All right. Good afternoon, everyone. Thanks for joining us at the Goldman Sachs Global Healthcare Conference. Thrilled to be joined on stage today with David Meeker, the CEO of Rhythm. We are thrilled to be hosting you ahead of, I'm going to get this one out of the way early on, ahead of the ENDO conference this week, where you're going to be sharing data for Praloretel. We would love to talk to you about it, but what are you going to be able to say?
Yeah, thanks, Corinne. I'm excited to be here. We're really looking forward to Saturday. We have our six-month data from the open label study, an 18-patient study run by Dr. Miller out of the University of Florida. We presented some very early results last December. We'll now be presenting the full 17-patient data set at six months with this group. Our goal will be to We are presenting four different data points for each patient. We have almost a complete set on the DEXA. Every patient you'll have their weight change, the BMI or BMIZ for the kids, the DEXA scan results, which gives you the fat and the lean changes, and then two patient-reported outcomes, one HQ-CT, of course, and the second is a PADQ questionnaire, which measures anxiety and distress.
Those will be, we'll give you, like I said, the data for each patient, and people will have the full picture with that. We're not in a position to talk more about it this conference, needless to say, because we're so close to Saturday, and there's no real good way to answer even hypothetical questions. We're going to defer on those.
All right. Gentle plug, but you can join us for dinner post that meeting on Saturday night. If you'd like to do that, reach out to your salesperson. Okay, with that, let's talk about the HO launch, because that's also super topical these days. Maybe just given the audience, we could talk first about just HO was approved in March, or IMCIVREE was approved for HO in March, and it was the third approved indication for the drug. For those not familiar, can you just remind us about the data that supported that approval and what made it on label relative to your expectations and clinical results?
Also excited to get that approval in March, which was a three-month delay on our PDUFA date. I think got up a little bit in some of the changes in Washington. The label that we got was a good label. We were trying, as we do each time, to get a hunger into the indication statement. We were again unsuccessful. I think the biggest reason is from the FDA, as they've explained it. To get something in the indication statement, you really need hunger to, one, be in your primary endpoint. It was, in this case, a key secondary, but also, we studied in that trial, as people remember, kids as young as four years of age and individuals as old as 66. Having one patient-reported outcome measure for that full range, you don't. You have different measures.
We ended up having subsets of populations, and they don't tend to give you an indication based on subsets. For that reason, hunger didn't get into the indication statement, but it is in the label. That's really only an issue, and I'll get back to the launch here in a minute, but that's only really an issue for our conversations with Medicare, specifically. Medicare by statute does not cover weight loss drugs. Anything in the indication statement which would help differentiate us from a quote, unquote, more general anti-obesity medication. We've talked to CMS, and they're very receptive, and they understand what we are trying to do, and they understand our drug's different, but that they felt bound by statute. From a label standpoint, we got pretty much everything we want. No real restrictions on the label.
It's not defined by the requirement for imaging, for example, and the like. It's for acquired Hypothalamic Obesity. We felt really good about where we ended up coming out of the regulatory process. We talked about it on our first quarter earnings call, the initial six weeks of launch. I don't know if we want to dive into that now. Happy to offer a few comments-
Yeah
Turn it back to you for some more questions.
Let's get there. First, I just want to talk about the size of the market opportunity, because I think when you started introducing this, it was very much 5 to 10,000, and as we've gotten close to the launch and since the launch, I think you guys have solidified around that 10,000 number. Maybe you could talk about what are the kind of puts and takes that gave you confidence in that 10,000 number, and what have you learned now that you're on market in terms of kind of understanding the market opportunity there?
I'll back up and speak a little bit generally about how we get to rare disease epidemiology numbers, and I'll use BBS as an example. When we came out with BBS, it was sort of, I think 2,500, 3,000 number. I may even be misquoting there, but it was a little lower than where we are now. A couple of things informed our increase to 4,000 to 5,000, which is number, prevalent number that we feel really good about for the U.S. only. One is we were doing more genetic screening, so that informed us based on what we felt was the prevalence of the background genetics there. Actually got us to a significantly larger number.
Two, the prevalence of the disease in Europe and the U.S. we felt was highly similar, so much better understanding of the prevalence of the disease in France, for example. We could take the French number and correct on a population basis for the U.S. That gave us a second data point. Third, which is I think really important and part of the answer to the HO is, I think when people do rare disease epidemiology, almost invariably it's rare. Not a lot of work has been done, so it tends to be poor in the published literature and the like.
I think you tend to fall in one of two buckets, and one is either you're trying to inflate your numbers a bit to make a business case, but when you get out in the field, it's really hard to find those patients. Alternatively, you're sort of working straight up from whatever poor epidemiology you have, and that epidemiology tends to be larger than what you estimate, not smaller, just because inherently these early estimates tend to underestimate it. I think we're in the second bucket there.
When we went out with our 5,000-10,000 estimate, that was very much predicated on sort of the literature kind of review and the like. We then did claims analysis, not just in the U.S. but outside the U.S. We had claims analysis in Germany, we had claims analysis in Japan. We can talk about that. Across populations, all of that was very reinforcing that the numbers on the higher side, 10,000 as opposed to five. What's very important is once we had people in the field, they were finding patients. They were getting strong feedback that the patients were there, and the gestalt of that is that, no, these numbers estimate there's a 10,000-ish-
Yeah
prevalent population.
In terms of where these patients are treated, can you remind us, where are these patients? Who are the target physicians, and how have you guys tiered your commercial strategy relative to the target physician population?
Yeah. One we just knew based on the problem here, which is majority of individuals having a tumor, benign tumor that gets resected and the complications of that surgery are 80%+ of them have pituitary insufficiency.
Yeah.
By definition, that group tends to be taken care of by endocrinology. Even if they're not their primary, they will see an endo every six to 12 months as a rule kind of thing.
Yeah.
We expected them to be in the endocrinologist's offices. When we did claims analysis, and this is where you've got a very hard starting point, which is the injury, most often the tumor and the surgery and the like. You can identify that population very reliably. You can figure out what percentage or who are the patients who have pituitary insufficiency, and then you get into obesity coding and the like, which is a little less reliable because that doesn't necessarily tell you that that obesity is due to HO, but you're really starting to narrow the funnel there. Based on that, Jennifer and her North American team tiered physicians based on, and not were appropriately focused on those who had more than two patients, basically.
That was our 5,000 as patients, and we built a sales force with a goal of targeting that 5,000 out of the 10,000 plus.
Yeah
Endos overall. That's.
Yeah. As you've gotten out into the market, you're talking to these physicians, what have you learned in terms of physician feedback about their enthusiasm for the drug, the patients that they're willing to put on it, and how they're thinking about adoption?
Yeah. Hi, as I said, very reinforcingly, many investors and analysts and the like do their own work, I think everybody's pretty much getting the same feedback. What we're hearing in the office is huge amount of interest. A surprising, to me anyway, lack of awareness in many settings. If you think about acquired HO, it's not one of those things that many or most endocrinologists were trained on during fellowship. It's a clear disease, but hadn't been given a name. What will drive that awareness, as is often the case, is the availability of a therapy. Before there was a treatment, if you think about an individual with a craniopharyngioma now getting ready to go to surgery, they will be told, A, not a single patient coming out of surgery, if they have hypothyroidism, it will not be missed.
100% of those patients will have their hypothyroid status diagnosed. Secondly, almost all of them will have been educated about that possibility going into surgery. A very low percentage of patients today are educated about the possibility of developing acquired HO.
Why is that? There's no therapy. This is one view of what we hear and the like is you're creating anxiety within the family for a problem that there's nothing to do about. You may have this problem. Wow, it sounds horrible, but yeah, there's not much we can do. Now, there's something to do. I think all of those things will greatly accelerate. Back to your question, what we're hearing going in is a huge amount of interest. Majority of the patients are probably in the suspected category, not confirmed diagnosis. They need to come in and get it. Getting into doctor's offices were sometimes hard to get into previously. Endos are busy. Now, our field team is getting in there much more reliably.
Okay. With all of that kind of background, you disclosed 150 patient start forms in early May. That was about six weeks into the launch. Can you help us bridge from the patient start forms then to revenue, as well as what can you share qualitatively about the trajectory of patient starts since the last update?
Yeah. As you know, and we've gotten feedback on this, there's aspects of this opportunity, which are very specialty-like, and that's a huge advantage. For an ultra-rare disease, and this is at 10,000, that's still ultra-rare by any definition. The specialty-like aspect of this is if they're not diagnosed, they have a presentation/phenotype, which is very diagnosable. It's not hard to recognize once you know what they're looking for, and they are concentrated in a specialty. They are extremely approachable. Our ability to penetrate into that should be high. On the other side of the equation, which is, yeah, we have many of the challenges of a classic ultra-rare, which is day one, awareness is still relatively low. A lot of work to do. Two, access to the physicians who will be writing the script, still challenging.
It's not like ENDOs have big open spaces in their clinic day where patients can just come in and get their script written. Three, it's an ultra rare, so there's no difference necessarily from anything else where, it's a prior off. You have to go through, you have to get policies in place. For BBS, the average time out of the gates to getting a patient from a script to approval was about three months. Now, average, so some patients went through much more quickly, some took longer, and the longer ones were the multiple appeals that took you out into the farther than that. I'd say our very early start here has been very much what we expected, which is a little easier than BBS, not surprisingly.
They know the drug, most of these payers, and the disease itself is clearly more severe at one level than what the BBS patients are experiencing. All of that, I think, bodes well for what we expect to have as broad coverage, similar to what we had for BBS.
Okay. I guess with that in mind, maybe be a little bit more specific. When do you anticipate having most of the coverage plans in place? In the interim, what should we anticipate with respect to reimbursement?
Yeah. Six to 12 months, using BBS as an example. When a new drug gets approved, they don't call a committee meeting. You just get reviewed whenever their
formulary committees come up to do their review. Think six to 12 months.
Okay. What do you anticipate in terms of growth to net over time once these coverage plans are in place, and any other kind of free drug aspects we should keep in mind?
Yeah. We don't discount, and haven't, and don't anticipate doing that going forward. Our gross net is driven very much off the Medicaid population, which has a mandatory discount, as you know. That'll be the same here. We don't have a good feeling for the size of the Medicaid population. It was large in BBS, a significant part of our overall population. I think there's reasons to believe it might be a little smaller. Conversely, the Medicare population may be a little bit larger.
Given the fact that you have a relatively normal survival. We have almost very few, if any, over 65 Medicare-eligible patients in BBS. We will have some here.
Okay. How should we think about compliance and adherence, maybe relative to your other launches or based on any color you can provide in HO? Maybe talk specifically about that hyperpigmentation piece or any other things that you think are big drivers of compliance and adherence over time.
Yeah. This is a group where if anything, I think the adherence will be higher than it was with BBS, although I think it was quite good in BBS overall. The difference here is you've got a population who had a quote unquote, before state when they were normal. Now they've experienced the abnormal and desperately want to get back to the normal state, and so they start feeling better. All of those things, I think, are strong contributors toward what we would anticipate would be high levels of adherence. The hyperpigmentation, in BBS, which is our major experience, about 5%-6% of patients discontinue because of hyperpigmentation. Not a huge number out of the total, of course. I think there's likely to be some maybe meaningful part of the population, which is on the sidelines.
We look forward to the next generation of therapies as bringing in on the BBS world. BBS is a complicated disease. In HO, in talking to some of the KOLs, some of the feedback is, yeah, they just don't care. They're just happy to be. I'm guessing it'll be less here.
Okay.
It won't be zero.
Okay. What about the motivation to get on drug between pediatric and adult populations, and any other kind of differences between those two groups of people, whether it's the physician or the patients?
Yeah. I don't know yet. You can hypothesize reasonably that kids, there may be a greater motivation. They've got their parents there.
helping to get them in. On the other hand, Peds ENDO, there's fewer of them, maybe the availability-
Yeah
office slots and why may dictate that. I think if you're living with this problem and you know you have it's going to be pretty high, whether you're an adult. I think the group that may be more challenged is if you're out 20 years from your insult and you don't have a diagnosis, you may just not know.
And so.
One of the things that we see sometimes in rare disease launches is this concept of a bolus, et cetera. I guess, how do you think about whether that's something that could play out in the HO launch versus, I think what you've characterized in prior launches as slow and steady growth?
Yeah. I think I'll characterize HO as steady. We can take out the slow part.
Okay.
Every launch, there'll be a segment of the population that can see it coming and a bit of pent-up demand. We can't tell you if that first six weeks experience reflected an element of that. I'm sure it did to a small extent. In the ingredients that are here and the opportunity says, no, we didn't get a big bolus, and now it's going to taper off. This was a really good start. We feel good about it, but we're looking for steady growth here going forward. The other thing we're conscious, could endlessly say this, right? It's a rare disease launch. Don't beat us up on the quarters. We'll be up and down around whatever the expectations may be. That's a rare disease launch.
The overall opportunity here over time is absolutely. We're more and more bullish about that opportunity the more we learn about it.
Okay. Recognizing you can't talk about the Prader-Willi data coming this year, but maybe we can talk about the opportunity set that you see in Prader-Willi. Why was this an indication that you thought worth pursuing from a development perspective, and how do you envision the role setmelanotide could play in that population?
Like every company, certainly the way I've thought about being in this industry is, you want to be addressing unmet needs. I've never been a sort of me too kind of strategy in terms of, that's not really what we do, or certainly, probably don't do well. Prader-Willi, huge unmet medical need, incredibly complicated disease. The biology that got us interested, as people remember, we ran that trial in the late teens. Our initial read on that was it was negative. When you went back and looked at it, and looked at the patients on the highest dose for the longest period, the famous eight weeks, four patients, three out of those four patients did have a response. It gave us some encouragement there.
We know that MAGEL2, for example, one of the genes that is affected in a Prader-Willi patient, is a gene that's part of the signaling through this MC4R pathway. We studied MAGEL2 in our DAYBREAK and in the three patients who we had confirmed evidence that they had true loss of function. That was encouraging. They had a reasonable response. Yeah, I think the biology is likely to be embedded. The challenge with Prader-Willi is it's so complex, and you have multiple genes that are affected.
There's a lot of other more specifically to behaviors, one of the most challenging aspects obsessive-compulsive part of it, which is. I use the example as you know, around, if you're hardwired to have a snack at 10:00 A.M., even if you're not hungry, you remove that part of the drive, still that's part of my structured day. I want that snack.
There's a lot of reasons why studying the drug has been challenging here for everybody going into it. Biologically, that's why.
Okay.
Big unmet need. I think there's a chance we can make a difference.
One of the questions we fielded in the past has been kind of the clinical relevance of weight loss as an endpoint versus hyperphagia. How do you think about weight loss as a primary endpoint in Prader-Willi trials and the relevance that that would then translate for a commercial product?
Yeah, we were clear, I was clear when we went into this that we have a drug which has the ability to impact weight, no drug is approved for that, clearly a big part of their unmet medical need. That for sure would be part of a development program going forward. I think the Soleno experience, what the majority of the companies that have been working to develop a drug for have pursued, one is hyperphagia is a big part of the challenge, just for the families and the patient, how to manage that given all their behavioral challenges. Two is the fact that with the Soleno, now Neurocrine, diazoxide approval, that set a precedent.
Yeah
There's a paradigm out there now where you can run a hyperphagia trial that's shorter, so four to six months, as opposed to weight loss trials, which are 52 weeks. I think, if we do something, we would certainly look at both approaches.
Okay. In terms of how you're sizing the commercial opportunity in Prader-Willi, how should we think about it relative to maybe like HO or other indications you currently have in development? What have you learned with now approved products on that market in terms of the size of market enthusiasm to treat, et cetera?
Well, I'll take that. I think the experience of the diazoxide pulling out of the gate was pretty remarkable but not surprising in that this is a community that is very strong. They've been together for a long time. They're very well organized. They provide tremendous support to any company that's trying to develop a drug. They're following all programs. They're hopeful for any treatment.
To get the approval, that was just a huge win for the community, very well known within the community. Pent-up demand for sure. That was one part of the dynamic. The second is, it's a very distinct disease, they tend to be taken care of by expert centers. They tend to have clinics that they come into. Their ability as patients, families to access the system when the new drug comes out and get a script written is much greater than HO, for example.
Where it doesn't have that same kind of organized community and access to the healthcare system in the form of clinics. With regard to the epidemiology, I think the published literature's pretty good. We've done our own work just to try to understand if there's some nuances we're missing. 10,000-20,000, I think the addressable population. As a starting point, might look at it more around the 10,000 piece of it, 10,000-person part. It's clearly in the 10,000-20,000 range.
With Wegovy on market, I guess, where do you see the residual unmet need for patients in Prader-Willi, and how does that map to what setmelanotide could offer? You've kind of answered some of this, but just put a finer point on that.
Yeah. I'm absolutely convinced that drug works, and it's just a very challenging population, number one. What they showed and got approval on was the hyperphagia piece of this.
I think the unmet need again is something, and it may be that you can have greater effects on hyperphagia, so it's not that they've fully addressed it, one. Maybe no single drug will address that. That's another potential outcome. We talked about the BMI weight-related issues not there. They're not because of the side effects of a diazoxide. They're not indicated, or the ability to use in diabetes is more challenging, not that you can. There's parts of the population where, as with any drug, the profile of the drug may not match up and give you access to the full population. Now there remains and there will remain, I think, a huge unmet need here.
How do you think about potential combination use with Vykat and how will that kind of inform potential future studies in terms of inclusion criteria, et cetera?
Meaning learning off what they did? Is that what you're saying?
Yeah, also will you allow for combinations?
Oh, that. Sorry, allow. In the dataset we have with Dr. Miller, there's about nine patients out of the 17 who are on Vykat. People can look at that. It's a small dataset, of course. I don't know. Going forward, we'll have to see. We'll get through, talk about it after.
Okay. On the next generation program, RM-718 bivamelagon, I guess first, we'll see some updated data from the biva one-year study.
this weekend as well, that will be highlighted at the conference. Could you talk a little bit about that program, what you've seen and the path from here to registrational trial?
Yeah, it's all highly confirmatory. The one-year data is highly confirmatory. I think the mean values are driven again by, they're basically about the same as setmelanotide. We had some patients in there who were a small number, the teenage, younger teenage kids who are still struggling a little bit taking the drug, weren't fully compliant. The drug works. I think we've got a good read to the dose. I think there's personally a low risk to a phase III trial.
We will run that trial largely outside the U.S. That depending which countries you're in, always introduces some variables in terms of getting the trial up and going. Our goal is to get first adult patients treated by the end of the year. The pediatric formulation I think will be available in the first quarter. What we would do there is the peds part of the trial would come in once that formulation. This is a chewable tablet.
Okay.
We've significantly improved the size of the tablets.
current approach formulation. As I said, we'll get down to the age four with this chewable tablet.
Okay. How will the registrational program compare to the semaglutide program in terms of any sort of features there?
Very similar. Again, we'll look at this whole issue of hyperphagia and between, it'll be the key secondary probably and or, BMI will be a primary endpoint.
Okay.
As always. It'll be very similar. As you learn as you go forward, I think we're going to work harder to get DEXA scans more formally on all patients. There's more and more interest in the quality of weight loss. I think the way our mechanism works, we've done really well on the quality of weight loss, which is, remember, we're restoring more normal physiology, which again, if you're a teenage boy, you should put on lean mass. You see teenage boys going through puberty, putting on lean mass.
All of that I think is a real positive that we'd like to help the world understand.
Okay. You are also planning to share RM-718 data in HO this year. Maybe you could remind us what exactly will be shared, maybe when you think we could have that data, and how it will inform next steps.
Yeah. We'll target next quarter earning call. There's about 10-ish patients that we'll have data on. Yeah, what people ask, Well, what should we look for? What we're looking to see is how this compares to semaglutide, very similar to what we did for bivamelagon. We'll show you that data.
Maybe you could talk a little bit about why these drugs matter from a broader corporate strategy perspective. Why does it matter to have an oral and a weekly injectable in terms of the overall franchise?
Yeah. From a patient standpoint, it's just I think there's clear advantages to the oral or a daily injectable and a weekly is a weekly. I think from a side effect profile, the biggest difference for these drugs will be the hyperpigmentation. As I said, I do think it's just not a good way to estimate this, but we will be very interested to see if it unlocks, and I think it will on some % of the population. Of course, from a patent standpoint, this was to move and.
Okay. As you think about allocating investment $ behind each of these programs and with multiple indications that you could go into, how are you thinking about prioritizing and selecting which drug for which indication?
Yeah. Probably TBD, to be determined category. I think we can all have our opinions about which might be better. I think in general, for a big opportunity like HO, our goal will be to approve both. Get both approved, but there's no urgency to get both approved. I think we'll move as we are with Biva and HO. We don't have to rush out and do RM-718, for example, in HO.
We can get there, but not tomorrow kind of thing. We would not prioritize that as the next piece. We'll probably do some other things with HO. For the smaller opportunities, like going back to some of the DAYBREAK genes.
and the like, we will develop one or the other, because it's unlikely we'd run the two trials.
That just seems like a bit excessive maybe for a small opportunity. I don't know. We'll debate it internally why we pick one approach for one of the diseases and another for the other.
With respect to Prader-Willi, can you share at this stage how you would think about RM-718 versus setmelanotide? What data do you need to have in hand before making that decision, is maybe an easier question to answer.
Yeah. I'm going to defer that one till Saturday.
No problem. How should we think about the funding picture from here in terms of path to profitability or any additional kind of capital needs you might have as you look at a relatively broad now portfolio across MC4R?
As Hunter likes to say, he can shout out from the audience here, we have more than 24 months cash, which at one level, I think the analyst population would interpret as enough to get us into profitability. Obviously, depends on what assumptions you make around revenue and the like, because that's part of that. That guidance, it does include a good amount of our developmental work and the like. Increase gets back to liquidity. I know whether we'd want to top up is a reasonable question. If we did that, as Hunter would say, we wouldn't do it with equity. There's lots of other instruments and ways to do that. Debt certainly being one, given where we are as a company.
Okay. A lot of things to invest behind, but you have done a little bit of BD in the past. I guess, what role should we think about BD playing in your forward strategy for the company on maybe a one, three, five-year sort of timeline?
Yeah. One year, we would remain in our current posture, which is completely opportunistic. If somebody came to us with something that they felt Rhythm could provide a unique contribution and/or one of us on the leadership team had insight into an opportunity, then of course we would look at that, but we're not actively looking.
We have more to do internally than we can process, arguably. three to five-year timeline, absolutely. I think building a more specific external-facing effort, looking for things that might complement. It's all a function of size of the company. It increases-
Yeah
your ability to do those kind of things and do them well, I think.
As you think about that three to five -year view, how do you think are the core competencies that Rhythm has in-house that would inform what kind of assets you might be open to bringing in?
Yeah. We've been clear we're not an obesity company. That's certainly not our goal here. What are we good at? I think we are good at rare. Rare, it doesn't have to be an endocrine rare. Rare is rare. I think that if you have a good solution to an unmet medical need, you can build an effort around it, and we would do that. We're a global organization. We're going direct, I think, which speaks again in almost every place, which speaks to the way we think about it and also the capabilities, particularly of our international team. Think rare first, but rare is also a blurry line.
Okay.
I think depending on how strong we are, we'd be pretty open to different scenarios.
I think with that, we did it. It was lovely chatting with you. Much appreciated, everyone who joined us here and online.
Thank you, Corinne.
Thanks, David.
Very much appreciate it.