Sign in
RP

RHYTHM PHARMACEUTICALS, INC. (RYTM)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net product revenue was $48.5M, up 29% QoQ and 67% YoY, driven by BBS demand and international growth; U.S. revenue was $32.0M and ex-U.S. $16.5M .
  • Revenue beat Wall Street consensus ($43.64M*) by $4.86M; EPS missed (-$0.75 vs -$0.6625*). Bold: revenue beat; EPS miss [Q2 consensus and actual]*.
  • Non-GAAP operating expense guidance for FY25 was maintained at $285–$315M, with SG&A $135–$145M and R&D $150–$170M .
  • Strategic catalysts: sNDA/Type II variation filings for setmelanotide in acquired hypothalamic obesity (HO) on track for Q3; positive Phase 2 bivamelagon BMI reductions; $189.2M net equity raise strengthens liquidity to at least 24 months runway .

Note: Estimate values marked with * are from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Strong commercial execution: Q2 global IMCIVREE revenue $48.5M; U.S. $32.0M (66%), ex-U.S. $16.5M (34%), with international early HO access programs contributing .
  • Clinical momentum: TRANSCEND Phase 3 in acquired HO showed -19.8% placebo-adjusted BMI reduction with consistent efficacy across age/sex subgroups; bivamelagon Phase 2 met primary endpoint with -9.3% BMI at 600mg and -7.7% at 400mg over 14 weeks .
  • Management confidence and regulatory progress: “We are on track to complete U.S. and European regulatory filings in Q3” — CEO, and cash runway of “at least 24 months” post offering — CFO .

What Went Wrong

  • EPS loss widened YoY with Q2 net loss per share of -$0.75 vs -$0.55 in Q2 2024, reflecting higher SG&A and R&D to support pipeline and launch readiness .
  • Other income (expense) swung negative (-$1.0M) vs $8.7M in Q2 2024 due to non-recurring prior-year gain and non-cash interest expense on deferred royalty and LG Chem liability .
  • Stock-based compensation increased, driving higher OpEx; CFO cautioned future stock comp is elevated and “beyond our direct control because it’s driven by the stock price” .

Financial Results

Summary P&L (USD Millions unless noted)

MetricQ4 2024Q1 2025Q2 2025
Product revenue, net$41.830 $37.718 $48.502
Total revenues$41.830 $32.704 (incl. -$5.014 license) $48.502
Cost of sales$3.787 $3.648 $5.543
Gross margin % (derived)90.9% (41.830/3.787) 90.3% (37.718/3.648) 88.6% (48.502/5.543)
R&D expense$41.168 $36.973 $42.308
SG&A expense$38.130 $39.087 $45.947
Net loss per share (basic & diluted)-$0.72 -$0.81 -$0.75
Weighted avg shares (basic & diluted)61.596M 63.059M 63.684M

Notes: Gross margin % derived from product revenue and cost of sales cited above.

Revenue and EPS vs S&P Global Consensus

MetricQ1 2025Q2 2025
Revenue Consensus Mean ($M)*$40.161*$43.637*
Actual Revenue ($M)$32.704 $48.502
Surprise ($M)-$7.457+$4.865
EPS Consensus Mean ($)*-$0.694*-$0.6625*
Actual EPS ($)-$0.81 -$0.75
Surprise ($)-$0.116-$0.0875

Note: Values marked * are from S&P Global.

Geographic Revenue Mix

MetricQ4 2024Q1 2025Q2 2025
U.S. revenue ($M)$31.7 $24.5 $32.0
International revenue ($M)$10.1 $13.2 $16.5
U.S. % of product revenue76% 65% 66%
International % of product revenue24% 35% 34%

KPIs

KPIQ1 2025Q2 2025
Gross-to-net (U.S.)—83.9%
Cost of sales (% of net product revenue)—11.4%
Reimbursed patients QoQ growth (global)+14% vs Q4 2024 ~+12% QoQ
Specialty pharmacy inventory days on hand (U.S.)<10 days; $8.3M decrease in inventory impacted revenue ~10 days; shipments exceeded dispensed by ~$0.5M
Cash, cash equivalents & short-term investments$314.5M (as of 3/31/25) $291.0M (as of 6/30/25; excludes $189.2M July raise; includes $40M LG Chem payment)

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
Non-GAAP Operating Expenses ($M)FY 2025$285–$315 $285–$315 Maintained
SG&A ($M, non-GAAP basis)FY 2025$135–$145 $135–$145 Maintained
R&D ($M, non-GAAP basis)FY 2025$150–$170 $150–$170 Maintained
Liquidity runwayRollingInto 2027 (pre-offering) ≥24 months post July offering Updated framing

Definition: Non-GAAP Operating Expenses exclude stock-based compensation and fixed consideration related to in-licensing .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Setmelanotide in Acquired HOQ4: Phase 3 data expected Q2 2025 ; Q1: TRANSCEND met primary endpoint (-19.8% placebo-adjusted BMI) and filings on track for Q3 Filings on track for Q3; consistency across age/sex highlighted Advancing to regulatory submission
Bivamelagon (oral MC4R)Q4: Phase 2 enrollment completed ; Q1: topline expected Q3 Phase 2 met primary endpoint (-9.3% at 600mg; -7.7% at 400mg) and tolerability consistent; planning Phase 3 path Positive efficacy; preparing Phase 3
RM-718 (weekly MC4R)Q4: Part C enrollment planned ; Q1: Part C enrollment in 2H 2025 First HO patient enrolled in Part C; timing now more likely data into 2026 Progressing; timelines pushed
Commercial execution (BBS)Q4: Solid sales; U.S. label expanded to age 2 Continued prescriber growth and younger patients onboarding; steady new starts Sustained growth trajectory
International expansionQ4: Partnerships (Turkey), expanding access >20 countries reimbursed; early HO access in France/Italy; named-patient sales in multiple countries Broadening footprint
Liquidity/financingQ4: ATM raised ~$75M; runway into 2027 Upsized equity raise $189.2M; ≥24-month runway Strengthened balance sheet

Management Commentary

  • CEO: “We are on track to complete U.S. and European regulatory filings in Q3... we’re very well capitalized following our recent oversubscribed $189,000,000 raise” .
  • CFO: “Global revenue for the second quarter was 48,500,000... U.S. 66% ($32M), ex-U.S. 34% ($16.5M). Gross-to-net for U.S. sales was 83.9%; cost of sales 11.4% of net product revenues” .
  • North America EVP: “We continue to see solid growth in new prescriptions... preparing to launch IMCIVREE in hypothalamic obesity, pending FDA approval” .
  • International EVP: “IMCIVREE is now available... in more than 20 countries outside the U.S., including early access for HO in France and Italy” .

Q&A Highlights

  • Prader-Willi Phase 2: CEO characterized as exploratory with “a legitimate fifty-fifty” probability; target meaningful BMI loss ≥5% at 1 year per FDA obesity guidance; aiming for 10–20 patients by year-end .
  • HO prevalence: Company more confident in upper bound of 5,000–10,000 in U.S., informed by claims analyses and field validation; potential update at Sept. 24 “Commercial Readiness” event .
  • RM-718 timeline: Enrollment underway; unlikely to share data in 2025; more likely in 2026 .
  • Bivamelagon Phase 3 design: Will seek to leverage historical controls and earlier readouts if regulators permit; 600mg targeted dose; formulation work for tolerability .
  • Off-label HO use (U.S.): Minimal “handful” thus far; payers remain strict to label in rare diseases .

Estimates Context

  • Q2: Revenue beat by $4.86M (Actual: $48.50M vs Consensus: $43.64M*), while EPS missed by $0.0875 (Actual: -$0.75 vs Consensus: -$0.6625*) — bold beat on revenue; EPS miss [Q2 consensus and actual]* .
  • Q1: Revenue miss largely reflected unusual -$5.014M license revenue adjustment and U.S. specialty pharmacy inventory dynamics (actual total revenue $32.70M vs consensus $40.16M*) .
  • Estimate implications: International HO early-access momentum and U.S. demand suggest upward revisions to outer-quarter revenue; EPS may remain pressured near-term by higher SG&A/R&D and rising stock comp .

Note: Values marked * are from S&P Global.

Key Takeaways for Investors

  • Commercial inflection: Strong sequential and YoY revenue growth, with balanced U.S./ex-U.S. mix and expanding prescriber base in BBS .
  • Regulatory catalyst: sNDA/Type II variation filings for acquired HO expected in Q3; if approved, HO launch could steepen growth vs BBS ramp .
  • Pipeline depth: Bivamelagon oral data de-risks second MC4R asset; RM-718 weekly program advancing, albeit data likely in 2026 .
  • Financial posture: $291.0M cash and investments at Q2-end, plus $189.2M net from July offering, provides ≥24-month runway through multiple milestones .
  • Modeling: Raise revenue trajectory for 2H25 on international HO access and U.S. momentum; maintain higher OpEx and stock comp assumptions; EPS leverage contingent on HO approval and scale .
  • Stock drivers: Regulatory acceptance/approval timing, HO launch readiness event on Sept. 24, Phase 2 Prader-Willi readout, and Phase 3 design clarity for bivamelagon .
  • Risk checks: Non-cash interest and royalty accretion, payer behavior, and stock comp sensitivity to share price could create near-term EPS variability .