Rhythm Pharmaceuticals reports US$92.1M sales as IMCIVREE launch grows

Quarterly sales rose to US$92.1 million from US$51.3 million a year earlier as Rhythm Pharmaceuticals, Inc. NASDAQRYTM reported its third-quarter results on Tuesday. Cash, cash equivalents and short-term investments stood at US$320.9 million at Sept. 30, ahead of a planned pivotal trial start by year-end.

The Nov. 3 release said that balance excludes a US$250 million initial loan draw and a US$70 million payment due under an amended licensing agreement. The new facility provides access to as much as US$750 million over five years.

Rhythm is a Boston-based specialist drugmaker selling and developing treatments for rare neuroendocrine diseases worldwide. Its commercial business centres on IMCIVREE, with expanding launches supporting development of its next generation of medicines.

Rhythm's NASDAQRYTM shares closed at US$93.44 on Nasdaq at 4 p.m. EST on Nov. 2, before Tuesday's results. That price provides a baseline for the announcement, rather than a response to it.

Launch Demand Lifts Reimbursed Patient Numbers

Third-quarter sales increased 29 per cent from the preceding quarter, while the number of patients receiving reimbursed IMCIVREE treatment globally increased 20 per cent. Rhythm attributed U.S. growth primarily to demand in acquired hypothalamic obesity, alongside continued growth in Bardet-Biedl syndrome.

U.S. sales reached US$67.5 million in the third quarter, up 32 per cent sequentially. Revenue outside the United States reached US$24.7 million, with the Japanese acquired hypothalamic obesity launch beginning on Oct. 13.

Rhythm had received more than 700 patient start forms for the acquired hypothalamic obesity indication by Sept. 30, from more than 500 prescribers. Those forms measure prescribing interest separately from the company's count of patients on reimbursed therapy.

"Our commercial launch in Japan represents another important milestone in a market with the potential to become our second largest," Rhythm chair, chief executive and president David Meeker said in the release.

Read more: Eli Lilly raises revenue outlook to US$91B to US$92B

The funding changes accompany higher spending. Third-quarter research and development expenses reached US$52.5 million, compared with US$46.0 million a year earlier, as manufacturing-development activity and clinical trial costs increased.

Selling, general and administrative expenses rose to US$66.8 million from US$52.4 million in the corresponding quarter. Rhythm attributed that increase primarily to personnel costs associated with expanded operations, including stock-based compensation.

Under the Nov. 2 licensing amendment, Rhythm agreed to US$350 million in fixed payments over four years. In exchange, the royalty on net product revenue from its MC4R portfolio falls to one per cent from the original low-to-mid single-digit rate.

Prader-Willi Development Has A Commercial Benchmark

Neurocrine Biosciences, Inc. NASDAQNBIX reported US$107 million in third-quarter VYKAT XR sales in its Nov. 2 results. That update also described research on Prader-Willi syndrome and real-world experience with VYKAT XR.

Rhythm plans a six-month bivamelagon study evaluating hyperphagia in Prader-Willi syndrome in 2027, pending alignment with the FDA. The planned study and Neurocrine's commercial sales represent different development stages, without establishing a comparison of treatment efficacy.

Read more: Neurocrine Biosciences starts 135-patient Alzheimer's cognition trial

For sector context, the iShares Biotechnology ETF NASDAQIBB closed at US$213.79 at 4 p.m. EST on Nov. 2. That broader biotechnology benchmark also predates Rhythm's results.

Rhythm's next scheduled scientific update is ObesityWeek, running Nov. 14 to 17, where presentations include long-term setmelanotide results in acquired hypothalamic obesity. By year-end, the company expects to start a pivotal Phase 3 bivamelagon trial in that indication, taking its next-generation program into pivotal testing.