Good day, and thank you for standing by. Welcome to the Rhythm Pharmaceuticals First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today’s conference is being recorded. After the speakers’ presentation, there will be a question-and-answer session.

Thank you, Josh. 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 Q1 2025 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, who is on the line and 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 on our most recent annual or quarterly reports on file with the SEC. In addition, any forward-looking statements represent our views 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. With that, I'll turn the call over to David Meeker, who will begin on Slide 5.

Thank you, Dave. So, good morning and thank you for joining. So, we're about one month since our call highlighting the top-line results from our Phase 3 trial on acquired hypothalamic obesity. We remain on track for a Q3 filing, including having an in-person Type D meeting scheduled with the FDA. I'll say the FDA is responsive, and I would characterize our interactions as completely normal. We have reviewed all of the data, which we will present at upcoming meetings. The more we dig into the data, the more convinced we and I are that setmelanotide has the potential to transform the life of both the patient and their families. I'll remind you of the top-line data with a little additional color in the next few slides. Commercially, with BBS, we had a very good first quarter. In the US, demand as reflected in vials dispensed to patients continues to grow. The team, as Jennifer will describe, is making good progress on multiple fronts, addressing the challenges of this complex disease. The growth in demand is obscured this quarter by the inventory shifts, which Hunter will walk you through. The international team continues to execute on its country-by-country BBS launch strategy and the HO contribution to revenues, predominantly from France and Italy, continues to grow, supporting our view of the unmet need and the level of interest in setmelanotide as an effective therapy. As we have highlighted, we're looking forward to the bivamelagon Phase 2 readout in Q3 and having something to say about the ongoing PWS study, Prader-Willi, and the 718 weekly study in HO by the end of the year. We remain well capitalized, with a projected cash runway into 2027. On Slide 6, this is data from a publication by Professor Müller from Germany, a renowned expert in the field of hypothalamic obesity. It provides some numbers behind what we are learning as we get to know this community and review the data from this trial. The medical complexity and severity that these patients and their families are dealing with is unlike any disease I have worked on in my industry career. There are diseases with higher mortality rates, but very few with higher medical complexity. You can see that from the numbers on the Slide, 3.7 hospitalizations in the first two years after the injury, of which 23% required an ICU admission, 12 visits to their general practitioner, and on average 20 visits to a specialist. Even more strikingly, the average number of prescriptions written per month is 5.5. The average number of unique medications prescribed in the first two years is 22, and 89% of these patients require three or more therapies for neuroendocrine dysfunction. As the data from this trial shows us, including the exit interviews with patients and caregivers, untreated hypothalamic obesity with its associated hyperphagia and fatigue represents a significant part of the medical burden they're dealing with. The fact that patients were willing to commit to this 52-week placebo-controlled trial, given the incremental burden of testing and clinic visits that are part of any trial, speaks to the motivation of this community to find solutions. We at Rhythm are highly motivated to not let them down. On Slide 7, I’ll now provide you a little additional color around the results of the Phase 3 study versus the top-line results. As we're showing again, with the 16.5% reduction in BMI in the setmelanotide cohort compared to a 3.3% increase in the placebo group for a placebo adjusted difference of 19.8%. As we showed you last time, moving to Slide 8, there was no difference in effect between patients under 18 and those over 18, but we have broken this out further. On Slide 9, we did stratify patients between three age groups, breaking out the under 18s from those between 12 and 18 and those less than 12. Adults may be a relatively homogeneous population, but there's a significant difference between a four-year-old and a 17-year-old. Here you can see the three age cohorts, and remarkably they're similar, again, with placebo-adjusted BMI percent changes ranging from 19.2% to 21%. On Slide 10, a hallmark of the trials of setmelanotide in this disease has been the consistency of response. As we showed you last call, 80% of the patients lost more than 5%, suggesting some response. As always, the patients of greatest interest, at least to me, are the apparent non-responders. I gave three patient examples last call of patients who did not reach the 5% but had other data suggesting a response to the drug. A more complete summary of that analysis is as follows. There were 17 out of 81 setmelanotide-treated patients who were not considered responders by virtue of reaching 5% or more in this analysis. Eight of these patients discontinued treatment prematurely and had their data imputed. Three of these eight patients actually had reductions in BMI greater than or equal to 5% at their last time point assessed, but were counted as non-responders due to the conservative nature of the multiple imputation method, which uses the placebo patient data to generate the imputation values. Of the nine non-responders who did complete the trial, six of the nine patients either had a response greater than 5% at some point during the trial and/or for the pediatric patients had a BMI Z-score decrease greater than or equal to 0.2, which is clinically significant. Two of the three patients with no response and no other explanation had drug blood levels consistent with significant non-compliance. In summary, the consistency we saw in the Phase 2 trial and the consistency of the response we're seeing in the real-world French experience is evident here. This further analysis supports the thesis that the biology in this disease is driven by impaired signaling through the MC4R pathway, with a consequent deficit in alpha-melanocyte stimulating hormone. The consistency of the response to setmelanotide we see across this highly heterogeneous and medically complex patient population suggests we are helping to correct a fundamental biological deficit. On Slide 11, I’ll remind you of the disposition in this trial. The vast majority of the 143 patients enrolled, consisting of 120 in the pivotal cohort, 11 supplemental, and 12 in the Japanese cohort, have moved to the open-label extension trial. A total of 120 patients remain on treatment. That's 108 patients who transitioned to the open-label extension and the 12 Japanese patients who remain in the blinded portion of the study. Importantly, there were no new safety signals related to setmelanotide observed, which is in line with setmelanotide’s well-established and well-understood safety profile. Consistent with prior experience, setmelanotide is also generally well tolerated in the study. On Slide 12, which you've seen before, I want to remind you of the significant opportunity in acquired hypothalamic obesity. The unmet need is there. These patients are accessible, they're diagnosed, and the setmelanotide data looks extremely promising. We believe we can make a significant difference in this disease. With that, I'll turn the call over to Jennifer.

Thank you, David. Beginning on Slide 14, we are pleased to report that the demand for IMCIVREE as the only treatment that addresses the root cause of hyperphagia and obesity associated with Bardet-Biedl syndrome, remains strong in the first quarter of 2025. Overall, we have seen continued increasing demand for IMCIVREE, with a consistent number of new prescriptions received over the past several quarters, resulting in ongoing growth in patients on reimbursed therapy. During the first quarter, we noticed an increase in the number of patients transitioning to new insurance plans, which happens at the beginning of every year. This resulted in an increase in the number of patients temporarily transitioning from receiving commercial drug to receiving free drug from our Bridge program. I'm pleased to report that we secured access for the vast majority of these patients, and exited Q1 with the overall percentage of Bridge patients back to normal levels experienced at the end of 2024. On the next slide, I'll update you on two additional positive trends relating to improved Medicaid coverage and improvements in the breadth and depths of prescribers. Next slide. We continue to see increased breadth and depth of prescribers. In Q1, we saw the highest number of total prescribers within the quarter since the launch of IMCIVREE, and saw a 13% growth in the total number of prescribers this quarter compared to Q4 of 2024. This growth was driven by an increase in new prescribers, which is an important driver of the business. Since launch to date, approximately a third of new prescribers become repeat prescribers. This demonstrates that when a physician is educated to look for the clinical manifestations of BBS in their patients, they begin to find more BBS patients. The second positive trend is Medicaid access on the next slide. The last time we shared this metric was a year ago, when the breakdown between States with positive coverage from IMCIVREE versus no coverage was approximately 85 to 15. We'll continue to work persistently to expand access, and in recent months we have secured IMCIVREE-specific policies in three additional States. We now have IMCIVREE-specific policies or positive coverage decisions for IMCIVREE in States that account for greater than 95% of covered Medicaid lives, leaving less than 5% in States with no positive coverage for IMCIVREE to date. This success in securing access for IMCIVREE from Medicaid, as well as commercial payers, will serve as a strong foundation for our next potential launch in acquired hypothalamic obesity. We are excited by the potential to bring IMCIVREE to HO patients since our market research, both with physicians and patients and caregivers, points to a significant need for a therapy for this devastating disease. Next slide. We know endocrine neurologists remain critical for patients with hypothalamic obesity, enabling us to focus our efforts on this one specialty, which is the same specialty that accounts for about half of prescribers for BBS. Weight gain, lack of energy, and hyperphagia were outlined by endocrinologists to have a significant negative impact on patients' day-to-day lives, with current treatment options insufficient in addressing these symptoms for patients. As expressed by one endocrinologist, we need a treatment that is going to be more effective, well tolerated, and safe to continue long term because this problem is not going to go away. These patients are going to be on this treatment for their lifetime. Once you withdraw the treatment, they will regain the weight and more. When shared a blinded target product profile, all physicians outlined they would prescribe setmelanotide for HO. On my next and my last slide, our research with patients and caregivers illustrates just how significant the impact of hunger and hyperphagia, decreased energy or fatigue, and weight gain are for patients. As seen in the first quote, I was just feeling like a different person after the tumor, and the hunger rules your life. These patients know what life was before the onset of these symptoms associated with HO, and they want their lives back. With that, let me hand it over to Yann.

Thank you, Jennifer. We are available to reimburse access name patient cells or programs now in more than 15 countries outside the United States. We are seeing steady global growth in the number of patients on paid therapy. The patient population that’s better identified in Europe than anywhere remains an important contributor in the international market. BBS, however, remains the main driver of revenue outside the United States, with steady growth in patients on therapy. In Germany and France, we are also seeing more patients with hypothalamic obesity gaining access through early access programs. Of course, we are focused on paid therapy for both acquired and congenital hypothalamic obesity, but the early access for our growth we are now seeing in Spain and even in the UK where our first patients have started therapy. Next slide. We are looking forward to presenting at major European medical conferences, including the European Society of Endocrinology and the European Obesity Summit. We are particularly looking forward to presenting real-world data from the French experience demonstrating the potential efficacy of setmelanotide in patients with acquired hypothalamic obesity. Recall in the fall of 2024, France previously presented real-world data demonstrating the potential efficacy of setmelanotide in eight patients with acquired hypothalamic obesity who achieved significant BMI reductions. Next week, we'll also present data from acquired or congenital hypothalamic obesity patients. Additionally, there will be a presentation of data for German BBS patients, which points towards the benefits of reducing hyperphagia and obesity, as well as details on how specialized nursing support programs contribute to patient and caregiver satisfaction. Altogether, we have 10 presentations at these two conferences, plus two symposia for additional engagement.

Yes. So, Yann, you were breaking up a little bit here. So, I think we lost some of your communication there. I'm just going to read briefly from your script, just so everybody has the last part. I think I'll summarize briefly. Things are going incredibly well in Europe, as Yann highlighted. Hopefully, people got that. And the BBS launch is progressing across countries. The ENDO SP meeting, which is coming up, and this is what he was speaking to at the end is, we're excited about that and we have multiple abstracts that are being presented there. Just to summarize what he said, I want to make sure everybody heard it. We previously presented data on the initial eight patients in the French real-world experience. Next week, we'll see data from 24 patients with acquired or congenital obesity who have reached at least three months or more on setmelanotide. There'll also be a presentation of real-world evidence of IMCIVREE for German BBS patients, which will point to the benefit of reducing hyperphagia and obesity, as well as details on how this specialized nursing support program contributes to patient and caregiver satisfaction. I think I’ll just comment that on the HO data, the 24 patients you're going to see, we're embargoed now, so we can't present that data, but you won't be surprised. There's nothing about that data set that's inconsistent with what we've seen so far. With that, I'll turn it over to Hunter.

Thank you, David. Thank you, Yann. Rhythm had a very good first quarter. Let me walk you through the components on Slide 23. Revenue from global sales of IMCIVREE was $37.7 million in the first quarter of 2025. The number of patients on reimbursed therapy increased 14% globally during the quarter. The biggest driver of the Q4 to Q1 change in revenue was an inventory swing of $8.3 million at the specialty pharmacy that dispenses IMCIVREE to patients in the US. As we discussed in our Q4 call, the specialty pharmacy had purchased approximately $4.1 million more than it dispensed to patients in that quarter. This resulted in an increase in the specialty pharmacy's inventory to more than 22 days on hand, effectively pulling forward orders from Q1 into Q4. In the first quarter of 2025, this ordering and shipment pattern more than reversed itself. The specialty pharmacy ordered $4.2 million less than it dispensed to patients, reducing inventory days on hand to less than nine. Typically, the specialty pharmacy inventory runs between 10 and 15 days on hand. The value of IMCIVREE dispensed to patients in the US, the best measure of demand for IMCIVREE, increased $1.1 million sequentially over Q4. Major drivers of this included a 4% price increase taken in January, an increase in the number of reimbursed BBS patients on therapy, an increase in the number of patients on Bridge therapy at the start of the quarter, as described earlier by Jennifer, that resolved itself by the end of the quarter, and a modest decrease in patient compliance. Outside the United States, sequential revenue growth was strong at $3.1 million, primarily driven by France, Germany, and Italy. Taken together, the $8.3 million inventory swing, the increase of $1.1 million in product dispensed to patients in the US, and the $3.1 million increase ex-US resulted in a net revenue decrease of $4.1 million compared to the fourth quarter of 2024, reflecting timing differences from inventory shipment patterns in what was an otherwise strong period of growth. Looking ahead, we don't expect such significant swings in IMCIVREE inventory at the specialty pharmacy as we experienced in the last two quarters. That said, if we do experience them, we will continue to highlight any significant impacts, as we have done in the past. Now, I'll move to Slide 24 with our financial snapshot from Q1 2025. In comparison to Q1 2024, net product revenues increased $11.7 million or 45% over the first quarter of 2024. For some additional color on the P&L, gross to net for US sales was 84.2%, generally in line with the 85% GTM we've reported in previous quarters. R&D expenses were $37 million for Q1 2025, compared to $128.7 million during the first quarter of last year when we incurred R&D costs of $92.4 million associated with the acquisition of bivamelagon from LG Chem. On a sequential basis, R&D expenses are down by approximately 10% from the $41.2 million we reported in the fourth quarter of 2024 due to decreased spending on the pediatrics Phase 3 trial and the Daybreak and Emanate trials, and decreased costs associated with the RM-718 Phase 1 trial. We are also seeing lower costs related to post-trial access due to a more efficient design for our open-label extensions. SG&A expenses were $39.1 million for the first quarter of 2025, as compared to $34.4 million for the first quarter of 2024. Sequentially, SG&A expenses increased modestly by less than 3% compared to Q4. For the first quarter of 2025, the weighted average common shares outstanding were 63.1 million, compared to 60.1 million for the first quarter of 2024, and 61.6 million weighted average common shares outstanding in Q4. The increase quarter-over-quarter primarily reflects the approximately 1.3 million shares sold under the ATM program in December and January, which we announced in conjunction with our Q4 earnings. Cash used in operations was approximately $40.4 million compared to $19 million in the fourth quarter. This change represents an expected seasonal increase that occurs in the first quarter each year with the payment of annual bonuses companywide. In addition, the $6.3 million cash consideration paid to reacquire the rights to IMCIVREE in China was recorded this quarter. Looking at cash flow going forward, the final $40 million portion of the license fee payable to LG as part of the bivamelagon transaction, will be paid during the coming quarter. It was expensed in the first quarter of 2024, as previously mentioned. On Slide 25, we ended the quarter with $314.5 million in cash on hand, which we believe will be sufficient to cover all planned operations into 2027. As we touched on earlier, US revenues were affected by an inventory swing from Q4 to Q1, which decreased the US percentage of overall product revenue to 65% in Q1 from 74% in Q4. OpEx for Q1 2025 includes $12.9 million in stock-based compensation. We noted previously about reacquiring our rights in China for $6.3 million during Q1. This transaction was recorded as a reduction of license revenue of $5 million due to the termination of our licensing agreement with RareStone and a reduction of deferred revenue on our balance sheet of $1.3 million. Our GAAP EPS for the first quarter of 2025 was a net loss per basic and diluted share of $0.81. This includes $0.08 per share for the RareStone repayment and $0.02 per share from accrued dividends on convertible preferred stock of $1.3 million. Lastly, on Slide 26, our OpEx guidance remains unchanged. 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. With that, I'll turn the call back over to David for Q&A.

Thanks, Hunter. So, in summary, again, hopefully what you're hearing, Rhythm continues to grow, and by all metrics, I'll give you one additional metric. We're about 300 people now employed at Rhythm to manage the diverse set of activities we have going on. Looking across everything, our commercial efforts, as you've heard, BBS launching progressively around the world, our global expansion efforts, and our development efforts, we're in a really good place. I've been in this industry for a very long time, much of that time spent in clinical development. I don't know if I've had another Phase 3 data set that has been more rewarding in terms of the impact that it is having and will have for a much larger number of patients going forward. We feel good about where we are. Look forward to your questions, and with that, we'll turn it over to Q&A.

Our first question comes from Jon Wolleben with Citizens. You may proceed.

Hey, thanks for taking the question and congrats on the update. David, I hope you can talk a little bit more about those non-responders you highlighted. It sounded like several of them were having good responses, but dropped out. So, what were the reasons for those discontinuations?

Yes, I mean, again, there were a variety, and they mixed from both placebo and treated. Patients withdrew because they couldn't keep up with the clinical trial, either themselves or the family managing it; that was about half of the group. The other reasons included a small number in the placebo group due to reactions such as GI issues, injection site issues, etc. One patient who had a pre-existing seizure disorder had uncontrolled seizures during the trial and ended up actually dying of uncontrolled seizures at the end of the trial. That patient did not complete. So, that's a patient who was included in the dropout. What I was trying to explain is that when patients drop out, their data does get imputed and the way companies are guided to handle that is done very conservatively. The FDA wants to ensure robust results here. The imputation is done by using data from the placebo group in terms of their trajectory throughout the course of the trial. And that value is then used to generate the imputation values, and obviously the placebo patient group here gained weight. So, if you're using data from that data set, it's going in the opposite direction of what might support evidence of an effect. So, as I highlighted, three of the patients out of the eight who dropped out had already reached a point of response at the time they dropped out, but the imputation took them down below that 5% level.

And can you talk just a minute about real-world persistence and understanding of expectations for adverse events and how that understanding keeps patients on drugs or not? Like, what's the real-world experience and how does that translate from the clinical data?

Yes, generally across all of our patient populations treated, our commercial experiences indicate we're globally with a patient rate around 30% who discontinue. In the HO world, we've received this question about whether we’re going to see fewer discontinuations there. The number's still relatively small, but I think the answer is yes. The discontinuation rate in this trial was a little less than 10% off the total 143 patients enrolled. Compliance looks like it was extremely high overall. Part of my goal in giving you the background around the medical complexity is, yes, that's the world they're living in. Despite all of that, the importance of continuing setmelanotide and the relief they're getting from that seems to be incredibly high. I think we're going to do better regarding both discontinuations and compliance in the HO population.

Hey, good morning, and thanks for taking the questions. Congrats on the progress here. Just two quick ones from us. Just for Part C for RM-718, I know you highlighted enrollment will complete by the end of the year, but we just wanted to confirm whether you actually plan to share any efficacy data for patients reaching 16 weeks before the end of the year. And then the second question for Hunter, you noted some changes in compliance during the quarter. So, I was wondering if you could just elaborate on that and I guess how we should be thinking about that trending for the rest of the year. Thanks.

Yes, Part C is just getting underway. It's true, it's hard to guide until the trial is really up and running, and you're enrolling at a more consistent rate. So we're just at the beginning. The reason we're guiding to hopefully being able to say something by the end of the year is we're not targeting a specific number of patients. In the open-label effort here for 718, it's the same for Prader-Willi, where we just want to get to a robust number, which is why my hope and expectation is that we will have enough patients treated for a long enough period to say something by the end of the year.

And Derek, on compliance, we generally have seen compliance sort of in the low 80% range. We had a very strong compliance rate in Q4, which was a bit of a tailwind then, and it returned to a more normalized level in Q1.

Hi, good morning. Thanks for taking my question. Can you just talk to us about the importance of these continual data updates that you're expecting to make now at conferences going forward? It's our understanding from companies that we've spoken to or doctors that we've spoken to that they think that the data is pretty much perfect. So, what additional data do you think is necessary?

Yann, if it’s all right, I'll take that one. Also, I’m not sure if your connection's back solid. It's a fair question. I think my view on particularly the rare disease world is that every patient is incremental news, particularly when you're early on. The French patient data that we presented last fall was only eight patients, but it was incredibly important because it highlighted a group we hadn't studied in our Phase 2, meaning these were all adults and with a mean age of 30, and they were also out about 11 years from the time of their insert. What is the value of now having a 24-patient update versus the eight? Again, 24 is a lot more than eight. It's still a small number of patients, so we're not going to provide updates endlessly. We do have individual patients in a few other countries treated for HO. We will do that for a little while, but not indefinitely.

Hi, good morning. Great to see the consistency across the age subgroups in the HO study. A couple of questions from us. First question for Hunter, apologies if I missed it in the discussion about inventories, but should we expect lumpiness this year as we model quarterly revenue? Should we think about another fourth quarter kind of inventory stocking? And also, is there a limiting factor that may be impacting the repeat prescribers from the first-time prescriber category?

On the lumpiness, yes, there are normal patterns in SPs that do tend to do a little bit of stocking during the fourth quarter. It’s a way they manage their gross margins because they think there may be price increases coming in the new year. It's not isolated to Rhythm, of course, and is common across the industry. Some lumpiness occurs due to various factors, like the quarter ending on a specific day when SPs usually place their orders. While we believe we won't see significant moves in days on hand going forward, there will always be timing vagaries and ways they may try to manage their gross margin.

To address the question about repeat prescribers, in the context of BBS, it's about the smaller breadcrumbs that the teams are scouring to get to the right physician. For HO, breadcrumbs are larger when looking to educate and engage with that physician population. Once a physician diagnoses one patient and has a good experience with IMCIVREE, they're more likely to prescribe it for other patients. The mix of where patients land in care impacts repeat prescribers, along with their positive experience with our drug.

Hi, good morning. Thanks for taking the question. Just one for me. In the context of the congenital HO sub-study, could you describe the patient mix that you're seeing among the different pituitary deficiency disorders included and any learnings on reliably diagnosing congenital HO?

Yes, we're too early to answer that in any meaningful way. The patient list we’ve discussed includes SOD, septo-optic dysplasia, pituitary stalk interruption syndrome, etc. Currently, I’d say SOD and pituitary stalk might be the more common ones, but it’s too early to provide a meaningful breakdown across those categories.

Very quickly, I just wanted to touch on bivamelagon and if you see any safety signals from the study related to liver or anything else that would give you more comfort in the molecule. Additionally, roughly how do you approach an expectation bar for this shorter Phase 2 study?

On the safety side, again, it's blinded, but you follow safety. There are no significant safety signals that we're concerned about. I don't have individual patient LFT data, but if there were serious adverse events related to LFTs, we would see those. I would categorize our blinded view as quite reassuring. Regarding the expectation bar, it's about the context around the data. If the mean gets to or above 10%, but you can explain a few patients dragging it down, then it's still a drug. If you look at our Phase 2 data with setmelanotide, they hit. So, we think a threshold of greater than 10% is not unreasonable. Thanks, everybody. Had a long call this morning with a lot of questions, so appreciate that. We look forward to our next update.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.