Q3 2025 Rhythm Pharmaceuticals Inc Earnings Call
And only mode.
After the speaker's presentation, there will be a question and answer session.
Speaker #1: Our team continues to execute and remains committed to expanding market access for patients in addressing the unmet need to treat these rare MC4R pathway diseases throughout the international region, establishing foundational relationships with experts physicians and local authorities, built on patients benefiting from MCV.
To ask a question drove in this session you will need to press star one one on your telephone you will then have an automated message advising Johan just raised to withdraw your question. Please press star one one again P.
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Speaker #1: This will help us to be successful as we prepare the next rhythm chapter for the international region. Next slide. The next chapter is our international launches in hypothalamic obesity.
I would now like to hand, the conference over to your Speaker today, David Kennedy Investor relationship with them. Please go ahead.
Thank you Heidi.
The economy 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 our website IR dot rhythm TX Dot com. This morning, we issued a press release that provides our Q3 financial results and a business update and that press release is also available on our website.
Speaker #1: The global unmet need for HO treatment is high, as demonstrated by the growth in our early access programs in France and Italy. During the third quarter, we completed the EMA submission to expand the marketing authorization for MCV to include acquired HO.
Speaker #1: The EMA has a set calendar to review such submissions. If that timeframe holds and the review is positive, we anticipate the CHMP opinion and an EU marketing authorization in the second half of 2026.
Our agenda is listed on slide two on the call today are David Meeker, Our Chairman Chief Executive Officer, and President Jennifer Li Executive Vice President Head of North America Hunter Smith, Chief Financial Officer, and John <unk> Executive Vice President head of International is underlying joining us from Europe.
Speaker #1: Establishing reimbursement for acquired HO in Europe country by country will take time. Germany would be the first country where we would launch, but as we did for POMC lipide and BBS, we will seek an exemption from the German federal strength committee annexed to exclusion list, that prohibits reimbursement for lifestyle drugs.
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 materially 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.
Speaker #1: Such as drugs designed to treat hair loss, smoking cessation, and general obesity. This process is necessary in order to secure federal reimbursement. We are confident we can have the same success we had with POMC lipide and BBS as MCV was the first ever precision medicine to be exempted and therefore reimbursed.
Quarterly reports on file with the SEC. In addition, any forward looking statements represent our views as of 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.
Speaker #1: We believe the same approach should hold for acquired hyperphagia, and that is demonstrating acquired hyperphagia clearly is a rare disease that is distinct from general obesity. So, we are hopeful for a similar outcome.
Thank you Dave.
Good morning, everybody. Thank you for joining us this morning.
Speaker #1: At the same time, we will engage in access and reimbursement negotiations in the United Kingdom, Italy, Spain, the Netherlands, and other countries. Taken together in these countries, we estimate the prevalence of acquired HO in Europe to be approximately 10,000 patients, making Europe a meaningful market for us.
Rhythm delivered strong growth and continued momentum during the third quarter as we prepare to launch in sebree and acquired hypothalamic obesity pending FDA approval that is a transformative opportunity for rhythm, we're finishing strong in 2025, a year in which we delivered robust phase III data with <unk> and H O presented outstanding Phase II efficacy.
Speaker #1: Moving to slide 18. Japan, we'll also be a very important market for us. With an estimated prevalence between 5,000 and 8,000 patients, which is 2 to 3 times greater per capita than Europe and the United States.
With our Nextgen oral <unk> inhibitor, Biffa Milligan and strength strengthened our balance sheet with a $189 million equity offering in July.
With our <unk> date next month and additional data Readouts coming this quarter and next we are well positioned to deliver sustained long term growth the steady growth in global and Sebree revenue driven predominantly by Bbs continued this quarter with $51 3 million in sales representing growth of approximately 10% in the number of patients on reimbursed therapy.
Speaker #1: We have started to build out a strong local team with a focus on regulatory, quality, CMC, medical affairs, market access, and marketing. We have now established a strong leadership team in Japan, and we have already 14 rhythm employees in place.
Speaker #1: Notably, our general manager, who is already well known to the team here from our time together at Sanofi Genzyme, previously led the highly successful launch of Dupixent in Japan.
We have built a strong global foundation for our business within say the only therapy that addresses the root cause hyperphagia and the severe obesity are rare emcee for our pathway diseases.
The teams continue to engage with physicians and prescribers identified patients and ensure access to in February.
Speaker #1: As David said, we anticipate top-line data from the Phase 3 cohort of Japanese patients in the first quarter of 2026. Which will be followed by submission of the Japanese NDA to the PMDA.
Beyond commercial success, we have been executing on the regulatory front as well for HOS, both the FDA and EMEA accepted our regulatory filings this quarter the EMEA.
A validated our type two marketing authorization request and the FDA accepted our supplemental NDA filing the regulatory dialog has been promising and productive and keeping us on track for a December 20th Paducah date, and potentially European approval in the second half of 2026, Jennifer and Jan will share some details on the quarter as well as the upcoming launch efforts in the.
And the timing and the international region.
We remain on track to report preliminary results from our exploratory phase II trial in <unk> Willi syndrome, but ended the year.
I have no further updates on today's call, but I will reiterate several of the comments we've made previously.
There's a strong biologic rationale as to why <unk> Agonism may work and PWM based to a large extent on the involvement of the mangled two gene where patients with isolated magnitude hearings happening.
We went through the emcee for our path.
We also know PWM is an incredibly complex disease due to defects in many genes in a clinical presentation characterized by obesity hyperphagia cognitive delay and abnormal behaviors is.
It is this latter aspect of the disease, which makes clinical studies, particularly difficult.
Thus, our rather neutral prediction.
Any chance of working.
Success will be defined by a BMI percent change with the target being results that would give us confidence we could clear a 5% threshold in BMI decreased 52 week phase III trial.
We are collecting measures of hyperphagia, specifically the <unk> questionnaire in this trial, but I remind you. It is an open label trial and absent a control group interpretation will be difficult.
We are working with one site with the goal of enrolling 10 to 20 patients followed for six months.
Obviously, we will not be reporting out on the full cohort in our end of the year release.
There will be questions on exact timing there are some practical aspects to that with regard to having as much data entered into the system and quality checked as possible, but we can commit that it will be prior to the Christmas break.
One comment before we dive into the findings on slide six is that over my career working on a number of rare diseases. One aspect that is invariably true because when you get a therapy approved you have only just begun to learn the full impact of your therapy on that disease and Bvs. For example, we had the clinical data from approximately 50 patients at the time of approval.
<unk> for a pathway diseases are rare and absolutely fit that mold. The paper described here on slide six is a German study that showed six months of settlement Antitype therapy was associated with clinically meaningful improvements in <unk> liver disease and kidney function. This prospective observational study was conducted at University Hospital in Germany, where.
26 patients with Bbs ages, six to 52 years, all with metabolic dysfunction associated stay at heidrick liver disease or <unk> at baseline. These patients were followed for six months and after six months of treatment more than 80% of patients exhibited either resolution of muscle or stabilization at the lowest grade.
That's one.
No weight loss can improve liver function in patients with obesity, but these changes did not correlate closely with BMI change raising the possibility that some other aspect of the banana important biology may be mediating these changes.
Results were recently published in the journal of clinical Endocrinology and metabolism.
On slide seven our upcoming launch in H O represents an incredibly important milestone rhythm as you heard from Jennifer at our Investor event in September and we'll hear again from her. This morning, we have the pieces in place to execute a successful launch she and her management team have done a great job expanding our existing commercial teams with the hiring of a group.
Of highly experienced and extremely talented individuals who are excited to individuals who are excited to get started with.
With an estimated prevalence of 10000 patients in the United States. This is noted a transformative opportunity for us the unmet need is significant.
<unk> showed a strong efficacy in phase III trials.
Regulatory dialogue is ongoing and we appear to be on track for our <unk> date of December 20th Obesity week begins this week in Atlanta, Dr. Christian rock as an oral presentation of the outcome of patients on <unk> therapy in our phase III trials you have seen this data previously, but it will again be an opportunity to highlight the value of correcting the hormonal deficit in <unk>.
Alcohol monocytes stimulating hormone in patients who may not be getting the desired response from other anti obesity medications overall and there is strong buzz in the community and a lot of excitement at rhythm as we near launch.
Lastly, slide eight are the upcoming milestones we covered the first two <unk> potentially.
Potentially to approval and the preliminary data readout and creator will both likely coming in December.
Aimed to complete enrollment of the RMB 700 weekly phase II study in <unk> patients during the first quarter of 2026, we will also release top line data from the Japanese cohort from our phase III acquired H O trial in Q1, and we will release top line data from the M&A trial in Q1.
Complete enrollment of the general nature of the trial.
And finally, we will initiate our phase III study with <unk> and acquired <unk> next year will further redefine the timing once we've had feedback from the regulators. It's a busy end of the year with that I'll turn the call over to Joe.
Thank you, David I'm going to be good and site and today.
So it's an exciting time as we continue our preparations for launch and acquired heads like obesity pending FDA approval by leveraging the strong foundation of our commercial efforts for Bbs.
Bbs and <unk> are both rare diseases caused by an impairment to the empty for a pathway, which currently results in hyperphagia or abnormal foods seeking behavior therapy today.
Sebree and.
Its ability to address the root cause of hyperphagia and obesity in these patients. Nevertheless.
We have seen that physicians are prescribing <unk> for their patients with Bbs.
Payers are providing access and patients are benefiting with some now and therefore it yeah treatment.
The positive growth in DBS continued during the third quarter.
Every quarter, we have seen a steady volume of new prescriptions and an increase in number of patients on reimbursed therapy.
We continue to see gains in both the depth and breadth of prescribers with approximately a 7% increase in the cumulative total number of Bbs prescribers quarter over quarter.
And the third quarter, the proportion of prescription for pediatric versus adult patients began to normalize following the uptick in prescriptions for pediatric patients during the first half of this year, which we discussed in our last quarterly call.
The third quarter the breakdown of new first questions was as follows 50% of new patients were down 22% were adolescents and 28% or pediatric and these percentages are turning back to the typical mix prior to that in sebree label expansion to include patients as young as two years.
<unk>.
Next slide.
Moving on to our preparations for the acquired hypothalamic obesity lives. We have hired highly experienced professionals to supplement our home office and field organization and our teams have been actively engaging with customers.
As we outlined on our acquired had to climate Ubicity commercial ready live events in September we are focused on engaging with and educating physicians in order to differentiate empty for a pathway diseases, including acquired had finally obesity from general obesity expedite patient diagnosis and following.
A profile established in sebree as a foundational treatment for acquired HL and educate payers to secure access and support patients long term once they have initiated treatment.
Next slide.
We also share some insight into the market and our data driven approach to this specialty center opportunity.
We analyzed claims data to narrow down our top physician targets and size our field team.
Walk you through that once again.
We started with claims associated with brain tumors on treatment within days, we looked at those with hypothalamic dysfunction and also obesity.
And lastly, within these we look to patient visits with an endocrinologist within the past 18 months.
This claims analysis allowed us to identify approximately 5000 endocrinologists to potentially have one patient or more with isothermal obesity under their care.
From these 5000 endocrinologists, we narrowed our initial focus to 'twenty 400 top tier physician targets.
Belief manage a higher volume of patients.
Next slide.
Throughout this year, our teams have focused on profiling, our top targets, they're profiling activity to date has resulted in the identification of more than 2000 potential patients.
Did you have a show or formally diagnosed to have HL.
We are still early in the process of profiling identified physicians and our expanded sales organization is now on ground focus on further penetrating these top tier targets to identify more potential patients with acquired Atlantic obesity.
Next slide.
Our teams are in place and as we expanded our organization to support the upcoming months.
Our access team is engaging with payers to educate them on acquired HL and <unk> data Preapproval information exchange presentations to support reimbursement once approved.
Our territory managers are in the field engaging with the physician community to increase disease awareness and one subsidiary that proved it acquired HL.
Kate items different efficacy and safety data to support prescription.
Our patient service team will engage with patients and their families to educate them on the disease to help them navigate insurance coverage was prescribed in sebree and provide support to help guide treatment expectations and keep them on treatment long term.
It's certainly an exciting times with a strong foundation in place with many learnings on the needs of patients and their providers a clear strategy and experienced teams in place. We are ready to go pending approval on December 20th with that let me hand, it over to Jan.
Thank you Jennifer I'll begin on slide 16, we.
We saw continued success with our international business during the third quarter as you can see.
There is no available for Bbs and publicity about efficiencies in more than 25 countries outside the United States.
And the number of patients with Bbs Palm City power efficiencies all hypothalamic obesity on <unk> continues.
<unk> continues to grow in the international region.
During the third quarter, we reached an agreement with the French Economic Committee for health products on reimbursement pricing for EMC re for Bbs and Park City, Utah.
We are pleased with the result of some negotiations as negotiated price is in line with rare disease pricing and also reflects.
You take benefit patients received within CRE.
We remain very encouraged by a reimbursed early access programs for <unk> in France and Italy.
It was granted based on our phase two data, which is very uncommon.
The growth of this program illustrates the important unmet need and its potential to provide these patients with significant therapeutic benefit.
And in parallel <unk> continued to provide access to patients in suitable additional countries I would say <unk> four in the UK. For example, just recently we achieved our first commercial patients in Argentina through and ambitions.
Our team continues to execute and remains committed to expanding market access for patient in addressing the unmet need to treat these rare and shift our past with.
<unk> International region, establishing foundational relationships with expert physicians and local authorities.
Built on patients benefiting from in theory.
Will help us to be successful as we prepare for the next freedom Jeff.
The International region.
Next slide.
So the next chapter.
Our international launches and I put that amico Bgg Xu global admit needed for each treatment is higher.
Illustrated by the growth in our early access programs in trends.
Operator: At this time, all participants are in a listen-only mode. 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 one one on your telephone. You will then hear an automated message advising your hand is raised to withdraw your question. Please press Star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Connolly, Investor Relations at Rhythm. Please go ahead.
During the third quarter, we completed the EMA submission to extend the marketing authorization for <unk> to include acquired on April.
Yeah, as I said kind of enough to review such submissions and eases. The timeframe holds and zero Juul is positive we anticipate the <unk> opinion in the EU marketing authorization in the second half of 2026.
Establishing reimbursement for <unk> in Europe country by country will take time, Germany would be the first country, where we would launch but as we did for <unk> and Bbs, we will seek an exemption from the gym and so the whole strategy Committee.
David Connolly: Thank you, Heidi. I'm David 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 of our website, ir.rhythmpharma.com. This morning we issued our press release that provides our Q3 financial results and a business update, and that press release is also available on our website. Our agenda is listed on slide 2. On the call today are David Meeker, our Chairman, Chief Executive Officer, and President; Jennifer Lee, Executive Vice President, Head of North America; Hunter Smith, Chief Financial Officer; and Jan Massabro, Executive Vice President, Head of International, who is on the line joining us from Europe on slide 3. I'll remind you that this call contains remarks concerning future expectations, plans, and prospects, which constitute forward-looking statements.
<unk> exclusion list that prohibit reimbursement for lifestyle grows.
Such as drugs designed to treat.
Smoking cessation and general obesity.
This process is necessary in order to secure for the whole investment. We're confident we can have the same success, we had with <unk> Bbs and <unk> was the first precision medicine to be exempted and therefore reimbursed.
We really have the same approach would hold for acquired a true and that is demonstrating <unk> clearly is a rare disease that is distinct from general obesity. So we are hopeful for a similar outcome.
At the same time, we will engage in access and reimbursement negotiations in the United Kingdom, Italy, Spain, the Netherlands and those countries.
Taken together these countries, we estimate a prevalence of acquired it show in Europe to be approximately 10000 patients, making Europe, a meaningful market for us.
David Connolly: 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, quarterly reports on file with the SEC. In addition, any forward-looking statements represent our views as of 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 5.
Moving to slide 18.
Okay.
Japan will also be a very important market for us with an estimated prevalence between 5008 thousand patient, which is two to three times greater capital than Europe, and the United States.
We have started to build out a strong local team with a focus on regulatory quality CMC medical affairs and market access and marketing.
David Meeker: Thank you Dave. Good morning everybody. Thank you for joining us this morning. Rhythm delivered strong growth and continued momentum during the third quarter as we prepare to launch IMCIVREE in acquired hypothalamic obesity pending FDA approval. That is a transformative opportunity for Rhythm. We are finishing strong in 2025, a year in which we delivered robust Phase 3 data with setmelanotide and HO, presented outstanding Phase 2 efficacy data with our next-gen oral MC4R inhibitor bivamelagon, and strengthened our balance sheet with a $189 million equity offering in July. With our PDUFA date next month and additional data readouts coming this quarter and next, we are well positioned to deliver sustained long-term growth. The steady growth in global IMCIVREE revenue driven predominantly by BBS continued this quarter with $51.3 million in sales representing growth of approximately 10% in the number of patients on reimbursed therapy.
We have now established the senior leadership team in Japan, and we are already 14 rhythm employees in place, notably our general manager was already well known to the team here from our time to deliver terrific Genzyme could you see led the highly successful launch of <unk> in Japan.
As David said, we anticipate top line data from the phase III cohort of Japanese patients in the first quarter of 2020 ships.
Which will be followed by submission of the Japanese NDA <unk> typically regulatory review in Japan is approximately nine months.
<unk> timeline 0.2 launches.
Essentially during 2027.
That I will turn the call over to Hunter.
Okay.
Thank you John.
Before discussing the specifics of the quarter, let me reemphasize the message of financial strength delivered during our last quarterly call.
David Meeker: We have built a strong global foundation for a business with IMCIVREE, the only therapy that addresses the root cause hyperphagia and the severe obesity of rare MC4R pathway diseases. The teams continue to engage with physicians and prescribers, identify patients, and ensure access to IMCIVREE. Beyond commercial success, we have been executing on the regulatory front as well. For HO, both the FDA and EMA accepted our regulatory filings this quarter. The EMA validated our type 2 marketing authorization request, and the FDA accepted our supplemental NDA filings. The regulatory dialogue has been promising and productive in keeping us on track for a 20 December PDUFA date and potentially European approval in H2 2026. Jennifer and Jan will share some details on the quarter as well as the upcoming launch efforts in the US and the ex-US in the international region.
As we raised approximately $189 2 million in net proceeds from our follow on equity offering completed in early in Q3, we ended the third quarter with $416 1 million and cash on hand.
This cash in conjuncture with projected revenue from anticipated global sales of observer for currently approved indications and including <unk> pending FDA approval.
As well as planned R&D and SG&A spending provides us with at least 24 months of runway rhythms balance sheet is the strongest it's ever been.
Now looking at slide 20.
And the revenue dynamics during the quarter global revenue for the third quarter was $51 3 million a sequential 6% increase from $48 5 million for the second quarter of 2025.
David Meeker: We remain on track to report preliminary results from our exploratory Phase 2 trial in Prader-Willi Syndrome by the end of the year. I have no further updates on today's call, but I will reiterate several of the comments we have made previously. There is a strong biologic rationale as to why MC4 agonism may work in PWS based, to a large extent, on the involvement of the MAGEL2 gene, where patients with isolated MAGEL2 variants have impaired signaling through the MC4R pathway. We also know PWS is an incredibly complex disease due to defects in many genes and a clinical presentation characterized by obesity, hyperphagia, cognitive delay, and abnormal behaviors. It is this latter aspect of the disease which makes clinical studies particularly difficult.
The number of patients on reimbursed therapy increased by 10% globally during the quarter.
$38 $2 million or 74% of Q3 net revenue was generated in the United States and $13 1 million or 26% of total revenue was generated outside the United States.
The U S delivered another solid quarter buoyed by high single digit percentage increase in the number of reimbursed patients on therapy.
Approximately $3 7 million quarter over quarter increase in revenue was driven by an increase in in February dispense to patients a good indication of fundamental growth in demand.
As we've seen in prior quarters. There was also an inventory effect Q2 into Q3.
David Meeker: Thus, our rather neutral prediction that we have a 50-50 chance of working success will be defined by a BMI percent change with the target being results that would give us confidence we could clear a 5 threshold in BMI decrease at 52 weeks in a phase 3 trial. We are collecting measures of hyperphagia, specifically the HQCT questionnaire in this trial, but I remind you it is an open label trial and absent control group interpretation will be difficult. We are working with one site with a goal of enrolling 10 to 20 patients followed for six months. Obviously we will not be reporting out on the full cohort in our end of the year release. I know there will be questions on exact timing.
With increases in inventory at our specialty pharmacy, driving $2 $5 million of the sequential variance in quarterly sales.
The quarter ended on a Tuesday, the day that our specialty pharmacy. It takes delivery of product with the result that their inventory days on hand increase from just under 10 days at the end of Q2 to approximately 16 days at the end of Q3.
Outside the U S quarter over quarter revenue decreased by $3 4 million.
Patients on reimbursed therapy increased at a low double digit percentage during the quarter, indicating continued solid fundamental growth in demand from sebree.
In France as John mentioned, we agreed to a final reimbursed from Sebree for Palm City left bar in Bbs.
David Meeker: There are practical aspects to that with regard to having as much data entered into the system and quality checked as possible, but we can commit that it will be prior to the Christmas break. One comment before we dive into the findings on slide 6 is that over my career working on a number of rare diseases, one aspect that is invariably true is that when you get a therapy approved, you have only just begun to learn the full impact of your therapy on that disease. In BBS, for example, we had the clinical data from approximately 50 patients at the time of approval. These MC4R pathway diseases are rare and absolutely fit that mold. The paper described here on slide 6 is a German study that showed six months of setmelanotide therapy was associated with clinically meaningful improvements in steatotic liver disease and kidney function.
Since 2022, we've been accruing revenue under the front early access programs in provisioning for this eventual agreement.
Based on this agreement we recorded a one time $3 2 million charge during the quarter third quarter of 2025 to account for the difference between what has been accrued to date and what is one.
Of the $3 2 million approximately <unk> 6 million was related to revenue booked in Q3 dollars 25.
And one 5 million was related to year to date 2025 with the balance related to periods prior to 2025.
Excluding this impact.
International revenue was affected by variability in ordering patterns for named patient sales in certain distributor markets.
David Meeker: This prospective observational study was conducted at University Hospital Essen in Germany where 26 patients with BBS ages six to 52 years, all with metabolic dysfunction-associated steatotic liver disease or MASLD at baseline. These patients were followed for six months and after six months of treatment, more than 80% of patients exhibited either resolution of MASLD or stabilization at the lowest grade or S1. We know weight loss can improve liver function in patients with obesity, but these changes did not correlate closely with BMI change, raising the possibility that some other aspect of the melanocortin biology may be mediating these changes. These results were recently published in the Journal of Clinical Endocrinology and Metabolism on slide 7. Our upcoming launch in HO represents an incredibly important milestone for them. As you heard from Jennifer at our investor event in September and we'll hear again from her this morning.
On slide 21 is the financial snapshot.
And a year over year comparison to Q3 2024, the net product revenues increased $18 million or 54% of gross to net for U S. Sales was 84% generally in line with gross to net percentages. We've shown in previous quarters cost of goods sold this quarter was 10, 7% of product revenue, which is mostly attributable to cost of materials and our royalty payments.
<unk> two epson, we generally expect cost of goods sold to be between 10, and 12% of net product revenue was very variation due to how our inventory balances are changing and the corresponding capitalization of labor and overhead costs.
R&D expenses were 46 million for Q3 compared to $37 9 million in the same quarter last year.
Sequentially R&D expenses increased $3 7 million of approximately 9% over Q2 2025. This increase was primarily due to chemistry manufacturing and controls or CMC work related to improving the formulation of <unk> and development of an auto injector for RMB 718, as well as increased head count and stock comp expense.
David Meeker: We have the pieces in place to execute a successful launch. She and her management team have done a great job expanding our existing commercial teams with the hiring of a group of highly experienced and extremely talented individual individuals who are excited to get started. With an estimated prevalence of 10,000 patients in the United States, this is, as noted, a transformative opportunity for us. The unmet need is significant and clear. Setmelanotide showed strong efficacy in phase 2 and 3 trials. The regulatory dialogue is ongoing and we appear to be on track for our PDUFA date of December 20th. ObesityWeek begins this week in Atlanta. Dr. Christian Roth has an oral presentation of the outcome of patients on GLP-1 therapy in our phase 3 trials.
Year over year increase spending was partially offset by a reduction in clinical trial costs.
SG&A expenses were $52 4 million for Q3, 2025, as compared to $35 4 million in Q2 last year sequentially SG&A expenses increased by $6 5 million or approximately 14% compared to Q2 2025 increased SG&A spend from Q2 to Q3 was due to increased head count costs in <unk>.
<unk> costs associated with the upcoming launch and acquired hypothalamic obesity.
Based on this agreement, we recorded a 1 time 3.2 million charge during the quarter of third quarter of 2025 to account for the difference between what has been acred to date and what is owed.
David Meeker: You have seen this data previously, but it will again be an opportunity to highlight the value of correcting the hormonal deficit in alpha-melanocyte stimulating hormone in patients who may not be getting the desired response from other anti-obesity medications. Overall, there is strong buzz in the community, and a lot of excitement at Rhythm as we near launch. Lastly, Slide 8 is the upcoming milestones. We covered the first two, PDUFA and potential HO approval, and the preliminary data readout in Prader-Willi, both likely coming in December. We aim to complete enrollment of the RM-718 weekly Phase 2 study in HO patients during Q1 2026. We will release top-line data from the Japanese cohort from our Phase 3 acquired HO trial in Q1, and we will release top-line data from the phase 3 trial in Q1.
For the third quarter of 2025, the weighted average common shares outstanding were $66 3 million. The increase in Q3 was mostly due to the equity offering when we issued nearly $2 4 million shares as well as the exercise of <unk>.
Of the 3.2 million. Approximately 0.6 million was related to revenue booked in Q3 255.
And 1.5 million was related to year-to-date 2025 with the balance related to periods prior to 2025.
Previously issued stock options cash used in operations was approximately $27 million during the third quarter.
Our GAAP EPS for the third quarter of 2025 was a net loss per basic and diluted share of <unk> <unk>, including <unk> <unk> per share from accrued dividends on convertible preferred stock of $1 4 million.
Excluding this impact International Revenue was affected by variability in ordering patterns for name. Patient sales in certain distributor markets,
On slide 21 is the financial snapshot.
We ended the third quarter with approximately $416 million in cash cash equivalents and short term events investments, which again, we expect to be sufficient to fund planned operations for at least 24 months.
David Meeker: We aim to complete enrollment of the congenital HO trial in H1 2026, and finally we will initiate our Phase 3 study with bivamelagon in acquired HO next year. We'll further refine the timing once we've had feedback from the regulators. It's a busy end of the year. With that, I will turn the call over to Hunter.
Lastly for me.
On slide 22, there is further detail on our operating expenses for the third quarter and updated full year operating expense guidance for the third quarter operating expenses of $98 5 million include a total of $18 8 million in stock based compensation for fiscal year 2025, we are tightening our full year guidance of shifting the mix between R&D and <unk>.
In a year-over-year comparison to Q3 2024, the net product revenues increased 18 million or 54%, and gross enough for us sales was 84%. Generally in line with gross, net percentages, we've shown in previous quarters, cost some goods. Sold this quarter was 10.7% of product Revenue which is mostly attributable to cost of materials and our royalty payments on set in Atlanta type 2 ipsen. We generally expect cost of goods, sold to be between 10 and 12% of net product, Revenue with VAR variation, due to how our inventory balances are changing in the corresponding capitalization of Labor and overhead costs.
Jennifer Lee: Thank you David. I'm going to be starting on slide 10 today, so it's an exciting time as we continue our preparations for launch and acquired hypothalamic obesity pending FDA approval by leveraging the strong foundation of our commercial efforts for BBS. BBS and HO are both rare diseases caused by an impairment to the MC4R pathway, which commonly results in hyperphagia or abnormal food seeking behaviors and severe obesity. IMCIVREE is unique in its ability to address the root cause of hyperphagia and obesity in these patients, and over the last three years we have seen that physicians are prescribing IMCIVREE for their patients with BBS. Payers are providing access and patients are benefiting, with some now entering their fourth year on treatment. The positive growth in BBS continued during the third quarter.
R&D expenses were 46 million for Q3. Compared to 37.9 million in the same quarter last year.
<unk> expenses, given the resources, we have committed to be ready for the anticipated launch of <unk> and acquired a show later this quarter.
We anticipate approximately $295 million to $315 million and non-GAAP operating expenses comprise comprised of non-GAAP R&D expenses of $150 million to $165 million and non-GAAP SG&A expenses of $145 million to $150 million.
Sequentially R&D expenses increased 3.7 million approximately 9% over Q2 2025. This increase was primarily due to chemistry manufacturing and controls for CMC, work related to improving the formulation of betta, melon and development of an auto injector for rm7 18, as well as increased headcount and stock comp expense
With that I'll turn the call back over to David.
year-over-year. Increased spending was partially offset by a reduction in clinical trial costs.
Thank you Hunter.
We'll go to Q&A.
Thank you.
To ask a question you will need to press star one one on your telephone and wait for your name to be announced.
Sgna SG and a expenses. Were 52.4 million for Q3 2025 as compared to 35.4 million in Q2 last year.
Please limit yourself to one question to withdraw your question. Please press star one one again.
Sequentially sgna expenses increase by 6.5 million, or approximately 14% compared to Q2 20225.
Jennifer Lee: Quarter over quarter we have seen a steady volume in new prescriptions and an increase in number of patients on reimbursement therapy. We continue to see gains in both the depth and breadth of prescribers, with approximately a 7% increase in the cumulative total number of BBS prescribers. Quarter over quarter in the third quarter, the proportion of prescriptions for pediatric versus adult patients began to normalize following the uptick in prescriptions for pediatric patients during the first half of this year, which we discussed in our last quarterly call. For the third quarter, the breakdown of new prescriptions was as follows: 50% of new patients were adults, 22% were adolescents, and 28% were pediatrics, and these percentages are turning back to the typical mix prior to the IMCIVREE label expansion to include patients as young as 2 years of age. Next slide.
Oh.
Increased sgna spent from Q2 to Q3, was due to increase headcount costs, and marketing costs associated with the upcoming launch in acquired hypothalamic obesity.
We will take our first question on the <unk>.
Question comes from the line of Mike <unk> from Morgan Stanley. Please go ahead. Your line is open.
Yeah. Good morning, Thanks for taking the question and congratulations on all the progress maybe just one quick one on <unk>. If you can share your latest thinking on the trial design for your phase III <unk> study and just curious if you received any initial feedback yet from the FDA there. Thanks.
Quarter.
Yes.
At this point, we've read many trials and this FMC for our pathway area pivotal will be the HR trial will be similar and more obviously.
Mimic what we did in the H O trials. So our expectation at this point is it will be a double blind randomized controlled trial, we will have a discussion with the regulators around the duration of the double blind period, our expectation is that in some form they will want a full year of data. This is a new chemical entity.
Our gaap EPS, for the third quarter of 2025 was a net loss for basic and diluted share of 82 cents, including 2, cents per share from acred dividends on convertible preferred stock of 1.4 million. We ended the third quarter with approximately 416 million in cash, cash equivalents, and short-term events Investments, which again, we expect to be sufficient to fund planned operations for at least 24 months.
Lastly, for me.
Jennifer Lee: Moving on to our preparations for the acquired hypothalamic obesity launch, we have hired highly experienced professionals to supplement our home office and field organization, and our teams have been actively engaging with customers as we outlined on our Acquired Hypothalamic Obesity Commercial Readylist event in September. We are focused on engaging with and educating physicians in order to differentiate MC4 pathway diseases, including acquired hypothalamic obesity, from general obesity, expedite patient diagnosis and, following approval, establish IMCIVREE as a foundational treatment for acquired HO, and educate payers to secure access and support patients long term once they have initiated treatment. Next slide. We also shared some insights into the market and our data-driven approach to this specialty-centered opportunity. We analyzed claims data to narrow down our top physician targets and size our field team. Let me walk you through that once again.
So.
On slide. 22, there is further detail on our operating expenses for the third quarter, and updated full year, operating expense guidance. For the third quarter, operating expenses of 98.5, million include a total of 18.8 million in stock-based compensation.
Again, whether we would provide that six months a double blind plus an additional 600 locomotives better.
<unk> of questions, we'll bring forward two to regulators, but in terms of primary endpoints and the like again, we will present BMI change and we'll be enrolling children and adults in the trial.
For fiscal year 2025, we are tightening our 4-year guidance and Shifting the mix between R&D and sg&a expenses. Given the resources, we have committed to the to be ready for the anticipated launch of Imperial and acquired ho later this quarter.
And then in terms of regulators. So we anticipate at this point.
Our our expected phase two post phase two meeting with the FDA. When we would get this feedback come is likely to be in the first quarter.
We anticipate approximately 295 to 315 million in non-gaap operating expenses, compri comprised of non-gaap R&D, expenses of 150 million to 165 million and non-gaap sgna expenses of 145 to 150 million.
With that, I'll turn the call back over to David.
Next year.
Great. Thank you.
Thank you we will take our next question. The next question comes from the line of Phil Nadeau from TD Cowen. Please go ahead. Your line is open.
Good morning, and congrats on the progress. Thanks for taking my question a question as to dive into the PWM.
Thank you 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. Please limit yourself to 1 question to withdraw. Your question. Please. Press star 1 1 again.
<unk> efficacy endpoints a bit further.
Jennifer Lee: We started with claims associated with brain tumors and treatment. Within these we looked at those with hypothalamic dysfunction and also obesity, and lastly within these we looked at patient visits with an endocrinologist within the past 18 months. This claims analysis allowed us to identify approximately 5,000 endocrinologists who potentially have one patient or more with hypothalamic obesity under their care. From these 5,000 endocrinologists, we narrowed our initial focus to 2,400 top-tier physician targets who we believe manage a higher volume of patients. Next slide. Throughout this year, our teams have focused on profiling our top targets. Their profiling activity to date has resulted in the identification of more than 2,000 potential patients suspected to have HO or formally diagnosed to have HO.
Understand what you mean.
Need to see to advance.
Sebree forward and PWM. So in terms of weight you suggested something that suggests 5% weight loss of one year can you give us more of a sense of what that is is that two 5% at 26 weeks or is it a different way to think about it.
We will take our first question and the question comes from the line of Mike S from Morgan Stanley. Please go ahead. Your line is open.
And then in terms of Hyperphagia a similar question you said, it's going be hard too.
Interpret but nonetheless separate Fisher is a major determinant of quality of life compared to Willie. So is there any level of hyperphagia change that would be proof of concept and warrant further development.
Yep. Good morning. Uh, thanks for taking the question and congratulations on all the progress. Uh, maybe just 1 quick 1 on biva, megalon. Uh, if you can share your latest thinking on the trial design for your phase, 3, ho study and just curious, if you received any initial feedback yet from the FDA there, thanks.
Yes, yes, and I'll just preface the thing I know, there's going to be a lot of questions on <unk> I'll do the best but needless to say I won't have a lot.
Yeah. Um, you know, at this point we've run many trials, uh, in this mc4 pathway area, um, bivo will be the HR trial will be similar and we'll obviously, uh,
More to add to the color we provided previously but your question on <unk>.
What constitutes success and how will be interpreted.
Todd.
Our goal is to get 10 to 20 patients on treatment for six months and we will have some part of that cohort available by the end of the year, obviously, a very small data set will present patient by patient data the way we've done in the past that you can all see exactly what we're looking at it.
Mimic what we what we did in the ho trial. So our expectation at this point is uh it'll be a double blind randomized control trial, we will have a discussion with The Regulators around the duration of the double blind period. Our expectation is that in some form. They will want a full year of data. This is a new chemical entity uh and
Jennifer Lee: We are still early in the process of profiling identified physicians, and our expanded sales organization is now on the ground focused on further penetrating these top-tier targets to identify more potential patients with acquired hypothalamic obesity. Next slide. Our teams are in place, and as we expanded our organization to support the upcoming launch, our Access team is engaging with payers to educate them on acquired HO and setmelanotide data through pre-approval information exchange presentations to support reimbursement. Once approved, our territory managers are in the field engaging with the physician community to increase disease awareness, and once IMCIVREE is approved for acquired HO, they will educate on IMCIVREE's efficacy and safety data to support prescriptions.
That's not a mean.
so um again whether we would provide that 6 months of double blind plus an additional 6 and an open
Number again, we highlighted that for the <unk> data, it's going to be very much looking at patient by patient and of a patient seem to do well, but what's our best understanding as to why they did well enough in other patient didn't do well or have they changed some.
Kinds of questions we'll bring forward to uh to Regulators but in terms of primary endpoints and the like again we will be a percent BMI change and we'll be enrolling children and adults in the trial.
Are there some other explanation for that and you take all that into account so it's going to be a judgment call Phil.
Just to say.
And I don't think it will be well, let's put it this way I mean, you can make these judgment calls in these small data sets but.
And then, in terms of regulators, um, so we anticipate at this point, um, our our expected Phase 2, uh both Phase 2 meeting with the FDA. Um, when we would get this feedback, um, is likely to be in the first quarter.
Of next year.
That's how it'll be done it's not a magic number of we've got halfway to the 5% at six months I don't expect necessarily that that's going to be a metric per say these things don't tend to be linear, but there'll be a level of confidence looking at the individual data points that the drug seems to be working and will you run a longer a larger trial, we'll be able to get to the pilots.
Great. Thank you.
Jennifer Lee: Our patient service team will engage with patients and their families to educate them on the disease, to help them navigate insurance coverage once prescribed IMCIVREE, and provide support to help guide treatment expectations and keep them on treatment long term. It's certainly an exciting time with a strong foundation in place with many learnings on the needs of patients and their providers. A clear strategy and experienced teams in place. We are ready to go pending approval on 20 December. With that, let me hand it over to Jan.
Thank you, we will take our next question. The next question comes from the line of Phil. Nadal from TD Cohen, please go ahead. Your line is open
That's very helpful. Thank you.
And then just one last thing on <unk>, just remind everybody.
Good morning, congrats on the progress. Thanks for taking our question. Our question is, um, to dive into the PWS uh, and efficacy, and points a bit further to understand what what you need to see to advance. Um,
Primary endpoint here is BMI percent change.
In terms of reward and PWS. So in terms of weight, you suggested something that suggests
We would not go into a phase III trial without confidence that as I just indicated we could move that BMI.
5% weight loss at 1 year. Can you give us more of a sense of what that is, is that 2.5% at 26 weeks, or is it a different way to think about it?
We wouldnt pursue in a hyperphagia label only I know a number of companies are out there seeking that approval at this time, however, based on the mechanism of our drug if we do see BMI percent change almost by definition given the biology, we will improve hyperphagia.
in terms of,
Jan Massabro: Thank you Jennifer. I begin on slide 16. We saw continued success with our international business during Q3 as IMCIVREE is now available for BBS and/or POMC, LEPR deficiencies in more than 25 countries outside the United States, and the number of patients with BBS, POMC, LEPR deficiencies or hypothalamic obesity on IMCIVREE continues to grow in the international region. During Q3 we reached an agreement with the French Economic Committee for Health Products on reimbursement pricing for IMCIVREE for BBS and POMC, LEPR. We are pleased with the result of the negotiations, and as the negotiated price is in line with rare diseases pricing and also reflects the therapeutic benefit patients receive from setmelanotide. We remain very encouraged by our reimbursed early access programs for HO in France and Italy, both granted based on our phase 2 data, which is very uncommon.
Interpret. But nonetheless it is a major uh determinant of quality of life and in prayer Willie. So is there is there any level of hyper Vigor change? That would be proof of concept and warrant further development, thanks.
Yeah.
Okay. That's helpful. Thank you.
Thank you.
We'll take our next question.
Your next question comes from the line of Derek <unk> from Wells Fargo. Please go ahead. Your line is open hey.
Good morning, and thanks for taking the questions here. So first question just can you discuss some of the drivers behind the changes to the ongoing favorability trial for instance.
It looks like you extended it out to 52 weeks from 2006, and what looks like the potential to explore adding sites for the trial and then the second question. Just briefly can you discuss if you've had any FDA agree.
Agreements or discussions around the indication statement for HL, and whether it could or could not.
Include hyperplasia.
Jan Massabro: The growth of these programs illustrates the important unmet need and setmelanotide's potential to provide these patients with significant therapeutic benefit, and in parallel, named patient sales continue to provide access to patients in several additional countries outside the EU4 and the UK. For example, just recently we achieved our first commercial patient in Argentina through a named patient sale. Our team continues to execute and remains committed to expanding market access for patients in addressing the unmet need to treat these rare MC4R pathway diseases throughout the international region, establishing foundational relationships with expert physicians and local authorities built on patients benefiting from IMCIVREE. This will help us to be successful as we prepare the next Rhythm chapter for the international region. Next slide, the next chapter is our international launches in hypothalamic obesity.
Yes, I'll take the last one first so on the <unk> again, our regulatory interactions have been that I would characterize them as routine which is favorable given a lot of the new some circling the FDA, but.
Exactly as we would expect they'd come back with specific questions and we answer those the labeling discussions tend to be late so with regard to your specific question on the indication we have not entered into that specific dialogue at this point.
In terms of the updates that a number of you picked up on <unk> dot Gov for the greater Willy Phase II study, that's really housekeeping. So there was two issues. There we updated on one is in any trial rare disease trials.
Of, uh, patients seem to do well. Or why, did you know, what's our best understanding as to why they did well? And if another patient didn't do well or have a change, um, is there some other explanation for that and you take all that into account? So it's going to be a judgment call Phil um, needless to say. Um, and I I don't think it'll be well, let's put it this way. I mean, you can make these judgment calls and these small data sets but um, that that's how it'll be done. It's not a magic number of, you know, we got halfway to the 5% at 6 months, they don't expect necessarily that that's going to be the metric person per se. These things don't tend to be linear but there'll be a a level of confidence. Looking at the individual data points that the drug seems to be working and only run a longer, a larger trial will be able to get to the 5.
That's very helpful. Thank you.
We set the six months is the endpoint, meaning that's the point at which we would look at the BMI and make this judgment so to speak or are you seeing success or not but allowing patients to continue if they feel like they want to.
Beyond six months, we needed to update the trial to allow that to happen as opposed to leaving somebody to saying, Okay. We got to stop drug now and then the second was in terms of adding an additional site again that was just in case, we needed working with a single site. Dr. Miller site in Florida as you know she is extremely busy.
Jan Massabro: The global unmet need for HO treatment is high as demonstrated by the growth in our early access programs in France and Italy. During Q3 we completed the EMA submission to expand the marketing authorization for IMCIVREE to include acquired HO. The EMA has a set calendar to review such submissions, and if that time frame holds and the review is positive, we anticipate a CHMP opinion and the EU marketing authorization in the second half of 2026. Establishing reimbursement for acquired HO in Europe country by country will take time. Germany would be the first country where we would launch, but as we did for POMC, LEPR and BBS, we will seek an exemption from the German Federal Joint Committee Annex 2 exclusion list that prohibits reimbursement for lifestyle drugs such as drugs designed to treat hair loss, smoking cessation, and general obesity.
And then I just 1 last thing on the hqt, just remind everybody. Um, our primary end point here is BMI percent change. Um, we would not go into a phase 3 trial without confidence that as I just indicated, we could move that BMI. Um, I we wouldn't pursue an a, a hyper fasia label. Only I know a number of companies are out there and I'm seeing that approval at this time. However, based on the mechanism of our drug, if we do see BMI percent change, almost by definition, given the biology. We will improve
So that was just in case, we couldnt.
At this point, we haven't opened a second site that we're continuing to work on with Dr. Miller and she's doing well there.
So helpful. Thank you.
Thank you.
We will take our next question.
Okay.
So nothing to read through it.
Your next question comes from the line of Derek archilla from Wells. Fargo, please go ahead. Your line is open.
Thank you.
We'll take our next question. Your next question comes from the line of Whitney <unk> from CJS. Please go ahead. Your line is open.
Thank you for taking our question Daniela.
Maybe switching gears a little bit question on the <unk> launch.
Any update you can provide around conversations youre, having with payers.
Should we assume that most or all patients will beyond the free drug program until people start to finalize their policy updates in three to six months after approval or any color you can provide about that.
Jan Massabro: This process is necessary in order to secure federal reimbursement. We are confident we can have the same success we had with POMC, LEPR and BBS as IMCIVREE was the first ever precision medicine to be exempted and therefore reimbursed. We believe the same approach should hold for acquired HO, and that is demonstrating acquired HO clearly is a rare disease that is distinct from general obesity, so we are hopeful for a similar outcome. At the same time, we will engage in access and reimbursement negotiations in the United Kingdom, Italy, Spain, the Netherlands, and other countries. Taken together in these countries, we estimate the prevalence of acquired HO in Europe to be approximately 10,000 patients, making Europe a meaningful market for us.
Hey, good morning and thanks for taking the questions here. Uh, so first question, just can you discuss some of the drivers behind the changes to the ongoing prayer Billy trial for him to reach? It looks like you extended it out to 52 weeks from 26 and what looks like the potential to explore adding sites to the trial and then the second question just briefly can you discuss if you've had any FDA you know agreements or discussions around the indication statement for Howe and whether it could or could not, you know, include hyper fasia thanks.
Net ROM launch.
Maybe just one comment before I turn it over to Jennifer So.
Patients who have been in the trial will stay in the trial. So the clinical trial patients will stay on drug until they get access, but we will not have a early access programs, specifically, but beyond that time for you want to comment on.
Yeah, I'll take the last 1 first, so on the ho, um, again, our regulatory interactions have been. I've characterized them as routine, which is a highly favorable, given a lot of the news, some certainly in the FDA. But it's been exactly as we would expect they come back with specific questions and we we answer those the labeling discussions tend to be late. Um so you know with regard to your specific question on indication. We are not entered into that specific dialogue. I guess at this point.
And so we feel very positive just based off of the feedback that we've received just through our discussions with payers as well as the market research that we've conducted just getting their insights over all I think from a process of reimbursement post approval.
Jan Massabro: Moving to slide 18, Japan will also be a very important market for us with an estimated prevalence between 5,000 and 8,000 patients, which is two to three times greater per capita than Europe and the United States. We have started to build out a strong local team with a focus on regulatory quality, CMC, medical affairs, market access, and marketing. We have now established a strong leadership team in Japan, and we have already 14 Rhythm employees in place, notably our General Manager who is already well known to the team here from our time together at Sanofi. He previously led the highly successful launch of Dupixent in Japan. As David said, we anticipate top line data from the phase 3 cohort of Japanese patients in Q1 2026, which will be followed by submission of the Japanese NDA to the PMDA.
It's gonna be a similar process just in general as we receive prescriptions.
If theres not a specific policy in place by the time, we receive the script.
Still work through the process just in terms of going back to the air to try to gain access and we've been able to gain access even prior to that formal policy in place that we don't expect anything to be different.
We don't expect that we'd have to wait until the actual time of evaluation of a particular this particular drug with that specific pair to actually be able to gain.
Um, in terms of the updates that, um, a number of you picked up on in clin-trials 2 study. That's really housekeeping. Um, so there was 2 issues there. We updated on 1 is in any trial rare disease trials. Um, you know, we we set the 6 months as the endpoint meaning, that's the point in which we would look at the BMI and, you know, make this judgment, you know, so to speak, or you seeing success or not, but allowing patients to continue. If they feel like they want to um, Beyond 6 months, we needed to update the trial to allow that to happen as opposed to leaving somebody and just saying, okay, we got to stop the drug now and then the second was in terms of adding an additional site. Again, that was just you know, in case we needed working with a single site um, you know, Dr. Miller site in Florida, as, you know, she's extremely busy. And um, so that was just in case we, we couldn't. Um, as at this point, we haven't opened a second site. Um, we're continuing to work. Um, with Dr. Melon, she's doing well there, so
So we need to read through it.
<unk> with that patient to commercial therapy.
Thank you.
Next question.
Thank you we will take our next question. The question comes from the line of <unk> <unk> from Leerink Partners. Please go ahead. Your line is open.
We will take our next question. Your next question comes from the line of Whitney lamb from CG. Please go ahead. Your line is open.
Jan Massabro: Typically, regulatory review in Japan is approximately nine months. These aggressive timelines point to launches potentially during 2027. With that, I will turn the call over to Hunter.
Hi, guys. Thank you so much for taking the question I wanted to ask about how investors should be thinking about the launch curve and hypersonic obesity. I know you guys have put out this kind of.
These metrics are like playing for 100 current conditions and 2000 patients that you believe are kind of your top targets, how should we think about.
Hunter Smith: Thank you, Jan. Before discussing the specifics of the quarter, let me reemphasize the message of financial strength delivered during our last quarterly call, as we raised approximately $189.2 million in net proceeds from a follow-on equity offering completed in early Q3. We ended the third quarter with $416.1 million in cash on hand. This cash, in conjunction with projected revenue from anticipated global sales of IMCIVREE for currently approved indications and including HO pending FDA approval, as well as planned R&D and SG&A spending, provides us with at least 24 months of runway. Rhythm's balance sheet is as strong as it's ever been. Now looking at slide 20 and the revenue dynamics during the quarter, global revenue for the third quarter was $51.3 million, a sequential 6% increase from $48.5 million for the second quarter of 2025.
Kind of getting that opportunity.
All right, thank you for taking our questions. This is the Angela on for Whitney. Um, maybe 15 years, a little bit, a question on the ho launch. Um, any updates, you can provide route conversations, you're having with payers. Um, should we assume that most are all patients? Will be on the free drug, uh, program until payers start to finalize their policy updates, in 3 to 6 months after approval or any color to provide around, um the growth to net around knowledge.
Shape of the launch curve could look like relative to like bark beetle relative to other launches.
Lilly launches thank you.
Okay.
Yeah. Thanks for the question.
I think.
Overall, just in terms of HR, we have such a solid ground just based off of what we have learned and put in place for the Bbs launch even very specifically.
Maybe just 1 comment before I turn it over to Jennifer. Um, so um, patients who have been in the trial will stay in the trial. So the clinical trial patients will stay on drug until they get access, but we will not have a Early Access program specifically. But beyond that Jennifer you want to comment on?
Um,
Just in terms of the payer landscape to help them understand the difference in terms of our patient population in our drug versus general obesity to have that strong foundation in terms of that understanding as we potentially expand to other indications that are rare that also target a similar pathway.
We have the right team in place we feel very confident holistically just in terms of the ACP targeting that we have.
Hunter Smith: The number of patients on reimbursed therapy increased by 10% globally during the quarter. $38.2 million or 74% of Q3 net revenue was generated in the United States, and $13.1 million or 26% of total revenue was generated outside the United States. The US delivered another solid quarter buoyed by a high single-digit percentage increase in the number of reimbursed patients on therapy. Approximately $3.7 million of the quarter-over-quarter increase in revenue was driven by an increase in IMCIVREE dispensed to patients, a good indication of fundamental growth in demand. As we've seen in prior quarters, there was also an inventory effect Q2 into Q3 with increases in inventory at our specialty pharmacy driving $2.5 million of the sequential variance in quarterly sales.
Really pleased with the progress and I see you outlined.
Wind that we had about that.
Potential patients that were suspected or actually diagnosed at this point of time.
With that said the things that are similar just in terms of Bbs and any rare disease is that without a therapy available there.
It really isn't that much incentive to get patients to a diagnosis and theres not a lot of education to also help in terms of getting patients to that diagnosis and that is very similar to what we have learned in the <unk> space.
Uh it's going to be a similar process just in general as we receive prescriptions. Um, even if there's not a specific policy in place by the time, um, we received the script, uh, we still work through the process just in terms of going back to the pair, to try to gain access. And we've been able to gain access even prior to that formal, um, policy being in place. So, I don't expect anything, uh, to be different and I, um, don't expect that. We'd have to wait until the actual time of evaluation of a particular. This particular drug with that specific pair to actually be able to gain um, reimbursement and put that patient on Commercial uh therapy.
Next question.
Although it's easy potentially to identify potential patients with the background that may have a curve those patients have not necessarily gotten to that specific diagnosis. So that's going to take a bit of time.
Thank you, we will take our next question. The question comes from the line of phase or crocheted from leerink Partners, please go ahead. Your line is open.
Hunter Smith: The quarter ended on a Tuesday, the day that our specialty pharmacy takes delivery of product, with the result that their inventory days on hand increased from just under 10 days at the end of Q2 to approximately 16 days at the end of Q3. Outside the US, quarter-over-quarter revenue decreased by $3.4 million. Patients on reimbursed therapy increased at a low double-digit percentage during the quarter, indicating continued solid fundamental growth in demand for IMCIVREE in France. As Jan mentioned, we agreed to a final reimbursed price for IMCIVREE for POMC, LEPR, and BBS. Since 2022, we have been accruing revenue under the French early access programs and provisioning for this eventual agreement. Based on this agreement, we recorded a one-time $3.2 million charge during the third quarter of 2025 to account for the difference between what has been accrued to date and what is owed.
Especially as it takes time for these patients to get back to the endocrinologists.
Be able to see them have that discussion and get that diagnosis and then post a profile have that discussion.
Separate so.
We feel very confident just in terms of our ability to execute but there are different factors that may impact the ramp in terms of our lives.
Okay, thank you so much for taking the question. Uh, I want to ask about how investors and the streets should be thinking about the launch curve in a hypothalamic obesity. I know you guys have put out this kind of, uh, these metrics of like, 2400 Target positions and 2,000 patients. That you believe are, um, kind of your top targets. Um, how should we think about, uh, you know, kind of Prosecuting that opportunity and like what the shape of the launcher of look like relative to like borrowed Beetle or relative to other launches um out there like the trader? Really launches? Thank you.
Okay, thanks for the question. Um,
Two things I will just add in complement to what Jennifer just stayed at first.
The gws situation is significantly different because many PWM patients are cared for in group homes and dealt with very specific specialized centers with the result that the opportunity for them to be prescribed in a more bullish like fashion as greater so the what we've our researches.
Hunter Smith: Of the $3.2 million, approximately $0.6 million was related to revenue booked in Q3 2025, and $1.5 million was related to year-to-date 2025, with the balance related to periods prior to 2025. Excluding this impact, international revenue was affected by variability in ordering patterns for named patient sales in certain distributor markets. On slide 21 is the financial snapshot in a year over year comparison to Q3 2024. The net product revenues increased $18 million or 54%, and gross to net for US sales was 84%, generally in line with gross to net percentages we've shown in previous quarters. Cost of goods sold this quarter was 10.7% of product revenue, which is mostly attributable to cost of materials and our royalty payments on setmelanotide tied to Ipsen.
<unk> that the <unk> patients are more distributed with community and local endocrinologists as opposed to in specialized centers and secondly, <unk>.
Conversely.
As Jennifer stated versus Bbs with a higher diagnosis rate and the care in a single specialty accounting firm much greater patient percentage of the patients there is more opportunity there in the early days.
Got it that's helpful. Thank you so much.
Okay. Thanks next question.
Thank you. Your next question comes from the line of Kevin Johnson from Goldman Sachs. Please go ahead. Your line is open.
It's overall just in terms of ho we have such a solid ground just based off of what we have learned and put in place for the BBS launch. Um, even very specifically you know a lot of work, just in terms of the pair landscape to have them understand the difference in terms of our patient population and our drug versus General obesity to have that strong foundation in terms of that understanding, as we, uh, potentially expand to other indications that are rare. Um, that also Target a similar pathway. Um, we have the right team in place. We feel very confident holistically just in terms of the ACP targeting that we have um and are really pleased with the progress and I see you outlined, uh, we outlined um, that we had about, um, 20000 potential patients that were suspected or actually diagnosed at this point of time. Um, I think with that said, the things that are similar just in terms of BBS, and
Good morning. This is Eric on for Karen Johnson here and.
Hunter Smith: We generally expect cost of goods sold to be between 10% and 12% of net product revenue with variation due to how our inventory balances are changing and the corresponding capitalization of labor and overhead costs. R&D expenses were $46 million for Q3 compared to $37.9 million in the same quarter last year. Sequentially, R&D expenses increased $3.7 million or approximately 9% over Q2 2025. This increase was primarily due to chemistry, manufacturing and controls or CMC work related to improving the formulation of bivamelagon and development of an auto-injector for RM-718 as well as increased headcount and stock comp expense year over year. Increased spending was partially offset by a reduction in clinical trial costs. SG&A expenses were $52.4 million for Q3 2025 as compared to $35.4 million in Q2 last year. Sequentially, SG&A expenses increased by $6.5 million or approximately 14% compared to Q2 2025.
The question, we have is just to double click a little more on the <unk> launch that we were just discussing here how should we think about the process for in the cadence of reimbursement and the anticipated gross to net and H O.
And any emergencies is that, you know, without a therapy available, um, there really isn't that much incentive uh, to get patients to a diagnosis and there's not a lot of Education to also help in terms of getting patients to that diagnosis. And that is very similar to what we have, uh, learned in the ho space. Um, you know, although it's easy potentially to identify potential patients,
DBS could you just give us a little more color on that.
You want me to speak to gross to net to start I think what we anticipate in terms of differences gross to net is.
It's a little hard to say, we've had around $50 50, Medicare commercial mix for Bbs.
With the background that may have ho those patients have not necessarily gotten to that specific diagnosis. So that's going to take a bit of time. Um, especially as it takes time for these patients, to get back to the endocrinologist, um, to be able to see them have that discussion, get that diagnosis and then post approval have that discussion about potentially getting onto it.
We don't know how different bho population will be but that is the primary driver of our growth to that because we don't we don't rebate in any meaningful way.
So it really is just a question of what's the Medicaid share that of course assumes that we still do not have Medicare access.
We are able to get Medicare access then.
Hunter Smith: Increased SG&A spend from Q2 to Q3 was due to increased headcount costs and marketing costs associated with the upcoming launch in acquired hypothalamic obesity. For the third quarter of 2025 the weighted average common shares outstanding were 66.3 million. The increase in Q3 was mostly due to the equity offering when we issued nearly 2.4 million shares as well as the exercise of previously issued stock options. Cash used in operations was approximately $27 million during the third quarter. Our GAAP EPS for the third quarter of 2025 was a net loss per basic and diluted share of $0.82, including $0.02 per share from accrued dividends on convertible preferred stock of $1.4 million. We ended the third quarter with approximately $416 million in cash, cash equivalents and short-term investments, which again we expect to be sufficient to fund planned operations for at least 24 months.
GCN mix will shift favorably.
On the process in terms of the flow here getting that patient from the initial script to treat.
Separate. So, you know, we're we feel very confident just in terms of our ability to execute, but there are different factors that may impact the ramp in terms of uh, launched and 2 things. I'll just add in compliment to what Jennifer just stated first. Um, the PWS situation is significantly different because many PWS patients are cared for in group homes and and dealt with in very specific, specialized centers with the result that
So.
We're already engaging with payers just in terms of giving them that.
Heads up just in terms of timelines.
<unk> within <unk> to at least have that preliminary background in terms of expectations.
Once we received and our ask our teams work to.
Be able to work through that reimbursement process and that particular payer maybe more prioritized in terms of our.
The opportunity for them to be prescribed in a more bullish like fashion is greater. So the what we our research is indicated that the ho patients are more distributed with community and local endocrinologists as opposed to in specialized centers and secondly, um, conversely versus as Jennifer stated versus BBS with a higher diagnosis rate and the care in a single specialty accounting for much greater patient, percentage of the patients. There is more opportunity there in the early days.
God, that's helpful. Thank you so much.
Payer facing team in terms of follow up to educate them that we did get approval and we did get a script.
Thanks next question. Thank you. Your next question comes from the line of kin Johnson from Goldman Sachs, please go ahead. Your line is open
Would you be able to try to get reimbursement for that patient.
Hunter Smith: Lastly for me on slide 22 there is further detail on our operating expenses for the third quarter and updated full year operating expense guidance for the third quarter. Operating expenses of $98.5 million include a total of $18.8 million in stock-based compensation for fiscal year 2025. We are tightening our full year guidance and shifting the mix between R&D and SG&A expenses. Given the resources we have committed to be ready for the anticipated launch of IMCIVREE in acquired HO later this quarter, we anticipate approximately $295 to 315 million in non-GAAP operating expenses comprised of non-GAAP R&D expenses of $150 to 165 million, and non-GAAP SG&A expenses of $145 to 150 million. With that, I'll turn the call back over to David.
I think the timing overall in terms of getting specific policies in place their specific timing that different payers have in terms of your view of drugs. So that policy timing is a bit different and could be delayed.
Depending on.
You know the timing of that particular, payor and everything or if that drug such a profile.
So is it like relative to BBS? Could you just give us a little more color on on that?
But.
Similar to DBS, we didn't necessarily have a policy in place before we got reimbursement for that patient and we're gonna be working both of those through.
Maybe just to close on that 10%, it's a huge advantage to this as a follow on indications so.
You want me to speak to gross to net, to start? I I think what we anticipate in terms of the differences. Gross to net is, um, hard. It's a little hard to say. We've had around a 50-50. Medicare commercial mix for BBs.
Bvs was basically our first time through and people are learning about the drug for the first time here. They know the drug they've got a learning indication that deficit that will take some time, particularly with policies amazing thing that her team has done is.
David Meeker: Thank you, Hunter. We'll go to Q and A.
Operator: Thank you. As a reminder to ask a question, you will need to press Star 11 on your telephone and wait for your name to be announced. Please limit yourself to one question. To withdraw your question, please press star 11. We will take our first question, and the question comes from the line of Mike Olds from Morgan Stanley. Please go ahead. Your line is open.
Policy or no policy, we can get these patients reimbursed.
Um we don't know how different the ho population will be but that is the primary driver of our gross to that because we don't uh we don't rebate in any meaningful way. So it really is just a question of what's the Medicaid share that? Of course assumes that we still do not have Medicare access.
Got it thank you so much.
Thank you.
Your next question comes from the line of Paul <unk> from Stifel. Please go ahead. Your line is open.
If we are able to get Medicare access, then, you know, that GTM mix will shift favorably.
Hi, there this is Julian on for Paul Thanks, So much for taking our question.
You've talked in the past about how some patients in the Gws study may also be on background by cat.
Jan Massabro: Yep.
Hunter Smith: Good morning.
Jan Massabro: Thanks for taking the question, and congratulations.
Based on the mechanism curious on how you see the potential for added benefit.
Hunter Smith: On all the progress. Maybe just one quick one on Bivamelagon.
Jan Massabro: If you can share your latest thinking?
Thank you.
Hunter Smith: On the trial design for your phase.
Jan Massabro: 3 HO study and just curious if you received any initial feedback yet from the FDA there.
Yes, no. It's a good question I mean, we are interested in learning more there as you highlighted patients who are on by Cat are allowed in songs are stable and stable in the judgment of the trading position in this case, Dr Miller stable and thereby kind of dose.
David Meeker: Thanks. Yeah, you know, at this point we've run many trials in this MC4 pathway area. Bivamelagon will be. The HO trial will be similar and will obviously mimic what we did in the HO trial. So our expectation at this point is it'll be a double blind, randomized controlled trial. We will have a discussion with the regulators around the duration of the double blind period. Our expectation is that in some form they will want a full year of data. This is a new chemical entity. So again, whether we would provide that six months of double blind plus an additional six in an open label. Those are the kinds of questions we'll bring forward to regulators.
on the process in terms of the flow. Here I'm getting that patient from an initial script to treat. Yeah. So um, where already engaging with payers just in terms of giving them that, um, you know, heads up just in terms of timelines of potential approval within ho, so they at least have that preliminary background in terms of expectations. Um, once we received an RX, um, our teams work to, um, be able to uh, work through that reimbursement process, and that particular payer,
They are allowed in the trial Mechanistically.
How does <unk> oxide work with.
Hyperphagia is obviously by definition their approval has decreased behaviors, maybe somewhat better.
West circuits are they working on I think the one thing where comps and then AV is.
We're not redundant.
They're not working through.
<unk> agonists and exactly however, diazoxide working or not working through this empty for a pathway.
So.
David Meeker: But in terms of primary endpoints and the like, again we will be a % BMI change and we'll be enrolling children and adults in the, and then in terms of regulators. So we anticipate at this point our expected phase 2 post phase 2 meeting with the FDA when we would get this feedback is likely to be in Q1 next year.
There is certainly a possibility for them to be complementary I think from a side effect profile. There's no overlapping toxicities. They certainly can be used together.
Or maybe more prioritized in terms of our, um, pair facing team in terms of follow-up to educate them that we did get approval. And we did get a script um to be able to try to get a reimbursement for that patient. Um I think like the timing overall in terms of getting specific policies in place there are specific timings that different payers have in terms of review of drugs. So that policy timing is a bit different and could be delayed. Uh you know uh depending on on, you know, the timing of that particular payer uh and the reviewer of a drug um, post approval. Um but you know, similar to BBS. We didn't necessarily have a policy in place before we got reimbursement for that patient.
So we're going to be working both of those through.
Concern so we'll.
I will say again thanks.
Like I said open to learning here and hopefully the strong will give some insight.
Yeah, maybe just the the close on that as Jennifer said, and it's a huge advantage to just a follow on indication. So um,
Thanks for that.
Thanks.
Yes.
Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead. Your line is open.
you know, BBS was basically our first time through and people were learning about the drug for the first time. Um here they know the drug, they got to learn an indication that the deficit.
Jan Massabro: Great. Thank you.
Operator: Thank you. We will take our next question. The next question comes from the line of Phil Nadeau from TD Cowen. Please go ahead. Your line is open.
Hi, This is Evan Wang author Seamus Fernandez two questions for me first on <unk> just to follow up on the trial Amendment.
An amazing thing that her team has done is um policy or no policy. Um, we can get these patients reimbursed.
Got it. Thank you.
Hunter Smith: Good morning. Congrats on the progress.
Thank you.
David Meeker: Thanks for taking our question. Our question is to dive into the PWS efficacy endpoints a bit further to understand what you need to see to advance IMCIVREE forward in PWS. So in terms of weight, you suggested something that suggests 5% weight loss at one year. Can you give us more of a sense of what that is? Is that 2.5% at 26 weeks or is it a different way to think about it in terms of hyperphagia? Similar question, you said it's going to be hard to interpret, but nonetheless, hyperphagia is a major determinant of quality of life in Prader-Willi. So is there any level of hyperphagia change that would be proof of concept and warrant further development? Thanks. Yeah, yeah, I know, and I'll just preface the thing. I know there's going to be a lot of questions of Prader-Willi.
Yes.
Terms of the extension out to two weeks.
Your next question comes from the line of Paul Mattis from stifel. Please go ahead. Your line is open.
And the degree of participation.
Ed or tariffs, thus far have there been any dropped out that patients are entering that original 26 week conclusion.
And then on <unk> curious about the international launch preparation, particularly in Europe.
Hi there. This is Julian on for Paul. Thanks so much for taking our question. Um you talked in the past about how some patients in the PWS study, uh may also be on background vicat.
I'm just wondering if you could comment on how you're preparing for another launch theyre, giving existing approvals and DBS and any kind of major dialogues at major reimbursement authorities.
Just based on the mechanism. Um, curious on on how you see the potential for added benefit with site. Thank you.
Yeah. So I'll go and then beyond though so let's take the international one so I'm not going to update exactly where we are in the patients in the trial.
Yeah, no, it's a good question. I mean, we're interested in learning more there, um, as you highlighted, um, patients, who are on by Kat are allowed as long as they're stable and stable as in the Judgment of the uh treating position in this case, Dr. Miller stable on their vat dose, um,
Who is behind that that will be coming shortly again, we're targeting we will definitely be in December and as I said and our goal is to.
David Meeker: I'll do the best, but needless to say, I won't have a lot more to add to the color we provided previously. But your question on what constitutes success and how will we interpret it? Our goal is to get 10 to 20 patients on treatment for six months. We'll have some part of that cohort available by the end of the year, obviously a very small data set. We'll present patient by patient data the way we've done in the past, so you can all see exactly what we're looking at. It's not a mean number. Again, we highlighted that for the bivamelagon data. It's going to be very much, you know, looking patient by patient. And if patients seem to do well, why, you know, what's our best understanding as to why they did well?
Put out what data we have prior to the Christmas break.
They are allowed in the trial mechanistically. Um, you know, how does dioxide work? Um, what's...?
John you want to talk about the international launch.
Yes sure. Thank you for the question so.
Hey, Julien.
<unk>.
We expect to launch in Europe across various countries during 2027.
Hyper Pas is obviously by definition of their approval, um, is decreased, um, behaviors. May be, um, somewhat better. What circuits are they working on? I think the 1 thing we're confident of is
I think we will follow almost a long sequence we had for Bbs, we have already started to engage with payers of appeals.
So now many years.
We're not redundant, um, they're not working through, you know, semi tide, mc4r agonists and exactly however dioxide working or not working through this mc4r pathway except, you know, exactly. So, um, there's certainly a, a possibility for them to be complimentary. Um, I think from a side effect profile, um there's not overlapping.
And as it ties.
David Meeker: And if another patient didn't do well or have the change, is there some other explanation for that? And you take all that into account? So it's going to be a judgment call, Phil, needless to say, and I don't think it'll be. Well, let's put it this way. I mean, you can make these judgment calls in these small data sets, but that's how it'll be done. It's not a magic number of, you know, we got halfway to the 5% at six months. I don't expect necessarily that that's going to be the metric per se. These things don't tend to be linear, but there'll be a level of confidence looking at the individual data points that the drug seems to be working. And when we run a longer, a larger trial, we'll be able to get to the verdict. That's very helpful. Thank you.
Very well.
And the dealers who have a lot of experiences that they can reach out to bid on just turned in.
And so do you so we really are.
Toxicities. Otherwise, they certainly can be used together um with with no concerns. So um, we'll see. Again, we're like I said, open to learning here and, um, hopefully, this trial will give us some insight.
Thanks for the.
Didn't we sell.
Launch preparation.
Thanks.
And as we're now seeing is may be in terms of.
Tina.
A true patient population of course larger deals on BVA. So we will add some.
Thank you. Your next question comes from the line of Shameless. Fernandez from Guggenheim Securities. Please go ahead. Your line is open.
Stuff to make sure that we can adequately cover the <unk> necessary to make the most of it is upon entity, but this will.
Come later on in this really follows the launch sequence.
David Meeker: And then just one last thing on the HQCT, just to remind everybody, our primary endpoint here is BMI percent change. We would not go into a phase 3 trial without confidence that, as I just indicated, we could move that BMI. We wouldn't pursue a hyperphagia label only. I know a number of companies are out there and I'm seeking that approval at this time. However, based on the mechanism of our drug, if we do see BMI percent change, almost by definition, given the biology, we will improve hyperphagia.
Yeah. Thanks, Andy I just wanted to add.
MSA something Jon just said, which is a really important part of this international equation is these single payer systems. Some many of them they use local experts.
Um, and the degree of participation interested or deserves thus far. Have there. Been any dropouts as patients are entering that original 26 week conclusion.
And these are all people as John said, we work closely with many of them are trial, you know I've been part of our trials and so they're not only experts in the disease. They know the drug well and they have been incredibly helpful. In our prior discussions and as John said, we anticipate them being very helpful. In the upcoming H O discussions.
And then on uh ho um, curious about the international launch preparations particularly in Europe. Um, just uh, wondering if you could comment on how you're preparing for another launch their giving existing approvals in DBS and, you know, any kind of major dialogues with major reimbursement authorities. Thanks.
Next question.
Thank you.
Your next question comes from the line of Dennis <unk> from Jefferies. Please go ahead. Your line is open.
Jan Massabro: That is helpful.
David Meeker: Thank you.
Operator: Thank you. We will take our next question. Your next question comes from the line of Derek Archila from Wells Fargo. Please go ahead. Your line is open.
Hi, This is Deutsche Bank.
Yeah, so, uh, I'll go and then, you know, so let's take the international 1. So, you know, I'm not going to update, um, exactly where we are in the patients and the trial, and, you know who's behind that. So that that'll be coming shortly. Again, we're targeting, um, it'll definitely be in December. And as I said, you know, goal is to, um, you know, put out what data we have, um, prior to the Christmas break,
Interesting. Thank you for taking our questions.
Yeah, and you want to talk about the international lunch?
We had one on the PWA when you disclosed the initial data December potentially should we also be expecting a go versus no go decision in terms of moving into phase III or is there a scenario, where you would wait for a longer follow up before making that decision. Thank you.
David Meeker: Hey, good morning and thanks for taking the questions here. So, first question, just can you discuss some of the drivers behind the changes to the ongoing favorability trial for IMCIVREE?
David Connolly: It looks like you extended it out.
Yes, sure. Thank you for the question. So, as I have said during my presentation, we expect to launch in Europe across various countries during 2027.
David Meeker: To 52 weeks from 26.
David Connolly: What looks like the potential to.
David Meeker: Explore adding sites to the trial? And then the second question, just briefly.
Yes, no. It's a fair question, yes, definitely that's a scenario I mean I think this is incomplete data and we we might be in a position to make a call on depending on how strongly we feel the data signaling or we may indicate that.
David Connolly: Can you discuss if you've had any FDA, you know, agreements or discussions around?
David Meeker: The indication statement for HO and whether it could or could not, you know, include hyperphagia? Thanks. Yeah, I'll take the last one first. So on the HO, again, our regulatory interactions have been. I characterize them as routine, which is highly favorable given a lot of the news, some circling the FDA. But it's been exactly as we would expect. They come back with specific questions, and we answer those. The labeling discussions tend to be late, so with regard to your specific question on indication, we are not entered into that specific dialogue as of this point. In terms of the updates that a number of you picked up on in ClinicalTrials.gov for the Prader-Willi phase 2 study, that's really housekeeping. So there were two issues there we updated on.
Um I think we we will follow almost the launch sequence. We had for for BBS. We have already started to engage with the payers of the payers have known us for our many years and uh and they know certain prioritize very well.
We want to continue to get the full data set and then we'll come back to you with that final decision. So yes, all options are on the table.
Got it thank you.
Thanks.
Thank you.
We will take our final question on the final question comes from the line of rock around Silver Ravi from H C. Wainwright. Please go ahead. Your line is open.
And they also have a lot of experts that they can reach out to, to better understand the, the drug and and the disease. So we are really confident with our launch preparation. Um and the last thing is, maybe in terms of Team, the ho patients population is of course larger than BBS. So we will add some
Thanks, so much for taking our questions I just wanted to ask about the German observational study findings and how you expect that to potentially percolate into other indications beyond <unk> syndrome, and what impact you anticipate this might have on prescribing decisions in those areas. Thank you.
Stuff to make sure that we can adequately cover all the hcps necessary to make the most of this opportunity. But this will come later and this will follow the launch sequence.
David Meeker: One is, in any trial, rare disease trials, we set the six months as the end point, meaning that's the point in which we would look at the BMI and make this judgment, so to speak. Are you seeing success or not? But allowing patients to continue if they feel like they want to, beyond six months, we needed to update the trial to allow that to happen as opposed to leaving somebody and just saying, okay, we got to stop the drug now. And then the second was in terms of adding an additional site. Again, that was just, you know, in case we needed working with a single site. You know, Dr. Miller's site in Florida, as you know, she's extremely busy. And so that was just in case we couldn't. As of this point, we haven't opened a second site. We're continuing to work with Dr.
Yes, I think thanks for picking up on.
One other question.
Yeah, thanks. And yeah, I just want to um, emphasize something you just said, which is a really important part of this International equation? Is this Single Payer system, some many of them, they use local experts. Um,
I think what we found most interesting about that April it's just interesting in general right I mean these livers.
Two remarkable degree.
In Bbs and as I highlighted in my comments it didn't seem to tightly correlated with BMI change and so it raises the possibility we know theres empty for receptors in different places, we know <unk> agonism, Indra interacts with the autonomic nervous system the Vegas interacts.
And these are all people Jan said, we work closely with many of them are trial. You know, I've been part of our trials and so they're not only experts in the disease. They know the drug well and they've been incredibly helpful in our prior discussions. And, as Jan said, we anticipate, you know, being them being very helpful, in the upcoming, ho discussions.
Next question.
Thank you.
Your next question comes from the line of Dennis. Ding from Jeffrey's please go ahead. Your line is open.
<unk>.
David Meeker: Miller, and she's doing well there. So. So now I need to read through.
The liver there are they are not <unk> four receptor in the liver there are empty one receptor in the liver so.
It is.
As I said, you get a drug approved.
Operator: Thank you. We will take our next question. Your next question comes from the line of Whitney Ijem from Guggenheim Securities. Please go ahead. Your line is open.
Kols.
Others start making the observation.
Lot more so I think theres a lot my point again I'm sharing that was I think there is a lot more to be learned about.
Jennifer Lee: Thank you for taking our questions. This is D'Angela on for Whitney. Maybe switching gears a little bit. A question on the HO launch. Any updates you can provide around conversations you're having with payers? Should we assume that most or all patients will be on the free drug program until payers start to finalize their policy updates in three to six months after approval? Or any color you could provide around the gross to net around IMCIVREE?
This mechanism beyond simply the reduction in hyperplasia and associated increase in energy expenditure and associated BMI weight decrease so that's it.
Hi uh this is George with on for Dennis ding, thank you for taking our questions. Um we had 1 on the PWS when you disclose the initial data in December potentially, should we also be expecting a go verse no-go decision? In terms of moving into phase 3 or is there a scenario where you would wait for a longer follow-up before making that decision? Thank you.
You said it was these were pretty remarkable results and we thought it was worth highlighting.
Thank you.
Thank you.
We do have a question and the question comes from the line of John Wilson from <unk>. Please go ahead. Your line is open.
David Meeker: Maybe just one comment before I turn it over to Jennifer. So patients who have been in the trial will stay in the trial. So the clinical trial patients will stay on drug until they get access, but we will not have an early access program specifically. But beyond that, Jennifer, do you want to comment on it?
Yeah, no it's fair question. Um, yes, definitely, that that's a scenario. I mean, I I think, um, this is incomplete data and you know, we we we we might be in a position to make a a call. Um depending on you know how strongly we feel the data signaling. Or we may indicate that uh look we we want to you know continue to get the full data set and then we'll come back to you with that final decision. So yes, I'll uh all options are on the table.
Hey, Thanks for taking my questions squeezing me in just.
Thank you.
Just wondering and sorry, if I missed this earlier of the.
We will take our final question.
2000 potential patients.
<unk> been able to identify any more information on them on who may or may not be good candidates for one reason or the other or is it simply that you have kind of.
And the final question comes from the line of ragar ram salari from HV, Wayne Wright, please go ahead. Your line is open
David Connolly: Yeah.
Jennifer Lee: So we feel very positive just based off of the feedback that we've received just through our discussions with payers as well as the market research that we've conducted, just gaining payer insights overall. I think from a process of reimbursement post approval, it's going to be a similar process just in general as we receive prescriptions. Even if there's not a specific policy in place by the time we receive this script, we still work through the process just in terms of going back to the payer to try to gain access. We've been able to gain access even prior to that formal policy being in place.
Identifier through the claims analysis you've done.
The 2000 patients or one that through the discussions of our field organization and just.
Thanks so much for taking our questions. I just wanted to ask about the German observational study findings, and how you expect that to potentially percolate into other indications Beyond bardet, Beatles syndrome and what impact you anticipate? This might have on prescribing decisions in those areas. Thank you.
Discussions with the <unk>.
Physicians they have outlined that either they have X number of diagnosed <unk> patients or they have Y number of patients that meet that definition and criteria that they wanted to further evaluate at that patient came through in <unk>.
ZIP visiting to get them to an actual diagnosis.
Jennifer Lee: So I don't expect anything to be different, and I don't expect that we'd have to wait until the actual time of evaluation of this particular drug with that specific payer to actually be able to gain reimbursement and put that patient on commercial therapy.
That process is ongoing and we're very happy just overall in terms of understanding that it is it.
Addressable opportunity in terms of getting patients to a quicker diagnosis.
And there's also an interest from the physician perspective with a lot of Ah hah moments.
David Meeker: Next question.
To get patients to this particular diagnosis so that process is ongoing.
Operator: Thank you. We will take our next question. The question comes from the line of Faisal Khurshid from Leerink Partners. Please go ahead. Your line is open. Hi guys.
Got it okay. Thanks, Jennifer.
Thanks, John.
David Connolly: Thank you so much for taking the question. I wanted to ask about how investors in the street should be thinking about the launch curve in hypothalamic obesity. I know you guys have put out this kind of these metrics of like 2,400 target physicians and 2,000 patients that you believe are kind of your top targets. How should we think about, you know, kind of prosecuting that opportunity and like what the shape of the launch curve look like relative to like Bardet-Biedl or relative to other launches out there like the Prader-Willi launches. Thank you.
Thank you. This concludes today's question and answer session I will now hand back to David <unk> for closing remarks.
Okay, well. Thank you again for tuning in this morning.
Kls. Um, you know, others start making observations and you begin to learn a lot more. So I think there's a lot my point again, I'm sharing that was that. I think there's a lot more to be learned about uh this mechanism Beyond simply the reduction in hyper fasia and Associated, you know, increase in energy expenditure and Associated um BMI weight, decrease, so that's it. Um, like I said it was these were pretty remarkable results and we we thought it was worth highlighting.
<unk> heard.
Thank you.
Hopefully understood we're really excited about where we are.
We've made great progress and set ourselves up well.
Interesting and pretty important milestones in the fourth quarter and a lot.
Thank you. Thank you. We do have a question. The question comes from the line of John Woolman from Citizens. Please go ahead. Your line is open.
Hello.
Jennifer Lee: Thanks for the question. I think overall, just in terms of HO, we have such a solid ground just based off of what we have learned and put in place for the BBS launch, even very specifically, you know, a lot of work just in terms of the payer landscape to have them understand the difference in terms of our patient population, and our drug versus general obesity to have that strong foundation in terms of that understanding. As we potentially expand to other indications that are rare that also target a similar pathway, we have the right team in place. We feel very confident holistically just in terms of the HCP targeting that we have and are really pleased with the progress. And I see outlined, we outlined that we had about 2,000 potential patients that were suspected or actually diagnosed at this point of time.
Thanks Al.
This concludes today's conference call. Thank you for participating you may now disconnect.
Hey, uh, thanks for taking the question. Squeezing me in. Um, just wondering in sorry if I missed this earlier, um, of the 2000. Potential patients, have you been able to identify any more information on them on who may? Or may not be good candidates for 1 reason or the other? Or is it simply that you have kind of a a a identifier through the claims analysis you've done
the, the 20000 patients are ones that through the discussions of our field organization and just, uh, discussions with the, um,
Physicians. They have outlined that either. They have X number of diagnosed ho patients or they have y number of patients that meet that uh, definition and criteria that they wanted to further evaluate as that patient came through, in terms of visiting, to get them to an actual diagnosis.
Jennifer Lee: I think with that said, the things that are similar just in terms of BBS and any rare disease is that without a therapy available, there really isn't that much incentives to get patients to a diagnosis. And there's not a lot of education to also help in terms of getting patients to that diagnosis. And that is very similar to what we have learned in the HO space. You know, although it's easy potentially to identify potential patients with the background that may have HO, those patients have not necessarily gotten to that specific diagnosis. So that's going to take a bit of time, especially as it takes time for these patients to get back to the endocrinologist to be able to see them have that discussion, get that diagnosis, and then post approval have that discussion about potentially getting onto IMCIVREE.
Um, so that process is ongoing and where uh very happy just overall in terms of understanding that there is this addressable opportunity in terms of getting patients to a quicker diagnosis. Um and there's also an interest from The Physician perspective with a lot of aha moments.
Uh, to get patients um, to this particular diagnosis. So that process is ongoing
Got it. Okay. Thanks Jennifer.
Thank you.
This concludes today's question and answer session, I will now hand back to David Mica for closing remarks.
Okay. Well thank you again um for tuning in this morning as you've heard. Um hopefully understood um we're really excited about where we are.
Jennifer Lee: So you know, we feel very confident just in terms of our ability to execute. But there are different factors that may impact the ramp in terms of launch.
Made great progress, and set ourselves up for interesting and pretty important milestones in the fourth quarter and a lot. Um, that's going to continue to to enroll in 2026. So look forward to the next update. Thanks all.
Hunter Smith: Two things I'll just add in complement to what Jennifer just stated. First, the PWS situation is significantly different because many PWS patients are cared for in group homes, and dealt with in very specific specialized centers, with the result that the opportunity for them to be prescribed in a more bolus-like fashion is greater. So our research has indicated that the HO patients are more distributed with community and local endocrinologists as opposed to in specialized centers. And secondly, conversely versus as Jennifer stated, versus BBS, with a higher diagnosis rate and the care in a single specialty accounting for much greater patient percentage of the patients, there is more opportunity there in the early days.
This concludes today's conference call, thank you for participating. You may now disconnect
David Connolly: Got it. That's helpful.
David Meeker: Thank you so much. Thanks. Next question.
Operator: Thank you. Your next question comes from the line of Corinne Johnson from Goldman Sachs. Please go ahead. Your line is open.
David Meeker: Good morning, this is Eric on for Corinne Johnson here. The question we have is just.
David Connolly: To double click a little more on.
David Meeker: The HO launch that we were just discussing here. How should we think about the process for and the cadence of reimbursement and the anticipated gross to net in HO? So they're like relative to BBS. Can you just give us a little.
David Connolly: More color on that.
Hunter Smith: You want me to speak to gross to net to start? I think what we anticipate in terms of differences gross to net is it's a little hard to say. We've had around a 50-50 Medicare commercial mix for BBS. We don't know how different HO population will be, but that is the primary driver of our gross to net because we don't rebate in any meaningful way. So it really is just a question of what's the Medicaid share. That of course assumes that we still do not have Medicare access. If we are able to get Medicare access, then you know that GTN mix.
David Meeker: Will shift favorably on the process in terms of the flow here, getting that patient from an initial script to treatment.
Jennifer Lee: Yeah, so we're already engaging with payers just in terms of giving them that, you know, heads up just in terms of timelines of potential approval within HO so they at least have that preliminary background in terms of expectations. Once we received an Rx, our teams work to be able to work through that reimbursement process, and that particular payer may be more prioritized in terms of our payer facing team in terms of follow up to educate them that we did get approval and we did get a script to be able to try to get a reimbursement for that patient. I think like the timing overall in terms of getting specific policies in place. There's specific timing that different payers have in terms of review of drugs.
Jennifer Lee: So that policy timing is a bit different and could be delayed, you know, depending on, you know, the timing of that particular payer and the reviewer of a drug post approval. But you know, similar to BBS, we didn't necessarily have a policy in place before we got reimbursement for that patient. So we're going to be working both of those through.
David Meeker: Yeah, maybe just to close on that, as Jennifer said, it's a huge advantage to this is a follow-on indication. So you know, BBS was basically our first time through and people were learning about the drug for the first time here. They know the drug, they got to learn an indication. As Jennifer said, that'll take some time, particularly with policies. But amazing thing that her team has done is policy or no policy, we can get these patients reimbursed.
Jennifer Lee: Got it.
David Meeker: Thank you.
Operator: Thank you. Your next question comes from the line of Paul Mattis from Stifel. Please go ahead. Your line is open.
David Meeker: Hi there, this is Julian Trapal. Thanks so much for taking our question. You talked in the past about how.
Jan Massabro: Some patients in the PWS study may.
David Meeker: Also, be on background with that just based on the mechanism.
David Connolly: Curious on how you see the potential?
David Meeker: For added benefit with setmelanotide.
Jennifer Lee: Thank you.
David Meeker: Yeah, no, it's a good question. I mean, we're interested in learning more there. As you highlighted, patients who are on Victoza are allowed as long as they're stable. And stable is in the judgment of the treating physician in this case, Dr. Miller, stable on their Victoza dose. They are allowed in the trial. Mechanistically, you know, how does diazoxide work with hyperphagia? Obviously by definition their appetite is decreased. Behaviors may be somewhat better. What circuits are they working on? I think the one thing we're confident of is we're not redundant. They're not working through, you know, setmelanotide MC4R agonists and. Exactly. However, diazoxide is not working through this MC4R pathway. Exactly. So there's certainly a possibility for them to be complementary. I think from a side effect profile there's not overlapping toxicity. So they certainly can be used together with no concern. So we'll see.
David Meeker: Again, we're, like I said, open to learning here and hopefully this trial will give us some insight. Thanks for the thanks.
Operator: Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead. Your line is open.
David Meeker: Hi, this is Evan Wang on for Seamus Fernandez. Two questions for me. First on Prader-Willi, just a follow up on the trial amendment. Curious in terms of, you know, the extension out to 52 weeks and the degree of participation anticipated or observed thus far. Have there been any dropouts as patients are entering that original 26-week conclusion? And then on HO, curious about the international launch preparations, particularly in Europe. Just wondering if you'd comment on how you're preparing for another launch there, given existing approvals in BBS and, you know, any kind of major dialogues with major reimbursement authorities. Thanks. Yeah, so I'll go and then. Yeah, so let's take the international one. So, you know, I'm not going to update exactly where we are in the patients in the trial and, you know, who's behind that. That'll all be coming shortly. Again, we're targeting.
David Meeker: It'll definitely be in December. And as I said, the goal is to, you know, put out what data we have prior to the Christmas break. Jan, do you want to talk about the international launch?
Jan Massabro: Yes, sure. Thank you for the question. So as I've said during my presentation, we expect to launch in Europe across various countries during 2027. I think we will follow almost the launch sequence we had for BBS. We have already started to engage with the payers. So the payers have known us for now many years, and they know setmelanotide very well, and they also have a lot of experts that they can reach out to to better understand the drug and the disease. So we are really confident with our launch preparation. And the last thing is maybe in terms of team, the HO patient population is of course larger than BBS. So we will add some staff to make sure that we can adequately cover all the HCPs necessary to make the most of this opportunity.
Jan Massabro: But this will come later, and this will follow the launch sequence.
David Meeker: Yeah, thanks Jan. And I just want to emphasize something Jan just said, which is a really important part of this international equation, is these single payer systems. Some, many of them, they use local experts, and these are all people, as Jan said, we work closely with. Many of them are trial, you know, have been part of our trials. And so they're not only experts in the disease, they know the drug well and, and they've been incredibly helpful in our prior discussions. And as Jan said, we anticipate them being very helpful in the upcoming HO discussions. Next question.
Operator: Thank you. Your next question comes from the line of Dennis Ding from Jefferies. Please go ahead. Your line is open.
Jennifer Lee: Hi, this is Georgina, Bank of America, for Dennis Ding. Thank you for taking our questions. We had one on the PWS. When you disclose the initial data in December, potentially, should we also be expecting a go versus no go decision in terms of moving into phase 3 or is there a scenario where you would wait for a longer follow up before making that decision? Thank you.
David Meeker: Yeah, no, fair question. Yes, definitely that's a scenario. I mean, I think this is incomplete data and we might be in a position to make a call depending on how strongly we feel the data signaling or we may indicate that, look, we want to continue to get the full data set and then we'll come back to you with that final decision. So yes, all options are on the table.
Jennifer Lee: Got it. Thank you.
Jan Massabro: Thanks.
Operator: Thank you. We will take our final question. The final question comes from the line of Ram Selvaraju from H.C. Wainwright. Please go ahead. Your line is open.
David Meeker: Thanks so much for taking our questions. I just wanted to ask about the German observational study findings and how you expect that to potentially percolate into other indications beyond Bardet-Biedl Syndrome and?
David Connolly: What impact you anticipate this might have?
David Meeker: On prescribing decisions in those areas. Thank you. Yeah, thanks for picking up on that with a question. I think what we found most interesting about that. Well, it's just interesting in general, right. I mean, these livers improved to a remarkable degree in BBS. And as I highlighted in my comments, it didn't seem to tightly correlate with BMI change. And so it raised the possibility. We know there's MC4R receptors in different places. We know MC4R agonism interacts with the autonomic nervous system, the vagus interacts, you know, innervates the liver.
Hunter Smith: There are.
David Meeker: There's not MC4 receptors in the liver. There are MC1 receptors in the liver. So, you know, it just, it's as I said, you get a drug approved, you know, KOLs, you know, others start making observations and you begin to learn a lot more. So I think there's a lot. My point again of sharing that was that I think there's a lot more to be learned about this mechanism beyond simply the reduction in hyperphagia and associated, you know, increase in energy expenditure and associated BMI weight decrease. So that's it. Like I said, it was. These were pretty remarkable results and we thought it was worth highlighting. Thank you. Thank you.
Operator: Thank you. We do have a question, and the question comes from the line of Jon Wolleben from Citizens JMP. Please go ahead. Your line is open.
David Meeker: Hey, thanks for taking the question, squeezing me in.
Hunter Smith: Just wondering, and sorry if I missed this earlier.
David Meeker: Of the 2,000 potential patients, have you?
Hunter Smith: Been able to identify any more information on them on who may or may not be good candidates for one reason or the other? Or is it simply that you have kind of identified through the claims analysis you've done?
Jennifer Lee: The 2,000 patients are ones that through the discussions of our field organization and just discussions with the physicians, they have outlined that either they have X number of diagnosed HO patients or they have Y number of patients that meet that definition and criteria that they wanted to further evaluate as that patient came through in terms of visiting to get them to an actual diagnosis. So that process is ongoing, and we're very happy just overall in terms of understanding that there is this addressable opportunity in terms of getting patients to a quicker diagnosis. And there's also an interest from the physician perspective with a lot of aha moments to get patients to this particular diagnosis. So that process is ongoing.
Hunter Smith: Got it. Okay.
David Meeker: Thanks, Jennifer. Thanks, Jon.
Operator: Thank you. This concludes today's question and answer session. I will now hand back to David Meeker for closing remarks.
David Meeker: Okay, well, thank you again for tuning in this morning. As you heard, hopefully understood, we're really excited about where we are. We made great progress and set ourselves up for some interesting and pretty important milestones in the fourth quarter and a lot that's going to continue to unroll in 2026. So, look forward to the next update. Thanks all.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.