Rhythm Pharmaceuticals, Inc.

Good day and thank you for standby. Welcome to the Rhythm Pharmaceuticals Q1 2024 earnings conference call. At this time, all participants are in 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. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, David Connolly, Executive Director of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Stephen. I'm Dave Connolly here at Rhythm Pharmaceuticals. For those of you participating on the conference call, our slides can be accessed and controlled by going to the Investors section on the Investors page of our website, ir.rhythmtx.com. This morning, we issued our press release that provides our first quarter 2024 financial results and business update, and that is available on our website. As listed on slide two is our agenda. Here with me today in Boston are David Meeker, our Chairman, Chief Executive Officer and President, Jennifer Lee, Executive Vice President, Head of North America, Hunter Smith, our Chief Financial Officer, and Jan Mazegro, Executive Vice President, Head of International, is on the line joining us from Europe. And on slide three, 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 on our most recent annual or quarterly reports on file with the SEC. In addition, any forward-looking statements represents Our views, as of only today, it should not be relied upon as representing our views as of any subsequent dates. We specifically disclaim any obligation to update such statements. With that, I'll turn the call over to David Meeker, who will begin on slide five.

Good morning, and thank you for joining this morning. So, we're pleased to report another solid quarter as we build out the opportunity in rare MC4R pathways. a larger vision of becoming a leading company in rare neuroendocrine disease. I only have two slides today, followed by some additional commentary. As listed on slide five, Rhythm's value drivers remain unchanged. Near term, it is about BBS commercial execution and making Incivary the standard of care for those patients suffering from early onset obesity and hyperphasia in our approved indication. HO offers a significant expansion opportunity and our MC1R sparing next generation programs offer the potential for much improved therapeutic options for both patients, and both provide IP protection beyond 2040. Recent highlights include the recently completed convertible preferred financing, which extends our runway well into 2026, and fully funds our investment in the LG Chem molecule. Hunter will speak to that in more detail. Second, on slide six, our phase two HO data was published in Lancet Diabetes and Endocrinology, reminding the world again why we are excited about the difference we can make in this disease. Mean BMI decreased by 14.5% at 16 weeks and 25.5% at one year for patients who had 12 months of data. The unmet need in hypothalamic obesity is significant with an estimated 5,000 to 10,000 patients in just the U.S., and there are no approved therapies. Our clinical programs continue on track with a 120-patient pivotal cohort of our Phase III HO trial fully enrolled, and Japan set to enroll its first patients. We over-enrolled the trial with a total of 131 patients, excluding the 12 patients expected to be enrolled in Japan, and the total number of dropouts remain remarkably low. And all that speaks to the commitment and enthusiasm of both the patient community and the investigators. The first patients enrolled in the Phase 3 study will be finishing the blinded portion of that trial in the second quarter and moving into the open-label extension study. The phase one study of RM718, our next generation MC1 sparing weekly injectables progressing in normal healthy volunteers with obesity, and we look forward to dosing the first clinical HO patients in part C of this phase one study in quarter three. We also expect to dose the first patients in the phase two HO study with a daily oral MC1R sparing small molecule in quarter three of this year. Each of those programs positions us for an exciting set of top line readouts in the first half of 2025. Our commercial teams had another solid quarter with a slow and steady build of the BBS opportunity. U.S. script volume remained steady with approximately 100 new scripts written and 70 new patients approved for reimbursement. As Jennifer will speak to, we continue to find new patients, engage new physicians, and get strong feedback from the community with regard to how Incivry is changing their lives. Internationally, we are moving to a really exciting time as new countries begin to come online and will begin to contribute in the second half of this year. Most encouragingly, as we expand our commercial presence and build out our clinical trial network, we continue to have strong support from leading thought leaders in Europe who are seeing the benefit of setmelanotide in their patients. Jan will provide more color. Last quarter, we spoke to two challenges, a change in one state Medicaid plan and patient discontinuations, where we have continued to get some questions. I want to reinforce what we communicated on that call. With regard to the one state Medicaid plan who increased the stringency of their approval criteria, that state continues to have a policy in place and continues to cover patients. We have been clear that there is no expectation that the 30 patients converted to our bridge program will return to reimbursed therapy anytime in the near term. We have removed them from our internal models and suggest you do the same. Importantly, as noted, this experience was limited to a single state. There has been no read through to any other state nor do we expect to have any read-through. While this was disappointing, we are more than compensating and continue to make good progress in the other 49 states plus Puerto Rico. Second, the increase in the number of discontinuations we have seen recently is in line with our expectations, given that the much larger number of patients, both in the U.S. and internationally, who are now on treatment for a long period of time. We expect the rate of discontinuations to level out in the 20% to 30% range long-term, as we have highlighted previously. Although the focus will increasingly shift to the revenue number as this opportunity matures, we thought it would be useful to provide a one-time deeper dive into some of the reasons why BBS patients discontinue therapy. The short summary is that there is no major driver, and the majority remain related to patient-specific issues. First, age is an issue, with the discontinuation rate being highest in the adolescents, lowest in the pediatric patients under the age of 12, and in the middle for adults. The adolescent age group can be challenging in general, but particularly when it comes to a chronic daily injectable therapy. Overall, the specific reasons for discontinuation remain relatively unchanged. The most common and consistent are discontinuations due to hyperpigmentation, which represent about 5% of patients who have initiated therapy, and this has crept up a bit as we penetrate more deeply in populations where this is more of a concern, such as the Hispanic population in the U.S., Approximately 4% of patients have stopped therapy due to a perceived lack of efficacy, which also represents an opportunity as a number of these patients have stopped after only a few weeks on treatment and likely before they have experienced the full effect of the drug. This is an area where expectation setting and education is incredibly important. About 2% of patients stop because of nausea and vomiting and another 2% stop secondary to overall life challenges where the burden of a daily injectable becomes too much. There's a longer list of reasons for discontinuing that we have previously grouped together as other, each of which occurs with a frequency less than 1%. These reasons include allergic reactions, severe headache, chest pain, back pain, leg numbness, fatigue, and an increased frequency of erections, among others. The point is that the challenges facing BBS patients are complicated. Those who stop therapy do so for a variety of reasons, some related to the drug, many not related to the drug. Not surprisingly, there are items on this list we cannot do much about, but other areas where we can do something, and those are the areas we are investing in. These challenges, like the payer challenges from last quarter, are normal parts of the ups and downs of building out a novel therapy for a complex, rare disease. Most importantly, the fundamentals of this business continue to stray. Patient identification remains strong, a growing number of physicians are writing scripts, Reimbursement continues to be positive, with good news on the reauthorization front in the US, and we continue to receive positive patient feedback. On the clinical front, we look forward to filing our pediatric age two to six supplemental NDA with the FDA in the second quarter, and potentially receiving EMEA approval in quarter four of this year. Part two of the Daybreak Study will read out in quarter three, and we continue to make good progress with our phase three M&A trial enrollment. With that, I'll turn the call over to Jennifer.