Rhythm Pharmaceuticals, Inc. Q4 FY2021 Earnings Call

Thank you for standing by. Welcome to the Rhythm Pharmaceuticals Fourth Quarter and Fiscal Year 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, David Connolly with Rhythm Pharmaceuticals. Please go ahead.

Thank you, and good morning. I'm David Connolly, Head of IR and Corporate Communications here at Rhythm Pharmaceuticals. For those of you participating via conference call, the accompanying slides are available and can be controlled on the Events section of the Investors section on our website at ir.rhythmtx.com. This morning, we issued a press release that provides fourth quarter and year-end 2021 financial results and a business update, which is also available on our website. As listed on Slide 2 is our forward-looking statement. I'll remind you that this call will contain certain 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 factors, including those discussed in our most recent annual report on file with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent dates. We specifically disclaim any obligation to update such statements. On Slide 3, there's a list of today's speakers. We're all here today in Boston. David Meeker, Chair, President and Chief Executive Officer, is here. Linda Shapiro, our Chief Medical Officer; Yann Mazabraud, our Executive Vice President, Head of International; Hunter Smith, Chief Financial Officer; and Jen is also here for Q&A. She’s Executive Vice President, Head of North America. And with that, I'll turn the call over to David.

Thank you, Dave, and good morning, everybody. Thank you for tuning in this morning. So we're really pleased to report out another strong quarter, wrapping up what was an incredibly important year for Rhythm. And today, we'll take you through some of the more recent highlights which are captured on Slide 5. First and foremost, as we continue our preparations for BBS launch, I hope most of you had a chance to review or see or tune in to our event about two weeks ago where we heard from Mary Morris, a caregiver and mother of two children with Bardet-Biedl Syndrome, and I'll speak a little more about Mary's story in a moment. And we also heard from two of the experts, Dr. Haws and Dr. Conroy. That session gave us all, I think, a much stronger sense of both the challenges faced by individuals and families living with BBS, as well as how the experts view this community coming together and the ultimate opportunity for setmelanotide. As you know, we heard recently from the FDA requesting some additional analyses. No new data was required, but additional analyses, all of which we felt were good, strong, supportive of the overall file and perhaps, ultimately a better way of looking at the data. No issue there. But it did come with an additional three-month delay on our PDUFA date, which is now set for June 16. We also indicated in our recent communication that we made the strategic decision to remove Alström syndrome from the file in Europe. This was based largely on a calculation that we didn't want to prolong the review in Europe, and there was a risk that further engagement around the Alström opportunity might do that. Also, strategically, I think as we look at market access opportunities in Europe, it’s advantageous to go in a layered way. I think going to the authorities with the combination of BBS and Alström made it a little more complicated. So again, from a very strategic standpoint, we decided to withdraw Alström at this time from our European application. There's no change to our plans for the U.S. Second, you're going to hear from Yann Mazabraud today about our international efforts, and I have come to understand that if you can get it right internationally in a rare disease opportunity, most specifically in Europe, you can pretty much get it right anywhere. Europe has some of the more challenging healthcare systems in the world, and you'll hear from Yann about exciting progress in that sphere. We're also very pleased with our U.S. commercial experience to date. I'll spend one slide on that, but it's going as predicted and laying the foundation for our BBS launch. And finally, you'll hear from Linda as she takes us through a couple of different programs that we're excited about, meaning they are progressing well. We have a number of milestones met with a number of these trials now underway. And again, she'll speak to that in a little more detail. Next slide, number 6. This is a picture of Mary Morris and her family, including her two children, Ashley and Carly. During the session, we learned about the significant challenges faced by individuals living with Bardet-Biedl Syndrome and their families, particularly regarding obesity and the underlying genetic issue that leads to increased hunger, known as hyperphagia. This hunger is not the same as what most people experience. Listening to those affected, or those who support them, helps us begin to understand this condition better, although experiencing it firsthand provides the clearest insight. At our company-wide meeting, a caregiver shared her family's story and her son's struggles with Bardet-Biedl Syndrome. While each case is unique, a substantial portion of her hour-long presentation focused on hyperphagia and its difficulties. The connection to obesity and weight gain is undeniably significant, yet it's essential to recognize that these are distinct issues compared to general obesity. Tune in to our session for more information on this. Slide number 7 just highlights again the progress or how we think about the frame for our BBS preparation. The first is understanding the unmet medical need, which I just spoke to, the importance of the hyperphagia. But also the rapid weight gain and severe obesity that occurs early. An incurring fact that it occurs early means that the complications of obesity come with it and they start early. The cumulative effect over a lifetime is much greater. The solution, growing confidence in the solution which is setmelanotide I think is a targeted therapy addressing the MC4 receptor, melanocortin through a pathway which governs hunger and energy expenditure. The story is not completely in the numbers. The numbers are important. The amount of weight loss is important. The scales are important. But as you listen to the stories, you get a much better sense of how in fact a drug like setmelanotide can change the overall picture. And finally, we spoke about preparations for launch. And I feel really good about that. A number of us have a highly experienced team here led by Jennifer Chien and several people that both she and I have worked with over the years as well as some new people to us who come from other deeply experienced backgrounds. And that's what it takes to be successful in a rare disease are individuals with an entrepreneurial mindset and the ability to problem solve in a customized way. We've made great progress and I'll speak a little more about that in the next slide in terms of building this community and helping more and more patients come to diagnosis and, as I said, organizing the overall opportunity. So next slide, number eight. Now we spoke on the call about 350 plus individuals who have been identified. We spoke about the process of identifying those individuals which consisted of going to physicians where we had a strong understanding that they were caring for an individual with Bardet-Biedl Syndrome. The goal of those visits was to connect in and validate and confirm that in fact they were still following that patient. So that represents one part of this group, the identified and diagnosed group. We also know that there's a large number of patients out there who are diagnosed today but may not be actively engaged in the system, and that's another opportunity. As we've done genetic testing, the genetic testing, our current panel of 80 genes, includes 23 genes for Bardet-Biedl. We know from experience that when you screen an individual with a history of early onset obesity and hyperphagia, Bardet-Biedl appears in about 1.5% of those individuals will come back biallelic for Bardet-Biedl gene. Now that doesn't mean that they will meet the diagnosis for Bardet-Biedl, but that creates a roadmap to someone whose probability of having Bardet-Biedl may be slightly higher. And again, falling in this suspected category, and in rare disease, by far the largest part of the population is undiagnosed. It is a syndrome. It has advantages in a sense that if you can connect the dots, you have a better chance of making a diagnosis. But you don't connect those dots if you haven't seen one in a reliable way. And you can look at something that's obvious to an expert as a non-expert, and you just miss it. As a result, many of these patients are on this prolonged diagnostic odyssey where their ability to get a diagnosis, despite some classic parts of the presentation, may lead them to see 5 to 10 different physicians before someone puts it all together and says you may have Bardet-Biedl Syndrome. So we feel good about the 350 plus patients we talked about. The fact that the PDUFA date has been pushed out by three months doesn't change anything. Foundationally, everything remains the same. We'll continue those efforts and really look forward to June 16, when we will hopefully be able to move into a commercialization phase. Next slide, number 9. So as I said, we're really pleased with where we are in terms of our initial commercial experience and we reported 3.2 million in revenues for 2021 with 1.8 million in the last quarter. As or more importantly is what we've learned. Logistics are in place. Contact and interactions with payers is going well. One of the most important things is we bring up our patient services group and we have the opportunity to interact directly with patients who have consented since they want to be in contact with Rhythm for all the services we can provide. It gives us greater insights into how we can best support this population in terms of disease education, what they can expect, the onboarding as they start therapy, and what they can expect from therapy, and just again, general support in the rare disease world that they can’t always get from the healthcare system itself. And finally, on Slide 10, I just want to remind you all that we announced in December our partnership with RareStone for the opportunity in China. We’re really excited about that. It may not be so hard to do the deal, but I think it’s hard to find the right partner. As we've interacted over the past two months, our confidence that we've got the right partner in RareStone is growing. We're completely aligned from a cultural standpoint, from a philosophical perspective. They're highly experienced, having taken a couple of different products through the regulatory process. They're well on the way with filings related to Rhythm's opportunity itself, and we're quite hopeful that in that effort, they will be in a position to be participants in our Phase 3 effort, the EMANATE trial specifically, and contribute to that. So with that, I'd like to turn it over to Linda Shapiro, our CMO, who will take you through our regulatory and clinical update. Linda?

Great. Thank you very much, David. Let's begin on Slide 12. As David provided an update on the regulatory efforts relative to Bardet-Biedl syndrome and Alström syndrome, I intend to focus on our robust clinical development efforts. Setmelanotide and Rhythm's approach to rare genetic diseases of obesity is truly unique. We've known for decades that the MC4 pathway regulates hunger, energy expenditure, and consequently body weight, and for just as long it's been in targeted biopharma companies looking to develop medications to impact it. For setmelanotide, Rhythm has shown we can do just that. Setmelanotide is the first-ever MC4 receptor agonist that targets the root cause of the debilitating hyperphagia and early onset severe obesity that are the hallmarks of rare genetic diseases of obesity. In addition to our unique precision medicine setmelanotide, we are undertaking a unique approach to obesity driven by our belief, which is supported by decades of research, that all obesity is not the same. Yesterday, we recognized Rare Disease Day with an internal employee engagement event featuring a patient caregiver speaker who is truly inspiring, along with some artwork generated through team-building exercises to shine a light on rare diseases. Importantly, for the greater Rhythm community, Rare Disease Day falls at the beginning of Obesity Care Week, which is a campaign to increase awareness, education, and action on the complexities and chronic nature of obesity as a disease, as well as on weight bias and stigma. And Friday, March 4, is World Obesity Day with this year's theme of Everybody Needs to Act, encouraging all of us to work together to ensure a happier, healthier, and longer life for everybody. With that in mind, I'd like to encourage you to check out leadforrareobesity.com, a website where the Rhythm community offers educational resources, educates on the importance of genetic testing and shares stories. We welcome you to join us in leading the effort to provide education and access to treatment for rare diseases of obesity. And with that, let's move to our clinical development programs, Slide 13. We are reporting updates on several clinical trials today. In addition to completion of enrollment in the hypothalamic obesity trial, which we'll talk about shortly, today, we announced that the first patient has been dosed in our Phase 3 pediatric trial evaluating setmelanotide in patients aged two to less than six years with obesity due to biallelic POMC, PCSK1, or Leptin Receptor deficiency, all with a clinical diagnosis of BBS with genetic confirmation. In January, we announced the dosing of the first patients in the Phase 2 DAYBREAK clinical trial, which is evaluating setmelanotide for the treatment of severe obesity and hyperphagia potentially caused by genetic variants in one or more of 31 genes with strong or very strong relevance to the MC4 pathway. DAYBREAK is the most comprehensive Phase 2 trial ever initiated in rare genetic diseases of obesity. Also, in January, we announced the dosing of the first patients in the Phase 3 switch trial evaluating a once-weekly formulation of setmelanotide in patients six years of age and older with rare genetic diseases of obesity who are currently taking the daily formulation of setmelanotide. We expect to initiate the Phase 3 EMANATE trial in the first half of 2022. We faced some delays due to COVID and the Omicron surge with our CRO and other vendors. Slide 14. We have quite a few data readouts coming in the next few months. Several patients with SRC1 deficiency or SH2B1 deficiency advanced from our exploratory Phase 2 Basket Study to our open-label long-term extension study, and we are looking forward to reporting 12 months data from those patients at a conference this spring. As a reminder, last year we presented three months data in patients with SRC1 that showed a mean weight reduction of 7.9% in adult responders and a BMI score reduction of 0.48 in responders younger than 18 years. In SH2B1, adult responders achieved a mean reduction of 7.2%, and there was a mean reduction in BMI Z score of 0.25 in responders younger than 18 years. Also, we look forward to a fulsome presentation of 24-month data in patients with Bardet-Biedl syndrome. Dr. Bob Haws presented a preview of the BBS data last month with data from 19 patients at 24 months, showing a mean reduction in body mass index from pivotal trial baseline of 14.3%, a mean reduction of body weight from pivotal trial baseline among six patients 18 years of age or older of 14.9%, and a mean reduction in BMI Z score from pivotal trial baseline among 12 patients younger than 18 years of 0.72. We're also looking forward to presenting data for patients with biallelic POMC, PCSK1, or Leptin Receptor deficiency obesity. Importantly, we expect this data to continue to build the case for the long-term therapeutic value of setmelanotide, as long-term data we've presented to date have shown consistently that setmelanotide achieved sustained meaningful effects. Slide 15. Now let's turn to hypothalamic obesity. Hypothalamic obesity is a rare acquired form of obesity that develops following injury to the hypothalamic region of the brain that contains the MC4 pathway neurons, which are responsible for controlling physiological functions such as hunger and weight regulation. Hypothalamic obesity most frequently follows the development of a craniopharyngioma, a rare brain tumor or its treatment by surgical removal or radiation. Approximately half of patients with craniopharyngioma experience rapid weight gain and insatiable hunger in the first 6 to 12 months following tumor resection, ultimately developing severe obesity. While clinical and preclinical evidence suggests an apparent MC4 deficiency in these patients, the impact of the injury to the hypothalamus and its effect on the MC4 receptor itself remains difficult to ascertain. Currently, therapeutic options are very limited for patients with hypothalamic obesity. Slide 16. Today, we announced that we completed enrollment in our Phase 2 open-label proof of concept study evaluating setmelanotide in individuals with hypothalamic obesity. We enrolled 18 patients older than six years in this study. The trial consists of 16 weeks of treatment with setmelanotide administered once daily by subcutaneous injection, including an initial dose titration period. The primary endpoint is the proportion of patients with a 5% or greater reduction in BMI from baseline after 16 weeks of setmelanotide treatment compared to a historic control of less than 5% in this patient population. We're fortunate to have one of the country’s leading key opinion leaders of hypothalamic obesity as a principal investigator for this trial, Dr. Christian Roth of the Endocrine Division of Seattle Children's Hospital. We're looking forward to sharing preliminary data from this trial in the middle of this year. And with that, I'll turn the call over to Yann for an update on international.

Thanks, Linda, and good morning, everyone. As most of you know, it is crucial to be in Europe and in other key international markets to build a successful rare disease company. Over the last 18 months, we've made a lot of progress building out our international organization. We're now 20 people, with most of the positions being across EU4 plus the United Kingdom and also for positions in four other regions with strong potential, namely the Netherlands, the Nordics, Turkey, and Argentina. We are highly skilled and a very engaged team, relentlessly working closely with the main European centers of excellence and their regional networks to increase awareness and drive diagnosis, engaging and partnering with local payers and providing operational support for Rhythm's robust clinical operations, as Linda just described for you. Before I talk to you about our market access highlights, I want to say a few words about the European rare disease landscape and how both the patients we serve and Rhythm will benefit from it. In the last 20 years, I've had the privilege to launch and commercialize more than 10 rare disease drugs in Europe, in Latin America, and in the U.S. The European rare disease ecosystem is by far better organized than any of the others. More than 20 years ago, European countries began a very well-structured approach to rare disease, beginning with rare disease national plans with dedicated budgets and National Centers of Excellence, leading to better diagnosis and care for patients with rare diseases. Then we saw the advent of the European rare disease networks, ultimately leading to increased expertise and diagnosis acceleration. Specifically for the rare genetic disorder affability, we are extremely lucky as a company to leverage more than 30 years of research and clinical excellence in many large university hospitals in the most important European cities. Before us, before Rhythm, there were already patients with rare genetic disorders awaiting diagnosis. This has accelerated and increased since we started many clinical trials back in 2014. There are now over 100 patients diagnosed with biallelic POMC, PCSK1, or LEPR deficiency obesity being cared for in three European centers of excellence. Another example, in France, where the French HAS and the National Reference Center for rare genetic diseases of obesity introduced formal guidelines for the diagnosis and management of patients with rare genetic diseases of obesity. Next slide. As you can see on this timeline, we've made tremendous progress in the international markets since Q3 2020 from submitting our Market Authorization Application for IMCIVREE in POMC, PCSK1, and LEPR in July 2020, followed by European and United Kingdom authorizations in July and September of 2021. We have been very busy. We have engaged very early with the most important European HTA bodies, which is undoubtedly the number one key success factor in terms of market access. Today, I'm happy to report many significant successes across Europe, and more importantly, first commercial sales which are expected in Germany and France in the second quarter of this year. Next slide. And before I give you some details about these two countries, I am proud to say that there is a genuine excitement about IMCIVREE in Europe, and on this line, I'm very proud to report that IMCIVREE was highlighted two weeks ago in the EMA's 2021 edition of its Human Medicines Highlights and listed as one of the eight drugs with an outstanding contribution to public health within 92 positive opinions last year. So Germany is, as you know, the largest and most important country in Europe from a healthcare business point of view. In Germany, drugs classified as lifestyle drugs, which includes those designed to affect weight loss, smoking cessation, and hair loss, are not eligible for reimbursement. Today, we are excited to announce that the German Federal Joint Committee, or GB-A, excluded IMCIVREE from its lifestyle work for POMC, PCSK1, or LEPR deficiency obesity. Its first-ever exclusion marks an important recognition that this therapy is designed to treat a rare genetic disease that manifests as obesity and that this group of diseases is distinct from general obesity. With this exemption status, IMCIVREE will be eligible for national coverage and reimbursement, and we are looking forward to first commercial sales in Germany in the second quarter of 2022. Next slide. France now. Last month, on the 19th of January, the French Haute Autorité de Santé, or HAS, granted paid early access for IMCIVREE for patients with POMC, PCSK1, or LEPR deficiency obesity, which means that any obesity specialist in France can now prescribe for genetically confirmed POMC, PCSK1, or LEPR patients aged six years old and above. This is a very strong recognition of the important medical need and the value of setmelanotide, but also a testament to the strong support from the obesity and rare genetic communities and KOL, which we enjoy in France. Next slide. We will have more pending commercial status to report in the coming months. In 2021, we submitted for POMC, PCSK1, or LEPR in the UK, the Netherlands, and Israel, and we have already started to work on Bardet-Biedl syndrome. You just heard about Germany and France. Initial feedback from Spain and Italy is very positive. In the UK, following the selection of highly specialized technology, which is a very high bar to reach, we've had very positive interactions with NICE and are on time for market access. Next slide. Last but not least, the Bardet-Biedl syndrome indication in Europe. We are expecting a CHMP approval in the second semester of this year. The estimated European prevalence is 2,500 patients. There are a lot of patients already diagnosed, more than 1,500 actually. We are in a very good place in the most important European countries while opening new horizons in other key countries around the globe with a high sense of privatization and focus. Now I would like to turn the call over to Hunter to review our fourth quarter and full year 2021 financial results.

Thank you, Yann. Turning to Slide 26, as David mentioned at the start of the call, we were pleased to report product revenue of 1.8 million in the fourth quarter of 2021, an increase of 80% over the third quarter. For the full year 2021, which is effectively three quarters of sales, revenues were 3.2 million. All revenue came from sales of IMCIVREE in the United States. There were no revenues during the comparable period of 2020. Loss from operations was 50.9 million in the quarter, an increase of 15 million over the comparable quarter of 2020. For the full year 2021, loss from operations was 170.1 million, an increase of 33.5 million over the prior year. For both periods, these increases were due to increases in both clinical trial activity as well as higher headcount across our research and development, commercial, and G&A functions. We expect our operating expenses to continue to increase during 2022 due to costs associated with our expanding clinical development efforts as well as commercialization activities related to the potential IMCIVREE launch in BBS and ongoing efforts across Europe. Our share count was 50.3 million basic and diluted shares and common loss per share was $0.85, an increase of $0.06 over the fourth quarter of 2020. For the full year, our share count was 49.6 million basic and diluted shares and loss per common share was $1.40, a decrease of $1.64 over the full year 2020. We concluded the year in a strong financial position with cash, cash equivalents, and short-term investments of 295 million, which we believe will be sufficient to fund Rhythm's operations into the second half of 2023. And now, I'll turn the call back over to David for concluding remarks. Thank you.

Great. Thank you, Hunter. I hope what you're taking away from this initial part of the presentation is that we feel great about 2021, but we're even more excited as we look ahead to 2022. The number of milestones, Linda took us through. Some of them have already been achieved with the initiation of a number of these trials. We're looking forward to some additional data readouts, which again it’s obviously not in a position to predict but these are exciting questions. How will we do in the hypothalamic obesity world, or the MC4 receptor deficiency world? So again, we look forward to reporting those results from those studies in and around mid-year. Also, we'll have the long-term data that we will continue to roll forward as we collect more data on those patients with biallelic deficiencies, genetic variants, and those patients who we have studied in our existing ongoing Basket Study and have rolled into the long-term extension. Finally, the BBS world, as we've highlighted and will continue to highlight, this remains an incredibly strong focus for Rhythm. It's extremely important that we get this right. There's a big unmet need. We think we have a meaningful solution. And again, feel good about our preparations to date for that. So with that, we'll turn it back to the operator and open it up for questions.

Our first question comes from Phil Nadeau from Cowen and Company. Please go ahead with your question.

Good morning. Thanks for taking our question and congratulations on the progress. First question on the BBS launch. Can you discuss in a bit more detail what you can do between now and the June PDUFA to identify patients and physicians who could be amenable to consider it?

Yes. Thanks, Phil. So Jennifer? Jen is joining us.

Thanks for the question. Although we were disappointed in terms of the news about the delay, I will say that a lot of the work that we are doing right now until approval would be similar in terms of the engagement we are doing currently. So as David mentioned, there are various areas where we have opportunities in terms of one, validating the number of patients that were within our sphere already through the work done by our field teams and MSLs on the ground. That work is ongoing. In addition, there are several other opportunities in terms of finding the BBS patients that have already been diagnosed and are lost in the system. We have very targeted strategies to go about that activity, and we also aim to find and expedite the diagnosis of patients who have not yet been diagnosed. So these activities and interactions with physicians are ongoing, and we will support an excellent launch as we move forward.

That's very helpful.

Go ahead, Phil.

Sorry, David. You go ahead.

I was going to expand on that. Jennifer and the team provided a detailed overview of the various tools being utilized, which include our genetic screening and collaboration with IQVIA on ICD-10 coding and algorithmic identification. There are numerous actions we can take. In the realm of rare diseases, this effort is ongoing. The market is never fully saturated, and we don't achieve complete penetration. It's an endless pursuit of raising awareness, and we believe these efforts will yield positive results over time. Back to you, Phil.

Perfect. That's very helpful. Same questions on the Phase 2 data in hypothalamic obesity. Can you discuss a bit what would be considered proof of concept there? How much weight loss versus changes in hyperphagia would you need to see to progress development?

Linda?

Sure. Thank you for that question. Similar to our other programs, demonstrating a clinically meaningful improvement in weight or body mass index or BMI Z score would be adequate to demonstrate that proof of concept, and that's why we've designed the trial and set up a primary endpoint.

Perfect. That's helpful. And then the last question is on Germany. I think in the press release, you mentioned that the exclusion from the lifestyle list is a one-year exclusion. Did I interpret that correctly? And if so, does that decision have to be revisited every year, or is there a point at which it becomes a final decision that is perpetual?

Thank you. No, it's not a one-year exclusion. It’s exclusion for life.

Perfect. Thanks for taking our questions.

Thank you. Our next question comes from the line of Derek Archila from Wells Fargo. Your question please.

Hi. This is Adam on for Derek. Thank you for taking our questions. I have just a few for you this morning. Do you believe the FDA requested additional analyses because they are questioning the efficacy in Bardet-Biedl, or is it more a labeling consideration? And is there a possibility that the FDA could complete their review before June?

Thanks, Adam. To clarify, the FDA requested analyses that were not part of our pre-specified endpoint. So when we submitted the file, we did so based on our statistical analysis plan and protocol. They came back, asking for additional analyses driven largely around analyzing the data by age groups less than 18 and greater than 18. Our primary endpoint to analyze the group of patients was 12 and older. Of course, this introduced a confounding variable given that almost half of the primary analyses group were between 12 and 18. That group is still growing. Weight, in this case, was confounding. I think what they asked for, we’re fully supportive; it's how we talked about the data, but these were not pre-specified. So no, I don't think this introduces a risk to the overall approval. But I do think the requests made sense. In terms of their ability to complete it at an earlier time point, again, if they were focused on this and we were the only file in front of them, I think for sure they could complete their review in less than three months. That said, we're not the only file in front of them. So we have little expectation that we're going to get approval ahead of the pre-specified June 16 date.

That makes sense. And then I suppose related to my last question, how large is that amended data package?

Thank you. That's a good question. In reality, it was over 300 pages. That was 100 plus data outputs of cutting the data, as David mentioned, across the age groups, also across gender, looking at weight, BMI, BMI Z score, every possible way you could imagine cutting the data. It was quite a large package and therefore justifies their decision to take three months to review it. The very encouraging news is that no matter how we cut the data, every analysis was supportive of the same conclusion. There wasn't a subgroup by any of those cuts where setmelanotide did not demonstrate a clinically meaningful improvement. That was very encouraging. Now it's just a matter of time for the FDA to review all the data that they requested.

Okay. Thank you very much.

Thank you. Our next question comes from the line of Joseph Stringer from Needham & Company. Your question please.

Hi. Good morning. Thanks for taking our questions. Two from us. One, just given the recent requests from the FDA on BBS and Alström, I'm curious if that's changed your thinking or design of the Phase 3 EMANATE trial in any way in terms of data analysis there? And secondly, on the diagnosed BBS patients who may not be in the system or identified at an academic or medical center, what are the reasons why these diagnosed BBS patients are not part of this system? Is it just that they had a less severe phenotype, or are these sort of older patients that have gone on to live with the disease? This does make up a significant portion of the BBS population, and maybe more specifically, what are the specifics around capturing these potential patients? Thanks for taking our questions.

Yes. Thanks, Joe. So Jennifer will take your second question on the BBS diagnosis. With regard to the FDA, whether this recent communication changes our plans for EMANATE? No, there's no change. This was a set of requests that were very specific to our somewhat unique trial design, which incorporated BBS and Alström. We analyze them together. As I explained, we have the age greater than 12 issue. So they were very specific to the existing file. So no change to EMANATE. Jennifer?

So on the second question, I wanted to clarify that similar to many different rare diseases, there's certainly a large pool of patients that have not yet gotten to a diagnosis, but there may also be patients that are diagnosed but may not be visible to the company. That's where it really lies for us. We've had field teams on the ground, educating different physicians and interacting with them, trying to understand if they do have a BBS patient on hand. However, through those efforts, they may not have reached all the physicians who have BBS patients on hand, because our efforts were initially focused on certain specialties. Some of these patients may be in the hands of other specialists, including PCPs and GPs as well. One of the mechanisms we're using to identify additional patients is although there's not a specific BBS ICD-10 code, there is a code where BBS is one of several indications. The ability to use different claims to identify HEPs that more likely have a BBS patient because of the symptoms is one targeted way of trying to educate the right physician and interact with them, and ultimately understand if they have a diagnosed patient under their care.

And maybe Jennifer can address the other part of the question: do you think these patients are out there because they have a less severe form, or are they equally severe but simply unrecognized?

Yes. So I think that it could be that they're not necessarily less severe. I think that in the case of different diseases where there are no therapeutic options, they may have been more persistent in trying to identify the appropriate options in managing their care. But over time, as they've gone to physician after physician and realized that there aren't effective options, they may have become less persistent because there is simply nothing. Therefore, the potential availability of therapy may inspire engagement and opportunity from that perspective.

Thanks, Jennifer.

Thanks, Joe. Next question?

Thank you. Our next question comes from the line of Michael Higgins from Ladenburg Thalmann. Your question please.

Thanks, operator. Good morning, guys. Thanks for taking some questions this morning. My questions are focused on the upcoming data here before midyear. In hypothalamic obesity, it's not genetically driven. So the outcomes that you're expecting with these would be different from the previous data set that you had before, maybe in terms of hyperphagia or weight loss? Thanks.

Linda?

Thank you. That's a great question. You're correct. Although the etiology is not genetic, it's acquired. Presentation is similar. The outcomes actually are similar even though the etiology is different. We are looking at the changes in weight, and the numbers for us are similar, and we would anticipate a similar outcome for setmelanotide in the patient population.

Okay. And a couple quick follow-ups from that. If you could review with us again the control arm, I believe you mentioned historic controls; what you're expecting for that? And then relatedly to the number of patients we may be seeing in that study set?

Sure. In the study, we have 18 patients enrolled. It's an open-label treatment arm. The historic control consists of the opposite experiences to these patients, but we are able to gather additional layers of information up to the individual as well.

I appreciate the color. Thanks, guys.

Thank you. This concludes the question-and-answer session of today's program. I'd like to hand the program back to David Meeker for any further remarks.

Okay, great. Thanks to everyone again for tuning in and for your questions. We look forward to updating you on our progress as we go through the year. It's going to be an exciting year. Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.