Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) is a global, commercial-stage biopharmaceutical company dedicated to transforming the lives of patients and their families living with rare neuroendocrine diseases. The company's lead asset, IMCIVREE® (setmelanotide), is the first-ever therapy developed for patients with certain rare diseases that is approved or authorized in the United States, European Union, and Great Britain.
Business Overview
Rhythm Pharmaceuticals has built a robust pipeline and is advancing its melanocortin-4 receptor (MC4R) agonists, including setmelanotide and its next-generation candidates RM-718 and LB54640, as precision medicines designed to treat hyperphagia and severe obesity caused by rare MC4R pathway diseases. The company's comprehensive clinical research program is aimed at expanding the total number of patients who would benefit from setmelanotide therapy or its new drug candidates.
Financials
In the first quarter of 2024, Rhythm Pharmaceuticals reported net product revenue of $25.967 million, a significant increase from $11.469 million in the same period of 2023. This growth was driven by continued expansion of IMCIVREE's commercial footprint, both in the United States and internationally. For the full year 2023, the company reported annual net revenue of $77.428 million.
The company's net loss for the first quarter of 2024 was $141.372 million, compared to a net loss of $52.179 million in the same period of 2023. The increase in net loss was primarily due to a $92.4 million charge related to the acquisition of LG Chem's proprietary compound LB54640. For the full year 2023, Rhythm Pharmaceuticals reported an annual net loss of $184.678 million.
Rhythm Pharmaceuticals' operating cash flow for the first quarter of 2024 was -$40.743 million, compared to -$36.433 million in the same period of 2023. The company's free cash flow for the first quarter of 2024 was -$40.693 million, compared to -$36.480 million in the same period of 2023. For the full year 2023, the company reported annual operating cash flow of -$136.157 million and annual free cash flow of -$136.204 million.
Liquidity
The company's balance sheet remains strong, with $201.199 million in cash and cash equivalents and short-term investments as of March 31, 2024. This does not include the $150 million in gross proceeds from the company's recent convertible preferred stock offering, which closed in April 2024. On a pro forma basis, Rhythm Pharmaceuticals had approximately $351.199 million in cash and cash equivalents as of March 31, 2024.
Recent Developments
Rhythm Pharmaceuticals' commercial performance in the first quarter of 2024 was highlighted by continued growth in the number of reimbursed patients on IMCIVREE therapy in both the United States and internationally. In the U.S., the company received approximately 100 new prescriptions for IMCIVREE for Bardet-Biedl syndrome (BBS) and gained reimbursement approval for approximately 70 new prescriptions during the quarter.
Internationally, Rhythm Pharmaceuticals is making steady progress, with IMCIVREE now available for the treatment of BBS or POMC and LEPR deficiencies in 14 countries outside the U.S. The company is seeing increasing contributions to net sales from its international markets, which accounted for 26% of total net revenue in the first quarter of 2024, up from 24% in the fourth quarter of 2023.
The company's clinical pipeline continues to advance, with several key milestones expected in the near-term. Rhythm Pharmaceuticals plans to file a supplementary New Drug Application (sNDA) with the FDA in the second quarter of 2024 seeking a label expansion to treat pediatric patients between 2 and younger than 6 years old in approved indications. The company also expects to receive EMEA approval for this pediatric expansion in the fourth quarter of 2024.
Additionally, Rhythm Pharmaceuticals is making progress with its Phase 3 trial evaluating setmelanotide in hypothalamic obesity (HO). The company has completed enrollment in the pivotal 120-patient cohort, and the first patients enrolled are expected to finish the blinded portion of the trial in the second quarter of 2024 and move into the open-label extension study.
The company's next-generation MC4R agonist programs are also advancing. Rhythm Pharmaceuticals has initiated a Phase 1 clinical trial for RM-718, its investigational weekly MC4R-specific agonist, and expects to complete this trial and announce data in the first half of 2024. The company also plans to begin dosing patients in the Phase 2 SIGNAL trial evaluating LB54640, an investigational oral small molecule MC4R agonist, in the third quarter of 2024.
Outlook
Rhythm Pharmaceuticals' financial guidance for 2024 remains unchanged, with the company expecting non-GAAP operating expenses of approximately $250 million to $270 million, including $10 million to $15 million of development costs related to LB54640.
Conclusion
Rhythm Pharmaceuticals is well-positioned for continued growth and value creation. The company's approved product, IMCIVREE, is establishing itself as the standard of care for patients with rare MC4R pathway diseases, and its robust pipeline of next-generation candidates offers significant long-term potential. With a strong balance sheet, a clear strategic vision, and a talented team, Rhythm Pharmaceuticals is poised to deliver on its mission of transforming the lives of patients and their families living with rare neuroendocrine diseases.