RHYTHM PHARMACEUTICALS, INC. (RYTM)·Q4 2024 Earnings Summary

Executive Summary

• Rhythm delivered strong Q4 IMCIVREE revenue of $41.8M (+26% q/q), driven primarily by BBS; U.S. revenue was $31.7M (76% mix), +36.2% q/q, with ex-U.S. at $10.1M (24%) . Net loss per share was $(0.72) (vs. $(0.70) in Q4’23) as R&D and SG&A spending increased to advance HO and next-gen MC4R programs .
• 2025 non-GAAP OpEx guidance was introduced at $285–$315M (SG&A $135–$145M; R&D $150–$170M), reflecting HO launch prep and pipeline progress; cash runway extended into 2027 after ~$75M raised under the ATM program .
• Management reiterated Q2’25 topline for Phase 3 HO (dropout rate <10%); real-world adult HO data in France and Phase 2/3 experiences underpin confidence; expect Q1’25 U.S. destock after Q4 channel build .
• Potential stock catalysts: HO Phase 3 topline in Q2’25; pediatric label expansion realized in the U.S. (to age 2+); international access expansion; visibility on next-gen MC4R readouts (oral bivamelagon H2’25; RM‑718 Part C data before year-end 2025) .

What Went Well and What Went Wrong

What Went Well

• Commercial outperformance: Q4 IMCIVREE revenue $41.8M (+26% q/q); U.S. +36.2% q/q with lower discontinuations, switches from free-drug to reimbursed therapy, and late-stage appeal wins aiding growth .
• Regulatory momentum: U.S. FDA expanded IMCIVREE label to age 2+ (Dec 20) and MHRA extended to age 2+ (Dec 3), broadening pediatric access and differentiation versus general obesity .
• HO execution and confidence: Phase 3 readout guided to Q2’25; dropout rate <10%; adult/pediatric split ~50/50; management emphasizes restoration of MC4R pathway signaling biology vs. GLP‑1 analogs .

Quotes:

• “Rhythm delivered solid IMCIVREE global sales growth in the fourth quarter and is poised to drive continued growth in 2025.” – CEO David Meeker .
• “We are entering 2025 well capitalized… extends our cash run rate into 2027 through multiple inflection points.” – CEO David Meeker .
• “Gross to net in the U.S. remained consistent at about 85% for both the third and fourth quarters of 2024.” – CFO Hunter Smith .

What Went Wrong

• Operating losses widened: Non-GAAP OpEx ramp (2025 guide up to $285–$315M) signals heavier spend ahead; Q4 R&D rose to $41.2M (+38% y/y), SG&A to $38.1M (+18% y/y) .
• Q1 seasonality headwind: Expect Q1’25 destocking after Q4 specialty pharmacy inventory build, potentially making Q1 sequentially softer .
• No revenue guidance and consensus visibility limited: Management does not guide revenue; we were unable to retrieve S&P Global consensus for beat/miss analysis at this time .
  • Note: We attempted to pull S&P Global consensus; API request limit prevented retrieval, so estimate comparisons are not included.

Financial Results

P&L snapshot vs prior periods (USD Millions, except per-share and %s)

Notes: CFO cited COGS % of revenue for each period (approximate) . Revenue and operating expense line items per press release/8-K tables .

Geographic mix

Operating and cash KPIs

All figures in USD millions unless noted. Cash balances per press releases; cash use cited by CFO .

Segment/KPI Commentary

• Q4 growth drivers included fewer discontinuations, conversions from free-drug to reimbursed therapy, and late-stage appeal wins; new prescription flow was “consistent” q/q .
• Specialty pharmacy inventory increased in Q4 (part of the >$8M sequential growth), with destock anticipated in Q1 .

Guidance Changes

Definition: Non-GAAP OpEx excludes stock-based compensation and fixed in-licensing consideration .

Earnings Call Themes & Trends

Management Commentary

• Strategy and capital: “We are entering 2025 well capitalized… extends our cash run rate into 2027 through multiple inflection points” .
• Biology and differentiation: “We are replacing a deficit in [alpha‑MSH]… an apples and oranges comparison [to GLP‑1s]” .
• Commercial execution: “Q4…increase in number of patients on reimbursed therapy… fewer discontinuations… switches from free drug… later-stage appeal wins” .
• Financial framing: “For 2025, [we] anticipate ~$285–$315M in non-GAAP OpEx… SG&A $135–$145M; R&D $150–$170M” .

Q&A Highlights

• HO Phase 3 composition and GLP‑1: Adult/pediatric ~50/50; ~25% prior GLP‑1 exposure; continuation allowed if stable; no new weight-loss agents added during trial .
• Q1 destock: CFO expects destocking in Q1 after Q4 inventory build; acknowledges typical Q1 lumpiness with single specialty pharmacy .
• Uptake and payer posture in HO: Expect faster uptake vs BBS given concentrated endocrinology care and higher diagnosis rates, balanced by prior auth and reimbursement scrutiny; early payer feedback encouraging .
• Japan regulatory path: U.S./EU filings based on 120‑pt global cohort; Japan requires 12‑pt cohort at 52 weeks (gates filing timing for Japan) .
• Next-gen readouts: Oral bivamelagon top-line 2H’25; RM‑718 Part C enrollment Q1’25 with data before YE’25; SAD/MAD data likely shared with Part C .

Estimates Context

• We attempted to retrieve S&P Global (Capital IQ) consensus estimates for Q4’24 revenue and EPS and for near-term periods; the API request limit prevented retrieval at this time, so beat/miss versus consensus is unavailable. Management does not provide revenue guidance .
• Given Q4 revenue acceleration (+26% q/q) and 2025 OpEx guidance increase for launch readiness, we would expect models to revisit near-term revenue trajectory (BBS plus incremental international) and higher 2025 OpEx, but formal consensus comparisons are not provided due to unavailability.

Key Takeaways for Investors

• Q4 delivered strong commercial growth with U.S. strength and stable gross-to-net; expect Q1 destock to create near-term revenue lumpiness .
• The HO Phase 3 topline in Q2’25 is the major catalyst; dropout <10% and supportive adult RWD underpin confidence in success .
• 2025 OpEx will step up to fund HO launch prep and pipeline; cash runway now into 2027 reduces financing overhang ahead of readouts .
• Pediatric label expansion to age 2+ in the U.S. adds differentiation and modest volume upside; primary driver remains BBS and potential HO approval .
• International remains a growing contributor (24% of Q4 revenue), with access broadening (U.K., France/Italy early access, Turkey partnership); watch for steady ex‑U.S. adds .
• Next-gen MC4R assets are meaningful optionality (oral and weekly formulations aiming to avoid MC1R-related hyperpigmentation), with first patient-oriented readouts in 2H’25 and late‑’25 .
• Near term, trading setup: Q1 revenue normalization (destock), progressing toward Q2 HO data; medium term, HO approval/launch trajectory and mix shift could be the key stock drivers .

References: All data and quotations sourced from Rhythm’s Q4’24 8‑K and press release , Q4’24 earnings call transcript , and relevant Q4’24 press releases , with Q3/Q2 prior-quarter context from company materials .