638	$	3,154

As of December 31, 2023 and 2022, long-lived assets at locations outside the United States was not material.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 31
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-Paragraph 32
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-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

Subsequent Events (Details) - Subsequent event - License agreement - L G Chem Ltd	Jan. 04, 2024 USD ($)
Subsequent events
Cash payment	$ 40,000,000
Shares issued for license agreement	$ 20,000,000
Shares were issued at a per share price	10
License agreement consideration payment	$ 40,000,000
Effective date of the license agreement	18 months
Cash upon achieving various regulatory and sales milestones	$ 205,000,000

Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value of Financial Assets
Carrying amount of cash and cash equivalents and short term investments	$ 275,846	$ 333,288
Fair value of financial assets and liabilities
Marketable Securities	215,765	205,611
Derivative liability	1,150	1,340
Corporate Debt Securities and Commercial Paper
Fair value of financial assets and liabilities
Marketable Securities	215,765	205,611
Recurring \| Estimated fair value
Fair value of financial assets and liabilities
Fair value of assets	261,612	314,057
Derivative liability	1,150	1,340
Recurring \| Corporate Debt Securities and Commercial Paper \| Estimated fair value
Fair value of financial assets and liabilities
Cash Equivalents		8,484
Marketable Securities	215,765	205,611
Recurring \| Money Market Funds \| Estimated fair value
Fair value of financial assets and liabilities
Cash Equivalents	45,847	99,962
Recurring \| Level 1 \| Estimated fair value
Fair value of financial assets and liabilities
Fair value of assets	40,868	99,962
Recurring \| Level 1 \| Money Market Funds \| Estimated fair value
Fair value of financial assets and liabilities
Cash Equivalents	40,868	99,962
Recurring \| Level 2 \| Estimated fair value
Fair value of financial assets and liabilities
Fair value of assets	220,744	214,095
Recurring \| Level 2 \| Corporate Debt Securities and Commercial Paper \| Estimated fair value
Fair value of financial assets and liabilities
Cash Equivalents		8,484
Marketable Securities	215,765	205,611
Recurring \| Level 2 \| Money Market Funds \| Estimated fair value
Fair value of financial assets and liabilities
Cash Equivalents	4,979
Recurring \| Level 3 \| Estimated fair value
Fair value of financial assets and liabilities
Derivative liability	$ 1,150	$ 1,340

Accrued Expenses

12 Months Ended

Dec. 31, 2023

Accrued Expenses

Accrued Expenses

4. Accrued Expenses

Accrued expenses consists of the following:


	December 31,		December 31,
	2023		2022
Research and development costs	$	12,925	$	11,379
Professional fees		3,833		4,502
Payroll related		15,439		11,444
Royalties		1,180		440
Sales Allowances		9,475		2,710
Other		5,410		2,419
Accrued expenses and other current liabilities	$	48,262	$	32,894

Stock-based Compensation - 2022 Inducement Plan (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Feb. 09, 2022
Stock-based Compensation
Stock options outstanding	6,551,025	6,374,544
2022 Employment Inducement Plan
Stock-based Compensation
Authorized shares			1,000,000
Vesting period	4 years
Stock options outstanding	526,177
Restricted stock unit awards outstanding	233,719
Shares available for future grant	179,925
2022 Employment Inducement Plan \| Maximum
Stock-based Compensation
Expiration period	10 years

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 2
-Subparagraph (c)(1)(i)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

Summary of Significant Accounting Policies (Details)	12 Months Ended
Summary of Significant Accounting Policies (Details)	Dec. 31, 2023 USD ($) Institution segment	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Summary of Significant Accounting Policies
Reclassification of prior year balances		$ 2,314,000
Segment Information
Number of operating segments \| segment	1
Number of reporting segments \| segment	1
Off Balance Sheet Risk and Concentrations of Credit Risk
Number of federally insured financial institutions \| Institution	2
Income Taxes
Accrued interest or penalties	$ 0	0
Patent Costs
Patent costs	117,532,000	92,032,000	$ 68,486,000
Accounts Receivable, net
Revenue	77,428,000	23,638,000	3,154,000
Patents
Patent Costs
Patent costs	$ 555,000	$ 406,000	332,000
Customer concentration risk \| Customer one \| Revenue benchmark
Off Balance Sheet Risk and Concentrations of Credit Risk
Percentage of revenue generated from customer	77.00%	85.00%
Accounts Receivable, net
Accounts receivables	$ 67	$ 80
Product revenue
Accounts Receivable, net
Revenue	$ 77,428,000	$ 16,884,000	$ 3,154,000

Significant Agreements (Details)		1 Months Ended		3 Months Ended		12 Months Ended
Significant Agreements (Details)	Apr. 03, 2018 USD ($) shares	Dec. 31, 2021 USD ($) item	Jan. 31, 2016 USD ($)	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($) item	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Feb. 26, 2010 USD ($)
Significant Agreements
Revenue						$ 77,428,000	$ 23,638,000	$ 3,154,000
One-time non-refundable development milestone payment	$ 70,000,000
RareStone Group Ltd.
Significant Agreements
Number of independent sub studies in patients \| item								4
Upfront payment		$ 7,000,000
Equity issued in conjunction with license agreement		1,077,586
Aggregate payment upon achievement of development and commercial milestones		62,500,000						$ 62,500,000
Equity recorded at fair value		$ 1,040,000			$ 1,040,000			1,040,000	$ 2,440,000
Realized loss on RareStone equity				$ 1,040,000
Loss on RareStone equity investment					$ 300,000
Upfront consideration								8,040,000
Number of performance obligations \| item		2
License agreement commercial manufacturing supply discount							1,286,000
Contract with customer liability revenue recognized							6,754,000
Ipsen \| License agreement
Significant Agreements
Amount of commercial milestone capitalized									$ 4,000,000	$ 5,000,000
Milestone expenses						0	0	0
Ipsen \| License agreement \| Maximum
Significant Agreements
Aggregate payment upon achievement of development and commercial milestones											$ 40,000,000
Ipsen \| Sublicense agreement \| Minimum
Significant Agreements
Payment based on revenue received, as percentage											10.00%
Ipsen \| Sublicense agreement \| Maximum
Significant Agreements
Payment based on revenue received, as percentage											20.00%
Camurus \| License agreement
Significant Agreements
Milestone expenses						0	1,000,000	0
Non-refundable and non-creditable signing fee			$ 500,000
Royalty payment period			10 years
Camurus \| License agreement \| Maximum
Significant Agreements
One-time non-refundable development milestone payment			$ 7,750,000
One-time non-refundable non-creditable sales milestone payment			$ 57,000,000
Takeda
Significant Agreements
Equity issued in conjunction with license agreement	4,448,000
Milestone expenses						0	0	0
One-time non-refundable development milestone payment	$ 70,000,000
Shares issued for license agreement (in shares) \| shares	223,544
Period after date of first commercial sale (in years)	10 years
License revenue
Significant Agreements
Revenue						$ 0	$ 6,754,000	$ 0

Related-Party Transactions

12 Months Ended

Dec. 31, 2023

Related-Party Transactions

Related-Party Transactions

13. Related-Party Transactions

Amounts paid directly to consultants and vendors considered to be related parties amounted to $1,141, $1,868, and $1,961 for the years ended December 31, 2023, 2022 and 2021, respectively. Outstanding payments due to these related parties as of December 31, 2023 and 2022 were $1 and $13, respectively, and were included within accounts payable on the consolidated balance sheets.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 5
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-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Nature of Business - Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands					12 Months Ended
	Oct. 18, 2022	Sep. 19, 2022	Nov. 02, 2021	Feb. 09, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Liquidity
Accumulated deficit					$ 894,736	$ 710,058
Issuance of stock (in shares)	580,000	4,800,000		5,750,000
Price per share	$ 26.00	$ 26.00		$ 30.00
Net proceeds from issuance of common stock	$ 14,175	$ 116,887		$ 161,550	48,875	131,112	$ 161,726
Period for option to purchase additional shares by underwriter		30 days
Carrying amount of cash and cash equivalents and short term investments					$ 275,846	$ 333,288
Underwriter option to purchase
Liquidity
Issuance of stock (in shares)		720,000
Maximum \| At-the-market offering
Liquidity
Aggregate proceeds			$ 100,000