Rhythm (RYTM) Q1 2026 Earnings Call Transcript

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Date

May 5, 2026, 8 a.m. ET

Call participants

• Chairman & Chief Executive Officer — David Meeker
• Executive Vice President & Head of North America — Jennifer Chien
• Executive Vice President & Head of International — Yann Mazabraud
• Chief Financial Officer — Hunter Smith

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Takeaways

• Revenue -- $60.1 million global net product sales, up 5% sequentially from $57 million in Q4 2025.
• U.S. revenue proportion -- 61% of total quarterly revenue was generated in the United States; the remaining from international markets.
• International revenue -- Grew to $23.2 million from $18.3 million quarter over quarter, representing a 27% sequential increase, chiefly from Germany, France, Saudi Arabia, and Greece.
• Reimbursed patient growth -- Global patients on reimbursed therapy increased 8% over the prior quarter, primarily driven by Bardet-Biedl syndrome (BBS).
• BBS franchise -- Steady U.S. prescription growth noted, with insurance transitions temporarily increasing the use of the free drug bridge program; commercial patient levels normalized by mid-April.
• Acquired hypothalamic obesity (HO) U.S. launch -- Over 150 start forms submitted in six weeks post-approval, with about 40 attributed to clinical trial conversions.
• Prescriber metrics -- Approximately 110 unique prescribers for acquired HO; roughly 80% are new IMCIVREE prescribers, and most have written only one prescription so far.
• Label breadth -- FDA approval includes acquired HO from non-tumor causes and resulted in broad payor engagement.
• U.S. commercial expansion -- Sales force increased from 16 to 42 representatives to address the acquired HO opportunity, estimated at 10,000 patients in the U.S. and Europe.
• European marketing authorization -- IMCIVREE approved for acquired HO; fast-track timeframe with CHMP positive opinion and EU final authorization achieved in one month.
• Early access programs in Europe -- Early access in France and Italy have driven physician experience and real-world data generation for acquired HO, with over 60 patients treated under France’s program.
• Japan regulatory milestone -- New Drug Application for IMCIVREE in acquired HO accepted; anticipated commercial launch targeted by end of 2026.
• Headcount -- Rhythm employed nearly 50 staff in Japan as part of pre-launch expansion efforts.
• Operating expenses -- GAAP operating expenses of $105.3 million in Q1, with $23.1 million attributed to stock-based compensation and non-GAAP operating expenses totaling $82.2 million.
• R&D and SG&A -- R&D expense was $41.7 million ($37 million prior year Q1); SG&A expense was $63.6 million ($39.1 million prior year Q1), with sequential SG&A up $6.1 million or 11%, mainly for acquired HO launch activities.
• Cash position -- $341 million in cash, cash equivalents, and short-term investments at quarter-end, projected to cover operations for at least 24 months.
• Net loss & shares -- GAAP net loss per basic and diluted share was $0.83, with weighted average shares outstanding at 68 million.
• Fiscal 2026 non-GAAP OpEx guidance -- Maintained $385 million-$415 million, including $197 million-$213 million for R&D and $188 million-$202 million for SG&A.
• Clinical pipeline progress -- Japanese Phase 3 HO trial (12-month duration) completed; upcoming data disclosures for Part C in HO and PWS six-month data targeted for June and Q2 earnings call.

Summary

Rhythm Pharmaceuticals (NASDAQ:RYTM) delivered sequential and international revenue growth, capitalizing on accelerated IMCIVREE launches and regulatory milestones across the U.S., Europe, and Japan. Robust operational investment supported expanded commercial infrastructure and pipeline advancements, positioning the company for multiple 2026 data readouts and geographic launches.

• Physician engagement broadened, as indicated by 80% of new acquired HO prescribers never having previously prescribed IMCIVREE.
• David Meeker noted, "this is a steeper launch" for acquired HO compared to BBS, and the current rate of start forms notably surpassed previous launches' pacing.
• Regulatory interaction in Japan yielded an NDA filing acceptance and poised the company for approval less than one year after the U.S., described as a rare industry achievement for timing.
• Reimbursement policy for acquired HO is still maturing, with a stated expectation of three to nine months for formal policy development following FDA approval.
• Setmelanotide’s clinical profile is extending with real-world data sets, particularly in European early access cohorts and studies scheduled for publication and conference presentation.
• Planned escalation in operating expenses reflects accelerated CMC and international buildout initiatives, as well as clinical infrastructure investments supporting upcoming pivotal trials.

Industry glossary

• BBS (Bardet-Biedl syndrome): A rare genetic disorder characterized by obesity, retinal degeneration, kidney dysfunction, and polydactyly, among other features.
• Acquired HO (hypothalamic obesity): Obesity resulting from hypothalamic injury or dysfunction, often secondary to tumor, trauma, or inflammation.
• CHMP (Committee for Medicinal Products for Human Use): The European Medicines Agency committee responsible for preparing opinions on questions concerning medicines for human use.
• CMC (chemistry, manufacturing, and controls): Regulatory and scientific oversight of the chemistry, manufacturing processes, and controls for drug development and production.
• AP1 program: A French early access program (Autorisation Temporaire d’Utilisation de cohorte - AP1) enabling use of investigational drugs before formal reimbursement or approval.
• MC4R (melanocortin-4 receptor): A receptor involved in energy balance and appetite regulation, genetically linked to severe obesity phenotypes.
• Start form: A document initiating patient enrollment for therapy, often submitted by a prescriber to a biopharmaceutical manufacturer for new product access or insurance reimbursement efforts.
• PWS (Prader-Willi syndrome): A genetic disorder causing insatiable appetite, obesity, intellectual disability, and short stature.

Full Conference Call Transcript

David Meeker: Thank you, Dave. Good morning and thank you for joining. So we had another good quarter. Now before we dive into some of the more recent events, I do want to highlight the ongoing progress in our base business, predominantly BBS. Revenues for the quarter were $60 million. As we would expect with an ultra-rare disease, awareness of the disease continues to grow, leading to more patients diagnosed or potential candidates for therapy. We have learned much through this initial launch, and we continue to adapt and optimize use of available data to connect with the right health care providers who may have a BBS patient. There is still more long-term opportunity to unlock with BBS.

With the FDA approval of IMCIVREE for acquired HO on our PDUFA date and European marketing authorization, which came early, we have expanded our focus. As with the BBS launch, our plan will be to share a few of the early launch metrics with the goal of giving you a sense of how it is working, with the usual caveat that it is extremely early. That said, we are pleased with the strong start, with more than 150 start forms to date and a good reception at the payer level. Jennifer will provide more details.

Slide 6 is to remind you again of the significant opportunity in HO, with an estimated prevalence of 10,000 patients in the U.S. and Europe and 5,000 to 8,000 patients in Japan. And with a much more concentrated call point than BBS, this is a meaningfully larger opportunity. Japan is positioned to be the second-largest opportunity for HO behind the U.S. As we have shared, we have been extremely appreciative of the highly collaborative, encouraging nature of our interactions with the Japanese regulatory authority, the PMDA. All Japanese patients have completed the 12-month trial, eight patients on treatment and four on placebo. One patient discontinued early secondary to hyperpigmentation.

Slide 7 shows the BMI change as compared to the values for the full 142 patients. As you can see from the results, the results were similar to the full cohort. The placebo-adjusted differences were slightly less, mostly due in part, at least, to the fact that the placebo group did not gain weight in the same way their Western counterparts did. Although the numbers are small, this may reflect cultural differences with a more obesity-prone environment in the West. The team has moved rapidly to complete the filing, putting us in the position of an anticipated approval before the end of the year.

The Japanese team is fully in place, and Yann will talk more about the opportunity and the organizational build. Finally, as we have previously shared, we look forward to a number of milestones this year. Pending late-breaking abstract acceptance, our goal is to share Dr. Miller's 6-month data in PWS at the endo meeting in June. Similar to what was presented in December, we would expect to share BMI data, HQCT data and DEXA scan data for those patients who have completed the scans. We anticipate sharing 718 data midyear, and we are targeting the Q2 earnings call, at which time we would share the Part C results in HO and potentially the available data in PWS.

CMC work and biva bioequivalent studies for the new formulation are underway, with the goal of being in a position to start the Phase III trial with bivamelagon in HO by the end of 2026. I will now turn the call over to Jennifer.

Jennifer Chien: Thank you, David. I'm going to be starting today on Slide 10. It is an exciting time for Rhythm with the acquired HO approval, and our U.S. commercial launch is off to a strong start. The early reception has been positive. Physicians are prescribing IMCIVREE for patients with acquired HO, payers, especially those with experience through BBS, have begun approving reimbursement, and we have patients with acquired HO who have started therapy. IMCIVREE was first approved in 2020 for POMC and LEPR, and we launched in 2022 for Bardet-Biedl syndrome. BBS is an ultra-rare disease with an estimated prevalence of 5,000 in the U.S. Disease awareness and diagnosis rates were low at the time of launch.

Over the last three years, we helped build an active community of engaged physicians who support the earlier identification and treatment of patients. And we have worked to expand reimbursement of IMCIVREE. In doing so, we delivered steady, consistent growth over the last three years. It wasn't always easy, but we've learned from the challenges along the way and laid a solid foundation for future launches, including our recent one in acquired hypothalamic obesity. For BBS, in the first quarter of 2026, we had steady growth in prescriptions. Similar to Q1 last year, we had patients that transitioned to new insurance plans, leading to a temporary increase in patients provided free drug through our bridge program.

As of mid-April, we had transitioned most of these patients back to reimbursed therapy, and we are seeing steady growth in commercial patients. Now moving to the acquired HO opportunity, which we estimate is approximately twice the size of BBS at 10,000 patients. We've grown our commercial organization to extend our reach in this larger opportunity, going from 16 sales reps for BBS to a total of 42 sales reps deployed across the country. We have similarly scaled our patient services team as well.

The FDA approval on March 19 and the broad label, which goes beyond tumor and tumor treatment-related HO to include other injuries that may lead to acquired HO, has opened the doors for our team to engage with more physicians. Our team's continued engagement with HCPs around the causes of acquired HO, the role of the MC4R pathway and the compelling efficacy data and product profile of IMCIVREE. This has resulted in the identification of more acquired HO patients. And we've seen steady progress of patients.

This has resulted in the identification of more acquired HO patients, and we've seen steady progress of patients moving to diagnosis from suspected as physicians gain a better understanding of this unique disease and its causes. Next slide. The initial response from patients and the physician community reflects the high unmet need for treatment for acquired HO. We have received more than 150 start forms in the six weeks since approval. Of these start forms, approximately 40 are for clinical trial patients. During the first six weeks of launch, there have been approximately 110 unique prescribers for acquired HO, of which about 80% are new prescribers of IMCIVREE.

To date, the large majority of prescribers have written one script for an acquired HO patient. In these early days of launch, approximately 80% of prescribers are endos, along with some pediatricians and primary care physicians. We're seeing encouraging receptivity among payers, too. Having approval in place enables us to get back in front of payers to continue education around acquired HO and IMCIVREE for this new indication. Our prior education that led to IMCIVREE coverage for BBS has facilitated our discussions with payers and supported their understanding of acquired HO as an MC4R pathway disease.

We are pleased to see initial approvals for reimbursement for acquired HO prescriptions during this early phase of launch, but we continue to expect it will take approximately three to nine months from approval for HO-specific IMCIVREE policies to be established. The early launch indicators are highly encouraging, reinforcing our confidence in the long-term potential of IMCIVREE in hypothalamic obesity. We look forward to updating you on our progress. With that, let me hand it over to Yann.

Yann Mazabraud: Thank you, Jennifer. I will begin on Slide 13. We are very excited about the HO opportunity in the international region as we achieved significant milestones and our path towards bringing IMCIVREE to more patients. Just last week, the European Commission granted marketing authorization for IMCIVREE for the treatment of obesity and control of hunger in patients four years old and older with acquired hypothalamic obesity due to hypothalamic injury or impairment. Our dialogue with European regulators was very constructive and efficient, resulting in the EMEA's positive CHMP opinion coming sooner than we originally expected with marketing authorization following just one month later despite this process typically taking two months.

This is a tremendous achievement and the result of years of work and collaboration between Rhythm and our investigators, the European HO experts and the regulatory authorities, all of whom focused on bringing the first-ever therapy specifically approved for patients with HO. With an estimated prevalence of approximately 10,000 patients in Europe, this is a meaningful opportunity, and we have a very experienced market access team that will lead us through country-level negotiations with launches anticipated to begin in 2027.

Similar to the process we previously followed for our approved indications of POMC/LEPR and BBS, we have begun efforts to seek an exemption from the German Federal Joint Committee, the G-BA, from its exclusion list that prohibits reimbursement for lifestyle drugs, such as drugs indicated for smoking cessation and general obesity. The CHMP opinion enabled us to begin this process, which can take six to nine months, putting us on track for a launch in Germany in 2027. In addition, the key local reimbursement dossier are finalized and we will begin negotiations in France, Italy, Spain and other countries.

For the U.K., we leverage our EU submission through the International Recognition Procedures, IRP, to seek authorization from the Medicines and Healthcare Products Regulatory Agency, or MHRA. This was already submitted last week based on the positive CHMP opinion. Of course, there is already much enthusiasm in Europe as we have seen with the reimbursed early access programs for HO in France and Italy, which accounts for a meaningful portion of patients on reimbursed therapy in the international region. These early access programs have enabled many of the leading physicians in France and Italy to begin patients on setmelanotide, gain experience with the drug and see the benefit in patients.

The French AP1 program, in particular, has generated real-world efficacy results for publication, adding to the body of evidence supporting setmelanotide therapy for HO. Next week, at the European Congress of Endocrinology in Prague, French physicians will present real-world data from more than 60 patients with HO on setmelanotide in the early access program, including a cohort on therapy for up to 12 months. Next slide. We are also rapidly advancing towards achieving anticipated marketing authorization and commercialization in Japan.

With an estimated 5,000 to 8,000 patients with acquired hypothalamic obesity in Japan, where the prevalence and incidence rates are higher on a per capita basis than Europe and the U.S., the unmet need for an effective therapy is quite pronounced. There has been strong KOL support since we first disclosed our Phase II data in HO and our commitment to quickly bringing IMCIVREE to Japanese patients in need has enabled positive and open dialogue with Japanese regulators. We now have almost 50 employees in Japan, and we've begun executing on our pre-launch tactics focused on disease awareness, including face-to-face interactions, webinars and symposia and patient identification.

These activities provide us with a strong understanding of the disease landscape and position us well to begin pricing negotiations upon approval. Just last month in Japan, I joined the team for a series of meeting with KOLs and Japanese government officials. In addition to the excitement for the potential impact setmelanotide will have on these patients, these KOLs and officials told us they were very appreciative of the speed and urgency with which we entered Japan. Of particular note, our team has moved fast, potentially securing approval in Japan less than a year from the U.S. approval when many companies wait years or partner with someone else to pursue approval.

As we announced today, the PMDA has accepted and is reviewing our NDA filing for IMCIVREE for acquired hypothalamic obesity. Japanese regulators do not publish or announce a time line for approval as it is done in the U.S. and Europe, but we anticipate approval and launch by the end of 2026. Slide 15. Lastly, Q1 2026 was another strong quarter for the international region. We saw double-digit percent growth in patients on reimbursed therapy throughout the region, which includes more than 25 countries where IMCIVREE is available through national reimbursement or patient sales. BBS was a primary driver of growth from Q4 2025 to Q1 2026 with the early access programs in France and Italy for HO contribute meaningfully.

Since IMCIVREE was first authorized in Europe for POMC and LEPR in 2021, we have built a very strong foundation with positive and collaborative relationships in place with many experts and market access officials. This experience will serve us well with HO. With that, I will turn it over to Hunter.

Hunter Smith: Thank you, Yann. I begin on Slide 17. Rhythm is well capitalized and off to a strong start of what promises to be a transformational 2026. The initial phase of the U.S. launch and acquired HO is quite encouraging, and we're excited about the significant ongoing progress in the international region as well. We had a solid first quarter of 2026 with $60.1 million in global net revenues from sales of IMCIVREE, which represents 5% sequential growth over Q4 2025. During the first quarter, 61% of revenue was generated in the United States with the remainder generated outside the U.S., reflecting continued strong performance across those geographies.

Globally, we saw continued growth in patients on reimbursed therapy with an 8% increase over the prior quarter, driven primarily by BBS. On Slide 18, I'll walk through the revenue quarter-over-quarter as revenue increased from $57 million in Q4 2025 to $60 million in Q1 2026. First, the U.S. while the number of patients on reimbursed therapy in the United States increased from the end of Q1 to the -- end of Q4 to the end of Q1, the specialty pharmacy inventory increase of approximately $1.8 million in Q4 had the effect of pulling sales forward, which affected U.S. revenue during the quarter. Separately, during Q1, shipments to RSP and dispenses to patients were pretty balanced.

Therefore, specialty pharmacy inventory changes during the quarter did not have a significant impact on revenue. In addition, as we saw last year during the first quarter, and as Jennifer mentioned, a number of patients transitioned insurance plans in the new year. And as a result, they received free drug from our bridging program for some or much of the quarter. Due to the strong collaborative efforts of our patient support teams working closely with patients, payers and HCPs, the number of patients on bridge therapy has since returned to Q4 levels. Revenue outside the United States increased from $18.3 million to $23.2 million in Q1, reflecting a 27% sequential quarter-over-quarter increase.

This growth was driven by increased sales volumes in Germany and France as well as certain named patient sales markets, particularly Saudi Arabia and Greece. As we have said previously, some of these named patient sales markets order with longer lead times, which can result in more variable quarterly revenue growth. On Slide 19 is the financial snapshot of the first quarter of 2026 results compared to the first quarter of 2025. Gross to net for U.S. sales in Q1 was 84%, which is consistent with recent quarters.

Cost of goods sold in this quarter was 11.9% of product revenue within our normal range and primarily driven by cost of materials and royalty payments on setmelanotide in connection with higher product revenue during the quarter. As a percentage of product revenue, COGS can vary quarter-to-quarter based on changes in inventory balances and manufacturing activity. R&D expenses were $41.7 million for the first quarter of 2026 compared to $37 million in the same period last year. Sequentially, R&D expenses were flat compared to the fourth quarter of 2025. During the quarter, an increase in headcount and related costs was offset by a decrease in clinical trial costs and costs related to chemistry, manufacturing and controls or CMC work.

The year-over-year increase is primarily attributable to an increase in headcount-related costs. SG&A expenses were $63.6 million for the first quarter of 2026 compared to $39.1 million in the prior year period. Sequentially, SG&A expenses increased by $6.1 million or approximately 11% compared to the fourth quarter of 2025. The change in SG&A expenses primarily reflected higher headcount-related costs, including stock-based compensation and marketing activities in support of the anticipated launch of IMCIVREE in acquired hypodynamic obesity. Weighted average common shares outstanding were 68 million in Q1. Cash used in operations was approximately $44.2 million during the quarter.

GAAP EPS for the first quarter of 2026 was a net loss per basic and diluted share of $0.83, including $0.02 per share from accrued dividends on convertible preferred stock of $1.1 million. We ended the first quarter with approximately $341 million in cash, cash equivalents and short-term investments, which we continue to expect will be sufficient to fund planned operations for at least 24 months. Lastly for me, on Slide 20, there is further detail on operating expenses for the first quarter and our full year operating expense guidance. For the first quarter, operating expenses of approximately $105.3 million included $23.1 million of stock-based compensation. Non-GAAP operating expenses for Q1 were $82.2 million.

We expect this increase on a quarterly basis throughout -- we expect this to increase on a quarterly basis throughout 2026 due to investments in CMC supporting RM-718. The increased spending on clinical trials -- increased spending on clinical supply of bivamelagon ahead of our planned Phase III trial in hypothalamic obesity and the ongoing build-out of our team in Japan and preclinical work associated with our CHI program. Our guidance is unchanged as we anticipate approximately $385 million to $415 million in non-GAAP operating expenses in fiscal year 2026, comprised of non-GAAP R&D of approximately $197 million to $213 million and non-GAAP SG&A expenses of approximately $188 million to $202 million.

With that, I'll turn the call back over to David.

David Meeker: Thanks, Hunter. So, in closing, I hope it's clear why we're excited about building the next phase of Rhythm. We see three clear pillars supporting this phase. Work is continuing on the genetic causes of MC4R pathway impairment. That work is focused on improving our understanding of the specific genetic variants to better clarify those variants which have true loss of function. Those patients would be the focus of our next trials, which will be done with one of our next-generation therapies. That work will continue through 2026. The second pillar, as we have focused on today is hypothalamic obesity, either due to injury or hypothalamic dysfunction due to failure of the hypothalamus to develop normally.

And the third pillar is Prader-Willi syndrome, an extremely complicated disease with a huge unmet need, where we believe the MC4R pathway plays an important role. We are aggressively pursuing our life cycle management strategy with the next-generation therapies, and we are building out our early research function focused on a small number of programs, which includes our program for CHI. With that, we can now open the call for Q&A.

Operator: [Operator Instructions] And the first question will come from Phil Nadeau with TD Cowen.

Philip Nadeau: Congrats on the HO launch. Question is on those patient start forms and patient identification. I think the last number you gave us for a number of patients identified was approximately a few thousand, but you've said you've identified more since. Any update to that number today? And of the patient start forms you've received, how many were from that patient pool versus how many were newly discovered patients since launch?

David Meeker: Jennifer?

Jennifer Chien: Sure. So we've continued to make progress. We had a tiered list of groups that our sales reps were out targeting just in terms of disease education, and we've continued to make inroads in terms of penetrating that list. As I outlined, the 2,000 number has continued to increase even since that September date. It's not a number that we are updating moving forward as we're focusing more on metrics, including start forms. So many of those start forms that we've received, if you take a look at them, have come from the list of physicians that we educated prior to approval.

I would say that overall, the vast majority of these start forms were from physicians that our field teams had some type of engagement with prior to approval.

Operator: And the next question will come from Paul Matteis with Stifel.

Paul Matteis: Congrats on the early launch progress. Taking a step back, it feels like with a number of rare disease launches lately, the street just debates whether early success is a bolus or linear and sustainable. It looks like outside of the patients who are converting from clinical trials, you're adding around 20-ish a week. Do you feel like that's a cadence based on your visibility and conversations with physicians that could be sustainable for 2026? Or if not, how are you thinking about the kinetics?

Jennifer Chien: Sure. So I would say like overall, we were very pleased just in terms of the early -- first six weeks just in terms of how we were progressing. As you mentioned, we did have 40 of those Rxs coming from trial conversions and our teams continue to work with our clinical teams just in terms of pulling those forward. I would say that from the trial conversion piece, the remaining patients really are going to be based on the last visit that is actually set. So we continue to work through those in the next quarter and so moving forward. In terms of additional patients beyond the trial conversion, you talked about bolus.

I would say that in any launch, as expected, there's going to be physicians who are quite activated just in terms of waiting for approval. We have some that have proactively reached out to their patients upon approval to let them know about the availability of therapy. But the vast majority of the patients or the physicians are waiting to have those conversations with their patients as they come in for their regularly scheduled visits. So that will flow through on, I would say, more of a steady pace moving forward. And we still have a lot of opportunity in terms of education as we move forward into the launch.

David Meeker: Did that answer to your question, Paul?

Paul Matteis: Yes.

Operator: And the next question is going to come from Derek Archila with Wells Fargo.

Derek Archila: Congrats on the progress here. I just had a question on the 110 prescribers. I guess what's the makeup of these physicians. Are these mostly in centers of excellence? Or are these more one-offs?

Jennifer Chien: So in terms of the prescribers, one, I will say that we were very happy to see that there is a nice breadth of physicians with patients that have been activated just in terms of interest to prescribe IMCIVREE for their patients. Is that something that we will continue to focus on as we move forward as there were many physicians on our targeted list with potential patients? To date, I would say that the vast majority, similar to other rare diseases of these physicians have written one script for their patients. But I would also say that there is still opportunity that remains with some of these physicians just in terms of having additional patients within their practice.

And that is aligned with sort of the flow that I outlined in terms of those patients coming in so that physician can have that ongoing dialogue regarding diagnosis as well as IMCIVREE potential. And then relating -- sorry, relating to the concentration within the centers of excellence. In the past, we have outlined that we are focused in terms of these 42 priority accounts. However, I would say that our list follows also the patients that we have identified in the claims and the physicians who actually have these patients potentially that are HO patients. And so that breadth goes beyond these priority accounts, and we have received definite scripts that are outside of these priority accounts as well.

Operator: And the next question is going to come from Dennis Ding with Jefferies.

Yuchen Ding: Congrats on the quarter. So we're trying to get a sense of underlying demand here. So for the doctors who have prescribed IMCIVREE to an AHO patient, what's primarily been the gating factor preventing them from prescribing it to their second or third patient? Is it doctors getting comfortable with the product profile and reimbursement? And it seems like the vast majority of them are new to IMCIVREE or perhaps just the timing of patient visits.

Jennifer Chien: So I would say that the primary gating factors are -- could be two pieces. The primary one is the pace and the schedule just in terms of those patients coming in to have that dialogue around IMCIVREE. So that is really pre-planned just in terms of what that normal visit may look like for that patient. I think the other factor is, as we also continued with our education with HCPs, there were some patients that may have come top of mind or had already been diagnosed. But through our education, they also had several aha moments just in terms of other patients that they suspected may also have AHO.

And going back in terms of our breadth, we were very pleased in terms of the label that we got upon approval that was squatters and just brain tumor and brain tumor management-related causes of AHO. So there's still opportunity just in terms of educating about the other potential causes of AHO and getting those patients also to a diagnosis.

Operator: Next question comes from Corinne Johnson with Goldman Sachs.

Corinne Jenkins: Maybe if you could just quantify a bit more the reimbursement dynamics here for these AHO patients that are getting on therapy and translate that to how we should think about maybe net price per patient as this becomes a bigger portion of contribution to revenue?

David Meeker: Yes. As Jennifer [indiscernible] just for the reimbursement. So a little bit of sense for the mix of payers here. And then I think Corinne's getting at the Medicaid, of course, would have a discount and the like and so.

Jennifer Chien: Sure. So we are very early in the launch with just in terms of understanding what that payer mix will look like. And with that said, what we have seen is we've received scripts from basically all different payer types. I would say that just from the access perspective moving forward, I think there was a lot of benefit just in terms of the education that we had done with the BBS and the payers who have experience with BBS, also understanding that this is very different than general obesity. So once again, very pleased in terms of the fact that we did and already do have patients who have been approved for reimbursement as early in the process.

The caveat here is that in terms of actually having those policies in place, I reiterate that expectation continues to be approximately three to nine months from approval. So we're going to continue to monitor what that payer mix looks like as we move forward and update in future calls.

Operator: And the next question will come from Michael Ulz with Morgan Stanley.

Michael Ulz: Congrats on the launch as well. Maybe just a follow-up on the HO launch, just in terms of the greater than 150 start forms. Maybe if you can compare that to your internal expectations at the beginning of the launch? And then secondly, just how should we think about converting those patients to revenues, just given it sounds like you're having sort of good traction with payers early on here?

Jennifer Chien: So I would say that overall, just in terms of the start forms that we've received. We were really pleased with, one, the speed just in terms of working and all the work has been done with planning for those clinical trial conversions. So once again, the number that we were able to convert to actually having a commercial Rx was great just in terms of that collaborative effort to get to that point. In terms of the other Rxs that we've received, I think that it is a strong start.

Right now, we still feel like there's a lot of opportunity that remains just in terms of physicians that we've spoken with that may potentially have a patient who will have that conversation as we move forward. So, we do expect to see a steady growth throughout the year just in terms of the Rxs we received moving forward. From the payer dynamic piece, I would say that in terms of the approvals, if we also compare with BBS, well, one, the expectation in terms of these Rxs being denied upfront because there isn't a specific HO policy in place early just in terms of launch. That did happen.

However, like with the appropriate information that was provided, we were seeing with some of these payers a quicker approval time line than we did in the initial BBS launch. So I think that was a positive dynamic that we did see.

Operator: And the next question is going to come from Seamus Fernandez with Guggenheim.

Seamus Fernandez: So there's going to be some updates on PWS soon. And just wanted to get a better sense of what you believe the sort of clinical value add of setmelanotide in this space or at least targeting MC4R can be in this space. Is it going to be exclusively on weight loss without much benefit on satiety? Is it both weight loss and satiety benefits that are a possibility?

Just trying to get a better sense of what you see the overall kind of PWS target product profile that you're seeking in this setting and what we're likely to learn with the six-month data versus potential update on the second quarter results conference call, which may be incremental to the presentation in that setting.

David Meeker: Yes. Thanks, Seamus. Yes, just to be clear, for the 718 data, that Prader-Willi data, whatever we have, and hopefully, we'll have something that we can comment on at that point, but that will be extremely early in a much smaller number of patients. So the most informative data set that's coming is Dr. Miller's data set, which we'll put out at endo. Our expectation is really just based on the biology here, right, which is MC4R so one, as I said in my opening comments there, I mean, we're quite convinced that this MC4R pathway is an important part of the biology in Prader-Willi. It's not the only thing.

Correcting this does not fix or help correct a Prader-Willi patient's disease, but it can have, we believe, a significant impact. And that biology is a satiety signal. You decrease hunger and we think an accompanying decrease in their hyperphagia symptoms, which are the behaviors that are driven by that severe hunger and increases energy expenditure. And the net of that will be a decrease in their overall weight. We also know, and we highlighted this on our December call when we released the early data from Dr. Miller's trial, there's other reasons these patients eat, and we talked about the obsessive compulsive disorder part of this and the like.

And so those are confounding elements of a very complicated disease. But specifically with regard to what we would hope, it would be both, both a reduction in their hyperphagia symptoms and a decrease in [indiscernible].

Operator: And our next question will come from Samantha Semenkow with Citi.

Samantha Semenkow: Congratulations on the early HO launch. I have one on Japan. Just given the large potential market for HO in Japan, this is a bit in your prepared remarks, but could you elaborate more on some of the feedback you've received from Japanese KOLs on the impact IMCIVREE could have in this population? And then just pending the approval there later this year, how should we think about the trajectory of that launch in Japan relative to the early start we've seen thus far in the U.S. for HO?

David Meeker: Yes. So Yann, did you got that? So KOL reactions to...

Yann Mazabraud: Yes. Thank you for the question. So first of all, as I said in my remarks, I was in Japan a few weeks ago, and I have met with the many of the Japanese KOL and many of the investigators of the trial. So first, I think everybody in Japan is really concerned about the disease because of the significant prevalence. Two, they saw firsthand the results on their patients. So they are already believers in the efficacy of the drug. The third aspect is that we have engaged with them extremely early on.

So it's more than three years that we have interacted with them, and they have been part of publications and they have worked with us on a lot of data. So there is almost already a long-lasting relationship with them. So that's the third aspect. The third aspect in terms of trajectories is still difficult to -- so first, I will not compare the U.S. and Japan, as it is a bit difficult to forecast. We have good results so far in terms of patient identification. We have identified 151 Tier 1 hospitals with the highest volume of brain tumor surgeries, and those hospitals are currently being visited by the Japanese field force.

So again, I will not give a number, but we think that we have a significant amount of Japanese patients who will start the treatment in '27 following the launch.

Operator: And the next question will come from Joseph Stringer with Needham & Company.

Joseph Stringer: You mentioned the 150 start forms in the first six weeks of the AHO launch, 40 or so from the clinical trial. How does this number of start forms compare to the first six weeks of the BBS launch? And is this a fair comp at this point? And then our second question is on the patients, the 150 patients associated with the start forms. How many of these are tumor injury-related patients, and those who have had surgery? Just curious, given the broad label, what you're seeing in terms of a diverse patient pool, perhaps outside of the more common tumor-related cause?

David Meeker: Yes. Thanks. So maybe I'll make a comment on the BBS, and then Jennifer can comment on the mix of the tumors versus [indiscernible]. So is BBS a good comp? I mean, it's a rare disease. I think there are some fundamental differences here, which we've highlighted just in terms of how the HO population, A, is larger, but B, also being concentrated in the endo. So there is a difference there. So I'm not sure it's the best. That said, this is a steeper launch. I mean, the rate of start forms in the first six weeks is higher than we had in BBS.

I'll make a few comments once we finish all the questions about how to put all this together. But I think what you're hearing is, yes, we're really pleased with the 150. And yes, it is a more rapid start than we had with BBS. And on the tumor, Jen?

Jennifer Chien: Sure. And I'll echo the point that David made just in terms of the difference between the number of start forms in the first six weeks of the HO launch versus the BBS launch. The piece, though that I don't exactly remember, is the number of trial conversions on the BBS side, where that study had a much smaller number of total patients who were in the U.S. in that BBS study. But definitely, even with that said, a higher number of Rxs on this launch versus the BBS one. In terms of the backgrounds of the patients, the vast majority of these patients are with tumor or a tumor treatment-related background.

However, our indication is broader, and it covers things like stroke, TBI, or inflammation. And we have received Rxs from patients with these backgrounds as well. And I think that to date, the physicians who are aware of acquired hypothalamic obesity, I think their thinking is more around the tumor-based background. So there's still a lot of opportunity in terms of even educating physicians holistically in terms of the various other backgrounds that may lead to acquired hypothalamic obesity moving forward as well.

Operator: And our last question is going to come from Lisa Walter with RBC Capital.

Lisa Walter: Maybe just one on Prader-Willi syndrome. I'm just curious how important you think it is for ex-U.S. approval to have both hyperphagia and weight loss on the label. I think with ViTAD, we saw that the EMA perhaps did not want to approve ViTAD, given some of the chosen endpoints. So just curious how you are thinking about Prader-Willi syndrome trial design here for success, both in the U.S. and ex-U.S.

David Meeker: Yes. Thanks for the question. I think one, just back to the mechanism of this drug and this pathway. It's a satiety signal. We reduce hunger. We've shown that consistently across all of our trials. We haven't, for some trial design reasons, had some challenges getting that into the U.S. label, but we have gotten it into the European label. So the European label, it is indicated for the reduction of hunger and diseases that we're studying.

So as I said before, our expectation is that we will seek a label that has both a hyperphagia reduction with the expectation that we would get that worldwide globally, certainly in the three major regions that we've talked about today, and a reduction in weight/BMI.

Operator: And I would now like to turn the call back over to David Meeker for closing remarks.

David Meeker: So thanks, everybody, for tuning in. I hope -- and thanks for your patience here. I realize everybody would like the specific numbers and the ability to provide guidance. And as we've said with BBS, and as we all know, launches are enormously challenging to forecast, and rare disease launches are even more difficult. So with that famous caveat that it is early, what you're hearing is, yes, we're pleased. We're really pleased with the start here. I think this is a strong start. We're very happy about the breadth of prescribers that Jennifer highlighted. This is not a launch where we've got two or three believers, and they're writing a bunch of scripts. This is where it's very broad.

The dynamic that question was raised. And as Jennifer highlighted, I think the good news about the dynamic is that there's been some reasonable sense of urgency. And we're at the Pediatric Endocrine Society meeting over the weekend in San Francisco. And I've been around a lot of rare disease type meetings, and rare diseases tend to get lost in these larger meetings, and that wasn't a huge meeting.

But I have to say I was struck by the level of awareness, the number of endos, endocrinologists, pediatric endocrinologists, in this case, with awareness, a tremendous amount of excitement, and just really struggling with what they can do for their patients, and excited about at least now that there's something to do. So all of those dynamics, again, are very much in the positive category here. So we look forward to updating you. That will be on our Q2 call, but pretty excited about where we are out of the gates. Thanks, all.

Operator: Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.

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