Q1 2024 Rhythm Pharmaceuticals Inc Earnings Call

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Operator: Good day, and thank you for standing by. Welcome to the Rhythm Pharmaceuticals Q1 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker Change: Good day, and thank you for standby and welcome to the rhythm Pharmaceuticals, Q1, 'twenty 'twenty four earnings conference call.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one one on your telephone.

Well done here, an automated message advising your hand is raised.

Operator: To withdraw your question, please press star 118. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, David Connolly, Executive Director of Investor Relations and Corporate Communications. Please go ahead.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: Please be advised that today's conference is being recorded.

David Connolly: Thank you, Stephen. I'm Dave Connolly here at Rhythm Pharmaceuticals. For those of you participating on the conference call, our slides can be accessed and controlled by going to the investors section on the investors page of our website, IR.RhythmTX.com. This morning, we issued our press release that provides our first quarter 2024 financial results and business update, and that is available on our website, as listed on slide two is our agenda. Here with me today in Boston are David Meeker, our chairman, chief executive officer, and president; Jennifer Lee, executive vice president, head of North America.

Speaker Change: I would now like to hand, the conference over to your first speaker today, David Connolly Executive director of Investor Relations and corporate Communications. Please go ahead.

David Connolly: Thank you, Steve and Dave currently here at rhythm Pharmaceuticals for those of you participating on the conference call. Our slides can be accessed and controlled by going to the investors section of the investors page of our website IR dot rhythm TX dot com.

David Connolly: This morning, we issued a press release that provides our first quarter 2024 financial results and business update and that is available on our website.

David Connolly: Listed on slide two is our agenda here with me today in Boston are David Meeker, Our Chairman Chief Executive Officer President.

David Connolly: Jennifer Li Executive Vice President head of North America Hunter Smith, our Chief Financial Officer, and Jan Mazyck Rowe Executive Vice President and head of International is on the line joining us from Europe.

David Connolly: Hunter Smith, our chief financial officer, and Yann Mazabraud, executive vice president, head of international, are on the line joining us from Europe. And on slide three, I'll remind you that this call contains remarks concerning future expectations, plans, and prospects, which constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent annual or quarterly reports on file at the SAC. In addition, any forward-looking statements represent our views as of only today and should not be relied upon as representing our views as of any subsequent dates. We specifically disclaim any obligation to update such statements.

David Connolly: And on slide three I'll remind you that this call contains remarks concerning future expectations plans and prospects, which constitute forward looking statements actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed on our most recent annual or quarterly reports on file with the SEC.

David Connolly: In addition, any forward looking statements represents our views as of only today and should not be relied upon as representing our views as of any subsequent dates we specifically disclaim any obligation to update such statements with that I'll turn the call over to David Meeker, who will begin on slide five.

David P. Meeker: With that, I'll turn the call over to David Meeker, who will begin on slide five. Good morning, and thank you for joining us this morning. So we're pleased to report another solid quarter as we build out the opportunity in rare MC4R pathway diseases with a larger vision of becoming a leading company in rare neuroendocrine disorders. I only have two slides today, followed by some additional commentary. As listed on slide five, Rhythm's value drivers remain unchanged.

David P. Meeker: Good morning, and thank you for joining this morning.

David P. Meeker: So we're pleased to report another solid quarter as we build out the opportunity in rare <unk> for our Petro diseases with the larger vision of becoming a leading company in rare neuro endocrine diseases.

David P. Meeker: I only have two slides today im followed by some additional commentary.

David P. Meeker: As listed on slide five rhythms value drivers remain unchanged near term it is about Bbs commercial execution and making in sebree. The standard of care for those patients suffering from early onset obesity and hyperphagia and our approved indication <unk> offers a significant expansion opportunity in our <unk> sparing next generation programs offer the potential for much.

David P. Meeker: Near term, it is about BBS commercial execution and making incivory the standard of care for those patients suffering from early-onset obesity and hyperphagia in our approved indication. HO offers a significant expansion opportunity, and our MC1R Sparing Next Generation programs offer the potential for much improved therapeutic options for both patients, and both provide IP protection beyond 2040. Recent highlights include the recently completed convertible preferred financing, which extends our runway well into 2026 and fully funds our investment in the LG Chem molecule.

David P. Meeker: Improved therapeutic options for both patients and both provide IP protection beyond 2040.

David P. Meeker: Recent highlights include the recently completed convertible preferred financing, which extends our runway well into 2026 and fully fund our investment in the LG Chem molecule Hunter will speak to that in more detail.

David P. Meeker: Hunter will speak to that in more detail. Second, on slide six, our phase two HO data was published in Lancet Diabetes and Endocrinology, reminding the world again why we are excited about the difference we can make in this disease. Mean BMI decreased by 14.5% at 16 weeks and 25.5% at one year for patients who had 12 months of data.

David P. Meeker: Second on slide six our phase Iia trial data was published in lancet diabetes endocrinology reminding the world again, why we are excited about the difference we can make in this disease mean BMI decreased by 14, 5% at 16 weeks and 25, 5% at one year for patients who at 12 months of data.

David P. Meeker: The unmet need for hypothalamic obesity is significant, with an estimated five to 10,000 patients in just the US, and there are no approved therapies. Our clinical programs continue on track, with the 120 patient pivotal cohort of our phase 3 HO trial fully enrolled, and Japan set to enroll its first patient. We over-enrolled the trial with a total of 131 patients, excluding the 12 patients expected to be enrolled in Japan, and the total number of dropouts remained remarkably low, all of which speaks to the commitment and enthusiasm of both the patient community and the investigators.

David P. Meeker: Unmet need in hyperkalemia obesity is significant with an estimated five to 10000 patients in just the U S. And there are no approved therapies or clinical programs continue on track with 120 patient pivotal cohort of our phase III <unk> trial fully enrolled and Japan set to enroll its first patients.

David P. Meeker: Over enrolled the trial with a total of 131 patients excluding the 12 patients expected to be enrolled in Japan, and the total number of dropouts remain remarkably low and all of that speaks to the commitment and enthusiasm of both the patient community and the investigators the first patients enrolled in the phase III study will be finishing the blinded portion of that trial in the second quarter.

David P. Meeker: The first patients enrolled in the phase three study will be finishing the blinded portion of that trial in the second quarter and moving into the open label extension study. The phase one study of RM718, our next generation MC1 sparing weekly injectables, is progressing in normal healthy volunteers with obesity.

David P. Meeker: And moving into the open label extension study.

David P. Meeker: Phase one study of <unk>, our next generation <unk> sparing weekly injectable is progressing in normal healthy volunteers with obesity and we look forward to dosing the first clinical HL patients in part C of this phase one study in quarter. Three we also expect to dose the first patients in the phase II <unk> study with a daily oral mcl one are sparing small molecule.

David P. Meeker: And we look forward to dosing the first clinical HO patients in part C of this phase one study in quarter three. We also expect to dose the first patients in the phase two HO study with a daily oral MC1R sparing small molecule in quarter three of this year. Each of those programs positions us for an exciting set of top line readouts in the first half of 2025. Our commercial teams had another solid quarter with a slow and steady build of the BBS opportunity.

David P. Meeker: In quarter three of this year each of those programs positions us for an exciting set of top line readouts in the first half of 2025.

David P. Meeker: Our commercial teams had another solid quarter with a slow and steady build of the Bbs opportunity U S script volume remains steady with an approximately 100, new scripts written and 70, new patients approved for reimbursement as Jennifer will speak to we continue to find new patients engage new physicians and get strong feedback from the community with regard to how <unk> is changing their lives.

David P. Meeker: U.S. script volume remained steady with approximately 100 new scripts written and 70 new patients approved for reimbursement. As Jennifer will speak to, we continue to find new patients, engage new physicians, and get strong feedback from the community with regard to how Incivory is changing their lives. Internationally, we are moving to a really exciting time as new countries begin to come online and will begin to contribute in the second half of this year.

David P. Meeker: Internationally, we are moving to a really exciting time as new countries begin to come online and will begin to contribute in the second half of this year. Most encouragingly as we expand our commercial presence and build out our clinical trial network. We continue to have strong support from leading thought leaders in Europe, we're seeing the benefit of <unk> and their patients.

David P. Meeker: Most encouragingly, as we expand our commercial presence and build out our clinical trial network, we continue to have strong support from leading thought leaders in Europe who are seeing the benefit of settlement antide in their patients. Yann will provide more color.

David P. Meeker: We will provide more color.

David P. Meeker: Last quarter, we spoke about two challenges, a change in one state Medicaid plan and patient discontinuations, where we have continued to get some questions. I want to reinforce what we communicated on that call with regard to the one state Medicaid plan, which increased the stringency of its approval criteria. That state continues to have a policy in place and continues to cover patients. We have been clear that there is no expectation that the 30 patients converted to our bridge program will return to reimburse therapy anytime in the near term.

David P. Meeker: Last quarter, we spoke to two challenges a change in one state Medicaid plan and patient discontinuation, where we've continued to get some questions I want to reinforce what we communicated on that call with regard to the one state Medicaid plan will increase the stringency of their approval criteria that state continues to have a policy in place in <unk>.

David P. Meeker: <unk> to cover patients with.

David P. Meeker: <unk> been clear that there is no expectation that the 30 patients converted to our bridge program will return to reimbursed therapy anytime in the near term we have.

David P. Meeker: We have removed them from our internal models and suggest you do the same. Importantly, as noted, this experience was limited to a single state. There has been no read through to any other state, nor do we expect to have any.

David P. Meeker: Move them from our internal models and suggest you do the same.

David P. Meeker: Importantly, as noted this experience was limited to a single state Theres been no read through to any other state nor do we expect to have any read through while this was disappointing we are more than compensating and continue to make good progress in the other 49 states plus Puerto Rico.

David P. Meeker: While this was disappointing, we are more than compensating and continuing to make good progress in the other 49 states plus Puerto Rico. Second, the increase in the number of discontinuations we have seen recently is in line with our expectations, given the much larger number of patients, both in the U.S. and internationally, who are now on treatment for a prolonged period of time. We expect the rate of discontinuations to level out in the 20 to 30% range over the long term, as we have highlighted previously.

David P. Meeker: Second the increase in the number of discontinuation. We've seen recently is in line with our expectations given that the much larger number of patients both in the U S and internationally, who are now on treatment for a prolonged period of time, we expect the rate of discontinuation is to level out in the 20% to 30% range long term as we have highlighted previously although the.

David P. Meeker: Although the focus will increasingly shift to the revenue number as this opportunity matures, we thought it would be useful to provide a one-time deeper dive into some of the reasons why BBS patients discontinue therapy. The short summary is that there is no major driver, and the majority remain related to patient-specific issues. First, age is an issue, with the discontinuation rate being highest in adolescents, lowest in pediatric patients under the age of 12, and in the middle for adults. The adolescent age group can be challenging in general, but particularly when it comes to a chronic daily injectable therapy. Overall, the specific reasons for discontinuation remain relatively unchanged.

David P. Meeker: Focus will increasingly shift to the revenue number is this opportunity matures, we thought it would be useful to provide a onetime deeper dive into some of the reasons why Bbs patients discontinued therapy. The short summary is that there is no major driver and the majority remain related to patient specific issues.

David P. Meeker: <unk> eight is an issue with the discontinuation rate being highest in adolescence lowest in the pediatric patients under the age of 12 and in the middle for adults. The adolescent age group can be challenging in general, but particularly when it comes to a chronic daily injectable therapy.

David P. Meeker: Overall, the specific reasons for discontinuation remained relatively unchanged the most common and consistent.

David P. Meeker: The most common and consistent are discontinuations due to hyperpigmentation, which represent about 5% of patients who have initiated therapy. And this has crept up a bit as we penetrate more deeply into populations where this is more of a concern, such as the Hispanic population in the U.S. Approximately 4% of patients have stopped therapy due to a perceived lack of efficacy, which also represents an opportunity, as a number of these patients stopped after only a few weeks on treatment and likely before they have experienced the full effect of the drug.

David P. Meeker: Discontinuation due to hyper pigmentation, which represent about 5% of patients who have initiated therapy and this has crept up a bit as we penetrate more deeply in populations, where this is more of a concern such as the Hispanic population in the U S.

David P. Meeker: Approximately 4% of patients have stopped therapy due to a perceived lack of efficacy, which also represents an opportunity as a number of these patients have stopped after only a few weeks on treatment and likely before they have experienced the full effect of the drug. This is an area where expectation setting and education is incredibly important.

David P. Meeker: This is an area where expectation setting and education is incredibly important; about 2% of patients stop because of nausea and vomiting, and another 2% stop secondary to overall life challenges where the burden of a daily injectable becomes too much. There's a longer list of reasons for discontinuing that we have previously grouped together as other, each of which occurs with a frequency less than 1%. These reasons include allergic reactions, severe headache, chest pain, back pain, leg numbness, fatigue, and an increased frequency of erections, among others.

David P. Meeker: About 2% of patients stop because of nausea, and vomiting, and another 2% stopped secondary to overall life challenges, where the burden of a daily injectable becomes too much.

David P. Meeker: There is a longer list of reasons for discontinuing that we've previously grouped together as other each of which occurs with a frequency of less than 1%.

David P. Meeker: These reasons include allergic reactions severe headache chest pain back pain, like numbness, fatigue, and an increased frequency of erections among others. The point is that the challenges facing Bbs patients are complicate those who stopped therapy do so for a variety of reasons some related to the drug and not related to the drug not surprisingly there are items.

David P. Meeker: The point is that the challenges facing BBS patients are complicated. Those who stop therapy do so for a variety of reasons, some related to the drug, and many not related to the drug. Not surprisingly, there are items on this list we cannot do much about, but there are other areas where it can do something, and those are the areas we are investing in. These challenges, like the payer challenges from last quarter, are normal parts of the ups and downs of building out a novel therapy for a complex, rare disease. Most importantly, the fundamentals of this business continue.

David P. Meeker: On this list we cannot do much about.

But other areas, where it can do something and those are the areas we are investing.

David P. Meeker: These challenges like the payer challenges from last quarter, our normal parts of the ups and downs of building out a novel therapy for a complex rare disease.

David P. Meeker: Most importantly, the fundamentals of this business continues right.

David P. Meeker: Patient identification remains strong, a growing number of physicians are writing scripts, reimbursement continues to be positive with good news on the reauthorization front in the US, and we continue to receive positive patient feedback. On the clinical front, we look forward to filing our Pediatric Age 2-6 Supplemental NDA with the FDA in the second quarter and potentially receiving EMEA approval in Quarter 4 of this year. Part 2 of the Daybreak Study will be released in Quarter 3, and we continue to make good progress with our Phase 3 M&A trial. With that, I'll turn the call over to Jennifer.

David P. Meeker: Patient identification remains strong and growing number of physicians, writing scripts reimbursement continues to be positive with good news on the reauthorization front in the U S and we continue to receive positive patient feedback.

David P. Meeker: On the clinical front, we look forward to filing our pediatric H two to six supplemental NDA with the FDA in the second quarter and potentially receiving EMEA approval in quarter. Four this year part two of the DAYBREAK study will read out in quarter, three and we continue to make good progress with our phase III emanate trial enrollment.

David P. Meeker: With that I'll turn the call over to Jennifer.

Jennifer Lee: Thank you, David. The consistent steady demand for emphysema we've seen in the recent quarters has continued in the first quarter of this year, and we are making ongoing progress and positive reimbursement decisions and adding breaths and deaths to our prescriber base. Beginning on slide 8, through all of our education efforts supported by our cross-functional teams, we continue to identify ACPs with already diagnosed BBS patients, as well as help to facilitate an earlier diagnosis for additional patients.

Jennifer Lee: Thank you David.

Jennifer: That concludes in steady demand for I'm afraid we've seen in the recent quarters has continued the first quarter. This year, and we are making ongoing progress and positive reimbursement decisions and adding breadth and depth to our pets.

Speaker Change: Scarborough Bay.

Jennifer: Beginning on slide eight.

Jennifer: All of our education efforts supported by our cross functional teams, we continue to identify ACP with already diagnosed bbs patients as well as help to facilitate an earlier diagnosis for additional patients.

Jennifer Lee: This provides us with the opportunity to educate ACPs about the benefits of MCIVRI as the first and only precision medicine to target the impairment in the MC4 pathway, the root cause of hyperphagia, and early-onset obesity in BBS patients.

Jennifer: Provides us the opportunity to educate ATP about the benefits have been at the firm.

Jennifer: And only precision medicine to target the impairment on the MTA for a pathway the root cause of hyperphagia early onset obesity and Bbs patients.

Jennifer Lee: During the quarter, we received approximately 100 new prescriptions for MSIFRI to treat patients with BBS here in the United States, in addition to gaining approximately 70 approvals for reimbursement. These top-level metrics reinforce the confidence we have in the BBS opportunity over the long term, as well as our team's ability to execute to pull through the opportunity. On slide nine.

Jennifer: During the quarter, we received approximately 100, new prescriptions farms Geoffrey to treat patients with Bbs here in the United States.

Jennifer: This is Danny approximately 70 approvals for reimbursement base.

Jennifer: These top level metrics reinforce the confidence we have in the DBS opportunity over the long term as well as our team's ability to execute to pull through of the opportunity.

Jennifer: On slide nine.

Jennifer Lee: We're pleased to report continued consistent growth with prescribers. We now have more than 425 prescribers for BBS launched to date, and the breakdown by specialty remains consistent.

Jennifer: We're pleased to report continued consistent growth with prescribers, we now have more than 425 prescribers for Bbs.

Jennifer: Right.

Jennifer: The breakdown by specialty remains consistent adult and pediatric endocrinologists accounted for 45% of prescribers to date.

Jennifer Lee: Adult and pediatric endocrinologists account for 45% of prescribers launched to date, consistent with launch date metrics reported in the last few quarters. Additionally, more physicians are seeing the potential benefit of Mastiff spray and prescribing it for the first time. Among these physicians, we are also seeing consistency with new to Rhythm prescribers or physicians or territory managers we had not called on prior to the prescription being received. We are pleased to see the source of growth continue as we find new prescribers through our non-personal promotion efforts to supplement our field team efforts.

Jennifer: With large state metrics you plug it in the last few quarters.

Jennifer: More physicians are seeing the potential benefit mek.

Jennifer: And prescribing for the first time.

Jennifer: These physicians we are also seeing consistency with new two rhythm prescribers or physicians, our territory managers have not called on prior to the prescription being received well.

Jennifer: We're pleased to see the source of growth continue absolutely find new prescribers through our non personal promotion efforts to supplement our field team FX.

Jennifer Lee: In addition, more physicians are becoming repeat prescribers of msivri, writing new prescriptions for their second and subsequent patients with BBS. Launched to date, more than 30% of prescribing physicians have written two or more NCBRI prescriptions for BBS. We hear stories of patients and the benefits they receive from the weight loss, such as an increased level of confidence and ability to participate more in various physical activities.

Jennifer: In addition, more than physicians are becoming repeat prescriber seven separate writing new prescriptions for the second and subsequent patients with Bbs.

Jennifer: To date more than 30% of prescribing physicians have written two or more and February prescriptions for Bbs.

Jennifer: We hear stories of patients and the benefits they receive from the weight loss such as well Chris.

Jennifer: This level of confidence and ability to participate more in various physical activity.

Jennifer Lee: We also hear about the improvements in their ability to focus on other areas in their lives, including developing relationships and friendships, now that the preoccupation with food has been lifted. As a team, we are inspired by these stories from patients, families, and their ACPs. Next slide.

Jennifer: We also hear about the improvements in their ability to focus on other areas in their lives, including developing relationships and friendships now that the preoccupation with David has been lifted.

Jennifer: As a team we are inspired by the story for patients families and their HCP next slide.

Jennifer Lee: Overall, we remain quite pleased with what we have been able to achieve with access and reimbursement for MCIV rates. The pair mix for BBS remains consistent with what we reported last quarter, with approximately 90% of prescriptions since launch falling under a commercial or Medicaid plan. We continue to see incremental improvements by securing an MCV-specific policy with additional state Medicaid programs. Overall, we have either a positive Medicaid reimbursement policy in place, or we have gained reimbursement even without an emissivity-specific policy in the vast majority of states, representing more than 85% of Medicaid-covered lives.

Jennifer: Overall, we remain quite pleased with what we have been able to achieve with access and reimbursement for them separate.

The payer mix for Bbs remains consistent with what we reported last quarter with approximately 90% of prescriptions since launch following under a commercial or Medicaid plan.

Jennifer: We continue to see incremental improvements by securing and then zavery.

Jennifer: Policy with additional state Medicaid programs.

Jennifer: Overall, we have either a positive Medicaid reimbursement policy in place or we have gained reimbursement even without an EMS Jeffrey specific policy and the vast majority of states representing more than 85% of Medicaid covered lives.

Jennifer Lee: With reauthorizations, we continue to see strong success. As of the end of the quarter, we have received more than 140 positive reauthorization decisions for patients to continue treatment. During the first quarter, we did see 11 denials for reauthorization, but four of these have already been approved through appeal, and we are working through the remainder to maintain coverage for patients. Our BRIDGE program is in place to ensure patients maintain therapy at times when they may have lost coverage for reimbursement. Patients may be on bridge because they have either lost insurance coverage, had a change in insurance coverage, or are engaged in the appeals process for reauthorization for therapy.

Jennifer: With reauthorization, we continue to see strong success.

Jennifer: As of the end of the quarter, we have received more than 140 positive reauthorization decisions for patients to continue therapy.

Jennifer: In the first quarter, we did see 11 denials for reauthorization before these have already been approved to appeal and we are working through the remainder to maintain capex for patients.

Jennifer: Our bridge program is in place to ensure patients maintain therapy at times when they may have lost coverage for reimbursement.

Jennifer: <unk>, maybe on bridge, because they have either lost insurance coverage.

Jennifer: Change in insurance coverage or they were engaged in the appeals process for reauthorization for therapy.

Jennifer Lee: As often happens in Q1, patients may experience changes in insurance providers that impact reimbursement at the start of a new calendar year. In Q1, we saw an increase in the number of patients on MCIVRI entering a bridge program due to changes in insurance providers. Such changes are similar to any new prescription that comes in, as our teams work through the authorization process to regain commercial coverage for these patients. Some of these patients have already secured new coverage and exited BRIDGE, and we are working with the remainder to regain reimbursement. We are very happy with our success in converting the vast majority of BRIDGE patients back to commercial patients.

Jennifer: As often happens in Q1 patients may experience changes in insurance providers that impact reimbursement at the start of the new calendar year.

Jennifer: Q1, we saw an increase in the number of patients unimpeded re entering our bridge program due to changes in insurance provider such changes are similar to any new prescription that comes in as our teams work through the authorization process to regain commercial coverage for these patients.

Jennifer: Some of these patients have already secured new pepperidge and exited bridge and we are working with the remainder to regain reimbursement. We are very happy with our success in converting the vast majority of bridge patients back as commercial patients.

Jennifer Lee: Overall, as we come up on two years since approval of MCIVRI for BBS in June, we are quite pleased with our progress to date and remain fully confident that we will continue to see steady growth. We have ongoing focused efforts to drive patient identification and increase both the breadth and depth of our prescribing physicians. With that, I will hand it over to Yann.

Jennifer: Overall as we come up on two years since approval of <unk> for Bvs in June we are quite pleased with our progress to date and we remain fully confident that we will continue to see steady growth. We have ongoing focused efforts to drive patient identification and increase both the breadth and depth of prescribing physicians.

Yard: With that let me hand, it over to yard.

Yann Mazabraud: Thank you, Jennifer. I will start on slide 12. In the international region, we are seeing steady revenue growth as we continue to advance country by country within Syria. It is now available for POMC, LIPAR, and BBS in 14 countries, including the United States and Canada. We began laying the foundation with BioLelit, POMC, and LIPAR, and now we are advancing into BBS in close collaboration with the key centers of excellence and experts in the region.

Yard: Thank you Jennifer.

Yard: From slide 12.

Yard: Is international region, we are seeing steady revenue growth as we continue to have Vince country by country within CRE.

Yard: We are available for CV and DBS in 14 countries, including the United States and Canada, We began.

Yard: Condition, mainly considered eval and know we are advancing into evs in close collaboration with the keys until those excellence and experience in the region.

Yann Mazabraud: In Spain, where we completed price negotiation earlier this year, we are seeing the first patients come on commercial therapy as we navigate access state-by-state. In Italy, we anticipate that the first reimbursed patients will come on therapy in the coming weeks. In Turkey, we have a series of medicines, which we have not talked about much, available through named patient centers. And we are seeing patients come online there too. This is a typical approach for rare diseases in Turkey rather than in the United States.

Yard: In Spain, we completed pricing negotiation earlier this year, we are seeing the first patients come onto commercial therapy.

Yard: <unk> state by state.

Yard: In Italy, we anticipate that the first reimbursed patients will come on therapy in coming weeks.

Yard: Turkey.

Yard: Which we have not talked about much series available who named patient sales and we are seeing patients come on line.

Yard: This is a typical approach for rare diseases rooted in Turkey, and we have a very experienced team on the ground, where we are making significant progress.

Yann Mazabraud: And we have a very experienced team on the ground where we are making significant progress. Launches in this country build steadily over time, and we are pleased with our current pace. We will begin to see an increasing contribution to our net sales from these new launch countries in 2025. And we look forward to completing pricing negotiations in Belgium, the Netherlands, and the United Kingdom, and launching in those countries later this year.

Yard: Non citizens is completely built steadily over time and we are pleased with our communities. We will begin to see an increasing contribution to our net sales from these new launch countries in <unk>.

Yard: <unk> 25.

Yard: And we look forward to completing pricing negotiation in Belgium, and the Netherlands, and the United Kingdom launching into those countries later this year.

Yard: Next slide.

Yann Mazabraud: Next slide. In France and Germany, where we are generating more than 50% of the revenues for the international region, we are expanding the field teams to meet operational needs that come with increased demand and the decentralization of care. In France, we now have a number of patients with hypothalamic obesity on commercial drugs through the pre-EMER Forward Paid Early Access Program.

Yard: In France, and Germany, where we are generating more than 50% of the revenues for the international region.

Yard: Extending the <unk> teams to meet operational needs that come with increased demand and the decided this authorization of the queue.

Yard: In France, we now have a number of patients we think puts on an equal basis you on commercial drugs schools are pre EMEA approval paid early access program.

Yann Mazabraud: As we experienced with POMC and LIPA when we first gained early access in 2022 and then with DBS, we know these programs start slow and build gradually. Now we are seeing that steady, gradual build with hypothalamic obesity, which formally got underway late last year. And for POMSILIPA and DBS, we anticipate completing pricing negotiations by the end of this year. In Germany, our launch is progressing well, as expected. Our team remains focused and engaging with physicians, caring for patients, and with the many centers where they are treated.

Yard: As we experienced with potency and rebound when we first gain early access in 2022, and then DBS. We know these programs start slow in this gradually.

Yard: We are seeing Thats TV gradually built with hypothalamic obesity, which formerly good underway late last year.

Yard: Sure.

Yard: And for Polysilicon Bvs, we anticipate completing pricing negotiation by the end of this year.

Yard: In Germany, our launches program.

Yard: As expected our team remains focused and engaging with physicians caring for patients and we submitted <unk>, whereas they are treated in the first Bbs treatment guidelines were published very recently in a major medical journal.

Yann Mazabraud: And the first BBS treatment guidelines were published very recently in a major German medical journal. 17 clinicians from 13 treatment centers collaborated on this effort, led by the University Hospital in Essen. This guideline discusses, in detail, diagnosis, patient management, and treatment with cetal analytics.

Yard: 17 conditions 15 treatments and do collaborate on this effort led by his or her University hospital.

Yard: These guidelines discuss in detail diagnoses.

Yard: Management and treatment with <unk>.

Yann Mazabraud: We are expanding the number of treatment centers and large hospitals we are engaging with. Now that we are almost one year into the launch, we have received prescriptions for 15 treatment centers, which are all within large and very well-structured and resourced university hospitals. In addition, our German patient support program, Rhythm at Home, is performing very well too. We provide tailored support for each patient and their caregivers, and since December last year, pre-filled syringes have been available for both the BBS and POMC Lippard patients. And now I return the call to Hunter.

Yard: Spending is in the middle of treatments until now let's be totally we are engaging leaves no that we are almost one year into the launch we have received prescriptions for 15 treatments and bills, which are all with.

Yard: With the launch and any way to structure and resource University hospitals.

Yard: In addition, our German <unk> patient support program reason with whom.

Yard: Performing diluent.

Yard: We provide talos support for each patient and discount your bill and since December last year Prefilled syringes.

Yard: Available for both the Bds and consider competitions.

Yard: I will turn the call over to Hunter.

Hunter C. Smith: Thank you, y'all. Turning to slide 15, as announced last month, Rhythm raised $150 million in gross cash proceeds through the issuance of convertible preferred shares. We are very pleased by the strong show of support from Perceptive Advisors and their Discovery Fund, as well as by the support of another well-known life sciences investor who was and continues to be a top Rhythm shareholder. The preferred shares can be converted into common stock at a price of $48 per share, which represented a 19% premium to the 10 day average trailing volume weighted price at the time of issue.

Hunter C. Smith: Thank you.

Hunter C. Smith: The preferred shares are perpetual, but Rhythm can require conversion if the price of our common stock exceeds 250% of the implied conversion price of $48 for 20 trading days in the 30 trading day period, or it can redeem the preferred shares after the fifth anniversary of the closing date. In addition to the conversion features, Rhythm is also obligated to pay a 6% coupon in cash or in kind, but that coupon does not begin accruing until the second anniversary of the closing date.

Hunter C. Smith: Turning to slide 15, as announced last month rhythm raised $150 million in gross cash proceeds through the issuance of convertible preferred shares.

Hunter C. Smith: We're very pleased by the strong show of support from Perceptive advisors and their discovery fund as well as by the support of an additional well known life Sciences, Investor who was and continues to be a top rhythm shareholder.

Hunter C. Smith: The preferred shares can be convertible into common stock at a price of $48 per share, which represented a 19% premium to the 10 day average trailing volume weighted price at the time of issuance. The preferred shares are perpetual, but rhythm can require conversion if the price of our common stock exceeds 250% of the I'm glad conversion price of $48.

Hunter C. Smith: For 'twenty 'twenty.

<unk> 20 trading days of the 30 trading day period.

Hunter C. Smith: And can redeem the preferred shares after the fifth anniversary of the closing date.

Hunter C. Smith: And to the conversion features rhythm is also obligated to pay a 6% coupon and cash were inclined but that coupon does not begin accruing until the second anniversary of the closing date.

Hunter C. Smith: The result of this financing is that we now have sufficient cash to fund all planned activities well into 2026, potentially beyond multiple value-creating milestones, including the top-line data readout from our Phase III trial on hypothalamic obesity, currently planned for the first half of 2025. Please turn to slide 16 for a snapshot of Q1 P&L. We recorded $26 million in net product revenue in the first quarter versus $11.5 million during the same quarter last year.

Hunter C. Smith: The result of this financing is that we now have sufficient cash to fund all planned activities well into 2026 potentially beyond multiple value, creating milestones, including the topline data readout from our phase III trial with hypothalamic obesity currently planned for the first half of 2025.

Hunter C. Smith: Please turn to slide 16 for a snapshot Q1 P&L.

Hunter C. Smith: We recorded 26 million in net product revenue in the first quarter versus $11 5 million during the same quarter last year sequentially quarter over quarter, we saw an increase of $1 8 million or 7% in net product revenue driven primarily by continued growth in the number of reimbursed patients on <unk> therapy in both our international region in the U S.

Hunter C. Smith: sequentially, quarter over quarter, we saw an increase of $1.8 million or 7% in net product revenue driven primarily by continued growth in the number of reimbursed patients on MCIV re-therapy in both our international region and in the U.S. Gross to net sales decreased slightly quarter over quarter. Gross to net for US sales decreased slightly quarter over quarter from 84% to 84% from 85% in the fourth quarter.

Hunter C. Smith: Gross to net sales decreased slightly quarter over quarter gross to net for U S sales decreased slightly quarter over quarter from 84% to 84% from 85% in the fourth quarter.

Hunter C. Smith: Cost of sales during the first quarter was $2.8 million, or approximately 10.8% of net product revenue, representing a 2.5% decrease as compared to the fourth quarter of 2023. The primary driver of COGS was the 5% royalty to Ipsen under our original licensing agreement for Set! Melanotide, as well as product costs. The latter component was flat in dollar terms quarter over quarter, resulting in the improved percentage margin on higher overall revenue.

Hunter C. Smith: Cost of sales during the first quarter was $2 8 million or approximately 10, 8% of net product revenue, representing a two 5% decrease as compared to the fourth quarter of 2023.

Hunter C. Smith: The primary driver of Cogs was the 5% royalty to Epsilon under our original licensing agreement for certain Atlanta, Todd as well as product costs. The latter component was flat in dollar terms quarter over quarter, resulting in the improved percentage margin on higher overall revenue.

Hunter C. Smith: R&D expenses were $128.7 million for the first quarter of 2024, as compared to $37.9 million during Q123. This increase was primarily due to the consideration for our in-licensing of LB54640, the impact of which I will review on the next slide. SG&A expenses were $34.4 million for the first quarter of 2024 versus $24.6 million for the first quarter of 2023 and a 6.1% increase on a sequential quarterly basis. For the first quarter, weighted average common shares were 60.1 million, an increase of approximately 900,000 shares versus December 31st.

Hunter C. Smith: R&D expenses were $128 7 million for the first quarter of 2024 as compared to $37 9 million. During Q1 'twenty. Three this increase was primarily due to the consideration for our in licensing of <unk> 540, 640, the impact of which I work for you on the next slide.

Hunter C. Smith: SG&A expenses were $34 4 million for the first quarter of 2024 versus $24 6 million for the first quarter of 2023 and six <unk>.

Hunter C. Smith: Six 1% increase on a sequential quarterly basis.

Hunter C. Smith: For the first quarter weighted average common shares were $60 1 million an increase of approximately 900000 shares versus December 31.

Hunter C. Smith: Included in this amount was approximately 432,000 shares issued to LG Chem as partial consideration for the in-licensing of LP54640. Quarterly net loss per share was $2.35 versus $0.92 in Q1'23. Now on to slide 17. Rhythm reported $201 million of cash and cash equivalents as of March 31, 2024. This does not include any of the $150 million in proceeds from the convertible preferred stock that we issued in April.

Hunter C. Smith: Included in this amount was approximately 432000 shares issued to LG Chem as partial consideration for the in licensing of <unk> 540 640.

Hunter C. Smith: Quarterly net loss per share was $2 35 versus 92 seven for Q1 'twenty three.

Hunter C. Smith: Now on to slide 17.

Hunter C. Smith: Rhythm reported $201 million of cash and cash equivalents as of March 31, 2024. This does not include any of the $150 million in proceeds from the convertible preferred stock that we issued in April.

Hunter C. Smith: On a pro forma basis, cash and cash equivalents would have been approximately $350 million. On the net revenue for this quarter of $26 million, 74% of those revenues were generated in the United States. U.S. revenue of $19.4 million represented growth of $1.1 million, or 6% versus Q4. The proportion of revenue generated by our international region increased from 24% to 26% quarter over quarter. This increase primarily reflects the ongoing contribution from the BBS launch in Germany, as well as our two early access programs in France, including the AP1 program for hypothalamic obesity.

Hunter C. Smith: Pro forma basis cash and cash equivalents would've been approximately $350 billion.

Hunter C. Smith: On the net.

Hunter C. Smith: For this quarter of 26 million, 74% of those revenues were generated in the United States U S revenue of $19 4 million represented growth of $1 1 million or 6% versus Q4.

Hunter C. Smith: The proportion of revenue generated by our international region increased from 24% to 26% quarter over quarter.

Hunter C. Smith: This increase primarily reflects the ongoing contribution from our Bbs launch in Germany as well as our two early access programs in France, including VIP, One program for hypothalamic obesity.

Hunter C. Smith: The portfolio of markets contributing revenue has also continued to grow. Revenue from these other countries is small today, but we expect it will grow into a significant contribution over time. First quarter operating expenses included total shock-based compensation of $7.8 million for the quarter, as compared to $6.4 million for Q1 2023. To review the LB 54640 impact on the quarter, just to remind you, as a reminder, we committed $100 million of fixed consideration to LG Chem for the global right. In January, we paid $40 million in cash and issued LGC more than 430,000 shares of Rhythm stock valued at $18.7 million at the time of closing.

Hunter C. Smith: Our portfolio of markets contributing revenue also continued to grow revenue from these other countries are small today, but we expect it will grow into a significant contribution over time.

Hunter C. Smith: We also committed to pay $40 million, 18 months from January. Q1's R&D expenses included $92.4 million comprised of the cash payment, the equity issuance, and the present value of the last payment of $40 million. The present value adjustment of $6.3 million to that payment relates solely to a modeling of time value as required by U.S. GAAP and will be recognized as non-cash interest expense over the 18-month period. For those of you modeling at home, that means you can expect $1 million of non-cash interest expense per quarter between Q2-24 and Q3-25 related to this appreciation. We are reiterating our OPEX guidance of approximately $250 to $270 million in non-GAAP OPEX, comprised of SG&A non-GAAP operating expense of $105 to $110 million, and R&D non-GAAP operating expense of $145 to $160 million.

Hunter C. Smith: First quarter operating expenses include a total stock based compensation of $7 8 million for the quarter as compared to $6 4 million for Q1 'twenty three.

Hunter C. Smith: Okay.

Hunter C. Smith: To review the <unk> impact on the quarter just to remind as a reminder, we committed $100 million of fixed consideration to LG Chem for the global rights.

Hunter C. Smith: In January we paid $40 million in cash and issued <unk> see more than 430000 shares of rhythm stock valued at $18 7 million at the time of closing.

Hunter C. Smith: We also committed to pay 40 million $18 18 months from January Q.

Hunter C. Smith: Q1, R&D expenses include the $92 4 million comprised of the cash payment the equity issuance and the present value of the last payment of $40 million.

Hunter C. Smith: The present value adjustment of $6 3 million to that payment relates solely to our modeling a time value as required by U S. GAAP. It will be recognized as noncash interest expense over the 18 months period.

Hunter C. Smith: For those of you modeling at home that means you can expect 1 million of noncash interest expense per quarter between Q2 dollars 24 in Q3 25 relates to the accretion.

Hunter C. Smith: We are reiterating our opex guidance of approximately $250 million to $270 million and non-GAAP Opex comprised of SG&A non-GAAP operating expense of $105 million to $110 million in R&D non-GAAP operating expense of $145 million to $160 million. This includes $10 million to $15 million of development costs.

Hunter C. Smith: Related to <unk> 540 640.

With that I'll turn the call back over to David.

Hunter C. Smith: This includes $10 to $15 million in development costs related to LB54640. With that, I'll turn the call back over to David. Thank you, Hunter. So if you look back over the 16-year history of Rhythm, I think it's fair to say we've never been better.

David: Thank you Hunter.

David: So if you look back over the 16 year history of rhythm I think it's fair to say, we've never been better positioned.

David P. Meeker: And our approved indication for CIVRI is establishing itself as a standard of care, and we have all the necessary elements required to develop a sustainable, profitable rare disease business. We are executing on the biggest opportunity, which is an HO, with all signs suggesting our original excitement was justified. And we are well-funded to do what we need to do to get to those value inflections. And with that, we'll now open it up for Q&A.

David: And our approved indication and sebree is establishing itself as a standard of care and we have all the necessary elements required to develop a sustainable profitable rare disease business.

David: We are executing on the biggest opportunity, which is an H O with all signs, suggesting our original excitement was justified and we are well funded to do what we need to do to get to those value inflicting points and with that we'll now open it up for Q&A.

David P. Meeker: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced.

Speaker Change: Alright. Thank you at this time, we will conduct a question and answer session.

Operator: To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Derek Archila of Wells Fargo. Your line is now open.

Speaker Change: As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: These standby, while we compile the Q&A roster.

Speaker Change: Our first question comes from the line of Derrick our children with Wells Fargo. Your line is now open.

Derek Christian Archila: Hey, good morning, and thanks for taking the questions, just two from us. So I guess through some of our KOL checks, you know, we've heard some emerging clusters of BARDA beetle patients treated in the U.S. with, you know, Native American and Hispanic, you know, kind of heritage. So just wanted to kind of understand if that's accurate and if you could kind of shed some light on those clusters. And then, secondly, just, you know, I wanted to understand the gating factors for the 54-640s trial and get it up and running. And I guess how many of the experience sites from your NCIVRI experience will be incorporated there? Thanks. Yeah, Jeff. Where do you want to take me now?

Derrick: Hey, good morning, and thanks for taking the questions just two from US. So I guess there is some of our Kols checks, we've heard some emerging clusters of BARDA beetle patients treated in the U S.

Derrick: With native American and Hispanic Heritage. So I just wanted to kind of understand.

Derrick: If thats accurate and if you could kind of shed some light on those clusters and then secondly, just wanted to understand the gating factors for 54, 640, <unk> trial, and getting it up and running and I guess, how many of the experienced sites Rob Youre in sebree experience will be incorporated there. Thanks.

Derrick: Yes.

Speaker Change: For anyone to take that.

Speaker Change: Okay.

David P. Meeker: To your first question, just regarding clusters, I think, similar to other rare diseases, there can be sort of pockets of patient populations. It's based on, you know, how the different folks start to populate, and the genetics start to have potentially a different frequency impact based on their population style. So, we have seen, you know, in certain areas, the Native American population as well as Hispanic populations having a higher BBS prevalence in certain areas.

Speaker Change: To your first question just regarding clusters, I think similar to other rare diseases, there can be sort of pockets of patient populations just based off of.

Speaker Change: How are the difference.

Speaker Change: You know start to populate.

Speaker Change: Sorry to have potentially a different frequency impact based off of that there.

Speaker Change: Ladies and styles. So we have seen.

Speaker Change: You know in certain areas.

Speaker Change: And as well as Hispanic populations, having a higher Bbs prevalence and <unk>.

Speaker Change: Certain areas.

David P. Meeker: And Derek, on the HO side, so we're still adding sites there. I think we anticipate having between probably 10 to 12 sites to run that HO small molecule trial. The vast majority of these are actually new sites.

Speaker Change: And.

Speaker Change: Eric on the HR side, so we're still adding sites. There I think we anticipate having between probably 10 to 12 sites to run that small.

Speaker Change: Mchugh will trial the vast majority of these are actually new sites.

David P. Meeker: We have, we'll have a couple of those centers will be centers that were part of our original trial, but we're running two trials at the same time, essentially with our weekly injectable. So, we're looking for sites for that for part C, where it will enroll HO patients and then, of course, for the small molecule. So, but the small molecule itself will have about 12 sites, the vast majority of which are new to the program.

Eric: We'll have a couple of those centers will be centers that were part of our original trial, but we're running two two trials at the same time essentially with a weekly injectable. So we're looking for sites for that for the part C.

Eric: Rich will enroll <unk> patients and then of course for the small molecule. So but the small molecule itself will have about 12 sites. The vast majority of which are new to the program.

David P. Meeker: Got it. And just one follow-up question, if I may, just to make sure I heard you right in terms of the cadence of the readout. So obviously, you know, phase three HO in first half 25.

Speaker Change: Got it and just one follow up if I may just I want to make sure I heard you right in terms of the cadence of the readout. So obviously phase III in first half 'twenty five but I believe you guys said that.

Speaker Change: Seven one data as well as the oral data. It could also be first half 'twenty five for those patients who are the HL cohort at least for 718.

David P. Meeker: But I believe you guys said that, you know, 718 data as well as the oral data could also be first half 25 for those HO patients or the HO cohort, at least for 718. Exactly. That's the expectation. And you know, once we get these trials up and running, as always, sometimes the biggest variable is the initiation. But so far, we look good.

Speaker Change: Exactly that's the expectation once once we get these trials up and running as always and so sometimes the biggest variable is the initiation, but so far we look good and that's my expectation that we will read those out in the first half.

David P. Meeker: And that's my expectation. We will read those out in the first half. Got it. Thanks so much.

Speaker Change: Got it thanks, so much.

David P. Meeker: Thank you. One moment for our next question. The next question comes from the line of Jeff Hung of Morgan Stanley. Please go ahead.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of Jeff Hung of Morgan Stanley. Please go ahead.

Jeff Hung: Thanks for taking my questions. Last quarter, you indicated 30 patients came off SIVRI because of one state. Any updates on how many of those patients have had consults for proper documentation and how many are back on commercial drugs? And then I have a follow-up.

Jeff Hung: Thanks for taking my questions.

Jeff Hung: Last quarter, you indicated 30 patients came off in February because the one state any updates on how many of those patients have had console for proper documentation and how many are back on commercial drive and then I have a follow up.

David P. Meeker: Yeah, no, what we've tried to emphasize there is, so, again, these patients are still going through that evaluation. What we've encouraged people to do is to take those 30 patients out. I do think we'll get some back.

Jeff Hung: Yes.

Jeff Hung: We've tried to emphasize there is so again these patients are still going through that evaluation.

Jeff Hung: What we encourage people to do is to take those 30 patients out I do think we'll get some back.

David P. Meeker: They are still going through, but we're not going to update you sort of, you know, patient by patient in terms of that overall process. It's been quite laborious, to be honest with you. I mean, getting these additional consults is not easy. The stringency of what's required is high, which is why, like I said in my comments, I don't expect us to get all 30. And maybe a significant number of those may not be able to reach the thresholds that the requirements that this state has put in place specifically. So, that state is covering it.

Speaker Change: They are still going through but we're not going to update sort of.

Speaker Change: Patient by patient in terms of that overall process, it's been quite laborious to be honest with you I mean, it's.

Speaker Change: Getting these additional console is not easy the.

Speaker Change: The stringency of what's required is high which is why like I said in my comments I don't expect us to get all 30%, maybe a significant number of those may not be able to reach the thresholds.

Speaker Change: Our requirements at this state has put in place specifically so.

David P. Meeker: It's covered patients since we took, you know, these 30 patients off. But, again, we're not going to break out more specific details on those 30.

Speaker Change: That state is covering its covered patients thats covered patient since we took.

Speaker Change: These 30 patients off but again, we're not going to break out more specific details on those 30 patients.

David P. Meeker: Okay, thanks. And you guys talked about the bridge program and how some of the patients exited that program in one go. Typically, how many patients enter the bridge program in a given quarter? And then what is the average time that they remain in that program?

Speaker Change: Hey, Thanks, and you guys talked about the bridge program and then how some of the patients exited that program in <unk> typically how many patients enter the bridge program in a given quarter and then what is the average time that they remain in that program. Thank you.

David P. Meeker: Thank you. I don't know if there are any other questions. Okay. So, you know, I would say that in terms of the bridge program, that number is variable. Also, just based on the circumstances of each of these different patients, you know, and as I outlined, it could be, you know, they change jobs, they change insurance, and hence, we have to almost go through the authorization process from the start with this new payer.

Speaker Change: And I'm sorry.

Speaker Change: So.

Speaker Change: I would say that in terms of the best program that number is variable and also just based off what the circumstances of each of these different patients.

Speaker Change: And as I outlined it could be.

Speaker Change: They change insurance and hence we have done let's go through the day.

Speaker Change: Authorization process from the start with this new pack so that number varies over time.

David P. Meeker: So that number varies over time, and I would say that in terms of time to transition them off of bridge, that also is variable based on the reason, but I would say that it's consistent and similar to the time in terms of even getting the authorization or the initial prior authorization in place for patients.

Speaker Change: And I would say that in terms of time to transition them off of a bridge that also is variable based off of their reason.

Speaker Change: But I would say that it's consistent and similar to the time in terms of even get A&D authorization or the initial path of recession placed per patient.

David P. Meeker: Yeah, and to build on that, Jeff, I think what Jennifer said is a good way of thinking about it. You know, if it takes on average four to six weeks for these patients to get through their initial authorization, that'd be a good way to think about it. And as she highlighted, the bridge program, and this has been our historical experience with some of the other rare diseases we've worked on, tends to be very successful. Over 90% of the patients, if you exclude the 30 patients who came out of that one state and went on to the bridge program, but everybody else with that exception.

Speaker Change: To build on that Jeff I think what Jennifer said, it's a good way of thinking about it if it takes on average four to six weeks for these patients to get through their initial authorization that'd be a good way to think about it and as she highlighted the bridge program and this has been our historical experience somewhat other rare diseases. We've worked on.

Speaker Change: Tends to be very successful on over 90% of the patients. If you exclude the 30 patients who came out of that one state and went onto.

Speaker Change: The bridge program, but everybody else without exception.

David P. Meeker: You know, about 90% plus of those patients have been able to convert back to, or find insurance and coverage in some way. So it's been a very successful program.

Speaker Change: About 90% plus of those patients have been able to convert back to.

Speaker Change: <unk> insurance coverage in some way so again, it's been a very successful program.

David P. Meeker: Thank you. Thank you. One moment for our next question. The next question comes from the line of Dae Gun Hall of Stiefel. Your line is now open. Hey, good morning, guys.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Next.

Speaker Change: <unk> comes from the line of Dae Gon Ha of Stifel. Your line is now open.

Dae Gon Ha: Thanks for taking our questions. And congrats on the progress. Maybe I'll stick with two commercials, one on reimbursement and, I guess, reauthorization for Jennifer. I think you provided two statistics I wanted to hone in on the more than 140 reauthorizations and the 11 that were denied. Can you give us the denominator of that reauthorization number? And if so, I guess maybe Yann, if you could comment on what's been so beneficial in sort of the French and German launches that perhaps you can implement on the US side to make it a little bit more sticky and compliant?

Speaker Change: Hey, good morning, guys. Thanks for taking our questions and congrats on the progress maybe I'll stick with two commercial one on the reimbursement or I guess reauthorization for Jennifer.

Speaker Change: I think you provided two statistics I wanted to hone in on the more than 140, reauthorization and 11 that Werent denials.

Speaker Change: Well I guess denied can you give us the denominator of that reauthorization number and for those 11, specifically like how workable is it to get them back on therapy or is it kind of.

Speaker Change: Last in terms of going forward for modeling purposes, and then going over to international Hunter. If you can clarify did you mentioned, 26% of this quarter's revenues are comprised of the international sales and if so I guess, maybe on if you can comment on what's been so beneficial on sort of.

Speaker Change: The France, and German launches that perhaps you can implement on the U S side to make it a little bit more sticky and compliant.

David P. Meeker: So David, let me just clarify. So in your first question on the reauthorizations, so as Jennifer said, you know, more than 140 have had approvals, 11 have had denials, of which she's worked through, so that's about 150, 151 to be exact, but I don't know, was there an additional question behind that? Well, let me just speak to the 11 denials. So one, I'll say that, you know, in terms of the reauthorizations, we've been very, very successful just overall, just in terms of being able to get approvals. The 11 within the quarter, let me just break this down.

Speaker Change: So David let me just clarify so on your first question on the.

Speaker Change: The reauthorization, so it's 10% or more than 140 <unk> had approval 11 have had.

Speaker Change: Denials of which she has worked through so thats in about $150 51 to be exact.

Speaker Change: But I don't know if it was there additional question behind that but let me just speak to the 11 denials.

Speaker Change: So one I'll say that in terms of the reauthorization, we've been very very successful gesture for all just in terms of being able to get.

Speaker Change: Our protocols.

David P. Meeker: I would say it's sort of similar to the number that we had outlined, which was less than last quarter. But they can actually get a denial for a couple of different reasons. One possibility is that they may simply be missing some information, and we just need to go back to the physician to provide this additional information. That's an opportunity just in terms of going from a denial to gaining reimbursement back for the patient. Some of it could be because they may not be getting the exact 5% in terms of weight loss, so reauthorization can happen at less than the 1 year time point.

Speaker Change: The 11 within the quarter, let me just break this down I would say, it's sort of similar to the number that we had out languages less last quarter.

Speaker Change: But.

Speaker Change: They can actually get it done now for a couple of different reasons.

Speaker Change: One it may be that they may simply be missing some information and we just need to go back to the physician to provide this additional information that's been an opportunity just in terms of going from a denial to gaining reimbursement for the patients.

Speaker Change: Some of it could be because they may not be getting the exact 5% in terms of weight loss.

Speaker Change: The reauthorization can happen at less than the one year time point, so that may be an opportunity just in terms of follow up because these patients are definitely gaining clinical benefit hence they want to as well as our physician wants to maintain them on therapy.

David P. Meeker: So that may be an opportunity just in terms of follow-up because these patients are definitely gaining clinical benefit. Hence, they want to, as well as our physician wants to maintain them on therapy. And so I think there are various different reasons, just in terms of the 11 denials. But as I mentioned, we already have several of these 11 that have already been re-approved, and we continue to work through the remainder. And Dagan, to your question on international sales, you're correct, 26% of sales came from outside the U.S. during the quarter, and I'll let Yann talk about their experience in Germany and France as well.

Speaker Change: So I think there's various different reasons just in terms of the 11 denials, but as I mentioned, we already have.

Speaker Change: Several days 11 that have already been reapproved and we continue to work through the remainder.

Speaker Change: And Doug to your question on international.

Speaker Change: You are correct. It was 26% of sales came from outside the U S. During the quarter and I'll, let Jan talk about their experience.

Speaker Change: Germany, and France as well.

Yann Mazabraud: Yes, thank you. And thank you for the question. So I will start saying that the US region and the international region are very different from a rare disease landscape point of view. But back to your point, what do we, how do we cross-fertilize between the two regions?

Jan: Yes. Thank you and thank you for the question, so I will start seeing that too.

Jan: U S region.

Jan: Tuition erosion.

Jan: Different rare disease zones, K point of view.

Jan: But back.

Speaker Change: Back to your point, what do we.

Speaker Change: Wouldn't cross utilized between the two regions I've seen before.

Yann Mazabraud: I think there are three, four key activities that are similar for two reasons. First, because Jennifer and I have the same culture and background and good practices in terms of rare diseases. And second, because we and our teams also speak a lot.

Speaker Change: Key activities.

Speaker Change: That's all.

Speaker Change: Similar for two reasons because Denise.

Speaker Change: Same curcio and background and good practices in terms of revenues and <unk>.

Speaker Change: So going because we and our teams also speak a lot. So as those areas for my point of view, our collaboration with us until the fixed <unk>.

Yann Mazabraud: So those areas, from my point of view, are collaboration with the Centers of Excellence. You know that there are an important Center of Excellence in the U.S., more to come, more coming. And that is also the case in Europe. So how do we collaborate with them? How do we leverage their experience and translate it into the publication plan, for example?

Speaker Change: No there isn't.

Speaker Change: <unk> excellence in the U S more to come we're coming in.

Speaker Change: Also the case in Europe, So do we collaborate them how do we leverage deal.

Speaker Change: Her experience and translated into a publication plan to for example, that's one too I would say our medical marketing activities medical marketing omni channel activities.

Yann Mazabraud: That's one. Two, I would say medical marketing activities or medical marketing omnichannel activities, field and digital. We also exchange a lot about that. The third thing that I would think about is the patient identification program. In the U.S., there is a URO program.

Speaker Change: In digital we also exchanged a lot about that.

Speaker Change: So seeing that I would think about is your patient identification program.

Speaker Change: In the U S.

Yann Mazabraud: In Europe, we have the ROR program. It's a genetic testing program. And the four pillars that I'm thinking about are really patient support programs. In the U.S., we have a very comprehensive patient support program and team dedicated to all the patients. We do the same in Europe when we can, but it's not always possible from a legal point of view.

Speaker Change: Well program in Europe, we have the low program.

Speaker Change: Its existing program and therefore pit out with them seeking out is really patient support program.

Speaker Change: Yes, a very comprehensive patient support team of dedicated towards patients. We do the same in Europe, when we can but always placebo for medical point of view, but as I've said in my presentation.

Yann Mazabraud: But as I've said in my presentation, the German one, for example, is also very comprehensive, and this crucial activity for the patients and the patient veterans is also something that we speak a lot about across the two regions. Okay. Thank you very much. David. I guess, sorry for the confusion.

Speaker Change: Jim maybe one for example is also very comprehensive and rules.

Speaker Change: Is crucial activity for the patient is a patient Vincent is also something that we speak a lot about across the two regions.

Jim: Okay, great. Thank you very much David I guess, sorry for the confusion I was just wondering if there were any sort of in the pipeline for reauthorization beyond the 140, MD 11 that you disclosed today.

David P. Meeker: I was just wondering if there were any sort of in the pipeline for reauthorizations beyond the 140 and the 11 that you disclosed today. So, you know, once again, there's always going to be folks who are needing to get reauthorizations, and it depends on when they initiate therapy and when that time frame is for the reauthorization requirements, which can vary, but the majority of these are at the one-year point. So that's a continuous stream just based off of when they initiated treatment, when they got approval, and hence when they need to be re-evaluated to ensure that they're still garnering benefit from being on therapy.

Speaker Change: Yes. Thanks.

Speaker Change: Once again, there is always going to be folks who are needing to get reauthorization.

Speaker Change: It depends on when they initiate therapy and when that timeframe is for that.

Speaker Change: Rotation requirements, which can vary but the majority of these are at the one year point.

Speaker Change: So that's a continuous stream just based off of one day initiated when they got approval and then when they need to be reevaluated to ensure that they are still garnering.

Speaker Change: Benefit from being on therapy.

David P. Meeker: Thank you very much for the questions. Thank you. One moment for our next question. The next question comes from the line of Phil Nadeau of TD Cowan. Your line is now open. Good morning, congratulations on the progress, and thanks for taking our questions. Just two from us.

Speaker Change: Excellent. Thank you very much for the questions yes, yes.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Yes.

Speaker Change: Next question comes from the line of Phil Nadeau of Cowen. Your line is now open good morning.

Philip M. Nadeau: Congrats on the progress and thanks for taking our questions just two from US. So first on Q1 revenue for <unk>. This is going to be at the increase in revenue quarter over quarter seems to be at the lower end of what you would expect with 70 reimbursement approvals can you speak to those dynamics was that simply the timing of the reimbursement approvals or did some of the.

Philip M. Nadeau: First, on Q1 revenue for MCVRI, it does seem to be at the increase in revenue quarter of a quarter, but it seems to be at the lower end of what you'd expect with 70 reimbursement approvals. Can you speak to those dynamics? Was that simply the timing of the reimbursement approvals, or did some of the issues with insurance reauthorization that you discussed play into the reported revenue? Thank you, Juan. That's the first question. And then second, on Daybreak, can you remind us what you are likely to release during Q3 from that trial? Yeah, Hunter.

Philip M. Nadeau: Issues with insurance reauthorization that you've discussed play into reported revenue.

Speaker Change: Thank you on this first question and then second on DAYBREAK can you remind us what you are likely to release during Q3 from that trial.

Hunter C. Smith: So let me take the quarter over quarter growth. I think there are some puts and takes, as there always are in these elements. Last quarter, for example, we had a GTN impact of about 600,000 on sales that was favorable, which related to the release of Medicaid accruals based on actual invoices received. So that sort of sets the quarter down a little bit or adjusted the quarter over quarter growth a little bit.

Speaker Change: Yes, So let me let me take the quarter over quarter growth I think there are some puts and takes as there always are in these elements.

Speaker Change: Last quarter for example, we had a.

Speaker Change: <unk> impact of about 600000 on sales that was favorable that related to the release of Medicaid accruals based on actual invoices received so that sort of sets the quarter are down a little bit.

Speaker Change: Our.

Speaker Change: Adjusted the quarter over quarter growth a little bit. The other thing is is when we talked about the single state Medicaid program. We did receive shipments early in the quarter for that program. So.

Hunter C. Smith: The other thing is, when we talked about the single-state Medicaid program, we did receive shipments early in the quarter for that program, so those patients went off therapy about the middle of October. We did receive shipments from that or did ship to that program for many patients in the first half of October. So that took some non-recurring revenue out of the quarter over quarter.

Speaker Change: Those patients went off therapy about the middle of October when we did receive shipments from that did shift to that program for many patients for the first half of October so that took some are not.

Hunter C. Smith: We did have a healthy increase in patients on therapy, and we had a healthy increase in vials dispensed, and then some of it was offset by the patients going in and out of the bridge program during the first quarter, which is, I think, something we will expect as a normal first quarter occurrence. So I hope that's helpful. That makes sense. Yeah, that helps. And on daybreak, study.

Speaker Change: Nonrecurring revenue out quarter over quarter, we did have a healthy increase in patients on therapy, and we had a healthy increase in vials dispensed.

Speaker Change: And then some of it was offset a smaller amount was offset by the patients going in and out of Britain program. During the first quarter, which is I think something will we expect is a normal first quarter occurrence.

Speaker Change: So hope that makes sense.

Speaker Change: That helps thank you.

Speaker Change: And they're filling the DAYBREAK.

Speaker Change: Study.

David P. Meeker: So I haven't seen the data yet. What to expect, I think, as I said right from the beginning, you know, this was a basket trial, a signal-seeking trial. And so, as we presented at our December R&D day, you know, we were encouraged that out of a large number of genes that we started with, there seemed to be a much smaller number, but a number of genes that were of interest. So my goal is to give you an update on those six genes specifically and tell you how they fared in the double-blinded, placebo-controlled part of this. And then provide some insight as to how we think about going forward. But I'll caveat that expectation with the bar being really high.

Speaker Change: So I haven't seen the data yet on what to expect I think.

Speaker Change: As I said right from the beginning this was a basket trial.

Speaker Change: A signal seeking trial and so as we presented in our December R&D day, we were encouraged that out of a large number of genes that we started with there seem to be a much smaller number but a number of genes that were of interest.

Speaker Change: So my goal is to give you an update on those <unk>, specifically and tell you how they fared in the double blinded placebo controlled part of this and then provide some insight as to how we think about going forward, but I will caveat that expectation with the bar is going to be really high we're not going to rush into.

David P. Meeker: We're not going to rush into another trial unless, you know, there was something that was just so incredibly compelling that it couldn't wait. One. And then two, we fully expect any additional developmental work to be done with either the small molecule or our weekly formulation because, for obvious reasons, we see that as the long-term future of this overall franchise, and any additional approvals we would look to get from those specifically. Does that help?

Speaker Change: To another trial unless.

Speaker Change: There was something that was just so incredibly compelling that it couldnt wait one and then two we fully expect any additional developmental work can be done with either the small molecule and or our weekly formulation because for obvious reasons, we see that as the long term future of this overall France.

Speaker Change: <unk> and any additional approvals, we would look to get from those specifically that helped.

David P. Meeker: That's very helpful. Thanks again for taking our questions. Thank you. Thank you. One moment for our next question. The next question comes from the line of Corinne Johnson of Goldman Sachs. Your line is now open.

Speaker Change: That's very helpful. Thanks, again for taking our questions.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Okay.

Speaker Change: Our next question come from the line of chlorine Johnson with Goldman Sachs. Your line is now open.

Corinne Jenkins: Good morning, guys. Thanks for the color on all the discontinuation drivers. I guess, can you also help us understand when during the course of treatment patients are most likely to discontinue? And how do you think which of these factors maybe have read through to it, like the HO opportunity versus which ones might be more EBS specific? Yeah, let me start off, and Yann or Jennifer can add anything.

Chlorine Johnson: Good morning, guys. Thanks.

Chlorine Johnson: Thanks for the color on all the discontinuation drivers I guess can you also have to understand what happened during the course of treatment patients are most likely to just continue and how you think about which of these factors and maybe have read through like the HL opportunity versus which ones might be more UBS specific.

Speaker Change: Yes, let me start off in the 100, Jennifer can add anything.

David P. Meeker: So I think the majority, or not majority, but a significant percentage of these do occur early on. And again, that's, in fact, part of the goal of providing the level of color that we did today is just to remind people that, you know, we're not providing therapy to a population that only has one illness or, you know, challenge that they're facing. I mean, these, you know, Bardet-Beal syndrome, a syndrome by definition.

Speaker Change: So I.

Speaker Change: I think the.

Chlorine Johnson: Okay.

Speaker Change: The majority not the majority, but a significant percentage of these do occur early on and again thats.

Chlorine Johnson: And in fact part of the goal of providing the level of color that we did today is just to remind people that we're not providing a therapy to a population that only has one.

Chlorine Johnson: Illness.

Chlorine Johnson: <unk> that they are facing I mean, Brian <unk> syndrome syndrome by definition, so they have many challenges.

David P. Meeker: So they have many challenges. For example, in the U.S., there's a higher percentage of dyscons in the Medicaid population. And again, you know, the Medicaid population, in addition to the health of the patient, you know, they have other challenges in the family that they're trying to deal with. So, long story short, there are many, many different, often, as I said, patient-specific reasons why these patients are dyscon. But some of those, you know, we have, you know, very specific things we can do to work on. And I'll let Jennifer speak to that here. In terms of HO, it is a different population, and what's striking about the HO is that it's cleaner, for lack of a better word.

Chlorine Johnson: For example in the U S.

Chlorine Johnson: There's a higher percentage of discounts in the Medicaid population and again the Medicaid population. In addition to the health of the patient may have other challenges in the family that there they're trying to deal with so.

Chlorine Johnson: Long story short is again there are many many different often as I said patient specific reasons why these patients some discounting but some of those.

Chlorine Johnson: We have very specific things, we can do to work on and then I'll, let Jennifer speak to that.

Jennifer: In terms of <unk> it is a different population.

Chlorine Johnson: Sure.

Jennifer: And what's been striking about the H O us.

Jennifer: It's cleaner for lack of a better word.

David P. Meeker: You know, these are patients who have, you know, literally nothing working. And biologically, it seems that, you know, set melanotide is addressing a very specific biological abnormality. So mechanistically, it seems to be the solution, and that's led to potentially a different level of engagement than we've had in our other populations. And I say that simply based on the fact that, you know, in running this phase three trial, as we've highlighted, patients seem to be staying on treatment, including whoever is on placebo. We don't know who they are, but they might be guessing. And, you know, in today's world, if they truly felt there was another option, they would, you know, likely move to that location, and they're not.

Jennifer: These are patients who were literally nothing has worked biologically.

Jennifer: It seems that <unk>.

Jennifer: <unk> is addressing a very specific biologic abnormalities mechanistically it seems to be the solution and that's led to potentially a different level of engagement than we've had in our other populations and I say that is simply based on the fact that in running this phase III trial as we've highlighted patients seem to be staying on.

Jennifer: Treatment.

Jennifer: Including whoever's on placebo, we don't know who they are but they might be guessing and.

Jennifer: In today's world if they truly felt there was another option they would likely move to them and theyre not and why.

David P. Meeker: And why not? Because, you know, if they stay in the trial, then they know they can access the drug and the open-label portion of it. So, you know, I think there are differences with HO. I wouldn't be surprised if the discontinuation rate was lower in HO. But, you know, obviously, we have a lot more to learn, helpful things. And then can you help us understand the size of the market opportunity for this under the two to six-year-old patient population and how that kind of expands the commercial opportunity for BBS?

Jennifer: Because if they stay in the trial and they know they can access.

Jennifer: The drug in the open label portion of it. So I think there are differences with H O I wouldn't be surprised that the discontinuation rate was lower NHL, but obviously, we have a lot more to learn.

Speaker Change: Helpful. Thanks, and then can you help us understand the size of the market opportunity for this under the.

Speaker Change: Two to six year old patient population and.

Jennifer: And how that's kind of expanding the commercial opportunity for Bbs.

David P. Meeker: Yeah. And what we said about that previously is that when we do our genetic screening, the frequency, the positivity rate, in that zero to two specifically, but two to six, tends to be higher than the rest of the other ages, the older age groups. And that's not a surprise because, you know, parents who present with a child who has early-onset obesity and uncontrolled hunger, they know something's wrong.

Speaker Change: Yes, what we've said about that previously is that when we do our genetic screening.

Speaker Change: Frequency the positivity rate in that zero to two specifically, but 2% to six tends to be higher than the rest of the other agents. The older age groups and that's not a surprise because parents, who present with a child, who has early onset obesity and uncontrolled hunger they know something's wrong genetic.

David P. Meeker: Genetic testing perhaps gets to be done, you know, a little earlier. And as a result, as opposed to a 20-year-old, for example, coming in, and you're asking them, you know, when their obesity started and the like, it's just a different setting. So higher frequency hit rate, but the overall numbers are still quite small. So again, this will not dramatically increase the overall target population, but it does from a signaling standpoint, a reinforcing standpoint: when you're treating two-year-olds with your medication, that's really a remarkable, you know, indication that A, it's important to do so. B, The drug must be safe.

Jennifer: Testing, perhaps gets to be done a little earlier.

Jennifer: As a result.

Jennifer: As opposed to a 20 year old for example comes in and Youre asking them when their obesity started and the like it's just a different setting.

Jennifer: Higher frequency hit rate, but the overall numbers are still quite small so again this will not dramatically increased the overall target population.

Speaker Change: But it does for me.

Speaker Change: Signaling standpoint, reinforcing standpoint, when you're treating two year olds. Some with your medication, that's really a remarkable indication that it's important to do so be the drug must be safe.

David P. Meeker: And, you know, as you know, most of the other available anti-obesity medications have not been tested on kids as young as two to six. And so, you know, we've gotten positive feedback from the field just from our willingness to take that on. Great. Thanks. Thank you, Prim.

Jennifer: As you know most of the other available anti obesity medications have not test the kids as young as two to six and so we've gotten positive feedback from the field just from our willingness to take that on.

Speaker Change: Great. Thanks.

Speaker Change: Thank you Kim.

David P. Meeker: Thanks. One moment for our next question. Next. This question comes from the line of Joseph Stringer of Needham and Company. Your line is now open.

Speaker Change: One moment for our next question.

Jennifer: Sure.

Jennifer: Next.

Jennifer: Question comes from the line of Joseph Stringer with Needham <unk> Company. Your line is now open.

Joseph Robert Stringer: Hi, thanks for taking our questions. Sorry if I missed this, but what were the discontinuation rates through the first quarter of this year? I believe it was around 20% as of the last quarterly, and just given that the discontinuation rates have ticked up a bit quarter over quarter, what gives you confidence that the rate will level out in that 20 to 30% range?

Joseph Robert Stringer: Hi, Thanks for taking our questions sorry, if I missed this but what were the discontinuation rates through.

Joseph Robert Stringer: The first quarter of this year I believe it was around 20% as of the last quarterly update and just given that.

Joseph Robert Stringer: Discontinuation rates have ticked up a bit quarter over quarter, what gives you confidence that the rate will level out in that 20% to 30% range.

David P. Meeker: Yeah, no, it has ticked up. We're not, we're not going to break it out further. Again, I think that was part of the goal of today's comments was, you know, I and we do think it's going to level out in the 20 to 30%. Your question is, what gives us confidence? I mean, that's consistent, I think, with other chronic injectables, you know, daily injectables. I mean, think even, you know, insulin therapy and the like, you don't necessarily have to discontinue them per se, but, you know, compliance can be quite challenging in some of those areas.

Speaker Change: Yes. It has ticked up we're not we're not going to break it out further again I think that was part of the goal of todays comments was we do think it's going to level out in the 20% to 30% of your question is what gives us confidence.

Joseph Robert Stringer: That's consistent I think with other chronic injectables.

Joseph Robert Stringer: Daily injectable.

David P. Meeker: So, in this age group, I think, again, it's an estimate, Joey, we don't know for sure, but I think it's a reasonable one based on our experience, just working with rare disease populations and, you know, some of the challenges associated with this, this, injectable, chronic daily injection. What was the second part of that question? Yeah, does that cover it? I mean, again, yeah, it's maybe

Joseph Robert Stringer: Insulin therapies and alike.

Joseph Robert Stringer: So they don't discontinue per se, but compliance can be quite challenging and some of those areas. So.

Joseph Robert Stringer: In this age group I think again, it's an estimate joy, we don't know for sure, but I think its a reasonable one based on our experience just working with rare disease populations in some of the challenges associated with this.

Joseph Robert Stringer: Injectable chronic daily injectable.

Speaker Change: What was the second part of that question.

Speaker Change: Right.

David P. Meeker: No, that's here. Yeah, it's actually a good opportunity just to highlight what we're doing. Yeah, I think one piece is that we learn as we go just as we evaluate different parts of the business and think through if there's opportunities for us to, you know, focus a bit more on, as David mentioned, the first couple of different fences are when there is the highest risk in terms of folks just continuing, and when we look at different reasons, one example I'll give is in terms of injection issues.

Speaker Change: Is that correct I mean again.

Speaker Change: Maybe one for next year actually.

Speaker Change: I actually Jennifer it's a good opportunity just to highlight what we're doing.

Speaker Change: I think like what pieces. We also learn as we go just as we evaluate different parts of the business.

Speaker Change: Or if there is opportunities for us too.

Speaker Change: Focus a bit more and.

Speaker Change: David mentioned the first couple of defenses is when there is the highest risks in terms of folks discontinuing and when we will get different reasons. One example.

Speaker Change: In terms of injection issues.

David P. Meeker: We saw that that was an issue early on, you know, and through discussions, we implemented at-home nurse support for patients so that they feel very comfortable initiating therapy and being able to inject them themselves. And this has levels or decreased the, you know, that particular issue as a reason for just cons.

Speaker Change: We saw that that was an issue early on.

Speaker Change: There are discussions have implemented.

Speaker Change: Hum nurse support.

Speaker Change: For our patients so that they feel very comfortable initiating therapy and being able to inject them.

Speaker Change: Themselves and this has level decreased.

Speaker Change:

Speaker Change: That particular issue as a reason for gift cards.

David P. Meeker: We also, you know, just through that example, that sort of high touch, just in terms of the beginning to make sure that the patients are doing okay. As they initiate therapy, realize it's, you know, we thought in terms of the structure that we had in place and the structure we had from the patient support side.

Speaker Change: We also just through that example that sort of high touch just in terms of the beginning to make sure that the patients are doing okay assay initiate therapy realize it.

Speaker Change: We thought in terms of the structure that we had in place.

Speaker Change: The structure, we had from a patient support side was that there was one point of contact for the patient, but also was responsible in terms of.

David P. Meeker: Was that there was 1 point of contact for the patient but also was responsible in terms of, you know, being able to help through the reimbursement and reauthorization process, which was a lot for 1 person to be able to juggle both aspects. So we have recently restructured that group. So we have a specific team that focuses on the authorizations and maintaining the reauthorizations while we have a separate patient education team that is then able to, once again, have more time and ability to maintain close contact with the patient.

Speaker Change: Being able to help through the reimbursement and reauthorization process, which was a lot for one person to be able to juggle both aspects. So we have recently.

Speaker Change: Restructure that group. So we have specific team that focuses on the.

Speaker Change: Authorizations and maintaining the reauthorization is while we have a separate patient.

Speaker Change: <unk> education team that then is able to once again have more time and ability to maintain close contact with the patient.

Speaker Change: Okay.

David P. Meeker: Great, thank you for the detail. And thank you for taking our question. Thanks, Troy.

Speaker Change: Great. Thank you for the detail and thank you for taking my questions.

Speaker Change: Thanks, Charlie.

David P. Meeker: Thank you. One moment for our next question. Our next question comes from the line of Michael Higgins of Leidenberg, Ptolemy. Please go ahead.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Michael Higgins of Ladenburg Thalmann. Please go ahead.

Michael John Higgins: Good morning. This is Farhana on behalf of Michael. Congratulations from us on the continued progress this quarter. Two questions from us. The first is, so we believe Daybreak Stage 2 could be read out separately or there was going to be a staggered update. So should we look for another update in Q4 rather than the update in Q3?

Michael John Higgins: Good morning, the Susquehanna on behalf of Michael Congrats from US on the continued progress this quarter two questions from us.

Michael John Higgins: So we believe DAYBREAK stage, two could be read all separately, what's going to be a THAAD staggered, albeit so should we look forward to another update in Q4 than the update in Q3.

David P. Meeker: And the second question is, any guidance on the start of the second trial route for LB54640? Yeah, so thanks. The Daybreak Study, we'll get the results in quarter three. We haven't, again, depends a little bit on what they are and how long it takes us to sort all this out.

Speaker Change: And the second question is any guidance on the start of the second trial route for L. <unk> 5460.

Speaker Change: Yes, so thanks Amit.

Speaker Change: The DAYBREAK study, we'll get the results in quarter three we haven't.

Speaker Change: It depends a little bit on what they are and how long it takes us to sort all this out so whether we're going to report. This in Q3 or Q4, I don't know to be honest I'm right. Now. The second is obviously, we try to connect these with a meeting in there you have to submit as a late breaker and so again, there's just some things I don't quite know yet so.

David P. Meeker: So, you know, whether we're going to report this in Q3 or Q4, I don't know, to be honest, right now. The second thing is, obviously, we try to connect these with a meeting, and you have to, you know, Smith as a late breaker. So, again, there's just some things I don't quite know yet. So let's say our goal is to get this out this year for sure, in terms of reporting it out to all of you. But I don't know the driver of that vehicle.

Speaker Change: Lets say our goal is to get this out this year for sure in terms of reporting it out to all of you, but I don't know the vehicle I don't know the exact timing.

David P. Meeker: I don't know the exact timing. And second, with regard to the start, we're making really good progress on the small molecule trial. They'll be five, four, six.

Speaker Change: And then secondly, with regard to the start we're making really good of the small molecule trial there'll be 540 <unk>. So.

Speaker Change: Making really good progress in.

David P. Meeker: So we're making really good progress. The number of sites that we need have virtually all been identified, and we're working through the initiation part of that, so we will be beginning in quarter three, and hopefully early in quarter three, but that's as good as I can do today. Thank you. Thank you. Thank you. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone and wait for your name to be announced.

Speaker Change: The number of sites that we need them for virtually all been identified and we're working through the initiation part of that so we will beginning in quarter three.

Speaker Change: And hopefully early in quarter three.

Speaker Change: As good as I can do today.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.

David P. Meeker: One moment for our next question. The next question comes from the line of Whitney Ijem of Conocor Genuity, please go ahead. Hey, guys, thanks for taking the questions. First one, I guess, is just on the kind of steady state dropout rate that you talked about our discontinuation rate.

Speaker Change: One moment for our next question.

Speaker Change: The next question comes from the one line of Whitney origin of Canaccord Genuity. Please go ahead.

Whitney: Hey, guys. Thanks for taking the questions.

Whitney: First one I guess is just on the kind of steady state dropout rate that you talked about or discontinuation rate.

Whitney Glad Ijem: Are you seeing patients, or a higher discontinuation rate in patients who start when they're older versus younger, and maybe there could be some shift in that average rate over time as patients start when they're younger with the label expansion? So the short answer from Whitney is yes, and that was, you know, breaking down the three different age groups there.

Whitney: Is that informed at all I guess by the age at which patients are starting and just curious if you're seeing patients or a higher discontinuation rate in patients who start when theyre older versus younger and maybe there could be some shift in that average rate over time as patients start when theyre younger with the label expansion.

Speaker Change: So short answer Whitney is yes, and that was breaking out the three different age groups there.

Whitney Glad Ijem: The key is it's adolescents, so you know, I don't know if disproportionately we have a number of adolescents. I mean, we know we have, you know, about 60 percent adults versus, you know, 40 percent kids overall. So, you know, the adult group, we're continuing to move to a more normal patient distribution because, have a normal lifespan, in that sense. But no, it's just additional color, which says, yeah, that adolescent group is more difficult, and we do see higher discounts there.

Whitney: The key is its adolescence so.

Speaker Change: I don't know if disproportionately we have a number of adolescence I mean, we know we have about 60% of adults versus 40% peds overall so.

Speaker Change: That'll group.

Speaker Change: Turning to move to a more normal patient distribution.

Speaker Change: Kind of a normal lifespan in that sense.

Speaker Change: But no. It's just a it's additional color, which says yes that adolescent group is more difficult and reducing more higher discount there.

David P. Meeker: Okay. And then in France, and perhaps I just misunderstood, but I think I understood the comments to be that patients with HO have been getting treated via the Early Access Program, but maybe not so much for the BBS program. Did I interpret those comments correctly? And if so, can you talk a little bit about what you're seeing and, I guess, maybe urgency to treat or process of getting patients through that to get to approval in BBS versus HO in France? Yeah, no, that's not the case. Yann, do you want to make some comments? Yes, no, indeed that's not the case.

Speaker Change: Got it Okay and then.

Speaker Change: Rand.

Speaker Change: And perhaps I, just misunderstood, but I think I understood the comments to be that patients with <unk> have been.

Speaker Change: Getting treated via the early access program, but maybe not so much for the Bbs program did I interpret those comments correctly and if so I guess can you talk a little bit about what youre seeing in I guess, maybe urgency to treat a process of getting patients through that.

Speaker Change: To get to approval in Bbs versus Ito and France, yes.

Speaker Change: Yes, no that's not the case, John do you want to make some comments.

David P. Meeker: So we currently have three early access programs running, one for POMSILIPA, one for BDS, and more recently for HO. So those three programs move in parallel, and we have been very pleased with the uptake of these three programs. And the most recent one is HO, it started at the end of last year, and I can say that it is extremely rare in France to get this early access program based on phase two data and three EME approval. To be more precise, there are just two rare disease therapies with such status in France.

Speaker Change: Yes.

John: This was the case.

John: We have currencies three.

Speaker Change: Early access.

John: Running one for <unk>, one for the years and more recently for a true so as those three programs moving in parallel.

John: And we didn't really pleased with the uptake of these three programs.

John: The most recent one is a tool in desktop.

John: At the end of last year.

John: <unk>.

John: I can say that it is extremely rare in trends to date.

John: As early access to home based on the phase two data in <unk>.

John: The approval to be more precise Dan I'll, just two rare disease to our fees with such touches these trends and as I just mentioned during the call.

Yann Mazabraud: And as I have mentioned during the call, we now have a number of patients who are commercially treated for HO. And back to maybe the second part of your question, no, DDS is moving nicely as well. I think, Whitney, what we have said is that when the H.O. program was approved, we had said for a while that it was very slow and bureaucratic to get patients approved within it.

John: Number of patients, which now commercially tweak keeps for <unk>.

Speaker Change: And back to maybe the second part of your question.

John: This is moving nicely as well.

David P. Meeker: And that has only recently started. So that may have been the emphasis on the fact that we've started to get patients through the HO program, despite it being approved a longer time ago, may have caused that, you know, impression. I understand. I got it. Helpful. Thank you. Thank you. I am showing no further questions at this time. I would now like to turn it back to David Meeker for closing remarks. All right. Well, thank you everyone for attending this morning. And again, we look forward to our next earnings call and updating you on further progress over the next three months.

John: I think with me what we have said is when the ACO program was approved.

John: We had said for a while that it was very slow and bureaucratic to get patients approved within it and that has only recently started so that may have been the emphasis on the fact that we've started to get patients through the ACO program. Despite it being approved a longer time ago may have caused that.

John: Impression.

Speaker Change: Understood got it helpful. Thank you.

Speaker Change: Thank you.

Speaker Change: No.

Speaker Change: I am showing no further questions at this time I would now like to turn it back to David Meeker for closing remarks.

David P. Meeker: Great well thanks, everyone.

David P. Meeker: And this morning and generally.

David P. Meeker: Look forward to our next earnings call and updating you on our further progress over that three months. Thanks al.

David P. Meeker: Thank you, all. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Bye. D'Angelo, David R. Reid, Michael Higgins, Philip Nadeau, Hunter Smith, Derek Archila, Carter Gould, Whitney Ijem, Jennifer Miller, Danica Grujic, Dorit Koren, David Connolly, Yann Mazabraud, Jennifer Lee, Rhythm Pharmaceuticals Inc.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

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