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Introduction & Market Context
Rhythm Pharmaceuticals (NASDAQ:RYTM) presented its first quarter 2025 financial results and business updates on May 7, 2025, highlighting strong revenue growth and significant clinical advancements. The company, which focuses on developing therapies for rare genetic diseases of obesity, reported continued commercial expansion for its approved product IMCIVREE® (setmelanotide) while advancing its pipeline programs.
The company’s stock closed at $62.71 on May 6, 2025, down 2.64% from the previous close, but has shown significant appreciation from earlier in the year, reflecting investor confidence in the company’s growth trajectory.
Quarterly Performance Highlights
Rhythm reported Q1 2025 product revenue of $37.7 million, representing a 45% increase from $26.0 million in Q1 2024. This growth was driven by increased patient demand, with the number of patients on reimbursed therapy growing approximately 14% globally quarter-over-quarter.
As shown in the following revenue breakdown:
The company noted that a typical Q4-to-Q1 inventory swing affected U.S. overall revenue, with an $8.3 million reduction. Despite this seasonal effect, U.S. demand continued to grow, with more patients receiving reimbursed therapy. International growth was particularly strong, driven by Germany, France, and Italy.
Key financial metrics for the quarter included:
The company’s net loss narrowed significantly to $50.8 million in Q1 2025, compared to $141.4 million in the same period last year. This improvement was primarily due to increased revenue and lower R&D expenses, which decreased to $37.0 million from $128.7 million in Q1 2024.
Clinical Development Progress
The most significant clinical advancement highlighted in the presentation was the strong results from Rhythm’s Phase 3 trial of setmelanotide in acquired hypothalamic obesity (HO). The data showed statistically significant reductions in BMI compared to placebo:
The treatment demonstrated consistent efficacy across different age groups, with similar BMI reductions observed in both adults and children:
Based on these positive results, Rhythm is on track to complete U.S. and EU regulatory submissions for setmelanotide in acquired hypothalamic obesity in Q3 2025. The company also reported that 120 patients remain on active therapy in the extension study, indicating strong continued interest in the treatment.
Commercial Expansion
Rhythm continues to expand its commercial footprint both domestically and internationally. In the U.S., the company reported consistent demand and steady growth in prescriptions for IMCIVREE in Bardet-Biedl syndrome (BBS), with a 13% increase in the number of prescribers from Q4 2024 to Q1 2025.
The company has made significant progress in securing Medicaid access and reimbursement, with over 95% of covered lives now in states that either have an IMCIVREE policy in place or have made positive coverage decisions in the absence of a specific policy.
Internationally, Rhythm has expanded its presence to more than 15 countries with reimbursed access or named patient sales for BBS and POMC or LEPR deficiency obesity. Additionally, six countries now have reimbursed early access programs or named patient sales for hypothalamic obesity.
Market Opportunity (SO:FTCE11B) in Hypothalamic Obesity
Rhythm emphasized the significant market opportunity in hypothalamic obesity, which affects an estimated 5,000-10,000 patients in the U.S., 3,500-10,000 in Europe, and 5,000-8,000 in Japan:
The company highlighted the high unmet medical need in this patient population, noting that these patients are already identified and engaged with the healthcare system. According to feedback from endocrinologists, approximately 80% of patients with acquired HO remain under endocrinologists’ care indefinitely, and there is significant dissatisfaction with current treatment options:
Financial Analysis
Rhythm maintains a strong financial position with $314.5 million in cash, cash equivalents, and short-term investments as of March 31, 2025. The company expects this to be sufficient to fund planned operations into 2027.
Key financial highlights for the quarter include:
For 2025, Rhythm provided non-GAAP operating expense guidance of $285 million to $315 million, including $135-145 million for SG&A and $150-170 million for R&D expenses.
Forward-Looking Statements
Looking ahead, Rhythm outlined several key milestones for 2025:
1. Completion of U.S. and EU regulatory submissions for setmelanotide in acquired hypothalamic obesity in Q3 2025
2. Data readout for the Phase 2 trial of oral bivamelagon in acquired hypothalamic obesity in Q3 2025
3. Continued commercial expansion in both U.S. and international markets
4. Four new data presentations at key medical conferences in May, including real-world setmelanotide weight outcomes in French patients with hypothalamic obesity and patient/caregiver experiences with setmelanotide treatment in Bardet-Biedl syndrome
The company’s long-term growth strategy remains focused on expanding the approved indications for setmelanotide, increasing patient identification and treatment, and advancing its pipeline of novel therapeutics for rare genetic diseases of obesity.
With strong clinical data, growing commercial traction, and a solid financial position, Rhythm Pharmaceuticals appears well-positioned to continue its growth trajectory throughout 2025 and beyond.
Full presentation:
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