Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rhythm Pharmaceuticals Inc (RYTM, Financial) reported strong revenue growth with third-quarter revenues reaching $33.3 million, a 14% increase from the previous quarter.
- The company is making significant progress in its clinical programs, with the phase three trial for hypothalamic obesity on track for a data readout in the first half of 2025.
- Real-world data from France showed promising results for hypothalamic obesity patients, with a mean BMI decrease of 21.3% at six months.
- The company is expanding its market presence internationally, with INSR now available in over 15 countries outside the United States.
- Rhythm Pharmaceuticals Inc (RYTM) has reduced its 2024 operating expense guidance, indicating improved operating leverage and financial management.
Negative Points
- The company experienced a slight increase in cost of sales, primarily due to higher labor and overhead costs.
- There is a noted dropout rate in clinical trials, although it remains below 10%, which could impact future trial outcomes.
- The company faces challenges in enrolling patients for certain substudies, such as LE R and SRC one, which may delay progress.
- Despite strong growth, there is still a significant portion of prescriptions transitioning to free drug due to lack of coverage, particularly from Medicare.
- The company acknowledges the need for better identification of patients with true loss of function variants, which could complicate future development efforts.
Q & A Highlights
Q: Can you quantify the impact of the pull forward of demand from Q4 to Q3 and any other lumpy items included in the revenue number?
A: It's a little imprecise, but we estimate that the pull forward could be around half a million dollars in Q3. (Hunter C Smith, CFO)
Q: What do you need to see to advance one of the Daybreak trial populations to a pivotal study, and when might you make a go/no-go decision?
A: We need to better understand the variants, particularly those that are true loss of function. A gene like POMC might be considered earlier, potentially with a next-generation program, but this would be a 2026 activity. (David Meeker, CEO)
Q: Do you think the real-world data from French HO patients will be predictive of the Phase 3 study in terms of BMI reduction?
A: The consistency of response in every patient who has taken the drug is reassuring. The magnitude of BMI decrease is good, but the consistency is more important, predicting well for a positive Phase 3 outcome. (David Meeker, CEO)
Q: How should we think about the contribution from Europe as we look into 2025, and do you anticipate it becoming a larger share of overall revenue?
A: We foresee growth in international markets, but the degree to which it keeps pace with the US, which is starting from a larger base, will be variable quarter to quarter. (Hunter C Smith, CFO)
Q: Can you provide updates on adherence and compliance in the BBS patient population?
A: The discount rate remains close to 30%. We focus on educating and setting clear expectations around the timing of efficacy impact to maintain patients on therapy. (Jennifer Lee, EVP, Head of North America)
Q: Can you expand on the opportunity to continue expanding early access in Europe with the new data from French HO patients?
A: The local data will help in France and Italy, and other smaller countries with named patient sales may decide to start some patients based on these data. (Christophe R Jean, Board of Director)
Q: What are the current paid rates, and how much room is there to improve upon this in the US?
A: We have high coverage from commercial and Medicaid, but no coverage from Medicare due to statutory reasons. About 20% of scripts transition to free drug. (Hunter C Smith, CFO)
Q: Regarding the Phase 3 data for HO, should we expect the timeline to be condensed, and what about the desire to combine GLP-1s with setmelanotide?
A: The timeline is based on the last patient out at a year, and we can't refine it much more. There is interest in combination therapies, and they can be used together, potentially providing better outcomes. (David Meeker, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
