Rhythm Pharmaceuticals, Inc. Common Stock 2026 Q2 Earnings Call

I'm Dave Connolly here at Rhythm Pharmaceuticals. For those of you participating on the conference call, our slides can be accessed and controlled by going to the investors section of our website, ir.rhythmtx.com. This morning, we issued our press release that provides our Q2 2026 financial results and a business update. That press release is available on our website. We also released data for RM-718 phase II trial in acquired hypothalamic obesity. Our agenda today is listed on slide 2. On the call 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 Yann Mazerbeau, executive vice president, head of international, is on the line joining us from Europe.

On slide 3, I'll remind you this call contains remarks concerning future expectations, plans, and prospects, which constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent annual or quarterly reports on file 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.

Good morning, and thank you for joining us. We have a lot to share today, headlined by a strong start to the U.S. launch of IMCIVREE for acquired hypothalamic obesity, reinforcing our conviction that HO represents a meaningful long-term opportunity for Rhythm. Progress during the quarter wasn't limited to our commercial business. In June, we presented positive six-month data in Prader-Willi at ENDO, showing setmelanotide achieved clinically meaningful BMI and BMI z-score reductions in fat mass and preservation of lean mass, and improvements in hyperphagia and anxiety measures. These data confirm the mechanistic rationale that MC4R agonism plays a key role in the pathology of PWS and demonstrated the positive impact IMCIVREE can have in this difficult-to-treat patient population. We look forward to updating you on a path forward for PWS in the next few months. Which brings us to our pipeline.

We believe our next generation MC4R agonists have the potential to bring meaningful new treatment options to patients living with rare neuroendocrine diseases. Today, we announce encouraging results that demonstrate RM-718, our weekly MC4R agonist, has the potential to deliver clinically meaningful BMI reductions in patients with acquired hypothalamic obesity, with efficacy comparable to what we've demonstrated with setmelanotide and bivamelagon, importantly, a favorable tolerability profile with no reports of generalized hyperpigmentation. First, let me comment on the IMCIVREE launch in HO. This is a unique, severe, rare disease marked by accelerated and sustained weight gain caused by a brain tumor and/or its treatment or other brain injury to the hypothalamus that impairs the MC4R pathway. Acquired HO is clearly distinct from general obesity and remains underdiagnosed and underrecognized.

With an estimated 10,000 patients in the U.S., a similar number in Europe, between 5,000-8,000 patients in Japan, this represents a significant global opportunity. In July, results from the phase III HO TRANSCEND trial were published in "The New England Journal of Medicine" by lead author Dr. Jennifer Miller and senior author Dr. Christian Roth, two of the world's leading experts in HO. In addition, as shown on slide six, "The New England Journal of Medicine" published an accompanying editorial with its Science Behind the Study feature, authored by Professor Sadaf Farooqi, one of the world's leading experts in the MC4R pathway diseases.

Articles like this in "The New England Journal of Medicine," 10 years after the POMC deficiency "New England Journal of Medicine" article that put Rhythm on the map, raised visibility of a historically underrecognized disease among clinicians, researchers, and payers, further establishes setmelanotide as a clinically meaningful advancement for patients. The awareness that there is an effective therapy for a rare disease increases the urgency on all parts of the healthcare system. Getting to a diagnosis matters when there's a precision medicine available. "The New England Journal of Medicine" article follows on the heels of the FDA approval on March 19th of this year. Throughout 2025 and 2026 our teams have been in the field focused on disease awareness and patient identification, engaging endocrinologists to deepen understanding of acquired HO and the connection between hypothalamic injury and the disruption of the MC4R pathway.

Our HO launch builds on this engagement and the successful commercial effort in BBS, an opportunity that continues to grow. Rhythm now has a mature rare disease commercial platform built on 4 years of commercial success and established relationships across physicians, payers, and patient communities. We're off to a promising start with this next phase of growth. With strong demand from patients and families, a broad and growing prescriber base, a positive reception from payers, we are encouraged with the first 14 weeks of the U.S. launch. Since approval on March 19th, we have received more than 400 start forms from approximately 300 unique prescribers. Jennifer will provide additional color on the U.S. launch. Yann will detail the next steps toward anticipated approval and launch in Japan this year and country-level launches in Europe next year. We are mindful that it is early days.

The first launch quarter performance reinforces our conviction that HO represents a long-term, durable, and sustainable opportunity for Rhythm. I want to briefly review preliminary data from the open label phase II Part C trial of RM-718, our weekly MC4R agonist in acquired HO. RM-718 is one of the two next generation MC4R agonists that have the potential to improve on the hyperpigmentation and convenience of setmelanotide. The weight loss efficacy for each of these three assets has been remarkably consistent. We believe these preliminary results are encouraging and meaningfully de-risk 718 as a development candidate going forward. Beginning on slide eight, we show the patient disposition and patient demographics. 11 patients were enrolled, and eight patients remain on active therapy. Seven patients have reached 16 weeks, and that is the data we are sharing here.

Two patients discontinued because of AEs during the first four weeks of treatment. One patient stopped because of injection site reactions, and a second patient discontinued secondary to ongoing nausea, which could not be controlled even with dose reductions. A third patient completed the 16-week trial period and later withdrew from long-term extension for personal reasons. Two additional patients have yet to reach the 16-week time point. Patients in the trial were 12 years of age or older, with a mean BMI of 40.1. Per protocol, doses were escalated to 40 mgs as tolerated. The mean BMI change of 11.6% for the seven patients who have reached week 16 is shown on slide nine. As you can see on slide 10, these results compare favorably with setmelanotide and bivamelagon results at a similar time point in patients with acquired HO.

In a pooled analysis of patients with HO in the phase II and phase III setmelanotide trials, the week 16 BMI reduction was 10.1%. For bivamelagon at 600 milligram dose, mean BMI reduction for seven patients at week 14 was 10.1%. Slide 11 shows a continued deepening of the effect in four patients with 28 weeks or more of treatment. As shown on slide 12, RM-718 was generally well-tolerated, with most common adverse events being injection site reactions and nausea. Importantly, we have observed no generalized hyperpigmentation with either bivamelagon or 718, which you would expect to see with MC1R agonism. Overall, these results validate our conviction that 718 has the potential to be a viable treatment option for rare MC4R pathway diseases.

Both 718 and bivamelagon have been shown to affect BMI reductions comparable to setmelanotide in patients with acquired HO, and both have greater specificity for the MC4R receptor without generalized hyperpigmentation. Importantly, the patent protection for both 718 and bima goes past 2040. We believe today's data further de-risks our ability to build a durable franchise of MC4R agonists. Enrollment of PWS patients in Part D of this open label trial will complete by the end of the year with a goal of enrolling 10 to 15 patients. As I mentioned, we are moving closer to a decision on a potential path forward for PWS with setmelanotide, bivamelagon, or 718, all viable options. As a reminder, we are aiming to initiate the phase III trial of bivamelagon in acquired HO by the end of this year, which is listed among the upcoming milestones on slide 13.

The first patients enrolled will be patients 12 and older as we finalize CMC work for the oral dissolvable tablets in the first quarter of next year. With that, I'll turn the call over to Jennifer and then Johan to provide more color on our strong commercial progress during the quarter.

Thank you, David. I'll begin on slide 15. I'm pleased to provide an update on the U.S. launch of IMCIVREE for acquired hypothalamic obesity. This was the first full quarter of launch, plus one additional week following FDA approval on March 19th. While we remain very early in the launch, we have seen strong demand, broad and expanding prescriber engagement and activation, and positive early payer experience supporting access. Overall, the early indicators are encouraging and reinforce our conviction in the long-term opportunity for acquired hypothalamic obesity. On slide 16, I'll start with the patient-level metrics. In the 14 weeks between FDA approval on March 19th and June 30th, we received more than 400 start forms for acquired hypothalamic obesity. This includes 66 start forms for converted trial patients, accounting for almost all the U.S. trial patients.