Rhythm Pharmaceuticals, Inc. (Nasdaq: RYTM) (“Rhythm”), a
commercial-stage biopharmaceutical company committed to
transforming the care of people living with rare genetic diseases
of obesity, today announced that it has entered into a Revenue
Interest Financing Agreement (the “Agreement”), with HealthCare
Royalty Partners (“HealthCare Royalty”) for a total investment
amount of up to $100 million. Rhythm intends to use the proceeds
from the Agreement and its cash on hand to support global
commercialization efforts for IMCIVREE® (setmelanotide) and ongoing
clinical development.
Under the terms of the Agreement, Rhythm will receive an initial
investment amount of $37.5 million from HealthCare Royalty, as a
result of the approval of IMCIVREE by the U.S. Food and Drug
Administration (“FDA”) for the treatment of obesity and control of
hunger in adult and pediatric patients 6 years old and older with
Bardet-Biedl syndrome (“BBS”). Rhythm will receive an additional
investment amount of $37.5 million following European Commission
marketing authorization for IMCIVREE for BBS, which is anticipated
in the second half of 2022. The final investment amount of $25
million will be payable upon Rhythm’s achievement of certain agreed
sales milestones in 2023.
In exchange for the total investment amount received by Rhythm,
HealthCare Royalty will receive a tiered royalty based on global
net product sales generated by IMCIVREE. This royalty will begin in
the low double digits and decrease to the low single digits upon
the achievement of certain annual revenue thresholds. The total
royalty payable by Rhythm to HealthCare Royalty is capped between
185 percent and 250 percent of the amount paid to Rhythm, dependent
on the aggregate royalty paid between 2028 and 2032. Based on the
total funding under this Agreement, together with Rhythm’s current
cash balance, Rhythm anticipates that it will be able to fund its
operating expenses and capital expenditure requirements into the
second half of 2024, regardless of whether the sales milestone
relating to the third tranche is achieved.
“This Agreement with HealthCare Royalty, a premier investment
firm, underscores the significant opportunity for IMCIVREE as the
first-ever treatment to address the unmet needs of hyperphagia and
severe obesity in people living with BBS,” said David Meeker, M.D.,
Chair, President and Chief Executive Officer of Rhythm. “We are
excited to announce this transaction concurrently with U.S.
approval for IMCIVREE in BBS, as it provides meaningful
non-dilutive capital as we initiate our launch. The added financial
flexibility will also support investment in our broad clinical
development program for setmelanotide, with the goal of delivering
our precision medicine to many more people suffering from
hyperphagia and severe obesity caused by rare melanocortin-4
receptor (MC4R) pathway diseases.”
“Our investment reflects our confidence in Rhythm and IMCIVREE’s
commercial prospects in BBS, as well as its potential for expansion
into additional indications,” said Clarke Futch, Chairman and Chief
Executive Officer of HealthCare Royalty. “Our extensive due
diligence indicates that the BBS community is well established and
that Rhythm has identified health care providers and patients who
are eager to initiate therapy with IMCIVREE. We are also excited to
collaborate with Rhythm to support further clinical development of
setmelanotide in additional indications with substantial medical
and commercial opportunity.”
Morgan Stanley & Co. LLC acted as Sole Structuring Agent and
Latham & Watkins LLP acted as legal advisor to Rhythm on the
transaction. Morgan, Lewis & Bockius LLP acted as legal advisor
to HealthCare Royalty.
About Rhythm PharmaceuticalsRhythm is a
commercial-stage biopharmaceutical company committed transforming
the lives of patients and their families living with hyperphagia
and severe obesity caused by rare melanocortin-4 receptor (MC4R)
pathway diseases. Rhythm’s precision medicine, IMCIVREE
(setmelanotide), is approved by the U.S. Food and Drug
Administration (FDA) for chronic weight management in adult and
pediatric patients 6 years of age and older with monogenic or
syndromic obesity due to POMC, PCSK1 or LEPR deficiency confirmed
by genetic testing, or patients with a clinical diagnosis of
Bardet-Biedl syndrome (BBS). The European Commission (EC) and Great
Britain’s Medicines & Healthcare Products Regulatory Agency
(MHRA) have authorized IMCIVREE for the treatment of obesity and
the control of hunger associated with genetically confirmed
loss-of-function biallelic POMC, including PCSK1, deficiency or
biallelic LEPR deficiency in adults and children 6 years of age and
above. IMCIVREE is the first-ever FDA-approved and EC- and
MHRA-authorized therapy for patients with these rare genetic
diseases of obesity. The Company submitted a Type II variation
application to the European Medicines Agency seeking regulatory
approval and authorization for setmelanotide to treat obesity and
control of hunger in adult and pediatric patients 6 years of age
and older with BBS in the European Union. Additionally, Rhythm is
advancing a broad clinical development program for setmelanotide in
other rare genetic diseases of obesity and is leveraging the Rhythm
Engine and the largest known obesity DNA database -- now with
approximately 45,000 sequencing samples -- to improve the
understanding, diagnosis and care of people living with severe
obesity due to certain genetic deficiencies. Rhythm’s headquarters
is in Boston, MA.
About
HealthCare Royalty HealthCare Royalty purchases royalties
and uses debt-like structures to invest in commercial or
near-commercial stage life science assets. HealthCare Royalty has
$6.0 billion in cumulative capital commitments with offices in
Stamford (CT), San Francisco, Boston and London. For more
information, visit www.healthcareroyalty.com. HEALTHCARE
ROYALTY PARTNERS® is a registered trademark of HealthCare Royalty
Management, LLC in the U.S. and a trademark in other countries.
IMCIVREE®
(setmelanotide) IndicationIn the United
States, IMCIVREE is indicated for chronic weight management in
adult and pediatric patients 6 years of age and older with
monogenic or syndromic obesity due to:
- Pro-opiomelanocortin (POMC), proprotein convertase
subtilisin/kexin type 1 (PCSK1), or leptin receptor (LEPR)
deficiency as determined by an FDA-approved test demonstrating
variants in POMC, PCSK1, or LEPR genes that are interpreted as
pathogenic, likely pathogenic, or of uncertain significance
(VUS)
- Bardet-Biedl syndrome (BBS)
Limitations of UseIMCIVREE is not indicated for
the treatment of patients with the following conditions as IMCIVREE
would not be expected to be effective:
- Obesity due to suspected POMC, PCSK1, or LEPR deficiency with
POMC, PCSK1, or LEPR variants classified as benign or likely
benign
- Other types of obesity not related to POMC, PCSK1, or LEPR
deficiency, or BBS, including obesity associated with other genetic
syndromes and general (polygenic) obesity
WARNINGS AND PRECAUTIONS
Disturbance in Sexual Arousal: Spontaneous
penile erections in males and sexual adverse reactions in females
have occurred. Inform patients that these events may occur and
instruct patients who have an erection lasting longer than 4 hours
to seek emergency medical attention.
Depression and Suicidal Ideation: Depression
and suicidal ideation have occurred. Monitor patients for new onset
or worsening depression or suicidal thoughts or behaviors. Consider
discontinuing IMCIVREE if patients experience suicidal thoughts or
behaviors, or clinically significant or persistent depression
symptoms occur.
Skin Pigmentation and Darkening of Pre-existing
Nevi: Generalized increased skin pigmentation and
darkening of pre-existing nevi have occurred. Perform a full body
skin examination prior to initiation and periodically during
treatment to monitor pre-existing and new pigmentary lesions.
Risk of Serious Adverse Reactions Due to Benzyl Alcohol
Preservative in Neonates and Low Birth Weight Infants:
IMCIVREE is not approved for use in neonates or infants. Serious
and fatal adverse reactions including “gasping syndrome” can occur
in neonates and low birth weight infants treated with benzyl
alcohol-preserved drugs.
ADVERSE REACTIONS
- The most common adverse reactions (incidence ≥20%) included
skin hyperpigmentation, injection site reactions, nausea, headache,
diarrhea, abdominal pain, vomiting, depression, and spontaneous
penile erection.
USE IN SPECIFIC POPULATIONSTreatment with
IMCIVREE is not recommended when breastfeeding. Discontinue
IMCIVREE when pregnancy is recognized unless the benefits of
therapy outweigh the potential risks to the fetus.
To report SUSPECTED ADVERSE REACTIONS, contact Rhythm
Pharmaceuticals at 833-789-6337 or FDA at 1-800-FDA-1088 or
www.fda.gov/medwatch.
Please see the full Prescribing Information for
additional Important Safety Information.
Forward-Looking
StatementsThis press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking statements, including without limitation
statements regarding the potential, safety, efficacy, and
regulatory and clinical progress of setmelanotide, our expectations
surrounding potential regulatory submissions, approvals and timing
thereof, our business strategy and plans, including regarding
commercialization of setmelanotide, anticipated benefits of and
activities under our financing agreement with HealthCare Royalty,
our use of proceeds from the transaction with HealthCare Royalty
and our business strategy and plans. Statements using word such as
“expect”, “anticipate”, “believe”, “may”, “will” and similar terms
are also forward-looking statements. Such statements are subject to
numerous risks and uncertainties, including, but not limited to,
our ability to enroll patients in clinical trials, the design and
outcome of clinical trials, the impact of competition, the ability
to achieve or obtain necessary regulatory approvals, risks
associated with data analysis and reporting, our liquidity and
expenses, the impact of the COVID-19 pandemic on our business and
operations, including our preclinical studies, clinical trials and
commercialization prospects, and general economic conditions, and
the other important factors discussed under the caption “Risk
Factors” in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2022 and our other filings with the Securities and
Exchange Commission. Except as required by law, we undertake no
obligations to make any revisions to the forward-looking statements
contained in this release or to update them to reflect events or
circumstances occurring after the date of this release, whether as
a result of new information, future developments or otherwise.
Rhythm Corporate
Contact:David ConnollyHead of Investor Relations and
Corporate CommunicationsRhythm Pharmaceuticals,
Inc.857-264-4280dconnolly@rhythmtx.com
Rhythm Investor
Contact:Hannah DeresiewiczStern Investor Relations,
Inc.212-362-1200hannah.deresiewicz@sternir.com
Rhythm Media
Contact:Adam DaleyBerry & Company Public
Relations212-253-8881adaley@berrypr.com
HealthCare Royalty
Contact:Carlos AlmodovarHealthcare Royalty
Partners Chief Business
Officer 203-487-8411carlos.almodovar@hcroyalty.com
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