Good day, and welcome to Rhythm Pharmaceuticals Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. As a reminder, this call may be recorded. I would now like to turn the call over to David Connolly, IR and Corporate Communications.

Thank you, Michelle. 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 of our website ir.rhythmtx.com. This morning, we issued our press release that provides our 2024 and full year 2024 financial results and a business update, and that press release is available on our website. Our agenda is listed on Slide 2. On the call today are David Meeker, our Chairman, Chief Executive Officer and President; Jennifer Lee, Executive Vice President, Head of North America; Hunter Smith, Chief Financial Officer; and Yann Mazabraud, Executive Vice President, Head of International joining us from Europe. On Slide 3, 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 reports on file with the SEC. In addition, any forward-looking statements represent our views 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. With that, I'll turn the call over to David Meeker, who will begin on Slide 5.

Thank you, Dave. Good morning, everybody. Thank you for joining. So we preannounced strong fourth quarter earnings in advance of the JPM conference. We are entering 2025 well capitalized, having recently raised $75 million in gross proceeds from our ATM program, which extends our cash run rate into 2027 through multiple inflection points, and we have completed enrollment in our Phase II daily oral bivamelagon study. We feel incredibly positive about how the opportunity in genetically driven impairments to the MC4R pathway signaling is evolving. As we have highlighted many times, ultra-rare disease opportunities like BBS, where there is a significant unmet medical need, a high percentage of undiagnosed patients and where the availability of a precision therapy can accelerate the number of patients getting to a diagnosis, these opportunities will continue to grow at a steady pace for a decade or longer. The U.S. opportunity is taking shape, and we will continue to expand internationally. We could build a business around the BBS opportunity alone. We are excited about the progress we are making with our next-generation compounds, bivamelagon, a once-daily oral pill and the weekly subcutaneous injection RM-718. Our goal with this next generation opportunity is not just to extend patent life but to actually make a better drug. Both products have robust activity in preclinical models and have no cardiovascular activity in the appropriate models. Both are MC1R sparing, so no hyperpigmentation, and significantly more convenient, whether there is an opportunity to improve on efficacy remains to be seen. The bivamelagon Phase II study is fully enrolled this quarter, and we'll read out in the third quarter while the 718 program is beginning to enroll this quarter. On Slide 7 is the now familiar design slide for a Phase III trial of setmelanotide in acquired hypothalamic obesity (HO), and we continue to receive the majority of our questions here. What is the timing of the readout and what is the expected percent change in BMI? We have guided to the trial reading out in the first half, and we can now specify that it will be a second quarter readout. Our updates remain consistent with what we have said. Our dropout rate remains below 10%, which I think is an incredibly strong metric. Patients are rolling over into the open-label extension. They do remain blinded to their original assignment, and only 1 patient has not rolled over because that patient wanted to start a family. With regard to the percent change in BMI, it is a blinded Phase III clinical trial. However, we have reminded people that the current server around percent change comes out of the many trials being run in the general obesity space with some version of a GLP-1. These trials have similar designs, so comparisons can be made across trials, although this is always imperfect. When we look at setmelanotide in HO, it is an apples and oranges comparison. The biology is fundamentally different. We are replacing a deficit in the hormone alpha melanocyte-stimulating hormone. The GLP-1 approach is to provide pharmacologic doses on top of intact physiology. Our trial enrolls 4-year-old patients and 60-year-old patients, and we measure the same endpoint, the percent change in BMI at 52 weeks. In our Phase II trial, the youngest patient, age 6, lost approximately 35% of their BMI at 16 weeks, whereas the oldest patient, 24 years old, lost approximately 14%. Now the 24-year-old patient actually lost more weight, but on a percent basis, it was a smaller change. So these are variables that will impact the final numbers. That said, all of our data to date, including the Phase II study predominantly in pediatric patients and the French pre-approval early access data, which was all adults, suggests we will do well on the primary. The secondaries will break out the pediatric and adult patients, so the full story can be clearly understood. The Japanese cohort of 12 patients, for which we recently completed enrollment, will read out independently from the pivotal cohort, so there will be no impact on the timing of top-line data and subsequent regulatory filings in the United States and Europe. We expect the Japanese cohort will read out in the first half of '26. If successful, these data will enable us to seek marketing authorization in Japan, where there is a higher prevalence of certain brain tumors and hypothalamic obesity than in the U.S. or Europe. A reminder on Slide 8 that the opportunity in HO is significant, and we continue to learn more. We affirm our original estimates, which we believe were appropriately conservative. The population is reflected on the slides with 5,000 to 10,000 patients in the U.S. and a similar range in Europe, and 5,000 to 8,000 patients in Japan represents a pool of patients who may be largely diagnosed and concentrated in the endocrinology specialty call point. There's an additional pool of patients with injury to the hypothalamus where the diagnosis is not so clear and they are likely to remain undiagnosed. We look forward to expanding our understanding of this patient population. Now the path to building the future of Rhythm is clear. We have opportunities to further explore genetically driven impairments in the MC4R pathway. The M&A trial is enrolled, and we'll read out in the first half of 2026; there are genes coming out of the Daybreak trial, which with a little more work, can also be targeted. Prader-Willi syndrome is a challenging disease, but there's a sound biologic rationale as to why an MC4R agonist can work in that disease. This quarter, we have initiated, as you know, a new 26-week open-label Phase II trial to evaluate setmelanotide in Prader-Willi syndrome. We plan to enroll up to 20 patients, aged 6 to 65 years, in the signal-finding study, and patients will be dose escalated to 5 milligrams a day, which is significantly higher than the dose we used in the first attempt at Prader-Willi, and they'll be dose escalated to that as 5 milligrams as tolerated. So we are conducting this trial at a single U.S. site under an investigator with deep experience in Prader-Willi syndrome, and we look forward to updating you on that progress. The other pillar, which is emerging as an incredibly exciting opportunity is related to injury to the hypothalamus or failure of the hypothalamus to develop. We have focused on tumors and their associated treatment, which may lead to injury, but there are clearly many more ways the hypothalamus may be injured, leaving the patient with acquired hypothalamic obesity. We look forward to learning more about setmelanotide's activity in patients with developmental abnormalities related to congenital syndromes involving this area of the brain, and we are on track to enroll the first patients with congenital HO in an independent 39 patient, 34-week substudy in the first quarter of 2025. Finally, we anticipate doing much, if not all, of the supplemental indication expansion work with one or both of our next-generation compounds with patent lives, which extend past 2040. We have completed enrollment in the Phase II bivamelagon trial in acquired HO this quarter, and we anticipate the data readout to be in the second half of 2025. Also, we will begin enrolling patients with acquired HO in Part C of the Phase I trial of RM-718 this quarter and aim for a data readout before the end of the year. So in summary, 2024 was a year of execution, and 2025 is a year of readouts, which could prove to be transformative for Rhythm in addition to some critical trial initiations. I will now turn the call over to Jennifer.

Thank you, David. So 2024 was a solid year for IMCIVREE sales in the U.S. with consistent growth throughout the year. Over the years, we have fine-tuned our process to find patients, give them an accurate diagnosis, and ensure access to therapy. Once on therapy, we work with patients and their health care providers to support maintenance on therapy. More than 2 years from launch, the system we have put in place is working and will also help future potential launches. New prescriptions received in the fourth quarter were consistent quarter-over-quarter. We are seeing continued success in approvals and reauthorizations and our tailored support to patients and families is enabling patients to receive a long-term benefit of maintaining on therapy. Within the fourth quarter, the increase in the number of patients on reimbursed therapy was attributable to a number of incrementally positive trends that, when combined, added up to strong growth. For example, in addition to the steady level of approvals for reimbursement from scripts received, we saw fewer discontinuations from patients who are on reimbursed therapy, several switches from our free drug program to reimbursed therapy, and some later-stage appeal wins during the quarter. While none of the quarterly metrics in each of these categories stand out as a significant change on their own, when taken together, they resulted in a strong quarter. Turning to Slide 12. In December, the FDA approved a label expansion for IMCIVREE to include children as young as 2 years of age with obesity due to BBS or POMC PCSK1 or LEPR deficiency. This approval sends a strong message that helps us differentiate the root cause and impact of these rare MC4R pathway diseases. With this insatiable hunger, most patients develop early-onset obesity before the age of 5. Obesity in childhood is often left untreated and leads mainly to severe and long-term health complications. Intervention at a young age can be critical as treating obesity early can lead to better health outcomes. We are excited about what this label expansion means for patients like Ben and their families. Ben was diagnosed with biolilic LEPR deficiency when he was 2 years old. Up until then, he was seen by approximately 20 different doctors. His mother outlines that Ben was constantly trying to get food even when he had a snack in his hand. Even though the doctors did not know it, she knew something was not right. Ben enrolled in our Phase III pediatric trial when he was 3.5 years old, and his BMI went from 36.8 to 30. Ben, who is now on commercial therapy, and his entire family have more freedom now that their lives do not revolve around food. This story is one example of IMCIVREE making a positive impact on a young child and his family. Moving to Slide 13. Our teams are preparing for a positive outcome in our Phase III trial in acquired hypothalamic obesity and the next potential launch. Market research to gain insights from physicians, payers, and patients and families is ongoing. We are actively engaging with patient advocacy groups, and our teams are executing physician engagement efforts in 2025. We look forward to sharing more details with you as we progress with potential FDA submission and launch.

Thank you, Jennifer. We are pleased with the growth in the international region for the fourth quarter of 2024 and for the year 2024. We have achieved access for IMCIVREE in more than 15 countries outside the U.S. for patients with POMC, BBS, and HO through either reimbursed access or named sales. Germany, with the BBS launch now well established, and France, with paid early access programs for POMC, BBS, and HO, remain the main drivers for the region. In Germany, our BBS launch is steady and mirrors the consistent growth pattern of the U.S., and we continue to expand the number of centers treating BBS patients. France is also contributing with both the pre-EMA approval paid early access program for HO and the paid early access programs for POMC and BBS. We continue to receive positive feedback from the physicians treating patients in France under these programs, specifically that patients with either acquired or congenital hypothalamic obesity are responding well to setmelanotide. Also, like in the U.S., the marketing authorization for pediatric patients has led to reimbursement for patients as young as 2 years old in many countries, including the U.K., Spain, and Italy. Today, we announced a new strategic partnership in Turkey, where there is a significant unmet need; the prevalence rates for rare diseases in general, and POMC and BBS in our case, are greater than the rest of Europe, providing us an incremental growth opportunity. Our partner is Trispera Pharma Solutions, an entity very well known to us. We began working with them as a consultancy a few years back and recently formalized this new partnership. Trispera has deep experience, a relationship with the rare disease community, and MC4R pathway disease experts and Centers of Excellence in Turkey. Last but not least, in Japan, we are beginning to build out operations in anticipation of success in acquired hypothalamic obesity, with a significant unmet need and a prevalence per capita greater than in the U.S. or Europe. Japan represents a major opportunity for Rhythm. Overall, 2024 has served as a foundational year in expanding access to IMCIVREE across the international region, met with enthusiasm among scientific and medical experts, clinicians, and patient advocacy groups, and recognized IMCIVREE as a precision medicine for certain rare neuroendocrine diseases.

Thank you, Yann. Before getting into Q4 and the year-end financial results, I want to start with our balance sheet, beginning on Slide 17. Rhythm ended 2024 with $320.6 million in cash and cash equivalents. We raised gross proceeds of $75 million through the sale of approximately 1.3 million shares of common stock at a weighted average price of $56.30 under our at-the-market equity offering program during the fourth quarter of 2024 and continuing into January of 2025. The $320.6 million in cash on hand includes about $40 million of gross proceeds raised in Q4, but not the additional gross proceeds of $35 million raised in January. We expect this level of cash to be sufficient to fund planned operations into 2027, well past several meaningful milestones and data readouts, including the pivotal Phase III data readout and acquired hypothalamic obesity as well as the data readouts for both the Phase II trial of bivamelagon and HO and the Phase I Part C study of RM-718 in HO. We also anticipate data from the single-site Prader-Willi trial as well as data from the Phase III M&A trial within this time frame. Let's now review the snapshot of the full year P&L on Slide 18. We preannounced preliminary unaudited revenue from global sales of IMCIVREE in January, reporting that net revenue from global sales of IMCIVREE came in at $41.8 million in Q4 and $130.1 million for the full year 2024, as compared to $24.2 million and $77.4 million for the fourth quarter and full year 2023. Gross to net in the U.S. remained consistent at about 85% for both the third and fourth quarters of 2024. Cost of sales during the fourth quarter was $3.8 million or approximately 9% of net product revenue versus 11.5% of net product revenue in the third quarter of '24 and 13.4% in fourth quarter of 2023. COGS as a percentage of revenues decreased in part due to capitalized costs associated with higher inventory produced versus products sold in the quarter. The largest component of COGS remains the 5% royalty on IMCIVREE, which we paid at IPSA. R&D expenses were $41.2 million for the fourth quarter compared to $29.9 million in the fourth quarter of 2023. Sequentially, quarter-over-quarter, we experienced a 9% increase in R&D expenses due to increased costs associated with the ongoing trials of bivamelagon and RM-718 and the new Phase II setmelanotide trial in Prader-Willi, which began this quarter. The year-over-year increase was primarily due to acquisition costs related to bivamelagon. SG&A expenses were $38.1 million for the fourth quarter of '24 as compared to $32.4 million for the fourth quarter of '23. Sequentially, SG&A expenses increased by almost 8% compared to Q3, primarily driven by increased headcount and marketing costs. For the fourth quarter of 2024, weighted average common shares outstanding were 61.6 million, almost 61 million for the full year of 2024. Cash used in operations was approximately $19 million in Q4 and has averaged approximately $28.5 million in the last 4 quarters. Fourth quarter operating expenses included total stock-based compensation of $10.6 million for the quarter compared to $11 million in the prior quarter. Reported GAAP EPS for the fourth quarter was a net loss per basic and diluted share of $0.72. This includes $0.02 per share from accrued dividends on convertible preferred stock of $1.3 million. As a reminder, this ongoing accrual will be $1.3 million per quarter. Some highlights from the quarter and the year are broken out on Slide 19. As mentioned, Q4 revenue from global sales of IMCIVREE was $41.8 million. U.S. revenue in the fourth quarter was $31.7 million of that, accounting for 76% of revenue during the quarter. For the year, U.S. sales accounted for 74% of revenue. As we detailed in January, the sequential quarter-over-quarter revenue growth of greater than $8 million was evenly split by an increase in the number of U.S. patients on reimbursed therapy, which Jennifer spoke to, and increased inventory stocking during the fourth quarter by our specialty pharmacy. Such inventory moves are not unusual in the fourth quarter of the calendar year. Our U.S. GAAP OpEx for 2024 totaled $382.3 million, and that included $39.7 million in stock-based compensation as well as $92.4 million in consideration for the acquisition of the global rights to bivamelagon from LG Chem. For the year, non-GAAP OpEx came in at $250.2 million, which is at the low end of our $250 million to $270 million guidance range. Consistent with years past, we are not giving revenue guidance, but we are offering guidance on non-GAAP operating expenses. For 2025, we anticipate approximately $285 million to $315 million in non-GAAP OpEx comprised of non-GAAP SG&A expenses of $135 million to $145 million and non-GAAP R&D expenses of $150 million to $170 million. The overall increase in expected non-GAAP OpEx for 2025 is due to anticipated increases in SG&A as we grow our organization, in preparation for launching IMCIVREE for the treatment of hypothalamic obesity in the United States and subsequently in Europe and Japan. Increased R&D spending is anticipated due to ongoing trials and development of bivamelagon and RM-718 in HO, setmelanotide in the new Prader-Willi trial, and expansion of our medical affairs programs. We believe this increased level of investment in our business will drive long-term growth and shareholder value. One final point: we will pay $40 million in cash to LG Chem in July 2025; this is the second and final tranche of the license fee for bivamelagon. This payment is included in our cash out guidance, but not our 2025 OpEx guidance as this amount was recognized as R&D expense in 2024. With that, I'll hand the call back over to David. Thank you.

Thanks, Hunter. So hopefully, what you've heard is that Rhythm is in a really good place. We're established commercially, and we're growing. We've got exciting developmental programs that all potentially open up significant opportunities for us. We've significantly strengthened our balance sheet, putting us in a really strong position to execute on what's in front of us. So we feel good about where we are. With that, we'll open it up to Q&A.

Our first question comes from Derek Archila with Wells Fargo.

Congrats on the progress. Just 2 questions from us. Just first, could you comment on whether you're going to share the SAD MAD portion of the RM-718 study separately? Or will that be wrapped into the second half '25 update with Part C? And then just on the IMCIVREE Phase III trial in HO, I was wondering if you could just remind us the mix of adult and pediatric patients you expect, and ultimately, will the split be the same in the Japanese cohort?

Yes. So for the SAD MAD piece of it, I think it's likely we don't have specific plans to present that as an independent breakout. So you're right, we'll probably do that in concert with Part C of that trial. What I will say about that is it's a little bit of no news, for SAD MAD opportunities, as long as you're progressing, you can assume that things are going well there. So we feel good about where we are with the data that's coming out so far on 718. For Phase III, the HO adult-pediatric split, we did not cap the number of peds or adults to lock the number to have it be exactly the same. We're about 50-50. The regulators wanted more adults in the trial. So we focused on that and got multiple additional adult centers to participate. The split will be roughly even 50-50.

Our next question comes from Seamus Fernandez with Guggenheim Securities.

So David, you're emphasizing a lot the market opportunity in HO, being quite firm at the sort of 5,000 to 10,000 patient range. Interested to get a sense of with success, how you would see uptake in that population, just more identifiable than the BBS patient population or perhaps even the genetic population. So interested to just get a better understanding there. And then as we've spoken with some thought leaders in the space, there is a little bit of discussion around sort of the pre-existing obesity set point as a potential contributor because of the hormone replacement dynamics of treatment with setmelanotide. Just interested to know if you feel like that could have an impact on the Phase III HO trial results in any direction given the mix of patients that you just talked about in the Phase III study?

Sorry, Seamus. I didn't quite understand the second question there. So you're saying that the variations in endocrine replacement impact their outcomes? More that there was a pre-existing set point prior to the injury, and that it could sort of limit the magnitude of benefit depending on the timing of that injury. Yes, let me take that question first. I mean, that's a really interesting question. I think the way we're learning, right? When we entered into HO, nothing really worked, nobody really understood what the underlying biology was. Then we have this result where essentially, every patient who took the drug—a small number of patients—took an MC4 agonist, had a response, which suggests that the problem in HO is, in fact, signaling through this melanocortin-4 pathway. What I highlighted in my prepared remarks was one major difference between the GLP-1s and ourselves is we're replacing a deficit. So in a sense, in theory, restoring normal physiology. We have examples of that, particularly in teenage boys where you'd expect them to be gaining muscle mass, and they did. They gained well. And so I think there's some support for the idea that we're going to restore normal physiology, and then you are who you are. So back to your question of if you were obese prior to getting your tumor and developed your insult. In theory, we could get you back to where you were before, but our drug is not a drug for general obesity. So that underlying deficit or your underlying normal physiology aren't likely to be impacted, so I think that is true. And I think what we've talked about internally and with experts is our hope, and we have some anecdotal evidence of this, that we'd like to get you back to where you were before your injury. I think that's a very reasonable expectation, and that would be a huge restoration of health. So hopefully, that answered the question. On the uptake side of this, yes, we're not guiding—and also, I mean, as Jennifer said, we're early here. We're learning along with all of you as we do our own research and the like. What we can say is this is fundamentally different than BBS. Yes, we expect a different uptake than we saw with BBS. These patients, as we've highlighted, are concentrated in the endocrinology call point, and the reason they're concentrated in the endocrinology call point is because the vast majority, 80%-85% of these patients have pituitary insufficiency and they need to be managed by an endocrinologist. That will lead to a faster uptake. Now that said, counterbalancing that, which is always true, this isn't you write a script and go to your local pharmacy. So it's not going to launch like some drugs do. We'll have prior authorization. We'll still have to go through the reimbursement challenges that we have. It's—we're not changing the price. So it's still going to be priced at a level where payers will look at it closely. That said, we've been encouraged by the feedback from payers initially, so we expect that to go well. But those are balancing factors that what cause us to be a little bit different from maybe a more easily accessible specialty opportunity.

Our next question comes from Philip Nadeau with TD Cowen.

Two from us as well. Diving into the HO pivotal data a bit more deeply. In your prepared remarks, you said you expect melanotide to do well on the primary endpoint. I'm sure the question we're going to get from investors is what does management think well is, I guess, in the spectrum of 5% weight loss, which is the regulatory hurdle to 25% BMI reduction, which is what you saw in the long-term extension. Where in that spectrum is well? That's the first question. And then second one for Hunter. In terms of Q1 trends, just trying to assemble the data points you gave because it sounds like there was $4 million of inventory build in Q4. Is that likely to be destocked in Q1 and therefore, is a modestly down quarter-over-quarter possible? Or is that going to be absorbed in the channel and put out more slowly?

So I'll take the second question first. Yes, we absolutely anticipate the destocking to occur in this quarter. So you know how it is, Phil. Q1 for all companies like ours, especially when you have a single specialty pharmacy, can always be a little lunky.

Yes, Phil. So the question of what does management think our percent change is. We've had this question endlessly, and it's understandable. What we know is that in a small number of patients in Phase II and then this early experience in France, essentially, everybody who's taken the drug has responded well. The average numbers are 20% plus at 1 year for both of those groups. We also know that we have patients who—like I gave you the example of the 24-year-old at 16 weeks, right? He lost more subsequently, but at 16 weeks had lost less on a percent basis than a much lighter individual who launched a larger percent of his BMI but a smaller overall absolute amount. So those are just variables that are really hard to predict. We have a larger number of adults in this trial. Now I have no fear, and the adults have looked like they respond well. I think that was an incredibly powerful part coming out of HO. This long answer to your question is, I mean what we've said is 5% is the regulatory hurdle. We'd be incredibly disappointed for less than 10%. I feel incredibly good about—I know this drug works. I have the ability to project what percent change we're likely to see becomes much more difficult beyond that.

Our next question comes from Whitney Ijem with Canaccord Genuity.

I just wanted to follow up on Seamus' question around prevalence in HO. Additionally, some of the commentary earlier on the call, just around the prevalence numbers that have been quoted, I think, largely being based on craniopharyngioma data. So is there any work that—I mean, I know there's work. Can you speak to any of the work ongoing in terms of the prevalence that might come from other etiologies, including the congenital form?

Yes. It's a work in progress. You're hearing increased confidence around those numbers that we put out because this work is supporting the fact that we're at least that good, we believe. When we entered, we assumed that craniopharyngioma would be the majority of cases. That's not necessarily true. There's clearly many more tumors contributing significantly to this population. That's coming out of some of this early claims work, which we'll see where that takes the ultimate numbers. We did our initial calculation with taking a 20-year period post-injury. We know these patients live longer. If you have your tumor at age 15, you don't die at 35; you tend to live much longer. And then seeing that the adults respond well, I think that's a part of the model we may have been conservative on. Those are things we'll continue to look at, and we will come out and update these numbers as we have more confidence. There is clearly an undiagnosed pool here, and we talked about injury and it's still a—I mean that's a case report world today, and it's way too early to say maybe it's nothing more than a case report. But I am confident that if you have a head injury and you suddenly start gaining weight, nobody's thinking you have acquired hypothalamic obesity. So that's a population likely to be undiagnosed today.

Our next question comes from Tazeen Ahmad with Bank of America.

David, I wanted to ask a little more detail about—I know what you said about your thoughts on not really being able to project what results you'll get other than knowing that this is an active drug and that it works over time. But what have doctors told you about what they'd like to see in terms of percent weight loss in order for them to want to be using it right away in HO patients? And then my second is more of a financial one. You completed your ATM, but you do have this HO dataset readout coming up very soon. Would you rule out doing a cash raise after that dataset reads out, assuming that it's positive?

Yes. Thanks, Tazeen. I'll let Hunter answer that question, of course. To be honest, we're not asking the doctors that very direct question, would you use it if we had a 12% weight loss or not use it if it was 12% and you would use it if it was 15% or 18%. What the doctors are telling us is that nothing in general works in this. We all know there are case reports and small series with GLP-1s, and I've quoted what some doctors have said about 20% of HO patients who will have some response to a GLP-1, and that response tends to be less than 10%. I think where the doctors are—certainly, those who are knowledgeable and actively understand this problem—are focused on whether this approved drug actually works consistently and better than what they previously had. So I can't give a projection. I think it's not what the majority of doctors who are treating these patients are focused on. They want to know if it works and how it compares to existing options.

And Tazeen, to your second question, and thank you very much for that. First of all, I'm sure you're hearing, and I want to reiterate that we have very, very high confidence in the data readout that's coming up. At the same time, given the uncertainty of the broader market conditions and the vagaries of market reactions to data, we thought it prudent to take steps to extend the runway to a period where we didn't absolutely have to do a raise following the data. We’re now in that position. We're very happy to be here, and we think it benefits our overall operational flexibility. Our investment program for the coming years is generally associated with bivamelagon and RM-718, and indication expansion. The need to invest more and the need to raise more will be driven largely by success in those programs, which is exciting. So we're not in a position today where we would say, 'No, we're done raising money' or anything like that. Having said that, we want to be in a position which we are in, where we don't have to do a raise following the readout.

Our next question comes from Joseph Stringer with Needham & Company.

Just on the Phase III HO trial, the inclusion criteria has slightly different age groups compared to the open-label Phase II where Phase III, it's including 4 to 6 year olds and then also patients older than 40. Can you describe what impact the inclusion of each of these groups of patients could have on the Phase III BMI primary endpoint, both in terms of magnitude of effect and overall data variability?

Yes. No, thanks, Joey. I think there will be no impact. We had patients down to 6 before. I think the difference between 4 and 6 is negligible. The 4-year-old will do as well as the 6-year-old. The French data was incredibly helpful. And these were the 8 adult patients we reported out. They had—if you remember, a mean age of 30, with some significantly older than that. On average, they were 11 years out from their insult, which provided strong support for the concept that this isn't a problem that only works if you can intervene within the first 1 to 2 years after injury. It looks like it doesn't matter how long ago the injury occurred. So I don't think either end of the spectrum is going to impact our results. And one other thing I want to bring up because I know people are focused on percent change: In that Phase II trial, the patient who did the least well at 16 weeks, meaning he had about a 4% decrease in his BMI, was on track to lose 10% or more by 16 weeks. When you looked at the DEXA scan, they had like a 20% increase in lean body mass and a 15% decrease in fat mass. So from a health response standpoint, arguably, that was one of our best responders. We’re replacing a deficit, restoring more normal physiology.

Our next question comes from Leland Gershell with Oppenheimer.

We have 2 questions. First, Dave, I just wanted to ask. It's early days, but since the label expansion, I wanted to see to what extent the extension for younger ages is becoming a component of commercial uptake. And then also, as you look to enroll patients with congenital HO, could you review how similar they are to the patients you've extracted from your historical genetic therapies?

Yes. Let me take the second question first, and then Jennifer can comment on the 2 to 6-year-old opportunity. So we're learning about the congenital HO opportunity. This was brought to us by doctors following similar populations. They observed patients with this area of the brain not developing appropriately, and there are a variety of different syndromes depending on how they present. It's clear that there is a percentage of these patients who have obesity, and the very early data in France suggests that some of those patients respond to an MC4R agonist. Our challenge is that the literature just is not very helpful yet in understanding how many patients with one of these congenital syndromes actually have obesity, further complicated by the fact that, unlike the injury setting where you have a before and after, these are congenital. They start at birth and emerge over time. Their pituitary insufficiencies emerge as well. So it's not like they're born with a full-blown picture. As obesity might emerge, you can imagine that a doctor looking at that patient wouldn't necessarily connect the dots that you have this congenital syndrome and obesity. So that's a challenge. I think we'll learn a lot over the next year. There’s a lot of enthusiasm around this. Physicians say they have these patients and would like to have something to offer them, so we remain eager.

Another point about the potential opportunity for the pediatric expansion. In Q4, this indication came quite late in the year, so it didn't have an impact in terms of the revenue that we released. Moving forward, we are happy to have this as an option for patients to our 2-plus years of age. As I outlined during my story around Ben's background, the impact can be significant for these patients. However, we don’t feel like it's going to represent a significant market opportunity just in terms of increasing revenue. We're more happy to have this as an additional piece of information that further differentiates our patient population in terms of the need to actually get approval for a 2-year-old and up, which is shown with the ability to secure approval.

Our next question comes from Dennis Ding with Jefferies.

This is Anthea on for Dennis. Two from us. On the upcoming Phase III HO trial, could you talk a little bit about GLP-1 use at baseline? If drop-ins are allowed throughout the trial and how you anticipate that to impact efficacy? And then on the pivotal Phase II, do you see any read-through from this setmelanotide trial in terms of efficacy as well as enrollment and the adult pediatric mix?

Yes. So that's a 28-patient 4-arm, so 7 patients for our blinded trial. We have no insight into the efficacy at this point. We didn't restrict it. It's 12 and older, slightly older population. We're still developing the pediatric formulation for bivamelagon, which we're making great progress on. Regarding GLPs in the Phase III trial, about 25% of the patients had previously been on a GLP and/or were continuing a GLP. If they continued to use GLPs, they could not have had weight loss of 2% or greater in the prior 3 months. You have to be stable on it. You cannot add a new weight loss medication during the trial, and that was excluded by protocol.

Our next question comes from Ram Selvaraju with H.C. Wainwright & Company.

And congrats on all the progress recently. I just wanted to ask if you could comment a little bit more on the recent impact of the label expansion for IMCIVREE and what specific dynamics you're seeing in the U.S. market regarding patient acquisition, patient adherence, and how that compares to the ex-U.S. experience that you've had since that label has been in place for longer outside of the U.S.? And the second question is, if we think about the Trispera relationship that you have announced, to what extent is this likely to be a template or model for future relationships in ex-U.S. territories? Is this likely to inform significantly your future ex-U.S. business development activities? Or is it very much kind of individualized to the Turkish context?

Yes. So Yann, can you comment on your international experience here with 2- to 6-year-olds? Jennifer just commented on the U.S. and how you see that impacting the overall opportunity as well as how we think about distributorships and partnerships.

So, yes, thank you. So pediatric in Europe. We have now treated patients younger than 6 in a few countries: France, Germany, the U.K., and Spain, and we'll continue to see more of that. As Jennifer said previously, the impact on revenues will not be significant, but the impact for the patients, caregivers, and clinicians is significant. So in a nutshell, that's what I can say about the pediatric indication in Europe.

The way we think about distributorship is country by country. Our general approach is to go direct where we can and then be practical about where we need to leverage additional help. Just a little thinking behind the decision to use that distributor in Turkey and how that might represent or be indicative of our thinking going forward.

Yes, exactly, as you said, David. I think we choose our approach country by country. Of course, in the main European countries, we are direct for some specific territories where we believe that the expertise on the ground is better with partners than with what we do. We have done such with medicine in Israel and with Genpharm in the Middle East, and now with Trispera in Turkey. We have been very happy with these partnerships.

Our next question comes from Jon Wolleben with Citizens JMP.

Just wondering in the Phase II, we did see some patients who dose reduced due to AEs, so a regain of BMI, which gives us confidence in the drug effect. But wondering the Phase III protocol, if you're allowing dose reductions for AEs during the 52-week period or if everyone's set after the dose titration period?

Yes. No, good question. The protocol is set to dose escalation for everybody to 3 as tolerated. If you can't tolerate it, then you stay a little longer at that dose to hopefully acclimate; most patients do and then dose escalate again. If you truly are having trouble, you can dose decrease. It’s a dosing paradigm that allows titration to tolerance. The vast majority of patients get to the desired dose at 3. Not everybody needs to go to 3. I think the HO world will be somewhere between 2 and 3; BBS weighs a little heavier to the 3. I think HO will land more firmly in the 2 to 3 range. We had 1 patient who couldn't tolerate it and ended up stopping the drug. Yes, we may lose something like that, but that's quite uncommon, and again, we have fewer than 10% dropouts in the trial so far. So that doesn't seem to be an issue in the Phase III.

Okay. And one more, if I may. You talked about the bivamelagon and 718 being less active at MC1. Can you talk about the relative activity at MC4 between the next gens and setmelanotide? You said efficacy is kind of TBD, if there's going to be a difference there. But can you talk about the specific activity at MC4 receptor between those 3 candidates?

Yes. The 718 and setmelanotide in vitro assays functional looking at potency are highly similar. The potency for bivamelagon was done in a different assay. We're actually running that now. I don't have those full results yet. But I can say the preclinical data got in an extensive set of models with similar results using the dose of bivamelagon, as we saw with setmelanotide and 718. The doses in the trial were built off that understanding. So I think we are likely to be in a therapeutic range, and I’m expecting that we're going to get adequate MC4 agonism across each one of these.

I'm showing no further questions at this time. I'd like to turn the call back over to David Meeker for any closing remarks.

Okay. Well, great. Thanks, all again for tuning in this morning. As you heard, we're excited about where we are, and we look forward to our next call, which we'll be updating you on some exciting information. Thanks, all.

Thank you for your participation. You may now disconnect. Everyone, have a great day.