Rhythm Pharmaceuticals Reports Third Quarter 2020 Financial Results
-- NDA for setmelanotide for POMC and LEPR deficiency obesities under review, with PDUFA goal date of
-- On track to announce topline data from pivotal Phase 3 trial in Bardet-Biedl and Alström syndromes late in fourth quarter of 2020 or early in first quarter 2021 --
-- Plan to announce data from multiple cohorts in ongoing Phase 2 basket study early in first quarter 2021 --
“At Rhythm, we are making meaningful progress toward our goal of changing how the world thinks about obesity by focusing attention on the critical role that genetics can play in driving disease,” said
- In October, the Company announced that results from two pivotal Phase 3 studies evaluating setmelanotide in pro-opiomelanocortin (POMC) deficiency obesity and leptin receptor (LEPR) deficiency obesity were published in The Lancet Diabetes & Endocrinology. Rhythm believes these data validate setmelanotide’s potential to be the first approved therapy for people living with POMC or LEPR deficiency obesities.
- Rhythm recently announced the addition of two senior biopharmaceutical executives to its leadership team to lead global integrated commercial strategies in key markets. In October, the Company announced the appointment of
Jennifer Chienas Executive Vice President, Head of North America, effective Nov. 9, and in September, the Company announced the appointment of Yann Mazabraudas Executive Vice President, Head of International.
Upcoming Regulatory Milestones:
- The Prescription Drug User Fee Act (PDUFA) target date is
November 27, 2020, which is when the U.S. Food and Drug Administration(FDA) is scheduled to act on the Company’s New Drug Application (NDA) for setmelanotide for the treatment of POMC deficiency obesity and LEPR deficiency obesity. As previously announced, the FDA granted rare pediatric disease designations for setmelanotide for the treatment of POMC deficiency obesity and LEPR deficiency obesity, which means Rhythm would be eligible to receive one priority review voucher, pending approval.
- Rhythm's Marketing Authorization Application (MAA) for setmelanotide for the treatment of POMC deficiency obesity and LEPR deficiency obesity is currently under review by the
European Medicines Agency(EMA). As is frequently the case with filings that initially receive accelerated assessment by the EMA, Rhythm's MAA recently has reverted from an accelerated assessment to a standard review.
Upcoming Clinical Milestones:
- Rhythm will present three abstracts at The Obesity Society’s ObesityWeek® 2020, being held virtually from
Nov. 2-6. Presentations include full data from the Phase 2 trial of a once-weekly formulation of setmelanotide, which will be presented in an oral presentation at 9:45 a.m. ETon Thursday, Nov. 5, as well as updated data from the long-term extension study of setmelanotide in POMC deficiency obesity and new data showing there is no treatment-related effect of setmelanotide on depression or suicidality, both of which will be presented in poster sessions, beginning at 12 noon ETon Nov. 3.
- Rhythm expects to report topline data from its combined pivotal Phase 3 trial evaluating setmelanotide in BBS and Alström syndrome late in the fourth quarter of 2020 or early in the first quarter of 2021.
- Rhythm now plans to provide an update on its ongoing exploratory Phase 2 Basket Study and genetic sequencing efforts early in the first quarter of 2021. This update will include new data from individuals living with HET obesity due to a loss-of-function variant in one of two alleles on the POMC, PCSK1 or LEPR gene, as well as SRC1 and SH2B1 deficiency obesities. The update will also include data from Company’s sequencing efforts, which now includes samples from more than 30,000 individuals with severe obesity.
- Rhythm currently is evaluating next steps for the pre-clinical development of
RM-853, its ghrelin o-acyltransferase (GOAT) inhibitor.
Third Quarter 2020 Financial Results:
- Cash Position: As of September 30, 2020, cash, cash equivalents and short-term investments were $201.8 million, as compared to $228.6 million as of June 30, 2020. This decrease reflects
$27.0 millionof cash used to fund operating activities in the third quarter 2020. Based on its current clinical development plans, Rhythm expects that its existing cash, cash equivalents and short-term investments will enable it to fund its operations at least through the end of 2021.
- R&D Expenses: R&D expenses were $23.0 million for the third quarter of 2020 as compared to $26.6 million for the third quarter of 2019. The decrease in R&D spending was primarily attributed to a
$5.2 millionreduction in clinical trial expenses associated with the Company’s Go-ID genotyping study and the once-weekly formulation study and a decrease of $3.2 millionrelated to translational research and genetic sequencing efforts. These decreases were partially offset by an increase of $3.6 millionrelated to purchases of setmelanotide API and an increase of $1.0 millionrelated to a milestone payment associated with the license agreement with Ipsen on filing the MAA for setmelanotide for the treatment of POMC and LEPR deficiency obesities.
- S,G&A Expenses: S,G&A expenses were $11.3 million for the third quarter of 2020 as compared to
$10.5million for the third quarter of 2019. This increase was primarily due to an increase of $1.3 millionin stock compensation expense associated with a grant to the Company’s new chief executive officer and other new hire grants during the period as well as a modification of stock options for the Company’s former chief commercial officer, partially offset by a decrease of $0.8 millionin consulting services.
- Net Loss: Net loss was $33.8 million for the third quarter of 2020, or a net loss per basic and diluted share of $0.77, as compared to a net loss of $36.0 million for the third quarter of 2019, or a net loss per basic and diluted share of $1.04.
Year to Date Financial Results:
- Cash Position: As of
September 30, 2020, cash, cash equivalents and short-term investments were $201.8 million, as compared to $292.5 millionas of December 31, 2019. This decrease reflects $92.9 millionof cash used to fund operating expenses in 2020.
- R&D Expenses: R&D expenses were
$68.5 millionfor the nine months ended September 30, 2020, as compared to $84.6 millionfor the nine months ended September 30, 2019. The decrease was primarily due to a decrease of $16.0 millionrelated to the GO-ID genotyping study, the POMC and LEPR clinical studies and the once-weekly formulation study, and a decrease of $7.5 millionrelated to translational research, pathway validation and genetic sequencing efforts. These decreases were partially offset by an increase of $3.0 millionrelated to a milestone expenses associated with the license agreement with Ipsen on filing the NDA with the FDA and the MAA with the EMA for setmelanotide for the treatment of POMC and LEPR deficiency obesities, an increase of $2.5 millionin spending related to the Phase 2 Basket Study, and an increase of $1.2 millionrelated to purchases of setmelanotide API.
- S,G&A Expenses: S,G&A expenses were
$33.0 millionfor the nine months ended September 30, 2020, as compared to $27.1 millionfor the nine months ended September 30, 2019. The increase was primarily due to an accounting charge of $4.0 millionrelated to the separation agreement and modification of stock options for the Company’s former chief executive officer and chief commercial officer, and an increase of $1.0 millionin various consulting and professional services related to legal and IT support costs.
- Net Loss: Net loss was
$99.1 millionfor the nine months ended September 30, 2020, or a net loss per basic and diluted share of $2.25, as compared to a net loss of $107.8 millionfor the nine months ended September 30, 2019, or a net loss per basic and diluted share of $3.13.
Rhythm is a late-stage biopharmaceutical company focused on the development and commercialization of therapies for the treatment of rare genetic disorders of obesity. The FDA has accepted for filing an NDA for setmelanotide for the treatment of POMC deficiency obesity and LEPR deficiency obesity with Priority Review and assigned a PDUFA goal date of
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the potential, safety, efficacy, and regulatory and clinical progress of setmelanotide, including the anticipated timing for release of clinical trial data and our expectations surrounding potential regulatory approvals and timing thereof, our business strategy and plans, including regarding commercialization of setmelanotide, management changes, our participation in upcoming events and presentations, and the sufficiency of our cash, cash equivalents and short-term investments to fund our operations. Statements using word such as “expect”, “anticipate”, “believe”, “may”, “will” and similar terms are also forward-looking statements. Such statements are subject to numerous risks and uncertainties, including, but not limited to, the impact of our management transition, our ability to enroll patients in clinical trials, the design and outcome of clinical trials, the impact of competition, the ability to achieve or obtain necessary regulatory approvals, risks associated with data analysis and reporting, our liquidity and expenses, the impact of the COVID-19 pandemic on our business and operations, including our preclinical studies, clinical trials and commercialization prospects, and general economic conditions, and the other important factors discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 and our other filings with the
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Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
|Three months ended
||Nine months ended
|Research and development||$||22,995||$||26,572||$||68,496||$||84,641|
|Selling, general, and administrative||11,289||10,535||33,006||27,135|
|Total operating expenses||34,284||37,107||101,502||111,776|
|Loss from operations||(34,284||)||(37,107||)||(101,502||)||(111,776||)|
|Other income (expense):|
|Interest income, net||466||1,104||2,403||4,003|
|Total other income, net||466||1,104||2,403||4,003|
|Net loss per share, basic and diluted||$||(0.77||)||$||(1.04||)||$||(2.25||)||$||(3.13||)|
|Weighted-average common shares outstanding, basic and diluted||44,142,334||34,541,765||44,097,178||34,470,995|
|Other comprehensive loss:|
|Unrealized (loss) gain on marketable securities||(392||)||—||238||—|
Condensed Consolidated Balance Sheets
(in thousands, except share data)
|Cash and cash equivalents||$||67,670||$||62,294|
|Prepaid expenses and other current assets||8,130||9,945|
|Total current assets||209,914||302,404|
|Property and equipment, net||3,289||3,671|
|Liabilities and stockholders’ equity|
|Accrued expenses and other current liabilities||11,536||13,530|
|Total current liabilities||15,848||24,417|
|Commitments and contingencies|
|Additional paid-in capital||621,085||606,307|
|Accumulated other comprehensive income||238||—|
|Total stockholders’ equity||196,937||281,020|
|Total liabilities and stockholders’ equity||$||215,477||$||308,523|
Source: Rhythm Pharmaceuticals, Inc.