Rhythm Pharmaceuticals, Inc.

Thank you.

Ladies and gentlemen, and thank you for standing by. Welcome to the Rhythm Pharmaceuticals second quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone keypad. At this time, I would like to turn the conference over to Mr. Dave Connolly. Sir, please begin.

Thank you. I'm Dave Connolly, head of IR and corporate communications here at Rhythm Pharmaceuticals. For those of you participating via the conference call, the accompanying slides can be accessed and controlled by going to the events section of our investors page on our website at ir.rhythmtx.com. I'll remind you that this call contains remarks concerning future expectations, plans, and prospects, which constitute forward-looking statements. Actual results may differ materially. from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent annual or quarterly report on file with the SEC. In addition, any forward-looking statements represent our views as of today only and should not be relied upon as representing our views as of any subsequent dates. We specifically disclaim any obligation to update such statements. This morning, we issued a press release that provides our second quarter financial results and business update, which is now available on our website. On our call today and here with me in Boston are David Meeker, Chair, President, and Chief Executive Officer of Rhythm, Jennifer Chen, Executive Vice President, Head of North America, and our Chief Financial Officer, Hunter Schmidt. And calling in from France is Yann Mazzebro, Executive Vice President, Head of International today. With that, I'll turn the call over to David, who will begin on slide five.

Thank you, Dave, and thanks to all of you for tuning in this morning. It's been another strong quarter. Between the regulatory approvals, citing data readouts, and extending our cash runway with a royalty financing deal, all of that speaks to a very successful recent past few months. So we're very eager to share our update on the first six weeks of the Incivary BBS launch here in the U.S. and the ongoing progress we continue to make in our international markets. Let's start on slide five. So we are executing on our global strategy. We're developing a precision medicine in Incivary for true unmet medical needs. And yes, there are a growing number of options for the management of obesity, but there's also a growing understanding that not all obesity is the same. Obesity is a disease, but it's not one disease. It is many diseases. And optimal medical management starts with understanding which disease you have and then matching it with the appropriate therapy. We're off to a really good start with BDS, and Jennifer will provide much more color. I have been clear leading up to this moment that launches in general are difficult to forecast. Rare disease launches even more difficult, so don't judge us on the first six months. That said, we do think this represents a very good start, increasing the strength of our conviction and the total opportunity. The major question in any rare disease opportunity is, will it work? Can you find the patients? Will they seek therapy? Will doctors prescribe? Will the system reimburse? It is early, and you can't turn the numbers, but the short answer to all those questions is yes. Patients are there, they want the therapy, doctors are prescribing, and our early experience with the reimbursement process is positive. This start is reflective of all the good work done leading up to launch. In Europe, Jan will update you on a steady, I'll call it remarkable, progress in Europe. We're getting approvals at better than average timelines for each of these healthcare systems. The international markets in Europe specifically are incredibly important opportunities for us. As we have said many times, and you will hear again from Jan today, Europe is better organized, more patients identified, and those healthcare systems are embracing . Finally, we have much still to do on the development side of the equation. We're obviously excited about the recently released hypothalamic obesity data, which I will discuss briefly on subsequent slides. And all of our other development programs are progressing well. So moving to slide six, I'm going to use the next three slides to remind you why we are excited about hypothalamic obesity. This slide is the brief primer that Dr. Abou-Zahab used on a prior call to explain the anatomy. Tumors arising in the junction between the pituitary and the hypothalamus potentially can injure both the pituitary and the hypothalamus, and this is an area referred to as Rasky's pouch. Patients with tumors in that area are likely to require replacement hormones related to pituitary injury, and about 50% will go on to develop hypothalamic obesity as a consequence of injury to the hypothalamus itself, either due to the tumor and or to the surgery and radiotherapy used to treat the tumor or in rare situations, inflammatory condition, or trauma. Patients with hypothalamic obesity have a classic presentation that clearly differentiates them from patients with a tumor that does not involve the hypothalamus to the same degree and who do not develop hypothalamic obesity. Patients experience rapid weight gain, children literally exploding off their growth chart, and I remind you of the example that Dr. Bouzahab showed on the last call. And about 50% of these patients will develop the classic hyperphasia we associate with MC4 pathway diseases, but not all patients. And strikingly, the majority of these patients with HO become less active in complainant disease. Their energy expenditure, both resting energy expenditure and activity levels, are low. Interestingly, the clinical presentation, the apparent response to set melanotide on top of supporting preclinical data, all point to a potential unifying hypothesis. that impairment to the MC4 pathway with both an increase in hunger and a decrease in energy expenditure is a critical element in the development of hypothalamic obesity. In slide 7, these are the interim results we shared last call from the first 11 patients, and they're striking. Not so much for the extent of the weight loss in a short period of time, which is quite good, but for their consistency. All 11 patients, including the two patients who discontinued, lost weight. The clinical presentation, which includes rapid weight gain, is temporally associated with injury to the hypothalamus, the new development of hyperphagia, and probably more importantly here, the change in energy expenditure, all point to impairment of the MC4 pathway. Now, we have evidence that a precision medicine targeting the MC4 receptor results in consistent clinical improvements. That consistency would suggest that melanotide, in addition to working through residual MC4 receptors in the hypothalamus, is likely working through receptors outside the hypothalamus, which interact with the autonomic nervous system and play a critical role in energy expenditure. Slide 8. So this is a rare disease, but unlike many rare diseases, it has a number of advantages with regard to our ability to identify and reach patients. The patients are diagnosed. They know who they are. This is a very well understood complication of these tumors and their management. Our best understanding of the overall prevalence is about 5,000 to 10,000, with a range reflecting uncertainty about the population who is out more than 10 years. We know median survival is on the order of 20 to 25 years. There's no reason to believe a 30-year-old patient who had their tumor resected at age 5 would not still be seeking help for their HL. The yearly incidence, assuming about 50% of patients with these benign intracranial tumors, will develop HO as about 500 per year in the U.S. As always, we have shared U.S. epidemiology data that is not fundamentally different in Europe and may not be so different in Asia, although we are early in our assessment. So our next steps, the goal is to present the full 18 patient cohort data at a fall meeting. We've requested our end-of-Phase II meeting with the FDA, and we look forward to initiating the Phase III trial as early as possible in 2024. Slide nine. In summary, why is HL so important as we expand our scope from genetically impaired defects in the MC4 pathway to genetic and acquired forms? So one is it reinforces the importance of the MC4 pathway as a key driver in some forms of obesity. Reminding you again, obesity is not one disease, but many diseases. Two, set melanotid is a targeted medicine to the MC4 receptor and provides key insights into the underlying pathophysiology of HO. Three, it provides potential evidence further supporting the importance of the energy expenditure side of the equation, further validating the role of an MC4 agonist in the management of MC4 pathway diseases. And four, it's a potentially incredibly meaningful opportunity for RITM. Patients are identified, no genetic testing is required. Patients are engaged with the system requiring specialist care, in most cases endocrinologists, to manage the other complications of pituitary and hypothalamic injury. And three, the unmet medical need is high. There's no approved therapies which exist, although many have been tried. So on slide 10, here's our pipeline. Our pipeline is progressing with multiple potential meaningful contributors to the portfolio of addressable MC4 pathway diseases. On a specific note, we announced today completion of enrollment in our PEAD study with an expected readout in mid-2023. This trial has enrolled a mix of patients with POMC, LEPR, and BDS between the ages of 2 and 6. And this is an important age group, as we know from our genetic screening. Genetic diseases, by definition, often start manifesting at an early age. Many of these patients are being screened, and our early data suggests a somewhat higher probability of a positive genetic test in this age group. Patients know that their child has a problem and they seek help. And with that, I will turn it over to Jennifer to talk about our encouraging start in the U.S. Jennifer.

Thank you, David. I'm going to be starting on slide 12 today. So we are really proud to lead the development and bring Insivory to additional patients. Insivory is the only FDA-approved therapy that targets the root cause of hyperphagia and early-onset severe obesity in patients with BBS. and we are pleased to report that the commercial launch is off to a strong start. Physicians are writing prescriptions, the initial paramex is receptive to emsiphery, and patients with BBS are initiating therapy. Next slide. Thanks to extensive patient identification and physician engagement efforts for BBS, as well as all the learnings from our commercialization in Palsy, PCSK1, and Leper over the past 15 months, we are starting BVS launch from a position of strength. Rare disease launches are challenging and difficult to protect, but with the experienced team we have assembled here at ISRhythm, a growing BVS community of patients, their caregivers and healthcare providers, and a drug that meets a high unmet need, we are off and running. As we instituted on our commercial availability strategy for our initial indication, We were able to deliver MCIVRI beginning in March of 2021. Beginning in September of that year, we deployed our territory managers to engage with the physician community, educate them on BBS, the MC4R pathway, and now MCIVRI. MCIVRI was approved on June 16, about six weeks ago, making June and July quite exciting for us. Our cross-functional field and marketing teams got together to prepare for the launch of Insevri during the week of June 5th here in Boston. Quickly following, we had a significant presence at ENDO in Atlanta with seven data presentations and a robust schedule of physician engagement activities, including one-on-one meetings and speaker programs. And our timing could not have been better with several local BBS Foundation events held in the recent weeks following approval. We were able to present background information on the Sivriyadvi's events and hear the excitement in the community after finally having a therapy to treat the hyperphagia and severe obesity of BDS. There was a total of over 50 BDS families at these live regional events and more than 170 attendees at the national virtual conference. All our activities led to the receipt of our first MCIPRI prescription two days after approval and our first shipment post-CBS approval on June 29. Next slide. With FDA approval on June 16, we effectively had two weeks of launch remaining in the second quarter. But for the purpose of this call, we want to share prescription and prescriber metrics that account for the initial six weeks of launch. We have talked in the past about the different sources of patient identification and health care provider engagement. We have outlined the territory manager's prioritized engagement of providers identified by rhythm with already diagnosed BBS patients. In addition, we have strong collaborative engagement with the team at Marshfield, as well as with patient advocacy organizations, including the BBS Foundation and Family Association and Foundation Fighting Blindness. We also executed non-personal promotion efforts targeting healthcare providers and patients to expand our education reach. All these efforts led to our current state, where we are excited to report that as of July 29th, we have received greater than 50 prescriptions for MCIVRI or BDS patients from over 35 unique prescribing physicians. Next slide. So who are these greater than 50 patients with BDS? We have clinical trial patients who were converted to commercial drugs and patients identified through our territory managers engaging with physicians. The age mix is evenly distributed so far, with about a third age 18 or older, a third between 12 and 17 years of age, and a third between the ages of 6 and 11. 78% of them have come from positions targeted by the territory managers, and we are excited that 22% are new physicians to Rhythm, expanding our reach to additional physicians with VBS patients. Next slide. It's early days snapshot of our initial and prescribers for BBS. Almost half of our prescriptions for BBS come from pediatric endocrinologists or endocrinologists, with the remainder coming from pediatricians, general practitioners, family medicine practitioners, internal medicine, or medical geneticists. Next slide. From a payer coverage standpoint, we see about 50% are commercial payers and 34% Medicaid. Although there are several prescriptions written for patients covered by Medicare, many of them have secondary coverage, so there are opportunities to seek reimbursement for these patients as well. This is in line with our expectations, and our teams work together to secure coverage for BBS patients, including our corporate accounts team, with their active payer engagement, including all 50 state Medicaid, with certain states prioritized based on analysis approved and our own database. And more importantly, we have motivated patients, real people with a real need for a therapy, and physicians willing to engage with us throughout the reimbursement process. Next slide. I've mentioned Rhythm and Tune, our patient support services, on prior calls. Rhythm and Tune enables us to build and sustain educational and supportive engagement with our patients and their caregivers. When a patient consents, our team helps achieve access with the ability to engage with their physician and their insurance. They set treatment expectations and also support patient adherence and continuity of therapy. Next slide. Overall, we are excited by the first six weeks of the BBS launch. We are accomplishing everything we set out to do. Find diagnosed patients, educate physicians on the disease date to help additional patients get to an accurate BBS diagnosis, educate physicians on the MC4 pathway and MCIPRI, facilitate reimbursement and insurance coverage, and have a seamless initiation on MCV therapy. With that, let me hand it over to my colleague, Jan Mazubrod, who will provide an update on the progress in the international region.

Thank you, Jennifer, and good morning, everyone. Slide 21, please. I will start with a reminder that Europe is an important market for MCV, as there are already many patients identified across our initial indications, especially for Barnabas syndrome. As we've spoken in the past, the European healthcare systems are better organized around rare disease, and especially rare MC4 pathway disease. There are established referral networks around centers of excellence, and genetic testing is more advanced for this disease. For POPSI, PCSK1, and LIPAR biologic patients, the estimated European prevalence is 600 to 2,500 patients. But importantly, we have already identified about 100 patients. who are diagnosed and receiving care for their disease. For patients with Barley-Biddle syndrome, while European prevalence is estimated to be approximately 2,500, we know that there are more than 1,500 patients who are diagnosed and receiving care for their disease. And there are about 20 European academic medical centers with each more than 40 patients with DBS. Next slide, please. For POMC, PCSK1 and Lipar deficiency obesities, we have a strong support from the experts from South Europe. We've had very positive interaction with the various European health care authorities, and we have already achieved market access in France and in Germany. Also, two weeks ago, the UK NICE recommended Emsivory for treating obesity and controlling hunger caused by POMC, PCSK1 and Lipar, and we will launch in October in the UK. We also anticipate launching in Italy and in the Netherlands by the end of this year. In Spain and Sweden, we have submitted the reimbursement dossier a few weeks ago. We expect to launch in early 2023. And in Israel and Argentina, we have identified patients and are currently seeking reimbursement on a named patient basis for those. Next slide, please. We are, for many reasons, very excited about Pardevidal syndrome in Europe. First, as I said at the beginning, we know that there are approximately 1,500 patients diagnosed and receiving care at centers of excellence in Germany, in France, United Kingdom, Spain, Italy, but also in the Netherlands and Turkey. As Dr. Philbills, who is one of the world's leading experts on body middle syndrome, said, these patients living with body middle syndrome are looking for a transformational treatment that can significantly reduce hunger and body weight. Second, we now have the positive CHMP opinion and its recommendation to EMEA to expand the current marketing organization for MCRE to include the treatment of obesity and control of ongoing adults and pediatric patients six years of age and older with genetically confirmed Bardi-Bidal syndrome. The final authorization is expected to come from the European Commission in October. I can report that we have submitted our application to the UK MHRA for Bardi-Wiesel syndrome through the reliance procedure, which allows us to leverage our EMU submission. And finally, we will begin very soon engaging with the authorities in Germany, Italy, and Spain, and all of whom very familiar with in theory and reason already. As done in the United States, our work with POMC, PCSK1, and Lipar has laid a strong foundation which will support our body-middle-syndromes-related efforts. Next slide, please. Last but not least, a few words about a very recent and, I think, unique achievement. France is my home country and home to a few of us in the international team. That's why I'm very proud of our team's many successes here. Following the AP2 early access granted to MCV for POMC, PCSK1, and Lipar back in March this year, we also have just achieved the pre-approval early access for Barde-Bidel syndrome called AP1 even before the CHMP recommendation and the EMA approval. We did so quite rapidly, only 32 days following the US FDA approval, which I believe is a record time in France, and with no restriction to labels. AP1 allows for early access to innovative therapies in France when a positive benefit risk balance is recognized and when no other therapeutic alternatives are available. The AP1 for MCV was granted following a very comprehensive review of efficacy and safety data. The AP program is fully covered by the French National Health System and will be reimbursed for any patients receiving treatment through this program. With approximately 700 patients with Barr-de-Biddle syndrome diagnosed and identified in France, there is a clear unmet need for therapies that treat the hyperphagia and the severity of this disease. In conclusion, we are making exciting and fast progress in Europe. And with that, I will turn it over to Hunter.

Thank you very much, Yann. Turning to slide 26, as we announced, one of was approved for BBS in June. we signed a capped revenue interest financing agreement with healthcare royalty partners that resulted in a commitment to invest up to $100 million in Rhythm. Healthcare royalty partners is one of the leading investors in royalty streams for pharmaceutical products, and this investment demonstrates HCR's confidence in Incivry for patients with barter fetal syndrome, as well as Rhythm's potential to generate additional revenue from new indications. The structure of this agreement, which we described in June, in detail here on slide six, enables us to access significant financial resources to fund the continued growth of our business while avoiding equity dilution and preserving shareholder value. This commitment also extends Rhythm's cash runway into the second half of 2024. On slide 27, we have a financial snapshot of Rhythm's business in the second quarter of 2022 as compared to the comparable quarter of 2021. We reported product revenues for Incivri totaling $2.3 million as compared to $300,000 for the second quarter of 2021. The revenues for this quarter also include a modest contribution from commercial sales in both Germany and France. What Q2 and year-to-date results include recognition of $6.8 million in licensing revenue from Rare Stone associated with their exclusive license to commercialize Incivri in China. This revenue relates to the $7 million upfront payment that Rhythm received in Q4 2021 and has no impact on cash flow in 2022. Cost of goods sold ran at approximately 16% of product revenue during the quarter. The primary driver of COGS is the amortization of previous commercial milestones paid to Ibsen, as well as the royalty due to Ibsen under our original licensing agreement. R&D expenses for 2Q22 were $31.5 million compared to $25.1 million in the second quarter of 2021. primarily due to a $4.6 million increase in clinical trial costs. Rhythm's Phase 3 M&A study, our Phase 2 Daybreak study, as well as our two registrational studies in our weekly formulation, contributed the bulk of the increase in spending. SG&A expenses for 2Q22 were $22.3 million compared to $15.5 million in the previous quarter. The primary driver of this increase was the BBS commercial launch in the U.S., as well as increases in headcount for our U.S. and international commercial organizations. Our share count was 50.4 million basic and diluted shares, and loss per common share was 89 cents. Cash used by operating activities was $37.2 million during the quarter. In addition, cash flow from investing activities included a $4 million milestone payment to Ipsen for the first commercial sale of MCIVRI in Europe. We concluded the quarter in a strong financial position with cash, cash equivalents and short-term investments of $235.6 million, which, including the additional $37.5 million transfer, we are entitled to receive upon EU approval for BBS. We believe it will be sufficient to fund Rhythm's operations into at least the second half of 2024. And now I'll turn the call back over to David for concluding remarks. Thank you.

Thank you, Hunter. So I think, hopefully, as you've said, Understood. We believe this is a very good quarter. BBS approval, extended cash runway, strong reception in Europe, and a really encouraging start to our U.S. launch. Our pipeline of indications continues to advance, and we are very much looking forward to updating on our progress in hyperclimatic obesity. And with that, we'll turn it back to the operator to begin Q&A.

Ladies and gentlemen, if you have a question or comment at this time, please press star then 1-1 on your telephone keypad. Again, if you have a question or comment at this time, please press star 1-1. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Philip Nadeau from Cowan & Company. Mr. Nadeau, your line is open.

Good morning. Thanks for taking our questions. A couple on the BBS launch, then one on HO. On the BBS launch, you mentioned 35 physicians have written. How many physicians are there in the target market, and do you think that the initial breakdown of the prescriber base is going to be consistent with ultimately who's writing for BBS?

Thanks for the question. So, as as you outlined, 35 current ACPs, greater than 35 current ACPs who have prescribed for BBS. We have outlined in the past that we have approximately 150 physicians with approximately 350 BBS patients identified within their practice. So we still have additional physicians who have not yet prescribed the drug, and our tertiary managers are continuing to engage with them. In addition, we are continuing to move forward in terms of our disease education efforts to get additional patients to an accurate as quickly as possible, so we expect that the physician population will also increase as we move forward with our activities. In terms of prescribers, we do target specific specialties, including pediatric endocrinologists and endocrinologists. However, there are additional ways that we go about in terms of our targeted education. So, I do believe that the pediatric endocrinologist and the endocrinologist will remain a key physician specialty that will be, you know, taking care of these patients, but additional physicians will also be coming up in terms of participating in the care of BVI patients overall.

And do you have a sense of how long it takes from when the prescription is written until reimbursement is secured? Appreciate that it's early in the launch.

Yeah. So I think early in the launch, you know, it's still early days right now. We are encouraged in terms of how things are going as there have been scripts that have been received, approved, as well as shipped. This early in terms of post-launch, we expect that there's going to be, you know, time as Payers are still in the evaluation process of evaluating this new indication for MCFRI. So that can take anywhere from 30 to 90 days, just in terms of review of specific scripts, and probably longer to get even on the formulary itself.

Great. And then last question on HO. Sounds like you have a pretty good idea of how you want to structure the phase three trial. what key elements do you need to check with the FDA before you can initiate? Are there points of design that you think could be controversial to the FDA or you really need clarity from the agency before you implement the trial?

Yeah, that's a good question. So I saw the answer, short answer, I don't know. What we said on the last call, which is where we still are, there's very specific guidance for the development of drugs and obesity um i'm sure uh it'll be a double-blind randomized controlled trial i don't think that's probably going to debate that their guidance is it's a year-long trial you know that's our starting point going in we'll see where that goes and as we said i don't think it needs to be a large trial we know just mathematically it doesn't need to be a large trial given the effect size that we've seen so It doesn't require so many patients to prove statistically efficacy. Safety, you know, besides the trial to support the safety of the drug in this new indication, that'll be a point of discussion. So, I mean, those are the elements. I mean, we've been through these trials before with MC4 agonists, set melanotides. So the short answer is not so controversial, but there's two or three really important pieces we'll need to iron out.

Perfect. Thanks for taking our questions and congrats again on the progress.

Thank you. And our next question or comment comes from the line of Derek Archillo from Wells Fargo. Mr. Archillo, your line is open.

Hey, good morning. Congrats on the quarter. A lot of things to be excited about here. So just a few questions from us. Maybe to start, can you just help us understand where you are in your thinking of having tens of patients on therapy in the first couple of years for the POMC, PCSK1, and the LEPR patients? You put out some new numbers, you know, I guess in Europe, of patients you've identified, and then also in light of the news in France, it seemingly, those are all positive. And then my second question is, just on the BBS launch, Can you talk about the conversion you're seeing for the scripts written for patients that are actually receiving treatment? I know it might be early, but any thoughts there would be helpful.

Yeah, maybe I'll take a comment on the first question and then Jennifer on the second, BDS conversion. So we're sticking, I mean, the tens of patients I think is highly descriptive. It's consistent with where we are today. I think the thrust of your question was how does the approval in Europe impact that? Jan has highlighted the fact that we have about 100 patients identified so far across the major markets, and those major markets are coming on, so obviously those patients will contribute. It's still going to leave us in the tens, hopefully getting up into the high tens in that scenario, but I wouldn't change our overall positioning around this initial biallelic POMC-LEP-R group. Incredibly fortunate in hindsight that we started with that, largely because it's taught us so much about this market and it's allowed us to engage with the healthcare systems in a very constructive, non-threatening way, if you will. And I think it's laid the foundation for what we're now seeing as some very early strong success with the BBS launch. And then, of course, the year of opening up also suggests that was the right entry point. So that's where I leave it. It's a tense recommendation or guidance, if you will.

So in terms of the scripts and where we are in terms of process, you know, we have received the scripts. There have been several that have already been approved and shipped. And we are still in the process of moving forward with trying to gain access for the additional patients, especially days post-approval. We did expect it to be a process just in terms of, you know, moving forward with the PA requirements and potential denials just in terms of, you know, continuing to educate on both the patient population and drug and ensuring that the patients that really need this therapy are able to access the therapy. So ongoing dialogue and ongoing work with the team at this point of time.

Got it. And maybe just one follow-up for Jennifer. Is there any geographic consistency that you're seeing among those first 35 prescribers?

I think we lost Derek. So maybe we go to the next question. If Derek comes back, we can put him back in the queue.

Thank you. Our next question or comment comes from the line of Dagon Ha from Stiefel. Stand by.

Thanks for taking our questions. I hope I'm not having any technical difficulties. Congrats on the quarter. A couple questions from us, too. So in terms of the BBS launch, congrats on the first six weeks. Looks great. Are these the metrics that you've settled on, prescribers as well as prescriptions, or should we expect different set of metrics going forward? And how are you, I guess, in the first couple of quarters thinking about the breakdown between PPL and BBS-derived revenues? And then I've got a follow-up on HO.

Yeah, I think with regard to metrics, obviously you're interested. We're also following all of these metrics closely. Our goal is to share metrics that provide you as clear insight as we can give you reasonably. For this first call, it was clear that Scripps and this prescribing base, the 35-plus physicians who are prescribing, did that. I think we'll evaluate each quarter what are the most meaningful metrics. So we're not going to commit to a consistent set of metrics at this time. Let's see how this overall market evolves. Ultimately, at some point in time, revenues are going to become the primary metric and you'll always have those. And then the question in terms of the PPL and BBS breakout, was that the question?

Yeah, the revenue breakdown between the two.

Yeah, I think, I don't know, we'll break it out specifically. I think the PPL, back to Derek's earlier question, that's in the 10 patients that will remain and become an increasingly smaller overall percentage of the total. So we may or may not break that out, but I don't think it'll obscure the real progress that we're making with BBS overall. And then an extension of that, are we going to break out numbers between the US and Europe again? I'll defer that. Let's see how it all plays forward. But for the moment, while it's early, you're getting one set of numbers with as much color as we can give you about the different regions.

Sounds good. And then a follow-up to what Phil was asking with regards to the end of Phase 2 meeting. I guess, what are your early thoughts about the HO study as it pertains to perhaps a head-to-head with either GLP-1s or even triseptide? We've heard some of that interest from docs we've spoken to. So, any thoughts there? Thanks so much.

Sure. So, for sure, we will not be running a head-to-head. You only go head-to-head as a rule if there's an established approved therapy, a standard of care, and in which, in those cases, That may be a regulatory path that makes sense. There is no approved therapy for hypothalamic obesity, number one. The more general question of, you know, how do GLP-1 slash terseptide work in this group? Again, early. What we do know is that earlier generations of GLP-1 agonists have been tried without success. There's case reports where individual patients respond I'd refer you back to the comment that Dr. Abouzahab made on her prior call. She shared an anecdotal with that one patient where she had tried the patient on a GLP-1 with, you know, a little response, and that patient subsequently had a very strong response to satin lanotide. She's also shared that she has another patient anecdotally who's doing well on a GLP-1. But I think she characterized overall that maybe 10% to 20% of the patients might have some response to GLP-1. GLP-1 agonists and put the magnitude of the response at 5% to 10% in conversations with other physicians. We ask, I do, and others ask them, Paul, what's their opinion about this? I think that's consistent. If anything, maybe a little bit high. This is a disease where you're destroying parts of the brain that these drugs work through. And the question is, is there a residual Part of the brain is when you allow them to meaningfully get the same results you might see in somebody whose brain is not impaired. So, again, much more to be learned. But, Dagan, I don't – for sure we're not going head-to-head. And I think our early understanding is GLP-1s may have a role or help some patients, but by no means the vast majority just because it's very different biology here.

Got it. Thanks for taking our questions, and congrats.

Thanks, Dagan. Thank you. We're going to go back to Mr. Derek Aquila from Wells Fargo to ask his question. Mr. Aquila, your line is open.

Hey, sorry, guys. It seems like I got cut off there. I was just following up on a question with Jennifer. I just wanted to understand the kind of geographic consistency or not of the first 35 prescribers at BDS, if she had any comments on that. Thanks.

prescriber base we were actually quite pleased to see that we had greater than 35 prescribers that were really you know throughout the nation and not you know localized in any particular area throughout the US so this group is distributed and not particularly focused in any particular area. And we expect that to remain the case, also, as we have seen the distribution in terms of the physicians that were within our sphere that we had identified with already identified BBS patients as well.

And, Derek, I'll just add, I think, you know, these questions, your questions focused on the right thing. I mean, You know, we're pleased with a 50-script-plus start here, but this 35-plus physicians who are writing is a really important metric. You know, it would be one thing if we were sitting here and Dr. Haas at Marshfield Clinic had written all the scripts. That would be a different story. But the fact that we're getting broad-based engagement here, and that's not inconsistent with the experience Jennifer and I have had in other diseases where physicians who are following these patients are as part of their primary care, step up and become more expert and are willing to learn how to prescribe the drug and use it. So this is very much following a template that we've seen multiple times in rare disease. There's very few quote-unquote experts, and if you had to go through only the experts, that would be challenging. You don't. Others step up.

Got it. Thanks so much. Congrats on the quarter.

Next question. Thanks. Thank you. Our next question or comment comes from the line of Joseph Stringer from Needham and Company. Mr. Stringer, your line is open.

Hi, good morning. Hi, good morning. Thanks for taking our questions and congrats on the progress. Two from us on the BBS launch. Just to clarify, you previously mentioned you have 350 identified and diagnosed BBS patients in the U.S. Do the 50 prescriptions, the 50 TRX, is that a part of that 350? And then secondly, I know it's early on in the launch, but have you encountered any prior authorization or requirements or genetic testing confirmation requirements from those 50 prescriptions written to date? Thank you.

Thanks for the question. So regarding the patients that we've received scripts from, I would say that it comes from a mix of different groupings. Certainly there are positions with patients that our territory managers have been engaging with up front that have written scripts. So some of them come from those. physicians but we were also excited because within this indication we also heard and and now saw that there were patients who also heard about the approvals and that's happened very different ways but you know we had ongoing non-personal promotions both ACPs as well as patients to educate them on disease and also share the news. We had engagements with the patient associations where they were also very happy to share the news of her purple. So, you know, word gets out in these small communities as new therapies are finally available for these patients. And that was also another source just in terms of either patients are actively going to their physicians seeking treatment or other physicians who heard about it and had patients that are now part of the RISM home in terms of our CRM and outreach efforts. Regarding the prior authorization, so very aligned with the current clinical practice for BBS. BBS is a clinical diagnosis. That was also what was outlined in our PI. So to date, we really have not seen there being a genetic requirement in terms of genetic confirmation as part of the PA.

There's a very much stick to the label. One of the qualifications, Joey, just the 350, just to remind you, that was 350 plus back in February. Obviously, we've continued to identify more patients since then. And to reinforce what Jennifer said, no, it's a quarter-ish, you know, that 22% of these current early scripts that are coming in are not part of that group. So, you know, that does speak to the fact that, you know, once you have a therapy, people do reengage with the healthcare system who may have been sitting on the sidelines and not in your line of sight.

Great. Thank you for taking our questions.

Thank you. Our next question or comment comes from the line of Michael Higgins from Leidenberg-Fallman. Stand by.

Thanks, guys. Hopefully you can hear me here. Congrats on the terrific performance so far this year that we're seeing. I want to ask some questions on BVS, but first I think the next driver being MC4, maybe we can spend some time on that. When should we look for data? How many patients are we looking for? Can you provide any feedback for us from this open label trial? And remind us, again, how many ID'd in the community? Thanks.

Yeah. Thanks. The MC4, so our goal is to put that out again in association with a medical event in the fall here. We haven't specified the exact timing of that, so we're still working that out. This is one of the most common monogenetic driver of obesity. But the big question we've always had with that is, if you have a genetic variant in the receptor affecting the receptor itself, do you render the receptor non-responsive? And so what you'll hear is, our attempt to divide those groups between those who are non-rescuable, where the receptor, where their variant renders that receptor non-responsive, from those who might have a response to a certain lanotide. So, again, more to come on that, but we'll look for some update here later in the fall.

I think that was the only question so far. Just to follow up on that, the number of ID patients. Thanks.

Well, the number is very large. I mean, but again, I'm not, you know, about 6% of patients on your screen might have a variant currency for R. The real issue is how many of those might be responsive versus non-responsive.

So based on our preclinical assay or our assay, you know, we've done an estimate based on our sequencing data that About 15,000 patients in the U.S. have rescuable variants in the MC4R gene. But that is not an identified patient number. That's a genetic epi number.

And the rescuable part of that is defined by a preclinical assay. So our challenge and goal is to look and try to understand whether that predicts rescuability. So more to come on that.

That's terrific. I did have a question on BBS, but just to follow up from that is another question we had coming into the call was the number of screenings that you've been able to perform this year and how that's been trending versus prior years.

Yeah, we're on track. We'll screen between 10,000 and 15,000 patients overall this year. The frequencies that we've talked about for each one of our genes has been remarkably consistent. So, again, that's been quite reassuring. And what it tells us is that we're not screening every patient with obesity, which is actually not what we'd want to do, that we really are, the healthcare providers really are targeting those patients who have a history of early onset obesity, you know, plus minus a stronger history of hyperphagia. So, I think we're getting consistent screening with pretty consistent results.

Thanks. And then one last one, if I could hear for Jennifer, of these new docs, 22% or so, I think is what I heard, that were not prior targeted. What's that telling you, not just about receptivity, but what can that do for you in terms of your strategy in trying to reach out to more of these? Have you had discussions with these docs to find out how they found out about it in CVRI, in BBS? How does that adjust your marketing going forward? Thanks.

So as we receive scripts, we also are able to understand the prescriber and certainly that is added in terms of targets for our GMs to go out and educate. and also make sure that there's ongoing engagement with them throughout the process as patients are also being initiated on therapy. So they will always be added just in terms of our sphere. We do expect that, you know, on top of the efforts of the TMs on ground, we are going to come across additional physicians who have patients and are, you know, maybe interested in terms of prescribing dystherapy for their patients just because of our broad-based non-personal promotion efforts, which expands our reach beyond the ability of our TNs on ground. So we expect that the prescriber base is going to continue to evolve as we move forward and as additional physicians and patients learn about the benefits of Incivri for this patient population.

And maybe just one comment on the role of the patient themselves and the social network.

Yeah, and I think that within rare disease, there are different states just in terms of organization. I would say that within the BBS, the patient population, the BBS Foundation itself is quite strongly organized. They did quite a nice job just in terms of organization. organizing these past events to have that opportunity for the patients to engage with each other, learn from each other, but also we have the opportunity to present information just in terms of MCIPRI itself. So, you know, it's nice to have that type of strong community and advocacy for this patient population.

And that's the point that these patients themselves may be drivers. They learn about it, and they go to their physician who may not have heard about it, but they're motivated, and they help that physician engage, and then we connect.

Thanks, David. Jennifer, it's very helpful.

Thank you. Our next question or comment comes from the line of Corinne Jenkins from Goldman Sachs. Ms. Jenkins, your line is open.

Good morning. So maybe I think a lot of our questions have been asked already, but perhaps from the patient hub that you started, have you had any feedback recently where you're starting to identify any potential pain points or other feedback that is helpful as you think about these initial 50 patients coming onto therapy?

So the opportunity to be able to have this type of high-level and high-touch service in-house has been really incredibly important in rare disease in general, but also for this particular patient population. I will say that from the perspective of reimbursement, there are many similarities just in terms of this early on post-launch in terms of the process that it is taking. every drug in this type of situation has a PA requirement so that's a given and we are fortunate to and happy to outline that you know the PA requirements are very much aligned with our PI so it was quite expected from that perspective I will say that you know in this particular disease stage, you know, there are the CMS statutes just in terms of restriction of reimbursement of obesity medication. So there are particular segments including the Medicare population, the one that only has Medicare as a source of reimbursement that will remain a challenge for us. And, you know, there may be other You know, payers who sort of, from a first-pass perspective, without the background in education, may lean more towards that type of exclusion. However, as we have heard through our initial dialogue, research and such, there are also opportunities to educate and gain exceptions for this particular patient population as payers can understand that quite the difference in terms of what is causing the early onset obesity, the challenges around the hyperphagia, and the specific nature of the targeted approach that Ansipri outlines. So it's early days and we're working through the process and a lot of the work that's being done is what we expected as well.

Great. And then maybe separately, can you just provide us an update on the timing for a potential readout of the weekly switch study? and then remind us what the registrational path is forward for that formulation pending results from the phase three.

So two parts, as you know. The SWITCH study will read out in 2023. We haven't further defined that exactly. And so it will be in 2023. And then the second study, which is the de novo study, that will begin in the first half of 2023. We are waiting for the autoinjector to begin that trial. And so that will complete the full process. I just muted myself, that will complete the full set of data and that would be a 2024 filing.

Great, thanks. That's all from us. Thanks.

Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star then one on your telephone keypad. Our next question or comment comes from the line of Jeff Hung from Morgan Stanley. Mr. Hung, your line is open.

Congratulations on the progress and thanks for taking my questions. You indicated that 22% of the prescribing physicians were new. How many identified patients and written scripts does that correspond to?

Yeah, we haven't broken out. What we've given you the split is on the 35 physicians, basically. So we're not sort of breaking it down further than that. I think it's actually quite a lot of information in the sense that this early on, what we hope you're taking away is a breadth prescribers, which is really the key, and strong engagement, reflecting, you know, for a rare disease, as I've said many times, you don't write a script and go to your local CVS. So it takes a little bit of a commitment and conviction to get even that first step of the script written. So strong message there.

Okay. And then you said you've continued to identify patients beyond the 350-plus in VBS. What's the updated number of identified patients, and do you have a better sense for how many of them overlap with the CRIBS registry? Thanks.

So we haven't updated that further. I mean, it was 350 plus in February and everything we do literally in rhythm supports another part of rhythm. So the clinical trials we're running are phase two, phase three trials, Daybreak and Emanate. We're out engaged with the community. Rhythm has more visibility. Stem melanotide and Sivri has more visibility. All of that, again, supports ongoing education and awareness around things including BBS. That number is going up. We haven't updated it further, but we feel good about where we are. Thank you.

Thanks, Jeff.

Thank you. Oh, sorry.

I have some questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.

Okay, thanks. I realize I didn't answer a justful question there. The question was overlap with the CRIBS registry. Again, we don't know exactly. We don't have a list of patients in CRIBs for sure. There is overlap with CRIBs, and we know we have some of the prescriptions, not surprisingly, being written out of the Marshfield Clinic, and those patients are likely to be in CRIBs. So there is for sure some overlap, but there's also for sure not 100% overlap. So again, I'd encourage you to think about those things as complementary, not overlapping completely. With that, thanks to all of you for tuning in this morning. Again, we're excited about our start here. There's a lot of really good signals to build on, both in the U.S. and Europe, and we're excited about our pipeline. So look forward to our next call when we can update you further on our progress. Thanks, everybody.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, stand by.