Conference. I'm Tazeen Ahmad. I'm one of the Senior Biotech Analysts here at the bank. It's my pleasure to have our next presenting company, Rhythm Pharmaceuticals. Sitting up here on stage with me is David Meeker, who is of course President and CEO. Welcome.
Thank you.
For the few people who may not know about the platform of the company, David, maybe you can give us a quick overview, and then we can go into some specifics.
Sure. Rhythm as a company was really founded around the melanocortin-4 pathway biology. The drug that's approved for multiple indications is a analog of the natural hormone that signals through this melanocortin-4 receptor. What that biology does is very simply is when we eat a meal, our gut hormones signal to the pancreas and to the adipocyte. The adipocyte releases leptin, it goes to the brain, signals down through this part of the hypothalamus, this POMC neuron, which then causes a hormone, alpha-melanocyte-stimulating hormone to be released. When that interacts with the receptor, it tells the body you're full, and there's food on board. You can increase your metabolic rate.
If you have impaired signaling through that pathway, you might eat a meal, or you eat a meal, the body doesn't get the signal you're full, you keep eating. Perversely, the body thinks you're starving, it's not getting the signal the food's on board, it keeps the metabolic rate low. These patients suffer with disproportionate levels of weight gain, and there's multiple different causes of how you get to impairment, some of which are genetic, for which we have some approved indication. Some of them are injury directly, that's our most recent approval, we'll talk more about that today, acquired hypothalamic obesity. Those are the two main categories that we're working on. As I said, our drug is a analog of this natural hormone that's deficient or missing.
In IMCIVREE, we're all looking at it for the HO launch now, but it's been on the market for a bit. You previously had smaller indications approved, maybe let's start off with those. Give us a sense of where you are, where you think you are in penetrating those markets.
Yeah. The first approvals, which were in 2020, as many companies do, particularly in rare diseases, you follow the biology. The best example of impaired signaling was patients who had a genetic impairment in this POMC neuron, so biallelic POMC neuron deficiency, if you will. That population, that one and another one with a leptin receptor, we thought, you know, there might be on the order of 2,500 patients epidemiologically. The challenge of that disease is Aside from this extreme early onset obesity, there weren't really any clear signs that that obesity might be due to a genetic cause as opposed to general obesity.
Of course, we live in an epidemic of obesity, so they're lost in the forest, truly, I mean, these patients. We've done genetic screening. We offer a genetic screening test for free. We realized early on that this was, in reality, a very, very small indication or two indications, we didn't put a sales force in the field when we got the drug approved. We made it commercially available. We priced the drug. There was a lot of advantages to having a little bit of that lead time, but it wasn't a true business opportunity that would sustain the company. Our next indication, which was Bardet-Biedl syndrome, larger indication.
We think there's about 5,000 patients in the U.S. that have that disease, but it's syndromic. The advantage of it being syndromic from an identification standpoint is that there's multiple disease manifestations that signal to the healthcare provider, whoever's trying to figure out what's going on, that there may be an underlying genetic disease here. You know, that population follows exactly the classic diagnostic odyssey that many patients with a rare disease do. They see multiple specialists until they finally find one who connects the dots and says, "Oh, you have Bardet-Biedl syndrome," and sends a genetic test. That drug, that indication we got approved in 2022. You know, from the beginning, we believed, and I think, you know, the results to date have supported that, is we could build a profitable company around, you know, Bardet-Biedl alone.
You wouldn't be spending a lot of money on R&D, but if you were really just, you know, focused on that, you know, it could support a company. From the beginning, with these genetic indications, and this, you know, partly from the world I came from, I believe strongly you know, all diseases, certainly genetic diseases, they're global. You know, despite being a smaller U.S. biotech company, you wanna think globally, and we did from the beginning. We have worked to make the drug available outside the U.S. We sell in about 25 countries now, and for these indications, these three genetic indications. That laid the foundation for where we are today.
A little bit of serendipity, which also I think is interesting in terms of how these things evolve. KOLs, thought leaders, one of them who'd been doing a lot of thinking about this area came to us and, you know, said, "You should really try this in this entity called acquired hypothalamic obesity." I will famously admit to when I took the CEO role in 2020, that trial was just getting underway, as I looked at the different places we could save money, I thought, "You know, well, let's stop that trial because if you injure the hypothalamus." I'll just give you the quick background for that, why it's sort of humorous in retrospect.
Most commonly, they have a tumor that develops in the region of the pituitary gland and the hypothalamus. Tumors that grow up in that area, benign tumors, they can be resected. When resected, patients can go on and live a relatively normal lifespan. The surgery, the radiation, sometimes the tumor itself, injures the pituitary. 80% plus of these patients will come out of surgery with pituitary insufficiency, meaning they need a thyroid replacement, adrenal hormone replacement, vasopressin insufficiency. You know, it can be a long list of hormonal insufficiency related to that pituitary and some hypothalamic damage. If you get enough hypothalamic damage, you injure this pathway, the melanocortin-4 pathway, which sits there.
About half of the patients with this underlying tumor come out of surgery and rapidly gain weight. It's like overnight, they have lost the signal that they're full, they explosively gain weight. What we found when we started the trial is that it's incredibly simple. We're replacing that hormone when replaced, the most striking thing about the clinical trial results was not that we got X percent weight loss, we got very good weight loss, you know, 19%-ish placebo-adjusted weight loss, but the consistency. It was like virtually every patient who took the drug had a meaningful response. That told us we were really fixing something. My early thought process, which was, "Well, you're injuring the hypothalamus.
I get it, you might injure the pathway, but won't you be losing the receptors as well? There's still a little bit of a mystery there. No. The answer is either, one, there's enough retained receptor activity in the hypothalamus and/or, and the and is probably significant, there are these melanocortin-4 receptors in other parts of the brain, including the brainstem and autonomic nervous system interacting with that that's probably contributing to the beneficial effect we see. Long story short is that's where we just got our PDUFA data in March 20th. We're now six weeks into launch and pretty excited about where we're going.
Okay. Thank you for that update. If we wanted to compare and contrast the launch trajectory of these smaller indications versus HO, can you just talk to some differences there, expected differences?
Yeah. The dynamics of a Bardet-Biedl syndrome, which I think about as a classic ultra-rare example, these patients tend not to be concentrated in a specific specialist. They're syndromic. They have, you know, many of these kids by age 18 are legally blind, so they'll see an ophthalmologist. Many of them have renal insufficiency, so they'll see a nephrologist. They have cognitive defects, so they'll, you know, see a neurologist. They see a variety of different specialists. The sales force that we put out was 16 people to cover all of the U.S., and obviously not with the goal of calling on everybody and calling on all of these specialists. The other challenge is these patients may see multiple specialists.
Once they get their diagnosis, they tend to go back to their primary care point, which might be a specialist, but also equally likely might be their primary care family physician, internal medicine. There's no way that with a Bardet-Biedl launch, you're gonna knock on the doors of doctors who you think might have a patient with that disease. You try to create a world with greater awareness so that the patient in that community has the ability, equal ability to find you as much as we find them. That's how it builds. In that world, in a launch market opportunity tends to grow, we said in the beginning, slow and steady. My team never liked the slow part, so we called it steady. The point is, it's a gradual launch, but it doesn't peak. It just keeps growing.
I'll go back to my Genzyme days, if you look at the early Genzyme enzyme replacement therapies, 30 years later, multiple, if you aggregate the companies that are working on Gaucher or Fabry or whatever, those are still billion-dollar-plus opportunities that just It's just they're still finding new patients. I mean, that is just the nature of these kind of rare diseases. We think about the BBS opportunity as a steady growth, whatever trajectory you have. We're on a, I think it's starting to evolve into a relatively steady picture here. That will go for a long time. I don't know if the 5,000 patient number in the U.S. is the right number or not. I mean, we'll see what happens over time. It's not like how many years to peak.
It's just like, you know, however many years you have, you'll have that opportunity. HO, in contrast, we think there's about 10,000 patients in the U.S., similar numbers in Europe, for example. We can talk about Japan separately 'cause that's an interesting story. 10,000 patients, so twice from a numbers standpoint, BBS. It has unique features, which are these patients, because the vast majority, 80% +, have pituitary insufficiency, they're taken care of by endocrinologists. They are concentrated in a specialty, which means they have all the advantages of a specialty opportunity. You know, this is what, you know, the larger companies like. You know, they love specialty, and the reason being is because you have a problem that is concentrated in a targeted audience.
When you approach that kind of opportunity commercially, our goal was here. No, we wanna cover the endocrinologists. Of course, in today's world, you know, you can do claims work, and the system gives you a much greater ability to understand who, where these patients may be, how many they may be, and which doctors may have them, which has allowed us to take the endocrinology world and tier them and say, "Okay, you know, who are the top?" By top meaning, you know, physicians who are likely to have two or five or more patients. Those will be prioritized, and then, you know, you tier down to, you know, physicians who may only have one.
With that direction, we put 42 reps, sales, reps in the field, and with the goal of we're gonna cover the endocrinologists, as opposed to, you know, they find us. No, we're very actively gonna go out there, try to educate that community, but also interact with it and build that relationship. Very different opportunity, larger numbers, but also different dynamic. As what we've said, is that the expected ramp of HO is gonna be meaningfully steeper than it is for BBS. It also has some of the same ingredients of a classic ultra-rare disease, which is, you know, it's a high-priced drug. It'll be a prior authorization. We're gonna have to go through, you know, this medical exceptions process, get policies in place.
Patients coming in to their doctor, it would be one of these things. Why don't If this bad problem and you got a drug approved, why won't they all get a script tomorrow? The answer is, you don't call this into the pharmacy. These patients, before you start a drug like this, it's gonna be lifelong, expensive, has some side effects. Patient's gonna come in and have a conversation with their doctor. 1 of the gating factors will be how quickly they can get in and get their appointment scheduled, like. That's the dynamic.
Thank you for that. On your last earnings call, you reported early metrics of the launch. Specifically, you talked about the greater than 150 patient start forms written. Can you talk to us about what that means, you know, relative to being on the market for just a few weeks? How should we be interpreting demand based on that number?
As those of you who've heard us talk about this, again, it's virtually impossible to, you know, truly predict what's gonna happen in a rare disease launch for a variety of reasons, some of which I've listed here. The only real metric we have in Rhythm is at the same point in time for Bardet-Biedl syndrome, we had about 50 start forms, scripts equivalents. Here we have greater than 150. That ratio doesn't surprise me at all. Incredibly pleased with how we got started. I would've been happy with 2x. You know, it's like you just don't know out of the gate. Yes, we're really pleased with where we are, but I think it's also very supportive of how we expected this opportunity to continue to evolve.
Another question, which you either ask or I'll just volunteer it, is, you know, was there bolus? Was there pent-up demand? There's always, in a disease that's a severe disease where you've been in development for a number of years, you know, there's some level of awareness, maybe a lot, and patients who are following this and obviously waiting for the approval. You know, there's that kind of urgency out of the gate, but the numbers we gave you, which were greater than 150 scripts, start forms, and written by 110 different physicians, which meant that most of those, you know, doctors wrote 1 script. There was a few, obviously, who wrote more than one script. It wasn't as though we had a small number of doctors who were driving that initial performance here.
This is really, I think, reflective of the fact that across the community, patients are coming in, it's exactly as I would've expected, which is, you know, doctors will get their first patient in, they'll write a script, then, you know, the second patient, whenever, to the extent they have a second patient, their next, their visit comes up, they'll write a script. I don't think it's a dynamic of I'm gonna try a script and see how that patient does. I think patients, physicians are comfortable with the drug. It's been out there since, approved drug since 2020. The data's extremely strong in terms of, you know, how patients have benefited. Today's world, the community, I mean, they're sharing experiences and pictures and, you know, some are quite striking.
I mean, there's patients who've, you know, have gotten, you know, their lives restored and, you know, back to their preexisting, you know, weight, meaning before they had their injury. I think there's that kind of excitement in the community, but I think these, the steady part of this growth is a reflection of how quickly, you know, patients get in to see their doctor.
Okay. Just remind us what the list price is, the announced list price.
Sure. Give me round numbers if you don't mind. A year at fully compliant at full dose is about $380. Gross to net, you know, as Hunter counsels me, we're about $330.
Okay. One question I've gotten leading into the launch is, this is obviously priced as a rare disease drug, $330,000 per patient per year, let's say. If the goal is to help patients lose weight, then why wouldn't a GLP be sufficient in this particular population given the fact that it's priced at a fraction?
Yeah, it's a critical question, and we've had, you know, when we got our first approval in 2020, the whole GLP-1 world was just emerging. In the beginning, I wouldn't call it tough, it was understandably there were a lot of questions because the GLP-1 results were so amazing. I mean, they're incredible drugs. A little bit of a view of they're a hammer and everything's a nail. It's like, you know, if you just need weight loss, you'll do this. What we've come to appreciate across indications, which is Remember, when I say across indications, all of these different diseases share the same problem. They have impaired signaling through the pathway, and GLP-1s do not consistently fix the problem.
In fact, in our phase III trial, we allowed patients who were on a GLP-1, and you know, many of them had tried a GLP-1 previously. In fact, we had about 16 patients who were on a GLP-1 in our phase III hypothalamic obesity trial. Now, they couldn't be actively losing weight, but these were patients who had tried, you know, almost all of them had either gotten semaglutide or tirzepatide at one point, and multiple of them have had multiple different GLP-1s over time, cause again, they had nothing else to try there. When they went on the trial, once you correct the deficiency in this pathway, then the fact that they were on a GLP-1, that group actually did as well or even better. You know, small numbers, trial wasn't designed to test it.
Looking at that data, and we have very good historical data, we could see what happened on their GLP-1s, which is, when they got on GLP-1, you could see, you know, some of them just plateaued, some lost a little weight, but they all tended to regain over time or just not continue losing. When they got on the setmelanotide, they had a pretty you know, start. This, you know, 20%. In that group, actually 27% placebo-adjusted, you know, weight loss. I think the take home, back to your question of why wouldn't you just use a GLP-1 is, GLP-1s, the patient our problem is essentially hormonal deficiency. If you are not signaling through this pathway, you're not making alpha-melanocyte-stimulating hormone, and that's what our drug is analog. You have to restore the more normal physiology.
We gain weight for different reasons. If you need more weight loss, if you're eating 'cause you're depressed, if you're eating 'cause you love ice cream, then a second anti-obesity medication on top of, because you've corrected that problem, might be appropriate. It won't be a replacement for this.
Okay. What about the hyperphagia portion?
It, you know, one of the challenges for the world we've lived in, and we and many others have struggled with this, because the general obesity world talks about food noise and the like, and that being quieted. I think that is a different thing. I know it is a different thing.
This is the Whatever the patient is experiencing in our world is that fact of not getting a full, just not being full. So you just feel like you're pursuing it. One of the most striking benefits, and now that we're out in the world, for example, in Bardet-Biedl syndrome, it is the quieting the hyperphagia, removing that drive to eat, that has dramatically improved their quality of life in the sense that a child with Bardet-Biedl syndrome who couldn't be in the kitchen and have a conversation with their parents while they're preparing dinner, without just constantly talking about food, can now sit in the kitchen.
A child who can go to school and not, you know, be stealing other kids' lunches or I mean, there's just endless stories about how that preoccupation with food has interfered with their ability to have a normal life, interfered with the family sibling's ability. You know, you can't socialize because they can't go out with their, you know, the child who's suffering from this and, you know, go to a party where there's food available. You know, yes, the hyperphagia is a really important part of it. The language around hunger, hyperphagia, food noise, I think is still evolving, and it makes it a little confusing.
Okay. How should we be thinking about what metrics you'll continue to give us, at least in the early quarters of the launch?
Yeah. What we tried to do is stay with this paradigm, is talk about, is to give people an understanding of is it working, how is it working. In any opportunity, we did this with Bardet-Biedel syndrome. You start with the epidemiology, which if it's published literature, is usually, you know, pretty poor, but it's a starting point. Claims data, if you have it. We did it for HO. We got a better sense. We updated our number for HO. That's where we felt much more confident. We started with a 5,000-10,000 range. We went to 10,000. We had our early field force interactions, mostly our existing MSL force, medical science liaisons, out there earlier last year.
That effort up through the fall in September, we then shared that through direct interactions with a healthcare provider, we had about 2,000 patients who either had a diagnosis or were suspected of having HO, and the suspected was the majority of that. They weren't carrying the diagnosis, the majority of those patients in the 2,000. That's a good number, but that's not, you know, again. You get to, you're launched, and you have start forms. Those are a hard number. We're not gonna update the 2,000 anymore. I think that's a less reliable number compared to start forms. We'll stay with the start forms. We'll do that for probably four quarters or so and see how we go. We'll give you more color around the payers.
We didn't do this on this call. Six weeks is just too early to have a good feel, but hopefully by our Q2 earnings call, we'll be able to give you a good sense of at least how that's starting to play out. Then, you know, ultimately you move to revenues, which then capture everything and tell you what to do, and we'll stop giving you start forms.
Okay. Got it. Maybe let's move on to a different indication that you're looking at setmelanotide for, Prader-Willi.
Maybe just tell everybody what PWS is and where you are in development there?
Yeah. Prader-Willi, it's a genetic disease also, syndromic, in the sense that it has multiple different manifestations. As many genes, there's a portion of chromosome 15 which is deleted, and in that section, are genes related to this melanocortin-4 pathway. There's a mouse model. There's reasons, pretty good reasons to believe that this melanocortin-4 pathway is an important part of the biology of Prader-Willi. It is not the whole thing. These children, this disease, and they tend to be diagnosed pretty early and reliably, is they tend to be very weak, hypotonic at birth, so, you know, flaccid muscles, not moving much. They eat poorly.
It revolves fairly rapidly to this voracious hyperphagic, you know, where they're eating all the time, they're gaining weight, but accompanied by some really challenging behaviors and other aspects, obsessive compulsive diseases. The behaviors can lead to violence. As they get older and bigger, it actually can be quite dangerous for even parents to be in a home, with, you know, a child with Prader-Willi when they get hungry and frustrated, and then they're strong enough that, you know, when they act out, they actually can hurt other family members. They often end up, as they move into adulthood, to being, having to be treated, managed in homes and the like. Devastating disease, no drugs approved. VYKAT, Celgene's drug, was the first drug ever approved about a year ago.
Forget exactly when that was. Yeah.
That was a huge breakthrough, 'cause nothing, and even there, was a bit of a challenging clinical development program. Big first step. That's the program. Rhythm, we ran a early trial in Prader-Willi back in 2018 or so. A very complicated trial design. Basically it was the wrong trial design. It was too short, the dose was too low, and complicated design. We concluded, correctly, we had no effect. However, if you went back and looked at the patients who were on the highest dose for the longest period of time, eight weeks in that trial, they actually had, three out of the four patients seemed to have a modest response. Okay, maybe it wasn't completely negative.
We went back and we're running an open-label study with Dr. Miller at University of Florida. She's one of the leading investigators, been part of many, many trials, including Soleno trials. She enrolled 18 patients. We released data on eight patients in December. One of the patients stopped after a few weeks related to family-related issues. 17 patients have stayed in the trial, and we'll provide updated data, six month data now, on the 17, hopefully at the upcoming ENDO meeting, pending acceptance of our abstract. What we've told people, what we'll present, our goal is these are small data sets. I find you don't mean that data. It's not very helpful. We'll give you individual data sets for all 17.
We'll give you multiple measures for each patient. We'll give you the BMI, we'll hopefully give you DEXA scans, which is looking at fat and lean mass. This pathway, you know, correcting it, has done very well on fat and lean. If you think about restoring normal physiology, it makes sense. To the extent GLP-1s, one of the concern is lean muscle mass loss, which is what happens sort of when you get in more of a starvation state. With more normal physiology, losing more fat but preserving lean or preserving the ability to put on lean would make sense. We're seeing that in some other indications. We'll see what we see in Prader-Willi, but hopefully that'll be supportive. We'll also look at HQ-CT.
Our goal for development in phase III, I think we're quite convinced that, you know, we have the activity we need to see, based on even what we presented in December, we'll move into a phase III development program, the details of which to be, you know, determined and shared as we learn more. We will seek indications both for BMI, for the weight loss, but also for hyperphagia. How we get there, do you run two trials? Can you get there, you know, with both endpoints in one trial? We'll look for regulatory feedback.
Okay. What would be the next step after you see this data set for Prader-Willi?
The other thing is, some of you know we have a strong life cycle management, we have a weekly injectable, which is in phase II for hypothalamic obesity, and is also enrolling some Prader-Willi patients. We have a next generation daily single oral pill, which has already shown very good data in a Phase II HO study, and that'll be going into phase III for HO. Our goal will be to run the Prader-Willi study with one of those two, to be determined.
Okay. Perfect. I did want to ask you about the current side effect profile of setmelanotide. One of the observations that happens to all patients is hyperpigmentation. This is a daily injectable, it's for rare disease, you know, patients, you know, will make a risk-reward decision as to whether or not they want to be on the drug. Can you talk about how much of an impact that hyperpigmentation has on, you know, whatever portion of the patient population that chooses?
Sure
not to engage in therapy?
Yeah, it's important. I mean, to date in our approved indication, about 5% to 6% of the patients stop because of hyperpigmentation. In that sense, it's an on target effect.
100% of the patients will have a darkening.
Yeah.
Some they like it, some they don't. I think for the Bardet-Biedl, probably a little more of an issue. HO, as Jennifer Miller has said, you know, what they're experiencing in HO is so great they don't care as much, it'll probably be less a problem. It is not a positive. Our next generation therapies were very specifically designed not to hit that MC1 target, which causes the darkening. Our expectation is, and we've got evidence already for both, but we'll continue to flesh this out, that neither one of those will have hyperpigmentation. We think the next generations will solve that. To the extent it's 5%-6% who might stay on the drug, that's great.
To the extent that we open it up particularly to certain populations that are more concerned about that, who have patients who are sitting on the sideline, they're not even signing up for it initially, and I think that may be also more meaningful than we think.
Okay. If you think about life cycle management, you mentioned the weekly and you mentioned the oral. How do you imagine them potentially both coexisting?
Yeah. From a company standpoint, we'll be indifferent. Really the goal from the beginning was to offer choice. I, just over my career I've been struck.
At the end of the day, yeah, patients sometimes surprise you. We'll be indifferent. We'll try to create a pricing structure where that's not a driver. It's just, you know, patient choice.
Okay. It's your belief that those will not have the hyperpigmentation side effect?
Yeah. I think, like I said, from a preclinical data, I think strong. I think our early clinical data, very supportive.
Yeah.
I do think we've achieved our goal. We'll we got pretty good evidence on [biva]. It's a little farther ahead of development than RM-718. RM-718 preclinically is even more specific.
meaning less likely than [bivamelagon]. I'm pretty confident there, but we'll confirm.
Okay. With that, we are out of time. Thank you, David, for spending the last 30 minutes with me. Thanks everyone for joining.