Rhythm Pharmaceuticals, Inc 10-Q for FY2021 Q2

Rhythm Pharmaceuticals, Inc. (RYTM)

10-Q 2021-08-03 For: 2021-06-30

Added on April 08, 2026

About this 10-Q

Rhythm Pharmaceuticals, Inc filed this 10-Q on August 3, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $274K
Net loss: $35.39M; compared with a net loss of $31.12M a year earlier
Diluted EPS: -$0.70; compared with -$0.71 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	28

	Item 4. Controls and Procedures	28

PART II	OTHER INFORMATION	29

	Item 1. Legal Proceedings	29

	Item 1A. Risk Factors	29

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	83

	Item 3. Defaults Upon Senior Securities	83

	Item 4. Mine Safety Disclosure	83

	Item 5. Other Information	83

	Item 6. Exhibits	84

SIGNATURES		85



	June 30,		December 31,
	2021		2020

Assets
Current assets:
Cash and cash equivalents	$	69,339	$	100,854
Short-term investments		298,815		71,938
Prepaid expenses and other current assets		10,300		8,876
Total current assets		378,454		181,668
Property and equipment, net		3,051		3,195
Right-of-use asset		1,671		1,807
Intangible assets, net		4,886		—
Restricted cash		328		403
Total assets	$	388,390	$	187,073
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,009	$	4,900
Accrued expenses and other current liabilities		11,880		12,559
Lease liability		570		535
Total current liabilities		17,459		17,994
Long-term liabilities:
Deferred tax liability		16,984		—
Lease liability		2,258		2,551
Total liabilities		36,701		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 June 30, 2021 and December 31, 2020		—		—
Common stock, $0.001 par value: 120,000,000 shares authorized; 50,226,739 and 44,235,903 shares issued and outstanding June 30, 2021 and December 31, 2020, respectively		50		44
Additional paid-in capital		802,584		625,762
Accumulated other comprehensive income		21		49
Accumulated deficit		(450,966)		(459,327)
Total stockholders’ equity		351,689		166,528
Total liabilities and stockholders’ equity	$	388,390	$	187,073



	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Product revenue, net	$	274	$	—	$	309	$	—
Costs and expenses:
Cost of sales		137		—		141		—
Research and development		25,104		22,997		45,015		45,501
Selling, general, and administrative		15,465		8,921		29,983		21,717
Total costs and expenses		40,706		31,918		75,139		67,218
Loss from operations		(40,432)		(31,918)		(74,830)		(67,218)
Other income (expense):
Other income		—		—		100,000		—
Interest income, net		21		801		175		1,937
Total other income, net		21		801		100,175		1,937
Income (loss) before taxes		(40,411)		(31,117)		25,345		(65,281)
Provision for (benefit from) income taxes		(5,022)		—		16,984		—
Net income (loss)	$	(35,389)	$	(31,117)	$	8,361	$	(65,281)
Net income (loss) per share
Basic	$	(0.70)	$	(0.71)	$	0.17	$	(1.48)
Diluted	$	(0.70)	$	(0.71)	$	0.17	$	(1.48)
Weighted-average common shares outstanding
Basic		50,209,484		44,098,860		48,931,127		44,074,352
Diluted		50,209,484		44,098,860		49,644,704		44,074,352

Other comprehensive income (loss):
Net income (loss)	$	(35,389)	$	(31,117)	$	8,361	$	(65,281)
Unrealized (loss) gain on marketable securities		79		567		(28)		630
Comprehensive income (loss)	$	(35,310)	$	(30,550)	$	8,333	$	(64,651)


						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
Stock compensation expense	—		—		5,669		—		—		5,669
Issuance of common stock in connection with exercise of stock options	24,981		—		383		—		—		383
Unrealized gain on marketable securities	—		—		—		79		—		79
Net loss	—		—		—		—		(35,389)		(35,389)
Balance at June 30, 2021	50,226,739	$	50	$	802,584	$	21	$	(450,966)	$	351,689

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
Stock compensation expense	—		—		3,028		—		—		3,028
Issuance of common stock in connection with exercise of stock options	27,222		—		174		—		—		174
Unrealized gain on marketable securities	—		—		—		567		—		567
Net loss	—		—		—		—		(31,117)		(31,117)
Balance at June 30, 2020	44,115,612	$	44	$	615,691	$	630	$	(390,612)	$	225,753


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Stock options		5,151,118		4,239,682		4,691,373		4,239,682
Restricted stock units		185,176		204,662		133,286		204,662
Potential common shares		5,336,294		4,444,344		4,824,659		4,444,344


	Fair value Measurements as of
	June 30, 2021 using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents:
Commercial Paper	$	—	$	14,998	$	—	$	14,998
Money Market Funds		45,941		—		—		45,941
Marketable Securities:
Corporate Debt Securities and Commercial Paper		—		298,815		—		298,815
Total	$	45,941	$	313,813	$	—	$	359,754


	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


	June 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Assets
Corporate debt securities and commercial paper (due within 1 year)	$	298,794	$	25	$	(4)	$	298,815
	$	298,794	$	25	$	(4)	$	298,815


	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	$	404
2022		818
2023		834
2024		851
2025		502
Thereafter		—
Total operating lease payments		3,409
Less: imputed interest		581
Total operating lease liability	$	2,828


2021	$	228
2022		454
2023		455
2024		455
2025		455
Thereafter		2,839
Total	$	4,886


	Three Months Ended
	June 30,				Change
	2021		2020		$		%

	(in thousands)
Statement of Operations Data:
Product revenue, net	$	274	$	—	$	274	NM
Costs and expenses:
Cost of sales		137		—		137	NM
Research and development		25,104		22,997		2,107	9	%
Selling, general, and administrative		15,465		8,921		6,544	73	%
Total costs and expenses		40,706		31,918		8,788	28	%
Loss from operations		(40,432)		(31,918)		(8,514)	27	%
Other income, net		21		801		(780)	(97)	%
Loss before taxes		(40,411)		(31,117)		(9,294)	30	%
Provision for income taxes		(5,022)		—		(5,022)	NM
Net loss	$	(35,389)	$	(31,117)	$	(4,272)	14	%


		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*	Offer Letter, dated July 9, 2021, by and between the Registrant and Pamela Cramer.
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).
101.INS*	Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


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