Rhythm Pharmaceuticals, Inc 10-Q for FY2021 Q1

About this 10-Q

Headline figures

Rhythm Pharmaceuticals, Inc. (RYTM)

10-Q 2021-05-03 For: 2021-03-31

Added on April 08, 2026

Rhythm Pharmaceuticals, Inc filed this 10-Q on May 3, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Three Months Ended

March 31,

Research and development summary

Research and development expense

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $35K
Net income: $43.75M; compared with a net loss of $34.16M a year earlier
Diluted EPS: $0.90; compared with -$0.78 a year earlier

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Delaware	46-2159271
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	RYTM	The Nasdaq Stock Market LLC (Nasdaq Global Market)


Large accelerated filer ☒	Accelerated filer ☐

Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐


		Page No.
PART I	FINANCIAL INFORMATION

	Item 1. Condensed Consolidated Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	4


	Condensed Consolidated Statements of Stockholders’ Equity	5


	Condensed Consolidated Statements of Cash Flows	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	17

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	26

	Item 4. Controls and Procedures	26

PART II	OTHER INFORMATION	27

	Item 1. Legal Proceedings	27

	Item 1A. Risk Factors	27

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	81

	Item 3. Defaults Upon Senior Securities	81

	Item 4. Mine Safety Disclosure	81

	Item 5. Other Information	81

	Item 6. Exhibits	82

SIGNATURES		83



	March 31,		December 31,
	2021		2020

Assets
Current assets:
Cash and cash equivalents	$	87,271	$	100,854
Short-term investments		317,479		71,938
Prepaid expenses and other current assets		7,384		8,876
Total current assets		412,134		181,668
Property and equipment, net		3,006		3,195
Right-of-use asset		1,741		1,807
Intangible assets, net		5,000		—
Restricted cash		328		403
Total assets	$	422,209	$	187,073
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	9,147	$	4,900
Accrued expenses and other current liabilities		7,150		12,559
Lease liability		553		535
Total current liabilities		16,850		17,994
Long-term liabilities:
Deferred tax liability		22,006		—
Lease liability		2,406		2,551
Total liabilities		41,262		20,545
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred Stock, $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding at March 31, 2021 and December 31, 2020		—		—
Common stock, $0.001 par value: 120,000,000 shares authorized; 50,201,758 and 44,235,903 shares issued and outstanding March 31, 2021 and December 31, 2020, respectively		50		44
Additional paid-in capital		796,532		625,762
Accumulated other comprehensive (loss) income		(58)		49
Accumulated deficit		(415,577)		(459,327)
Total stockholders’ equity		380,947		166,528
Total liabilities and stockholders’ equity	$	422,209	$	187,073



	Three months ended March 31,
	2021		2020
Product revenue, net	$	35	$	—
Costs and expenses:
Cost of sales		4		—
Research and development		19,911		22,504
Selling, general, and administrative		14,518		12,796
Total costs and expenses		34,433		35,300
Loss from operations		(34,398)		(35,300)
Other income (expense):
Other income		100,000		—
Interest income, net		154		1,136
Total other income, net		100,154		1,136
Income (loss) before taxes		65,756		(34,164)
Provision for income taxes		22,006		—
Net income (loss)	$	43,750	$	(34,164)
Net income (loss) per share
Basic	$	0.92	$	(0.78)
Diluted	$	0.90	$	(0.78)
Weighted-average common shares outstanding
Basic		47,638,565		44,049,843
Diluted		48,501,697		44,049,843

Other comprehensive income (loss):
Net income (loss)	$	43,750	$	(34,164)
Unrealized (loss) gain on marketable securities		(107)		63
Comprehensive income (loss)	$	43,643	$	(34,101)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity


Balance at December 31, 2020	44,235,903	$	44	$	625,762	$	49	$	(459,327)	$	166,528
Stock compensation expense	—		—		5,191		—		—		5,191
Issuance of common stock in connection with ESPP	17,000		—		388		—		—		388
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units	198,855		—		3,466		—		—		3,466
Issuance of common stock upon completion of public offering, net of offering costs	5,750,000		6		161,725		—		—		161,731
Unrealized loss on marketable securities	—		—		—		(107)		—		(107)
Net income	—		—		—		—		43,750		43,750
Balance at March 31, 2021	50,201,758	$	50	$	796,532	$	(58)	$	(415,577)	$	380,947

Balance at December 31, 2019	43,996,753	$	44	$	606,307	$	—	$	(325,331)	$	281,020
Stock compensation expense	—		—		5,475		—		—		5,475
Issuance of common stock in connection with ESPP	18,673		—		324		—		—		324
Issuance of common stock in connection with exercise of stock options	72,964		—		383		—		—		383
Unrealized gain on marketable securities	—		—		—		63		—		63
Net loss	—		—		—		—		(34,164)		(34,164)
Balance at March 31, 2020	44,088,390	$	44	$	612,489	$	63	$	(359,495)	$	253,101


	Fair value Measurements as of
	March 31, 2021 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents:
Commercial Paper	$	—	$	4,750	$	—	$	4,750
Money Market Funds		81,365		—		—		81,365
Marketable Securities:
Corporate Debt Securities and Commercial Paper		—		317,479		—		317,479
Total	$	81,365	$	322,229	$	—	$	403,594


	Fair value Measurements as of
	December 31, 2020 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents:
Corporate Debt Securities and Commercial Paper	$	—	$	36,242	$	—	$	36,242
Money Market Funds		63,182		—		—		63,182
Marketable Securities:
Corporate Debt Securities and Commercial Paper		—		71,938		—		71,938
Total	$	63,182	$	108,180	$	—	$	171,362


	March 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate debt securities and commercial paper (due within 1 year)	$	317,538	$	1	$	(60)	$	317,479
	$	317,538	$	1	$	(60)	$	317,479


	December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate debt securities and commercial paper (due within 1 year)	$	71,895	$	43	$	—	$	71,938
	$	71,895	$	43	$	—	$	71,938


	Operating Lease
Remainder of 2021	$	603
2022		818
2023		834
2024		851
2025		502
Thereafter		—
Total operating lease payments		3,608
Less: imputed interest		649
Total operating lease liability	$	2,959


	Three Months Ended
	March 31,				Change
	2021		2020		$		%

	(in thousands)
Statement of Operations Data:
Product revenue, net	$	35	$	—	$	35	NM	%
Costs and expenses:
Cost of sales		4		—		4	NM	%
Research and development		19,911		22,504		(2,593)	(12)	%
Selling, general, and administrative		14,518		12,796		1,722	13	%
Total costs and expenses		34,433		35,300		(867)	(2)	%
Loss from operations		(34,398)		(35,300)		902	(3)	%
Other income, net		100,154		1,136		99,018	NM	%
Income (loss) before taxes		65,756		(34,164)		99,920	(292)
Provision for income taxes		22,006		—		22,006	NM
Net income (loss)	$	43,750	$	(34,164)	$	77,914	(228)	%


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Date	Number
3.1	Amended and Restated Certificate of Incorporation.	10-Q	05/04/2020	3.1
3.2	Amended and Restated Bylaws.	8-K	12/11/2020	3.1
10.1	Summary of Non-Employee Director Compensation Policy.	10-K	03/01/2021	10.5
31.1*	Certification of the Principal Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
31.2*	Certification of the Principal Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
32.1**	Certification of the Principal Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
32.2**	Certification of the Principal Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
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Dated: May 3, 2021	By:	/s/ David P. Meeker, M.D.
		Name: David P. Meeker, M.D.
		Title: President and Chief Executive Officer
		(Principal Executive Officer)

Dated: May 3, 2021	By:	/s/ Hunter C. Smith
		Name: Hunter C. Smith
		Title: Chief Financial Officer and Treasurer
		(Principal Financial Officer)