View Filing Data

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2019	Jul. 25, 2019
Document and Entity Information
Entity Registrant Name	RHYTHM PHARMACEUTICALS, INC.
Entity Central Index Key	0001649904
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		34,515,042
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 63,118	$ 49,542
Short-term investments	132,049	202,519
Prepaid expenses and other current assets	8,334	6,628
Total current assets	203,501	258,689
Property and equipment, net	3,901	1,120
Right-of-use asset	3,085
Restricted cash	401	401
Total assets	210,888	260,210
Current liabilities:
Accounts payable	6,565	7,640
Accrued expenses and other current liabilities	19,146	5,942
Lease liability	379
Total current liabilities	26,090	13,582
Long-term liabilities:
Lease liability	3,331
Deferred rent		372
Total liabilities	29,421	13,954
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value: 120,000,000 shares authorized; 34,497,542 and 34,410,725 shares issued and outstanding June 30, 2019 and December 31, 2018, respectively	34	34
Additional paid-in capital	437,805	430,824
Accumulated deficit	(256,372)	(184,602)
Total stockholders’ equity	181,467	246,256
Total liabilities and stockholders’ equity	$ 210,888	$ 260,210

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Condensed Consolidated Balance Sheets
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, authorized	120,000,000	120,000,000
Common stock, issued	34,497,542	34,410,725
Common stock, outstanding	34,497,542	34,410,725
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

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Operating expenses:
Research and development	$ 35,308	$ 8,584	$ 58,069	$ 20,870
Selling, general, and administrative	8,841	6,437	16,600	11,152
Total operating expenses	44,149	15,021	74,669	32,022
Loss from operations	(44,149)	(15,021)	(74,669)	(32,022)
Other income (expense):
Interest income, net	1,353	609	2,899	1,151
Total other income:	1,353	609	2,899	1,151
Net loss and comprehensive loss	(42,796)	(14,412)	(71,770)	(30,871)
Net loss attributable to common stockholders	$ (42,796)	$ (14,412)	$ (71,770)	$ (30,871)
Net loss per share attributable to common stockholders, basic and diluted	$ (1.24)	$ (0.52)	$ (2.08)	$ (1.12)
Weighted average common shares outstanding, basic and diluted	34,452,661	27,960,664	34,435,023	27,624,271

Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands	Common stock	Additional Paid-in Capital	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2017	$ 27	$ 255,013	$ (110,252)	$ 144,788
Beginning balance (in shares) at Dec. 31, 2017	27,284,140
Increase (Decrease) in Stockholders' Equity
Stock compensation expense		958		958
Shares issued for license agreement		4,448		4,448
Change in unrealized loss on marketable securities		(77)		(77)
Net loss			(16,459)	(16,459)
Ending balance at Mar. 31, 2018	$ 27	260,342	(126,711)	133,658
Ending balance (in shares) at Mar. 31, 2018	27,284,140
Beginning balance at Dec. 31, 2017	$ 27	255,013	(110,252)	144,788
Beginning balance (in shares) at Dec. 31, 2017	27,284,140
Increase (Decrease) in Stockholders' Equity
Net loss				(30,871)
Ending balance at Jun. 30, 2018	$ 34	425,406	(141,123)	284,317
Ending balance (in shares) at Jun. 30, 2018	34,173,137
Beginning balance at Mar. 31, 2018	$ 27	260,342	(126,711)	133,658
Beginning balance (in shares) at Mar. 31, 2018	27,284,140
Increase (Decrease) in Stockholders' Equity
Stock compensation expense		1,516		1,516
Shares issued for license agreement (in shares)	223,544
Issuance of common stock upon completion of public offering, net of offering costs	$ 7	163,027		163,034
Issuance of common stock upon completion of public offering, net of offering costs (in shares)	6,591,800
Issuance of common stock in connection with exercise of stock options		399		399
Issuance of common stock in connection with exercise of stock options (in shares)	73,653
Change in unrealized loss on marketable securities		122		122
Net loss			(14,412)	(14,412)
Ending balance at Jun. 30, 2018	$ 34	425,406	(141,123)	284,317
Ending balance (in shares) at Jun. 30, 2018	34,173,137
Beginning balance at Dec. 31, 2018	$ 34	430,824	(184,602)	246,256
Beginning balance (in shares) at Dec. 31, 2018	34,410,725
Increase (Decrease) in Stockholders' Equity
Stock compensation expense		2,644		2,644
Issuance of common stock in connection with ESPP		295		295
Issuance of common stock in connection with ESPP (in shares)	12,105
Issuance of common stock in connection with exercise of stock options		54		54
Issuance of common stock in connection with exercise of stock options (in shares)	7,811
Change in unrealized loss on marketable securities		214		214
Net loss			(28,974)	(28,974)
Ending balance at Mar. 31, 2019	$ 34	434,031	(213,576)	220,489
Ending balance (in shares) at Mar. 31, 2019	34,430,641
Beginning balance at Dec. 31, 2018	$ 34	430,824	(184,602)	246,256
Beginning balance (in shares) at Dec. 31, 2018	34,410,725
Increase (Decrease) in Stockholders' Equity
Net loss				(71,770)
Ending balance at Jun. 30, 2019	$ 34	437,805	(256,372)	181,467
Ending balance (in shares) at Jun. 30, 2019	34,497,542
Beginning balance at Mar. 31, 2019	$ 34	434,031	(213,576)	220,489
Beginning balance (in shares) at Mar. 31, 2019	34,430,641
Increase (Decrease) in Stockholders' Equity
Stock compensation expense		3,272		3,272
Issuance of common stock in connection with exercise of stock options		465		465
Issuance of common stock in connection with exercise of stock options (in shares)	66,901
Change in unrealized loss on marketable securities		37		37
Net loss			(42,796)	(42,796)
Ending balance at Jun. 30, 2019	$ 34	$ 437,805	$ (256,372)	$ 181,467
Ending balance (in shares) at Jun. 30, 2019	34,497,542

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating activities
Net loss	$ (71,770)	$ (30,871)
Adjustments to reconcile net loss to cash used in operating activities:
Non-cash research and development license expense		4,448
Stock-based compensation expense	5,916	2,474
Depreciation and amortization	452	122
Non-cash rent expense	253	(40)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(4,048)	(833)
Accounts payable, accrued expenses and other current liabilities	12,273	569
Net cash used in operating activities	(56,924)	(24,131)
Investing activities
Purchases of short-term investments	(69,875)	(20,409)
Maturities of short-term investments	142,687	57,463
Purchases of property and equipment	(3,126)	(10)
Net cash provided by investing activities	69,686	37,044
Financing activities
Net proceeds from issuance of common stock		163,034
Proceeds from the exercise of stock options	519	326
Proceeds from issuance of common stock from ESPP	295
Net cash provided by financing activities	814	163,360
Net increase in cash, cash equivalents and restricted cash	13,576	176,273
Cash, cash equivalents and restricted cash at beginning of period	49,943	34,461
Cash, cash equivalents and restricted cash at end of period	$ 63,519	$ 210,734

Nature of Business	6 Months Ended
Nature of Business	Jun. 30, 2019
Nature of Business
Nature of Business	1. Nature of Business Rhythm Pharmaceuticals, Inc. (the “Company” or “we”), is a biopharmaceutical company focused on the development and commercialization of therapeutics for the treatment of rare genetic disorders that result in severe, life‑threatening metabolic disorders. The Company's lead product candidate is setmelanotide (“RM‑493”), which is a potent, first‑in‑class, melanocortin‑4 receptor, or MC4R, agonist peptide for the treatment of rare genetic disorders of obesity caused by MC4R pathway deficiencies. MC4R pathway deficiencies result in the disruption of satiety signals and energy homeostasis in the body, which, in turn, leads to intense feelings of hunger and to obesity. The Company is currently evaluating setmelanotide for the treatment of six single gene related, or monogenic, MC4R pathway deficiencies: pro‑opiomelanocortin, or POMC, leptin receptor, or LEPR, Bardet‑Biedl syndrome, Alström syndrome, POMC heterozygous, and POMC epigenetic disorders for which there are currently no effective or approved treatments. The Company believes that the MC4R pathway is a compelling target for treating these genetic disorders because of its critical role in regulating appetite and weight by promoting satiety and weight control, and that peptide therapeutics are uniquely suited for activating this target. In March 2018 the Company acquired exclusive, worldwide rights from Takeda Pharmaceutical Company Limited (“Takeda”) to develop and commercialize T-3525770 (now “RM-853”). RM-853 is a potent, orally available ghrelin o-acyltransferase (“GOAT”) inhibitor currently in preclinical development for Prader-Willi Syndrome (“PWS”). PWS is a rare genetic disorder that results in hyperphagia and early-onset, life-threatening obesity, for which there are no approved therapeutic options. Corporate Reorganization 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. Prior to its organization and a corporate reorganization, the Company was part of Rhythm Pharmaceuticals, Inc., a Delaware corporation which was organized in November 2008 and which commenced active operations in 2010. We refer to this corporation as the Predecessor Company. The Predecessor Company, after consummation of the corporate reorganization, is referred to within these Notes to Unaudited Condensed Consolidated Financial Statements as the Relamorelin Company. Liquidity The Company has incurred operating losses and negative cash flows from operations since inception. As of June 30, 2019, the Company had an accumulated deficit of $256,372. The Company has primarily funded these losses through the proceeds from the sales of common and preferred stock as well as capital contributions received from the Predecessor Company, the Relamorelin Company and the former parent company, Rhythm Holdings LLC. To date, the Company has no 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 research and development, manufacturing, conducting clinical trials for its product candidates, protecting its intellectual property, pre-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 June 30, 2019, the Company had $195,167 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, 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 operating plan into the fourth quarter of 2020.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company's unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. 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”). As permitted under these rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted.

The accompanying interim balance sheet as of June 30, 2019, the statements of operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018, the statement of stockholders equity and the statement of cash flows for the six months ended June 30, 2019 and 2018 and the related footnote disclosures are unaudited. In management's opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include all normal recurring adjustments necessary for the fair presentation of the interim financial statements. The results for the six months ended June 30, 2019 are not necessarily indicative of the results expected for the full fiscal year.

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the unaudited condensed consolidated financial statements. As of June 30, 2019, there have been no material changes in the Company's significant accounting policies from those that were disclosed in the 2018 Annual Report other than those resulting from the adoption of ASC Topic 842, which is described below.

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 accrued expenses, stock‑based compensation expense, and the valuation allowance on the Company's deferred tax assets.

Principles of Consolidation

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

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.

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 considers its chief executive officer as its chief operating decision maker. The Company views its operations and manages its business in one operating segment operating exclusively in the United States.

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 at June 30, 2019 and December 31, 2018 were carried at fair value, determined according to the fair value hierarchy. See Note 4 for further discussion.

The carrying amounts reflected in the consolidated balance sheets for accounts payable and accrued expenses approximate their fair values due to their short-term maturities at June 30, 2019 and December 31, 2018, respectively.

Net Loss Per Share Attributable to Common Shareholders

Basic net loss per share attributable to common stockholders is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period, without consideration for Common Stock equivalents. Net loss attributable to common stockholders is calculated by adjusting the net loss of the Company for cumulative preferred stock dividends. During periods of income, the Company allocates participating securities a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities (the “two class method”). The Company's convertible preferred stock participates in any dividends declared by the Company and are therefore considered to be participating securities. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. Diluted net loss per share attributable to common stockholders is calculated by adjusting weighted average shares outstanding for the dilutive effect of Common Stock equivalents outstanding for the period, determined using the more dilutive of the treasury‑stock and if‑converted methods. For purposes of the diluted net loss per share attributable to common stockholders calculation, convertible preferred stock and stock options are considered to be Common Stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders, 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 attributable to common stockholders for the periods indicated:



	June 30,
	2019		2018
Stock options		3,700,754		2,616,126

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.

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 April 2012, the Jump‑Start Our Business Startups Act (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an “emerging growth company.” As an emerging growth company, the Company elected to not take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards, and as a result, will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non‑emerging growth companies.

In November 2016, the FASB issued ASU 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 changes the presentation of restricted cash and cash equivalents on the statement of cash flows. Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. This amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company adopted this ASU on January 1, 2018 and has applied its content to statements of cash flows for the six months ended June 30, 2019 and 2018 presented herein.

In June 2018, the FASB issued ASU 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018‑07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for certain exemptions specified in the amendment. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The Company has early adopted ASU 2018‑07 in July 2018. The guidance has been adopted using the modified-retrospective approach, which requires that unsettled equity-classified awards for which a measurement date has not been established to be measured using the adoption date fair value. The adoption of this ASU did not have a material impact on the Company's financial position or results of operations.

In August 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 removes, modifies and adds to the disclosure requirements on fair value measurements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. This guidance will become effective in fiscal years beginning after December 15, 2019, including interim periods within that reporting period. Early adoption is permitted upon issuance of this updated guidance. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this updated guidance and delay adoption of the additional disclosures until their effective date. The Company does not plan to early adopt this ASU, and we are currently evaluating the impact of this guidance on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs in a Cloud Computing Arrangement That is a Service Contract (“ASU 2018-15”). ASU 2018-15 helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. This guidance will become effective in fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period. The Company has early adopted ASU 2018‑15 in the fourth quarter of 2018 and the adoption of this ASU did not have a material impact on the Company's financial position or results of operations.

Effective January 1, 2019 the Company adopted FASB ASU 2016‑02, Leases (Topic 842) (“ASU 2016‑02”). ASU 2016‑02 requires lessees to recognize a right-of-use (“ROU”) asset and lease liability for most lease arrangements. The new standard is effective for annual reporting periods beginning after December 15, 2018. The original guidance required application on a modified retrospective basis with the earliest period presented. In August 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842, which included an option to not restate comparative periods in transition and elect to use the effective date of ASC 842, as the date of initial application of transition, which the Company has elected. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard which allowed us to carry forward the historical lease classification. As a result of the adoption of ASC 842 on January 1, 2019, the Company recorded both an operating lease right-of-use asset of $3,265 and a lease liability of $3,636. Additional information and disclosures required by this new standard are contained in Note 5, Right Of Use Asset and Lease Liability.

Fair Value of Financial Assets and Liability

6 Months Ended

Jun. 30, 2019

Fair Value of Financial Assets and Liability

Fair Value of Financial Assets and Liability

4. Fair Value of Financial Assets and Liability

As of June 30, 2019 and December 31, 2018, the carrying amount of cash and cash equivalents and short‑term investments was $195,167 and $252,061, respectively, which approximates fair value. Cash and cash equivalents and short‑term investments includes investments in 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 and had a total balance of $58,615 and $37,019 as of June 30, 2019 and December 31, 2018, respectively. 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 following tables present information about the Company's financial assets 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
	June 30, 2019 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents:
Money Market Funds	$	58,615	$	—	$	—	$	58,615
Marketable Securities:
Corporate Debt Securities and Commercial Paper		—		132,049		—		132,049
Total	$	58,615	$	132,049	$	—	$	190,664


	Fair value Measurements as of
	December 31, 2018 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents:
Corporate Debt Securities	$	—	$	5,976	$	—	$	5,976
Money Market Funds		37,019		—		—		37,019
Marketable Securities:
Corporate Debt Securities		—		202,519		—		202,519
Total	$	37,019	$	208,495	$	—	$	245,514

Marketable Securities

The following tables summarize the Company's marketable securities:


	June 30, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate Debt Securities and Commercial Paper (due within 1 year)	$	131,931	$	119	$	(1)	$	132,049
	$	131,931	$	119	$	(1)	$	132,049


	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate Debt Securities (due within 1 year)	$	202,653	$	23	$	(157)	$	202,519
	$	202,653	$	23	$	(157)	$	202,519

- 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

Right of Use Asset and Lease Liability

6 Months Ended

Jun. 30, 2019

Right Of Use Asset and Lease Liability

Right Of Use Asset and Lease Liability

5. 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. Our office lease has a remaining lease term of 6.25 years. The Company has measured the lease liability associated with the office lease using a discount rate of 10%. 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 June 30, 2019, the Company has not entered into any lease arrangements classified as a finance lease.

Under ASC 842, 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 ROU asset and lease liability for short-term leases.

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. In August 2018, the Company amended its existing lease agreement and the new lease term 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 has 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, for the three and six months ended June 30, 2019 and 2018, was $177, $54, $353 and $107, respectively.

Supplemental cash flow information related to the Company’s lease for the six months ended June 30, 2019, includes cash payments of $100 used in the measurement of our operating lease liability.

The following table presents the maturities of the Company’s operating lease liability related to office space as of June 30, 2019, all of which is under a non-cancellable operating lease:


Remainder of 2019	$	325
2020		786
2021		802
2022		818
2023		834
Thereafter		1,353
Total operating lease payments		4,918
Less: imputed interest		1,208
Total operating lease liability	$	3,710

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Principles of Consolidation

Off-Balance Sheet Risk and Concentrations of Credit Risk

Off‑Balance Sheet Risk and Concentrations of Credit Risk

Segment Information

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.

Net Loss Per Share Attributable to Common Shareholders



	June 30,
	2019		2018
Stock options		3,700,754		2,616,126

Subsequent Events

Application of New or Revised Accounting Standards

Fair Value of Financial Assets and Liability (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value of Financial Assets and Liability

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


	Fair value Measurements as of
	June 30, 2019 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents:
Money Market Funds	$	58,615	$	—	$	—	$	58,615
Marketable Securities:
Corporate Debt Securities and Commercial Paper		—		132,049		—		132,049
Total	$	58,615	$	132,049	$	—	$	190,664


	Fair value Measurements as of
	December 31, 2018 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents:
Corporate Debt Securities	$	—	$	5,976	$	—	$	5,976
Money Market Funds		37,019		—		—		37,019
Marketable Securities:
Corporate Debt Securities		—		202,519		—		202,519
Total	$	37,019	$	208,495	$	—	$	245,514

Schedule of marketable securities


	June 30, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate Debt Securities and Commercial Paper (due within 1 year)	$	131,931	$	119	$	(1)	$	132,049
	$	131,931	$	119	$	(1)	$	132,049


	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate Debt Securities (due within 1 year)	$	202,653	$	23	$	(157)	$	202,519
	$	202,653	$	23	$	(157)	$	202,519

Nature of Business (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Nature of Business (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Nature of Business
Net loss	$ 42,796	$ 28,974	$ 14,412	$ 16,459	$ 71,770	$ 30,871
Accumulated deficit	256,372				256,372		$ 184,602
Carrying amount of cash and cash equivalents and short term investments	$ 195,167				$ 195,167		$ 252,061

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=118930883&loc=SL7669619-108580

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=118930883&loc=SL7669625-108580

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (c)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599

Reference 6: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=116874947&loc=SL4591551-111686

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=118932676&loc=d3e3000-108585

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=108774443&loc=SL4569616-111683

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4K
-URI http://asc.fasb.org/extlink&oid=116874947&loc=SL4591552-111686

+ Details

Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Jun. 25, 2018	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Common stock shares authorized			120,000,000	120,000,000
Common stock, par value per share			$ 0.001	$ 0.001
Preferred stock, authorized			10,000,000	10,000,000
Preferred stock par value per share			$ 0.001	$ 0.001
Issuance of stock (in shares)	6,591,800
Price per share	$ 26.42
Gross proceeds	$ 174,155	$ 163,034
Net proceeds	$ 162,878
Common stock, outstanding			34,497,542	34,410,725
Underwriter option to purchase
Issuance of stock (in shares)	859,800

Summary of Significant Accounting Policies - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Summary of Significant Accounting Policies
Net loss	$ (42,796)	$ (28,974)	$ (14,412)	$ (16,459)	$ (71,770)	$ (30,871)
Loss attributable to common shares—basic and diluted	$ (42,796)		$ (14,412)		$ (71,770)	$ (30,871)
Weighted—average number of common shares—basic and diluted	34,452,661		27,960,664		34,435,023	27,624,271
Loss per common share—basic and diluted	$ (1.24)		$ (0.52)		$ (2.08)	$ (1.12)
Costs to secure and defend patents	$ 8,841		$ 6,437		$ 16,600	$ 11,152

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

+ Details

Fair Value of Financial Assets and Liability (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Fair Value of Financial Assets and Liability
Carrying amount of cash and cash equivalents and short term investments	$ 195,167	$ 252,061
Fair value of financial assets and liability
Marketable Securities	132,049	202,519
Fair value of assets	132,049	202,519
Corporate Debt Securities
Fair value of financial assets and liability
Marketable Securities	132,049	202,519
Level 1 \| Money Market Funds and Government Funds in Aggregate
Fair value of financial assets and liability
Fair value of assets	58,615	37,019
Recurring \| Estimated fair value
Fair value of financial assets and liability
Fair value of assets	190,664	245,514
Recurring \| Corporate Debt Securities \| Estimated fair value
Fair value of financial assets and liability
Marketable Securities	132,049	202,519
Recurring \| Money Market Funds \| Estimated fair value
Fair value of financial assets and liability
Cash Equivalents	58,615	37,019
Recurring \| Government Funds \| Estimated fair value
Fair value of financial assets and liability
Cash Equivalents		5,976
Recurring \| Level 1 \| Estimated fair value
Fair value of financial assets and liability
Fair value of assets	58,615	37,019
Recurring \| Level 1 \| Money Market Funds \| Estimated fair value
Fair value of financial assets and liability
Cash Equivalents	58,615	37,019
Recurring \| Level 2 \| Estimated fair value
Fair value of financial assets and liability
Fair value of assets	132,049	208,495
Recurring \| Level 2 \| Corporate Debt Securities \| Estimated fair value
Fair value of financial assets and liability
Marketable Securities	$ 132,049	202,519
Recurring \| Level 2 \| Government Funds \| Estimated fair value
Fair value of financial assets and liability
Cash Equivalents		$ 5,976

Right of Use Asset and Lease Liability - Operating Lease Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Remainder of 2019	$ 325
2020	786
2021	802
2022	818
2023	834
Thereafter	1,353
Total operating lease payments	4,918
Less: imputed interest	1,208
Total operating lease liability	$ 3,710	$ 3,636

Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended
	Jun. 25, 2018	Apr. 03, 2018	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Preferred and Common Stock
Common stock, issued				34,497,542	34,410,725
Issuance of stock (in shares)	6,591,800
Price per share	$ 26.42
Gross proceeds	$ 174,155		$ 163,034
Net proceeds	$ 162,878
Underwriter option to purchase
Preferred and Common Stock
Issuance of stock (in shares)	859,800
License agreement \| Takeda
Preferred and Common Stock
Issuance of stock (in shares)		223,544

Common Stock	6 Months Ended
Common Stock	Jun. 30, 2019
Common Stock
Common Stock	6. Common Stock On April 3, 2018, in association with the Takeda license agreement, the Company issued 223,544 shares of common stock. See Note 7 for further discussion. On June 25, 2018 the Company completed a public offering of 6,591,800 shares of common stock at an offering price of $26.42 per share, which included the exercise in full by the underwriters of their option to purchase up to 859,800 additional shares of common stock. The Company received gross proceeds of approximately $174,155 or net proceeds of $162,878 after deducting underwriting discounts, commissions and offering expenses.

Significant Agreements	6 Months Ended
Significant Agreements	Jun. 30, 2019
Significant Agreements
Significant Agreements	7. Significant Agreements License Agreements 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.

Related-Party Transactions	6 Months Ended
Related-Party Transactions	Jun. 30, 2019
Related-Party Transactions
Related-Party Transactions	8. Related‑Party Transactions Expenses paid directly to consultants and vendors considered to be related parties amounted to $492, $504, $1,088 and $976 for the three and six months ended June 30, 2019 and 2018, respectively. Outstanding payments due to these related parties as of June 30, 2019 and December 31, 2018 were $148 and $260, respectively, and were included within accounts payable on the balance sheet.

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2019
Income Taxes
Income Taxes	9. Income Taxes For the year ended December 31, 2018, the Company did not have a current or deferred income tax expense or benefit as the entity has incurred losses since inception and has provided a full valuation allowance against its deferred tax assets.

Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2019 segment item
Off Balance Sheet Risk and Concentrations of Credit Risk
Number of federally insured financial institutions \| item	2
Segment Information
Number of operating segments \| segment	1

Summary of Significant Accounting Policies - Shares Excluded For EPS (Details) - shares	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Employees stock purchase plan
Shares excluded from the computation of diluted net loss per share
Unvested shares from share-based compensation that were anti-dilutive	3,700,754	2,616,126

Summary of Significant Accounting Policies - Application of New or Revised Accounting Standards (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019
Summary of Significant Accounting Policies
Right-of-use asset	$ 3,085	$ 3,265
Operating Lease, Liability	$ 3,710	$ 3,636

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Accrued Expenses
Research and development costs	$ 14,113	$ 2,614
Professional fees	2,435	858
Payroll related	2,356	2,410
Other	242	60
Accrued expenses	$ 19,146	$ 5,942

Fair Value of Financial Assets and Liability - Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Fair Value of Financial Assets and Liability
Amortized Cost	$ 131,931	$ 202,653
Gross Unrealized Gains	119	23
Gross Unrealized Losses	(1)	(157)
Fair Value	132,049	202,519
Corporate Debt Securities
Fair Value of Financial Assets and Liability
Amortized Cost	131,931	202,653
Gross Unrealized Gains	119	23
Gross Unrealized Losses	(1)	(157)
Fair Value	$ 132,049	$ 202,519

Significant Agreements (Details) - USD ($) $ in Thousands			1 Months Ended	6 Months Ended
Significant Agreements (Details) - USD ($) $ in Thousands	Jun. 25, 2018	Apr. 03, 2018	Mar. 31, 2018	Jun. 30, 2018
Significant Agreements
Issuance of stock (in shares)	6,591,800
Non-cash research and development license expense				$ 4,448
Takeda \| License agreement
Significant Agreements
Issuance of stock (in shares)		223,544
Non-cash research and development license expense		$ 4,448
One-time non-refundable development milestone payment		70,000
One-time non-refundable non-creditable sales milestone payment		$ 70,000
Period after date of first commercial sale (in years)			10 years

Income Taxes (Details) $ in Thousands	12 Months Ended
Income Taxes (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Income Taxes
Current income tax expense or benefit	$ 0
Deferred income tax expense or benefit	$ 0