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RHYTHM PHARMACEUTICALS, INC. (RYTM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 net product revenue was $37.7M with total revenues of $32.7M, a miss versus S&P Global consensus revenue of $40.2M and EPS of -$0.69, driven by a $5.0M negative license revenue (RareStone termination) and an $8.3M U.S. specialty pharmacy inventory destock; GAAP EPS was -$0.81 .
  • IMCIVREE demand remained strong: patients on reimbursed therapy rose 14% q/q; ex-U.S. revenue grew $3.1M; U.S. revenue was impacted by inventory normalization and bridge-program dynamics; U.S. gross-to-net was 84.2% .
  • Pipeline/regulatory: Phase 3 TRANSCEND in acquired hypothalamic obesity met primary endpoint (-19.8% placebo-adjusted BMI at 52 weeks; consistent efficacy across age strata); sNDA (U.S.) and Type II variation (EU) filings targeted for Q3 2025 .
  • FY2025 non-GAAP OpEx guidance maintained at $285–$315M (SG&A $135–$145M; R&D $150–$170M); cash, cash equivalents and short-term investments were $314.5M with runway into 2027, supporting multiple catalysts (HO filings, bivamelagon and RM-718 readouts) .
  • Stock reaction catalysts: HO pivotal success and near-term filings; Q1 revenue/EPS miss explained by license reversal and inventory timing; confidence in demand trajectory and payer access could support estimate revisions and sentiment normalization .

What Went Well and What Went Wrong

What Went Well

  • HO Phase 3 met primary endpoint with -19.8% placebo-adjusted BMI reduction; 80% achieved ≥5% BMI reduction; no new safety signals observed. “The more we dig into the data, the more convinced… setmelanotide has the potential to transform the life of both the patient and their families” — David Meeker .
  • Commercial momentum: 14% q/q increase in reimbursed patients; ex-U.S. revenue +$3.1M q/q; broadened prescriber base (+13% total prescribers vs Q4), improving Medicaid coverage (>95% of covered Medicaid lives) .
  • Strong international setup and scientific footprint: early-access HO programs (France/Italy) and upcoming conference data expansions; Japan orphan drug designation and plan for HO regulatory path with local cohort .

What Went Wrong

  • Miss vs consensus in Q1: revenue $32.7M vs $40.2M* and EPS -$0.81 vs -$0.69*, due to ($5.0M) license revenue reversal from RareStone termination and U.S. specialty pharmacy inventory destock (-$8.3M) offsetting underlying demand (+$1.1M product dispensed q/q) .
  • Sequential U.S. mix fell to 65% from 74% in Q4 due to inventory normalization and bridge-program seasonality; compliance normalized back to low-80% region after Q4 strength .
  • Continued net losses as OpEx supports HO launch readiness and pipeline; Q1 net loss was ($49.5M) and GAAP OpEx guidance implies elevated investment through 2025 .

Financial Results

Revenue and EPS vs Prior Periods and Estimates

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD)$33.251M $41.830M $32.704M
Product Revenue, net ($USD)$33.251M $41.830M $37.718M
License Revenue ($USD)——($5.014M)
GAAP EPS ($USD)($0.73) ($0.72) ($0.81)
Revenue Consensus Mean ($USD)$32.466M*$38.484M*$40.161M*
Primary EPS Consensus Mean ($USD)($0.807)*($0.711)*($0.694)*

Note: Asterisks denote values retrieved from S&P Global.

Operating Metrics

MetricQ3 2024Q4 2024Q1 2025
Cost of Sales ($USD)$3.828M $3.787M $3.648M
Total Costs & Expenses ($USD)$77.136M $83.085M $79.708M
Loss from Operations ($USD)($43.885M) ($41.255M) ($47.004M)
Net Loss ($USD)($43.641M) ($43.294M) ($49.498M)

Mix and Geography

MetricQ3 2024Q4 2024Q1 2025
U.S. Revenue (% of product revenue)70% 76% 65%
Ex-U.S. Revenue (% of product revenue)30% 24% 35%
U.S. Revenue ($USD)$23.3M $31.7M $24.5M
Ex-U.S. Revenue ($USD)$10.0M $10.1M $13.2M

KPIs and Cash

KPIQ3 2024Q4 2024Q1 2025
Patients on reimbursed therapy q/q growth (%)——+14%
Prescriber growth vs Q4 (%)——+13%
U.S. gross-to-net (%)85% 85% 84.2%
SP inventory change ($USD)Pull-forward ~$0.5M into Q3 +$4.1M build ($8.3M) destock
Bridge program impact ($USD)——~$0.7M headwind
Cash, cash equivalents & ST investments ($USD)$298.4M $320.6M $314.5M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-GAAP Operating Expenses ($USD)FY2025$285–$315M (Feb 26, 2025) $285–$315M (May 7, 2025) Maintained
SG&A (Non-GAAP) ($USD)FY2025$135–$145M $135–$145M Maintained
R&D (Non-GAAP) ($USD)FY2025$150–$170M $150–$170M Maintained
Cash RunwayMulti-yearInto 2027 Into 2027 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
HO efficacy and filingsReal-world French adults: 12.8% BMI at 3 months; consistent across ages; Q1H25 readout guided Phase 3 met primary (-19.8% placebo-adjusted BMI); sNDA (U.S.) and EU Type II filings targeted for Q3 2025 Strongly positive; execution on filings
U.S. inventory dynamicsQ4: SP inventory build; q/q revenue strength aided by stocking Q1: ($8.3M) destock; demand proxy (+$1.1M dispensed) Normalization; expect less lumpiness
Prescriber breadth & Medicaid accessBuilding prescriber network; EMA pediatric expansion; NICE U.K. launch Highest quarterly prescribers; +13% prescribers; >95% Medicaid covered lives Expanding access and breadth
Pipeline (bivamelagon, RM-718)Biva Phase 2 enrolling; RM-718 Part C start; Japan cohort planned Biva topline Q3 2025; RM-718 Part C dosing; aim for efficacy update by year-end On track; multiple 2025 catalysts
International HO programsFrance/Italy early access with positive initial outcomes Continued patient additions; broader European scientific presence Steady growth internationally
Payer mix/seasonalityU.S. GTN ~85%; Q4 stocking; bridge programs U.S. GTN 84.2%; bridge headwinds normalized by quarter-end Stable GTN; seasonal bridge resolved

Management Commentary

  • “Following compelling topline results from our pivotal Phase 3 trial of setmelanotide in acquired hypothalamic obesity (HO), we look forward to completing U.S. and EU regulatory submissions in the third quarter of 2025” — David Meeker .
  • “Revenue from global sales of IMCIVREE was $37.7 million… U.S. revenue was affected by an $8.3 million decrease in inventory at the specialty pharmacy… resulting in a net decrease in U.S. product revenue of $7.2 million q/q” — Press release .
  • “The value of IMCIVREE dispensed to patients in the U.S.… increased $1.1 million sequentially… Outside the United States, sequential revenue growth was strong at $3.1 million” — Hunter Smith .
  • “We now have IMCIVREE-specific policies or positive coverage decisions… in states that account for greater than 95% of covered Medicaid lives” — Jennifer Chien .
  • “There were no new safety signals related to setmelanotide observed… setmelanotide was also generally well tolerated” — David Meeker on HO Phase 3 .

Q&A Highlights

  • Nonresponders and imputations: Multiple “nonresponders” had ≥5% BMI reduction at last observed timepoint; conservative imputation using placebo trajectory suppressed counts; compliance generally high .
  • Inventory/seasonality: Expect Q1 destock of Q4 build; aim to reduce large swings; Q1 bridge-program transitions temporarily increased free-drug usage; normalized by quarter-end .
  • Label expectations: HO label likely to avoid fixed BMI thresholds; pediatric age expected ≥4 years consistent with trial; aim to include hunger language in indication .
  • Payer mix: ~80% combined commercial+Medicaid, roughly equal split; Medicare smaller due to obesity category exclusions .
  • Pipeline: RM-718 Part C open-label could share data by year-end; bivamelagon threshold for clinical meaningfulness around >10% BMI reduction at 16 weeks; MC1R sparing profile target .

Estimates Context

  • Q1 2025: Actual revenue $32.7M vs $40.2M* consensus; GAAP EPS -$0.81 vs -$0.69* — miss explained by ($5.0M) license revenue reversal and ($8.3M) SP inventory destock; underlying U.S. demand (+$1.1M dispensed) and ex-U.S. growth (+$3.1M) support trajectory .
  • Q4 2024: Actual revenue $41.8M vs $38.5M*; EPS -$0.72 vs -$0.71* — revenue beat aided by Q4 inventory build; EPS in line .
  • Q3 2024: Actual revenue $33.3M vs $32.5M*; EPS -$0.73 vs -$0.81* — beat driven by growth in reimbursed patients and international expansion .

Note: Asterisks denote values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term regulatory catalysts: Expect sNDA (U.S.) and EU Type II filings for HO in Q3 2025; the pivotal dataset shows robust, consistent efficacy across ages and strong tolerability — a likely stock driver on submission/regulatory clarity .
  • Q1 miss is transitory: License revenue reversal and SP inventory normalization masked demand; watch q/q recovery with reduced inventory volatility and expanding ex-U.S. contribution .
  • Demand signals intact: Patients on reimbursed therapy +14% q/q, prescriber base expanding (+13%), and Medicaid coverage >95% of covered lives — supports continued revenue growth .
  • Multiple 2025 readouts: Bivamelagon Phase 2 (Q3 2025) and RM-718 Part C (year-end) could broaden MC4R franchise with MC1R-sparing profiles; positive data would underpin medium-term pipeline value .
  • International and Japan optionality: Early-access programs in Europe and Japan orphan designation set a path for broader geographic uptake; Japan HO prevalence may be favorable .
  • OpEx consistent with launch prep: FY2025 non-GAAP OpEx guidance maintained; monitor SG&A ramp for HO launch readiness and R&D cadence tied to pipeline milestones .
  • Estimate revisions likely: Street should adjust for license revenue reversal mechanics and inventory timing; upside scenarios hinge on HO filings, ex-U.S. growth, and pipeline readouts.

Appendix: Additional Data Points

  • License revenue Q1 2025: ($5.0M) due to China rights re-acquisition and RareStone repayment .
  • Cash runway: Into 2027; $314.5M cash/cash equivalents/ST investments at Mar 31, 2025 .
  • U.S. gross-to-net: 84.2% in Q1 2025; historically ~85% .
  • SP inventory: Q4 build +$4.1M to >22 days on hand; Q1 destock ($8.3M) to <9 days .
  • Ex-U.S. HO early access: France/Italy programs expanding; consistent efficacy signals in real-world cohorts .