Rhythm Pharmaceuticals anticipates IMCIVREE launch in acquired hypothalamic obesity with $416M cash position

Earnings Call Insights: Rhythm Pharmaceuticals (RYTM) Q3 2025

MANAGEMENT VIEW

* David Meeker, Chairman, President & CEO, highlighted "strong growth and continued momentum during the third quarter as we prepare to launch IMCIVREE in acquired hypothalamic obesity pending FDA approval." He described the upcoming launch as a "transformative opportunity for Rhythm." Meeker also noted "robust Phase III data with setmelanotide and HO, presented outstanding Phase II efficacy data with our next-gen oral MC4R inhibitor, bivamelagon, and strengthened our balance sheet with a $189 million equity offering in July."
* Meeker reported "steady growth in global IMCIVREE revenue driven predominantly by BBS continued this quarter with $51.3 million in sales, representing growth of approximately 10% in the number of patients on reimbursed therapy." He emphasized regulatory progress, stating, "both the FDA and EMEA accepted our regulatory filings this quarter. The EMA validated our type 2 marketing authorization request and the FDA accepted our supplemental NDA filing."
* Jennifer Chien, Executive VP & Head of North America, discussed commercial preparations: "We have hired highly experienced professionals to supplement our home office and field organization, and our teams have been actively engaging with customers." She noted identification of "more than 2,000 potential patients suspected to have HO or formally diagnosed to have HO."
* Yann Mazabraud, Executive VP & Head of International, stated, "IMCIVREE is now available for BBS and/or POMC/LEPR deficiencies in more than 25 countries outside the United States." He added, "we reached an agreement with the French Economic Committee for Health Products on reimbursement pricing for IMCIVREE for BBS and POMC/LEPR."
* Hunter Smith, CFO & Treasurer, stated, "we raised approximately $189.2 million in net proceeds from a follow-on equity offering completed early in Q3, we ended the third quarter with $416.1 million in cash on hand. This cash in conjunction with projected revenue... provides us with at least 24 months of runway. Rhythm's balance sheet is as strong as it's ever been."

OUTLOOK

* Meeker said, "We remain on track to report preliminary results from our exploratory Phase II trial in Prader-Willi syndrome by the end of the year." He confirmed the PDUFA date for IMCIVREE in acquired hypothalamic obesity is December 20, 2025, and potential European approval in the second half of 2026. The company expects "to complete enrollment of the RM-718 weekly Phase II study in HO patients during the first quarter of 2026" and "initiate our Phase III study with bivamelagon in acquired HO next year."
* Mazabraud noted, "Japan will also be a very important market for us with an estimated prevalence between 5,000 and 8,000 patients... We anticipate top line data from the Phase III cohort of Japanese patients in the first quarter of 2026."

FINANCIAL RESULTS

* Smith reported, "Global revenue for the third quarter was $51.3 million, a sequential 6% increase from $48.5 million for the second quarter of 2025. The number of patients on reimbursed therapy increased by 10% globally during the quarter. $38.2 million or 74% of Q3 net revenue was generated in the United States and $13.1 million or 26%... outside the United States."
* He addressed a one-time item: "Based on this agreement, we recorded a onetime $3.2 million charge during the quarter -- third quarter of 2025 to account for the difference between what has been accrued to date and what is owed."
* Cost of goods sold was 10.7% of product revenue. R&D expenses were $46 million for Q3. SG&A expenses were $52.4 million for Q3 2025. Cash used in operations was approximately $27 million during the third quarter. GAAP EPS for the third quarter was a net loss per basic and diluted share of ($0.82).
* Operating expenses for the third quarter were $98.5 million, including $18.8 million in stock-based compensation. Full-year non-GAAP operating expense guidance tightened to $295 million to $315 million.

Q&A

* Michael Ulz, Morgan Stanley: Asked about the Phase III HO study trial design for bivamelagon. Meeker responded, "Our expectation at this point is it will be a double-blind randomized controlled trial... Our expectation is that in some form, they will want a full year of data."
* Philip Nadeau, TD Cowen: Inquired about efficacy endpoints for PWS. Meeker indicated, "Our goal is to get 10 to 20 patients on treatment for 6 months... It's going to be a judgment call... The primary endpoint here is BMI percent change."
* Derek Archila, Wells Fargo: Asked about changes to the ongoing trial and FDA discussions. Meeker stated, "Our regulatory interactions have been... routine, which is favorable... The labeling discussions tend to be late."
* Angela Qian, Canaccord Genuity: Questioned payer conversations and access post-approval. Chien explained, "We feel very positive just based off of the feedback that we've received... Even if there's not a specific policy in place, we still work through the process... we've been able to gain access even prior to that formal policy."
* Faisal Khurshid, Leerink Partners: Asked about the launch curve in HO. Chien shared, "We feel very confident holistically just in terms of the ACP targeting... but there are different factors that may impact the ramp in terms of launch."
* Erik Wong, Goldman Sachs: Asked about reimbursement cadence and gross to net in HO. Meeker said, "We've had around a 50-50 Medicare commercial mix for BBS. We don't know how different the HO population will be, but that is the primary driver of our gross to net."

SENTIMENT ANALYSIS

* Analyst tone was generally positive but focused on detailed clarifications regarding launch ramp, regulatory interactions, and trial endpoints, with questions indicating keen interest in commercialization timelines and patient access.
* Management maintained a confident and constructive tone during prepared remarks and Q&A, using phrases such as "we feel very confident" and "we are well positioned to deliver sustained long-term growth." Tone remained consistent with previous quarter, with no evident defensiveness or hesitation.
* Compared to Q2, sentiment remains upbeat, with analysts probing for execution risks and timing, while management continues to project confidence in readiness and market opportunity.

QUARTER-OVER-QUARTER COMPARISON

* Guidance was more specific regarding launch timing and regulatory milestones for IMCIVREE in acquired hypothalamic obesity, with clear focus on the December 20 PDUFA date.
* Strategic focus has shifted toward imminent commercial launch and expanded international market access, compared to the prior quarter's emphasis on clinical data readouts and regulatory filings.
* Analysts in both quarters concentrated on pipeline catalysts and launch execution, but with increasing attention to patient identification and access strategies in the current quarter.
* Gross to net and reimbursement processes were discussed in greater detail, reflecting the impending commercial launch.
* Management confidence and sentiment remained positive, with a slightly heightened sense of readiness and execution urgency as the company nears major milestones.

RISKS AND CONCERNS

* Management cited the complexity of Prader-Willi syndrome studies, noting, "PWS is an incredibly complex disease... which makes clinical studies particularly difficult."
* One-time financial charges related to French reimbursement agreements were disclosed.
* Analysts raised concerns about market access, payer reimbursement timelines, and potential variability in launch ramp, all addressed by management with detailed explanations of mitigation strategies and ongoing engagement efforts.

FINAL TAKEAWAY

Rhythm Pharmaceuticals' management emphasized strong financial positioning and readiness for the anticipated IMCIVREE launch in acquired hypothalamic obesity, pending FDA approval in December. The company reinforced its strategic expansion in the U.S., Europe, and Japan, highlighted robust sales growth in BBS, and outlined clear milestones for upcoming data readouts and regulatory submissions. Management remains confident in its commercial groundwork and capacity to address key market opportunities, with a focus on sustaining long-term growth and delivering value to patients and stakeholders.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/rytm/earnings/transcripts]

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