Good day and thank you for standing by. Welcome to the Rhythm Pharmaceuticals' Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Connolly, Executive Director of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Victor. 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 on the Investors page of our website at ir.rhythmtx.com. This morning, we issued a press release that provides our third quarter 2023 financial results and a business update, which is available on our website. As listed on Slide 2, here with me today in Boston are David Meeker, Chair, Chief Executive Officer, and President of Rhythm Pharmaceuticals; Jennifer Chien, Executive Vice President, Head of North America; Hunter Smith, our Chief Financial Officer; and Yann Mazabraud, Executive Vice President, Head of International is on the line joining us from Europe. And 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 represents our views only as of today and should not be relied upon as presenting our views as of any subsequent date. 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 and good morning. Thank you all for joining the call. So, we're pleased to report out another very strong quarter with continued execution across all parts of our business. The two near-term drivers of Rhythm value building the BBS commercial opportunity globally and enrollment into our Phase 3 HO trial remain on track. I'm incredibly impressed by the performance of our North American and international organizations, BBS and the monogenic forms of MC4R pathway diseases. We are approved to treat RM as we have discussed multiple times highly meaningful rare disease opportunities, but they do fall in the ultra-rare category with all of the challenge these patients face getting to a diagnosis and then accessing the appropriate therapy. The sheer volume of noise around the management of obesity as a disease in the of GLP1one specifically has both aided the cause. Healthcare providers are looking more closely at patients who present it with obesity and doing the appropriate workups, and hindered the cause where the availability of powerful therapies such as GLP1 medications has led many to believe that all obesity is the same and GLP1 represent the universal solution. As we know, that is not correct. Obesity is not one disease, but many diseases and as with most forms of medical therapy, the more targeted and specific the solution, the better. The medical community continues to learn more about the factors which control hunger, the role of the different pathways, and the effect of different drugs play in modulating those pathways. Our story remains relatively simple. We're replacing a sub -- we're replacing, sorry, or supplementing a hormonal signal, which is deficient. So, if you're managing a patient, why wouldn't you start there? Revenues in the quarter came in at $22.5 million, showing exactly the steady…

Thank you, David. We are pleased with the continued progress we are seeing with our BBS commercial launch. Hundreds of patients with BBS in the US are now realizing the benefits of IMCIVREE therapy. We continue to hear the positive, life-changing impact we are making to the lives of patients and families. Recently, we heard from one mother whose son is on IMCIVREE therapy, and IMCIVREE has had a profound effect on his weight and his hyperphagia. He is full for the first time. Leaves the dinner table before everyone else in the family. And for the very first time, he told his mother he does not like certain foods, like [Indiscernible] beans, tomatoes, and pickles. In the mother's words, we are experiencing him as a kid, not a hungry kid. IMCIVREE is the only therapy approved specifically to treat obesity due to BBS and we are thrilled to hear these stories from patients and families who now have access to therapy. Beginning on Slide 11, We are pleased with the growth and consistent strong demand for IMCIVREE over the first five quarters. Throughout the launch from June 16th, 2022 through the end of the third quarter of 2023, we now have received more than 545 new BBS prescriptions coming from more than 300 prescribers. Of these prescriptions, we have greater than 330 approvals for reimbursement from payers. On the next slide, I will cover results within the third quarter. We received greater than 120 prescriptions with 80 approval within the third quarter. Several of these approvals were from prescriptions received within the quarter, while others were written in prior quarters. We continue to identify more BBS patients and work to speed diagnosis. Our active engagement with physicians remain focused on disease awareness, diagnosis, and the benefits of IMCIVREE. And…

Thank you, Jennifer, and good morning. Slide 19. Today, we are very pleased to that we have achieved a significant international milestone with more than 100 patients from 11 countries outside of North America on reimbursed therapy as of the end of October. Our first patient on reimbursed drugs started with the AP2 program in France for pump CME power deficiencies in March of 2022 and it has been a gradual and steady build since then. As new countries came online for pharmaceutical power, and that continues as new countries come online for BBS, beginning with reimbursed early access in France and now fully launched in Germany. Regarding the French AP1 pre-EME approval reimbursed early access program for hypothalamic obesity, we are now working through the process to get it started. This program often starts slow because of the administrative requirements, we have not treated any patients yet under program, but we may be in position to treat a few patients during the fourth quarter. Overall, Europe is a key market for rare diseases for reason. European countries typically are better organized and more centralized in their approach to rare diseases compared to the United States. Even though these diseases are quite rare, the opportunity is meaningful. As a reminder, in the EU-focus UK, we estimate the prevalence for Bardet-Biedl syndromes to be 4,000 to 5,000 patients, which is a prevalence similar to the US. And we have already more than 1,500 patients identified in these countries. We are pleased with progress to-date in achieving market access for IMCIVREE in a large number of international markets. Next slide. Our launch in Germany is off to a solid start. Following the unanimous decision of the German Federal Joint Committee or GBA to exclude IMCIVREE from Germany's lifestyle exemption list and thereby…

Thank you, Yann. Rhythm remains tightly focused on global execution of commercial strategy across both our North America and international regions and continued development of the potential of IMCIVREE and our pipeline. All else being committed to financial discipline and delivering shareholder value. Let's start with a snapshot of the Q3 P&L on Slide 23. We recorded $22.5 million in net product revenue in the third quarter versus $4.3 million during the same quarter last year, an increase of $18.2 million. Q3 last year was our first full quarter of BBS commercial sales in the United States, which followed FDA approval on June 16th, 2022. Quarter-over-quarter, we saw an increase of $3.3 million or 17% in net product revenue, driven by continued growth in the number of patients on IMCIVREE therapy in both the US and international regions. In last quarter's results, we highlighted that $1.6 million of our revenue resulted from shipments to our specialty pharmacy in excess of amounts that it expense to patients, resulting in an increase in inventory days on hand at quarter end. This quarter, shipments to the SP and dispensers to patients were very close to match resulting in a de minimis difference in value. Because of the larger number of patients on IMCIVREE therapy at the end of the third quarter, inventory days on hand at the SP decreased, but remained within a normal range. Gross to net for US sales quarter-over-quarter decreased to 83% from 85% the second quarter, primarily due to a Medicaid rebate adjustment in that quarter. Our practice is to accrue for Medicaid rebates based upon expected payer mix and when actual Medicaid invoices are received, this may result in differences versus accrued amounts. Cost of sales during the third quarter was $2.4 million or approximately 10.7% of net…

Thanks Hunter. So, I think, hopefully you've heard, we're really happy with how the commercial opportunity is beginning to develop here, obviously, in the US and now you've heard international is becoming an increasingly important part of this overall picture as it will continue to do going forward. And on the HO side, just to highlight a moment of thanks here, I think, thanks to our investigators and the patient community who have been incredibly engaged here, in support of getting this trial going, not an easy trial, it’s a double-blind placebo controlled to the one, but, you sign up for the chance you'll end up for a year on a placebo therapy. So, again, I've been really pleased with, the reaction from the community and their engagement here. And a final note, thanks to the Rhythm team and not an easy trial. It's a complicated trial reflecting a lot of information -- important information will be the one of the perhaps our last chance to get this kind of robust, information in a controlled trial setting. So, they've done a great job, again, getting us to this position and putting us in place to be able to meet our end of the year enrollment targets. So, with that, we'll open it up to questions.

Thank you. [Operator Instructions] Our first question comes from the line of Corinne Jenkins from Goldman Sachs. Your line is open.

Good morning. Thanks for taking our question. I guess a couple from us. Maybe first, how should we think about the development for RM-718 as compared to the way you developed IMCIVREE, will it largely mirror or there's a -- or are there some kind of faster paths that you can take on that asset? And then as a follow-up, kind of separate question. Where are the bulk of these 100 international patients both with respect to region as well as BBS versus the PPL indication? And how does that kind of compare to where you were at the end of September?

Thanks Corinne. So, I'll take the first one and then Yann, I'll turn it over to you. So, on 718, there is a faster path mean, you remember the very first trials that were done were in IMCIVREE, were done in POMC, LEPR receptor biallelic patients. Again, we were learning about dosing. There was a lot of -- just we had to learn about the mechanism. So, we benefit from all of that prior learning. HO, we had no clue of it at that point. And HO as we have seen, looks like a very sensitive model here. So, again, a great place to start. So, the strategy for 718 will be after we've done our normal VOLUNTEER, SAD/MAD, the single ascending dose and multiple ascending dose portions of that VOLUNTEER study. We'll have a, a cohort of HO patients, which hopefully will give us the insight that we need for dosing to then go to the additional indications. So, it should go faster. It will go faster. There's no question it will go faster. Yann, on the 100 patients?

Yes. So, first of all, in terms of geographic repetition, two-thirds the patients are in France and in Germany. And the rest, spread across, four or five countries, Turkey, Italy, Netherlands, UK. The split between, POCM, LEPR and BBS, right now, it's about 50-50, which is, the reason, because we did launch POMC and LEPR first. But given the more important prevalence BBS, we will catch up quickly and the BBS will outpace from POMC and LEPR soon.

Very good. That's helpful. Thank you.

Next question.

And our next question comes from the line of Phil Nadeau from TD Cowen. Your line is open.

Good morning. Congrats on the progress, and thanks for taking our questions. Three from us; two pipeline and one commercial. On the pipeline, in terms of the HO pivotal study, should we look at the 25.5% mean BMI reduction that was shown in the 12-month extension as a reasonable proxy for what could be seen on the primary endpoint in the HO pivotal? That's first question. Second, any update on the M&A enrollment? And then third, in terms of commercial, curious to hear your most recent estimates of how penetrated the US diagnosed BBS market is, any sense of the number of diagnosed patients that are out there today? Thanks.

Sure. So, let me, let me take the first two. So is the 25% a good proxy? I mean, obviously, that's an incredibly robust result. We're very happy. I've said as a many times. It's a little bit less about the magnitude of the change because we have a heterogeneous group of patients. We have very young kids. We have older adults. We're mixing them all together. So, that confounds a little bit that number going to read through, but what is remarkable the consistency of the response. I mean, literally every patient in that trial, if they took the medication is having a response. So, we're powered for 10% difference. I think there's little risk, knock on wood, that, we wouldn't do better than that and the 25% speaks to, you know, that level of it. We're highly powered, 99% better powered to show the [Indiscernible]. So, it's a long way of saying I don't think you can take the 25% necessarily as a read through, but it's highly [Technical Difficulty] in this patient group. And then M&A, so we're making progress there again. We haven't highlighted it so much because we're still work in progress, but I think we sorted out, the issues which, put us well behind here on that trial and that trial is now and running, enrolling strongly. A couple of the cohorts are enrolling ahead of two of the other cohorts, which is not unexpected. We didn't expect all four. So, I think what I'll what we'll do is we'll be reading out in 2024, or sorry, we'll announce in 2024 that we fully enrolled as a year of study once we're fully enrolled for -- when at least two of those cohorts have enrolled. And then on the commercial side in terms of penetration, Jennifer. I mean, again, we make these epidemiologic estimates of 4,000 to 5,000. And there's uncertainty in those numbers, but how do you think penetrating against that?

Yes. So, we have not updated the number of patients that have been diagnosed. I will just say that that we've been focused more in terms of those who have had a prescription. But with that said, the teams are doing an amazing job just in terms of the education efforts, and we continue to get more and more patients or find HCTs that have BBS patients or, you know, as getting to, have them also diagnosed additional patients. I would say that in terms of opportunity that remains, there still remains a large opportunity in terms of not only the fines, but also the pull through in terms of diagnosed patients to an IMCIVREE prescription. So, lots of opportunities that still remain ahead.

That's very helpful. Thanks again for taking our questions.

Thank you.

Our next question comes from the line of Derek Archila from Wells Fargo. Your line is open.

Hey. Good morning. Thanks for taking the questions, and congrats on the progress here. So, just two from us. So I guess of the physicians that have written more than one script for BBS, I guess how long between the first script do they write the second? And I guess do you find the driver being them going out and finding more patients or just getting more experience with the drug and they already have patients that they're treating. And then they start treating those. So that's question one. And then the second, I guess what is left to be done to get HO patients on IMCIVREE, under the AP1 system in France. I guess, how do we think about the magnitude of the impact next year on new patients on therapy from that? Thanks.

Yes. Jennifer, first?

Yes. So, I would say that the timing is variable because the situation is also variable, physician-by-physician. Some were physicians that had more than pay one patient, even prior to our launch. And that took -- that could take time just in terms of that patient coming back in to have a dialogue with the physician just in terms of interest to get on to therapy. And then there's also others that through our education efforts, they, diagnosed the first patient and similar to rare disease, once you find that first patient, it's no longer this unicorn that's not in your practice, but something that you need to pay attention to just in terms of, differential diagnosis of additional patients that has, come to them in the past, or it will be coming to them in the future, to remember that understanding the different symptoms to get to a clinical diagnosis is important to bear in mind. So, it's a bit of a mix of both of them, and both of those also impact the timing in terms of the first to the next prescription.

And, Yann, maybe just a little bit more color on the process for the AP1 HO and then how should we think about 2024?

Yes, sure. So, first of all, of course, we are very pleased with this achievement. It's very rare. And to get such a pre NDA approval in France based on Phase 2 data. And to be more precise, there are just two rare disease therapies with such status in France. So, as mentioned, we are now working through the process and to answer to your questions. This program have administrative requirements. So, we get it rented and now we have to go through a few steps. One is, agreement in terms of data collections with the centers of reference and the French FDA. And the second is also, the centers of reference are setting up a multidisciplinary, decision making meetings to review the patient cases. So, and that's the usuals, and we have been through that responds to the path and also with DBS. So, we know how it works and it is the same for all the rare disease drugs. So, those tests are currently, we are working, we are working on them. For your second question, in terms of number of patients, it's a bit difficult to say today what we know because we have been, it has been known and we have been reached out by a lot of and we are working also with experts. There are a lot of patients who are in need and who, and we have a lot of physician interested to treat these patients. So, as soon as we will have these administrative requirements ready, we will have the first prescriptions and the first patients will be treated still difficult to say how much in 2024.

Good morning to come on that, Derek. We're learning here. All right. Thank you. Thank you.

And our next question comes from the line of Dae Gon Ha from Stifel. Your line is open.

Hey, good morning guys. Thanks for taking the question and congrats on the progress. Two from us, one on the commercial and one on HO. So, on the commercial front, I thought it was interesting. You pointed out the divergence between your experience versus CRIBBS. Since you do have a significant proportion of prescribers being peed endos, was wondering what kind of strategy are you are you thinking in terms of penetrating that segment in the market, I guess, a little bit more aggressively, and have more representation in your prescriber base? And just to clarify on the nomenclature, is it your going guidance is going to be on prescriptions because you've previously talked about start forms. I just want to make sure that's, that's what we should be looking at next? And then on HO, if you can maybe go into the screen failure commentary a little bit more, David, guess, what are the dynamics you're seeing with regards to enrollment? And how are you balancing rapid enrollment to reach that 4Q completion date and ensuring you avoid any compromises along the way? Thanks so much.

Jennifer.

So, sorry for clarification. The metric is the start forms that we are focused on, and they're new start forms. They're not repeat scripts for the same patient. And regarding your question regarding the, the CRIBBS piece, for sure, the pediatric endocrinologist that is a treater and prescriber, for IMCIVREE remain a key a specialty focus of our teams. And that's one that our territory managers are calling on. But we also supplement, their efforts, just with a lot of non-personal promotion efforts. We knew upfront that when we took a look at that CRIBBS' distribution of 80% less than 18 years of age, that these patients do not die at 18 years of age and so we knew that there were a lot more patients either that were diagnosed and lost in the system. And oftentimes, they, they may stop going to specific physicians. So, there was quite a breath in terms of different specialties that we wanted to educate, to get to those adults, which I think has been helpful in addition to the on ground field team efforts in terms of getting to the human distribution of, patients that, that feels a bit more right just based off of the age distribution of BBS patients in general.

Great. Thanks. And, Dae Gon, on the HO, the screen failure rate, so just to put that number a little more specifically, I think we've had four screen failures with over two-thirds of the patients screened or actively in screening. And even in that small number of screen failures. We've had at least one patient who's been brought back in to rescreen. There was a minor issue and so they may ultimately turned out to be not a screen failure. And the reason it's so low is when we started, this effort and we're looking at picking the sites, we probably had a total -- the sites themselves, had their list of patients, which were easily more than two times the number of patients we needed to enroll in this trial. So, they were all starting with a list of patients. They weren't looking, and then they we said, they knew the entry criteria. They don't want to disappoint patients. So they're bringing in patients who they feel, based on their knowing the patient that they meet entry criteria, and therefore the risk of screen failure is low. So in pushing to enroll this trial, I have no fear, if you will, that we're going to have a low quality patient enrollment, meaning people are working on the edges. I think we're going to have patients who very much meet entry criteria because there's, like I said, a good selection of patients who are eager to get in.

Awesome, thanks very much. Yeah, that helps. Thank you so much.

And our next question will come from the line of Jeff Hung from Morgan Stanley. Your line is open.

Thanks for taking my questions. You talked about a couple patients that didn't meet the 5% weight loss who are going through the appeals process. Do you have a sense for the proportion of BBS patients that discontinue based on the one-year recommendation? And then how does that compare to what you've seen for the other approved mutations? And then I have a follow-up.

So, the patients that are referred to just in terms of not meeting the requirements for the 5% weight loss is really at this point just a handful of patients. So, not many that fall into that category, but even so, because of the, the belief from the physician as well as the desire for the patient to remain on therapy. We are helping them through the appeals process, just in terms of trying to maintain them in terms of authorization there. You were asking a separate question, I believe, on the discontinuations on therapy overall. So we now do have a larger number of patients who have been on therapy for a longer period of time since our launch. And the discon rate to date has crept up a bit from the 10% that we had outlined to 13% of our X's. The reasons why have not really changed just in terms of, why they are disconning. It's, I would characterize it as almost half of them for more personal reasons, and about half of them for adverse event reasons. It is still an opportunity though for our teams just in terms of follow-up, because the hyperphagia for those who are responding does come back quickly, and they may consider coming back on therapy in the future.

Great, thanks. And you mentioned that about half or upwards of half of discontinuations are for personal reasons. Do you have any data indicating the proportion of those who discontinue who are coming back to be treated again? And then my follow-up question was that for the prescribers who have not written more than one prescription, are the main reasons because they're relatively new to prescribing set melanotide or they don't have additional BBS patients or maybe something else? Thanks so much.

Yeah, so I'll answer the last question first. So the reasons are variable. They may only have one patient, you know, just in terms of a lot of our scripts also is, patients who are been on therapy for a shorter period of time. So that may be the case just in terms of the, the reason for the one script and it may also be the case just in terms of physician having two patients where that patient either has not come in or is not ready to initiate therapy. In terms of the other questions...

Patients in the personal reason group and have any of those come back or likely to comeback?

I see and we don't have enough data right now in terms of that point just to outline or I don't have it on me right now. I do know that there have been a couple of patients who discontinued and wanted to Restart therapy because of the hyperphagia, but it's only a handful at this point of time

The other thing, Jeff, just on the 5% in general in terms of how people experience some benefit, this is a group because of their underlying mechanism, their inability to respond to some of the other therapy, certainly diet and exercise and some of the other medications isn't there. And so simply stopping the weight gain is a major advantage. And then as Jennifer said, the overwhelming story we've heard as we recounted on all these calls is just the quieting of their hyperphagia ability to respond leave the table, leave food on the table is a pretty significant change for them.

Great, thank you.

And our next question comes from Whitney Ijem from Canaccord Genuity. Your line is open.

Hey, morning guys. Going back to France and thinking particularly about BBS, can you remind us, I guess, where you are in the conversations for sort of regular way reimbursement? I know the logistics of the early access are slower than presumably it would be once you can flip over to regular reimbursement. Just curious where you are, the timing around that.

Sure, so we have started the pricing negotiations with the pricing committee. It usually takes between nine months to two, three years. We think that we will have an end mid next year, something like that. So we are in the third round technically and so far it has been good from both an understanding of the unmet medical need and the benefit from MCV and also the relationship and the openness and the transparency in the discussion. So we are at the beginning for something that should end mid next year.

Perfect, thanks. And then on 718, I guess, can you remind us, I know you've talked about it being more potent in terms of its activity at the receptor. Is the idea behind the TPP there a better weight loss kind of efficacy picture or lower dosing safety profile or just how you're thinking about that? Thanks.

Yeah, it's actually not, thanks Whitney, it's not more potent technically in terms of activity at the receptor, but it's more specific. So that's the major feature here, which is our current set melanocytes, as you know, we hit both the MC4 and the MC1, which contributes to the hyperpigmentation. And so we removed that, it's very specific. So the probability we will have hyperpigmentation is low, and we have animal data to support that. So that's the major advantage here. And then of course, it's weekly, so we have convenience. And of course we have an IP. protection that goes out to 2041. And so those are the major elements that make this a really critical program for us.

Great. Thanks very much.

And our next question comes from Joseph Stringer from Needham. Your line is open.

Hi, good morning. Thanks for taking our question with regards to the upcoming. Phase 3 readout and the two to six year old BBS patients just curious. They're all the patient identification work that you've done for BBS today in the U.S. How many you estimate are in that two to six year old range and. What do you expect to see sort of a bullet or how do you think that would impact? The launch it can win the label is expanded to include those patients.

Yeah, so maybe I'll lead and Jennifer can add anything here. I think, A, it's not a large number of patients. What we see is a higher hit rate when a two to six-year-old group is screened. That very early onset, you know, obviously the history is very good there. They have true early onset obesity. And so the screening hit rate is a little bit higher in that group. And so that's an important part of this, number one. But it's not a large number of patients. So, there won't be a big impact patient population. But I think what's really important about this, A, it's a genetic disease, you want to treat all patients getting in early, it's hugely important. So medically, I think this is very important. And it also builds, I think, an increasing recognition about what differentiates these diseases and the need to manage and think about them differently. So it will help us in different ways, but the absolute number will not be large.

Great Thank you for taking our question.

Thank you. I'm not showing any further questions in the queue. I'd like to turn the conference back to David Meeker, Chairman, CEO, and President, for closing remarks.

Thanks, Victor. So thanks again, everybody, for tuning in and excited about the progress we're making, as you've heard, and we very much look forward to seeing everybody or hopefully people will be able to either show up in person or call into our R&D day on December 6th, where we have updates. We'll have a hypothalamic KOL from our hypothalamic obesity world. So that will be interesting in addition to the data updates on our 718 program, the daybreak trial, and we will provide the data on the pediatric trial at that time. So with that, we'll sign off. Have a good day.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.