Thank you for standing by. Welcome to the Rhythm Pharmaceuticals Fourth Quarter and Fiscal Year 2021 Financial Results 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]. As a reminder, today's program may be recorded.

I would now like to introduce your host for today's program, David Connolly with Rhythm Pharmaceuticals. Please go ahead..

Thank you, and good morning. I'm David Connolly, Head of IR and Corporate Communications here at Rhythm Pharmaceuticals. For those of you participating via conference call, the accompanying slides are available and can be controlled on the Events section of the Investors section on our Web site at ir.rhythmtx.com.

This morning, we issued a press release that provides fourth quarter and year-end 2021 financial results and a business update, which is also available on our Web site. As listed on Slide 2 is our forward-looking statement.

I'll remind you that this call will contain certain 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 factors, including those discussed in our most recent annual report on file with the SEC.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent dates. We specifically disclaim any obligation to update such statements. On Slide 3, there's a list of today's speakers. We're all here today in Boston.

David Meeker, Chair, President and Chief Executive Officer, is here. Linda Shapiro, our Chief Medical Officer; Yann Mazabraud, our Executive Vice President, Head of International; Hunter Smith, Chief Financial Officer; and Jen is also here for Q&A. She’s Executive Vice President, Head of North America. And with that, I'll turn the call over to David..

Thank you, Dave, and good morning, everybody. Thank you for tuning in this morning. So we're really pleased to report out another strong quarter, wrapping up what was an incredibly important year for Rhythm. And today, we'll take you through some of the more recent highlights which are captured on Slide 5.

First and foremost, as we continue our preparations for BBS launch, and hopefully most of you have had a chance to review or see or tune in to our event about two weeks ago where we heard from Mary Morris, a caregiver and mother of two children with Bardet-Biedl Syndrome, and I'll speak a little more about Mary's story in a moment.

And we also heard from two of the experts, Dr. Haws and Dr. Conroy. And that session gave us all I think a much stronger sense of both the challenges faced by individuals and families living with BBS as well as how the experts view this community coming together and the ultimate opportunity for setmelanotide.

As you know, we heard recently from the FDA requesting some additional analyses. No new data was required, but additional analyses all of which we felt were good, strong, supportive over the overall file and perhaps, ultimately a better way of looking at the data. So no issue there.

But it did come with an additional three-month delay on our PDUFA date, which is now set for June 16. We also indicated in our recent communication that we made the strategic decision to remove Alström syndrome from the file in Europe.

This was based largely on a calculation that we didn't want to prolong the review in Europe, and there was a risk that engaging more around the Alström opportunity that might do that. Also, strategically, I think as we look at market access opportunities in Europe, it's advantageous to go in a layered way.

I think going to the authorities with the combination of BBS and Alström made it a little more of a complicated file. So again, from a very strategic standpoint, we decided to withdraw Alström at this time from our European application. There's no change to our plans for the U.S.

Second, you're going to hear from Yann Mazabraud today about our international, and I have come to understand, believe, I spent time in Europe that if you can get it right internationally in a rare disease opportunity, and most specifically in Europe, you can pretty much get it right anywhere.

It's some of the more challenging healthcare systems in the world, and you'll hear from Yann about exciting progress in that sphere. We're also very pleased with our U.S. commercial experience to-date. I'll spend one slide on that, but it's going as predicted and laying the foundation for our BBS launch.

And finally, you'll hear from Linda as she takes us through a couple of different programs that we're excited about, meaning they are progressing well. We have a number of milestones met with a number of these trials now underway. And again, she'll speak to that in a little more detail. Next slide, number 6.

So this is a picture of Mary Morris and her family, her two children, Ashley and Carly.

And again, if you have a chance to listen in, what we heard during that session is just the incredible challenges that individuals living with Bardet-Biedl Syndrome and their families face as they deal not only with obesity, but they deal with the underlying cause, the genetically-driven central defect which causes the increased hunger and folks, this is hyperphagia.

This is not the hunger that you and I know. And again, when you listen to individuals who are suffering or living with somebody suffering from it, you begin to understand. I don't think we can fully understand if you don't experience yourself, but you begin to understand that this is not what you and I experience when we miss a meal.

We heard yesterday at our company-wide meeting from a caregiver who told the story of her family and their son's challenges of living with Bardet-Biedl Syndrome. It was unique, of course, different in a sense, completely different individual and family, but the nature of that -- she spoke for an hour.

And literally 55 minutes of the hour was focused on the hyperphagia and the challenges of living with hyperphagia. The consequence, the obesity, the weight gain, the other factors, of course, were important, but what is so striking here is that this is a different disease.

These are different diseases from what we see in patients who are living with general obesity. So again, you can hear more about that if you tune into our session. Slide number 7 just highlights again the progress or how we think about the frame for our BBS preparation.

So first is understanding the unmet medical need, which I just spoke to, the importance of the hyperphagia. But also the rapid weight gain and severe obesity which occurs early. An incurring fact that it occurs early means that the complications of obesity come with it and they start early. And so the cumulative effect over a lifetime is much greater.

The solution, growing confidence in the solution which is setmelanotide I think is a targeted therapy addressing the MC4 receptor, melanocortin through a pathway which governs hunger and energy expenditure. The story is not completely in the numbers. The numbers are important. The amount of weight loss is important. The scales are important.

But as you listen to the stories, you get a much better sense of how in fact a drug like setmelanotide can change the overall picture. And finally, we spoke about preparations for launch. And I feel really good about that.

A number of us, we have a highly experienced team here led by Jennifer Chien and a number of people that both she and I have worked with over the years as well as some new people to us who come from other deeply experienced backgrounds.

And that's what it takes I think to be successful in a rare disease are individuals with an entrepreneurial mindset and the ability to problem solve in a customized way.

We've made great progress and I'll speak a little more about that in the next slide in terms of building this community and helping more and more patients come to diagnosis and, as I said, organize the overall opportunity. So next slide, number eight. Now we spoke on the call about 350 plus individuals who have been identified.

We spoke about the process of identifying those individuals which consisted of going to physicians where we had a strong understanding that they were caring for an individual with Bardet-Biedl Syndrome. The goal of those visits were to connect in, to validate and confirm that in fact they were still following that patient.

And so that represents one part of this group, the identified and diagnosed group. We also know that there's a large number of patients out there who are diagnosed today but may not be actively engaged in the system. That's another opportunity. As we've done genetic testing, the genetic testing, our current panel of 80 genes.

It includes 23 genes for Bardet-Biedl. And we know the hit rate, when you do screen an individual with a history of early onset obesity and hyperphagia, Bardet-Biedl is on the order of 1.5% of those individuals will come back biallelic for Bardet-Biedl gene.

Now that doesn't mean that they will meet the diagnosis for Bardet-Biedl, but that does create a roadmap to somebody who's probability of having Bardet-Biedl may be slightly higher. And so again, falling in this suspected category, and is always in rare disease by far the largest part of the population is undiagnosed. It is a syndrome.

It has advantages in the sense that if you can connect the dots, you have a better chance of making a diagnosis. But you don't connect those dots if you haven't seen one in a reliable way. And you can look at something that's obvious to an expert as a non-expert and you just miss it.

And so as a result, many of these patients are on this prolonged diagnostic odyssey where their ability to get a diagnosis despite some classic parts of the presentation, they may see 5 to 10 different physicians before somebody puts all it together and says, you may have Bardet-Biedl Syndrome.

So we feel good about the 350 plus patients we talked about. The fact that the PDUFA date has been pushed out by three months doesn't change anything. Foundationally, everything remains the same. And we'll continue those efforts and really look forward to June 16, when we will hopefully be able to move into a commercialization phase.

Next slide, number 9. So as I said, we're really pleased with where we are in terms of our initial commercial experience and we reported 3.2 million in revenues for 2021 with 1.8 million in the last quarter. As or more importantly is what we've learned. Logistics are in place. Contact and interactions with payers is going well.

And the practice, one of the most important things is we bring up our patient services group and we have the opportunity to interact directly with patients who have consented, and so they want to be in contact with Rhythm for all the services we can provide.

It gives us greater insights into how we can best support this population, both in terms of disease education, what they can expect, the onboarding as they start therapy and what they can expect from therapy, and just again, general support in the rare disease world that they can't always get from the healthcare system itself.

And finally, on Slide 10, I just want to remind you all that we announced in December our partnership with RareStone for the opportunity in China, really excited about that. It's hard to do -- maybe not so hard to do the deal, but I think it's hard to find the right partner.

And as we've interacted over the past two months, our confidence that we've got the right partner in RareStone is growing. We're completely aligned from a cultural standpoint, from a philosophical standpoint. They're highly experienced, having taken a couple of different products through the regulatory process.

And they are well on the way with filings related to Rhythm's opportunity itself. And we're quite hopeful that in that exercise, they will be in a position to be participants in our Phase 3 effort, the EMANATE trial specifically and contribute to that.

So with that, I'd like to turn it over to Linda Shapiro, our CMO, who will take you through our regulatory and clinical update.

Linda?.

Great. Thank you very much, David. Let's begin on Slide 12. So as David provided an update on the regulatory efforts relative to Bardet-Biedl syndrome and Alström syndrome, I intend to focus on our robust clinical development efforts. Setmelanotide and Rhythm's approach to rare genetic diseases of obesity is truly unique.

We've known for decades that the MC4 pathway regulates hunger, energy expenditure and consequently body weight, and for just as long as it's been in targeted biopharma companies looking to develop medications to impact it. For setmelanotide, Rhythm has shown we can do just that.

Setmelanotide is the first-ever MC4 receptor agonist that targets the root cause of the debilitating hyperphagia and early onset severe obesity that are the hallmarks of rare genetic diseases of obesity.

In addition to our unique precision medicine setmelanotide, we are undertaking a unique approach to obesity driven by our belief, which is supported by decades of research, that all obesity is not the same.

Yesterday, we recognized Rare Disease Day with an internal employee engagement event featuring a patient caregiver speaker who is truly inspiring, along with some artwork generated through team building exercises to shine the light on rare diseases.

Importantly, for the greater Rhythm community, Rare Disease Day falls at the beginning of Obesity Care Week which is a campaign to increase awareness, education and action on the complexities and chronic nature of obesity as a disease as well as on weight bias and stigma.

And Friday, March 4, is World Obesity Day with this year's theme of Everybody Needs to Act, encouraging all of us to work together to ensure happier, healthier and longer life for everybody.

With that in mind, I'd like to encourage you to check out leadforrareobesity.com, a Web site where the Rhythm community offers educational resources, educates on the importance of genetic testing and share stories. We welcome you to join us in leading the effort to provide education and access to treatment for rare diseases of obesity.

And with that, let's move to our clinical development programs, Slide 13. We are reporting updates on several clinical trials today.

In addition to completion of enrollment in the hypothalamic obesity trial, which we'll talk about shortly, today, we announced that the first patient has been dosed in our Phase 3 pediatric trial evaluating setmelanotide in patients aged two to less than six years with obesity due to biallelic POMC, PCSK1 or Leptin Receptor deficiency, all with a clinical diagnosis of BBS with genetic confirmation.

In January, we announced the dosing of the first patients in the Phase 2 DAYBREAK clinical trial, which is evaluating setmelanotide for the treatment of severe obesity and hyperphagia, potentially caused by genetic variants in one or more of 31 genes with strong or very strong relevance to the MC4 pathway.

DAYBREAK is the most comprehensive Phase 2 trial ever initiated in rare genetic diseases of obesity.

Also, in January, we announced the dosing of the first patients in the Phase 3 switch trial evaluating a once-weekly formulation of setmelanotide in patients six years of age and older with rare genetic diseases of obesity who are currently taking the daily formulation of setmelanotide.

And we expect to initiate the Phase 3 EMANATE trial in the first half of 2022. We faced some delays due to COVID and the Omicron surge with our CRO and other vendors. Slide 14. We also have quite a few data readouts coming in the next few months.

Several patients with SRC1 deficiency or SH2B1 deficiency advanced from our exploratory Phase 2 Basket Study to our open-label long-term extension study, and we are looking forward to reporting 12 months data from those patients at a conference this spring.

As a reminder, last year, we presented three months data in patients with SRC1 that showed a mean weight reduction of 7.9% in adult responders and a BMI score reduction of 0.48 in responders younger than 18 years.

In SH2B1, adult responders achieved the mean reduction of 7.2% and there was a mean reduction in BMI Z score of 0.25 in responders younger than 18 years. Also, we look forward to a fulsome presentation of 24-month data in patients with Bardet-Biedl syndrome. Dr.

Bob Haws presented a preview of the BBS data last month with data from 19 patients at 24 months, showing a mean reduction in body mass index from pivotal trial baseline of 14.3%, a mean reduction of body weight from pivotal trial baseline among six patients 18 years of age or older of 14.9%, and a mean reduction in BMI Z score from pivotal trial baseline among 12 patients younger than 18 years of 0.72.

We're also looking forward to presenting to your data for patients with biallelic POMC, PCSK1 or Leptin Receptor deficiency obesity.

Importantly, we expect this data to continue to build the case for long-term therapeutic value of setmelanotide as long-term data we presented to date have shown consistently that setmelanotide achieved sustained meaningful effects. Slide 15. Now let's turn to hypothalamic obesity.

Hypothalamic obesity is a rare acquired form of obesity that develops following injury to the hypothalamic region of the brain that contains the MC4 pathway neurons, and are responsible for controlling physiological functions such as hunger and weight regulation.

Hypothalamic obesity most frequently follows the development of a craniopharyngioma, a rare brain tumor or its treatment by surgical removal or radiation.

Approximately half of patients with craniopharyngioma experienced rapid weight gain and insatiable hunger in the first 6 to 12 months following tumor resection, and ultimately developed severe obesity.

While clinical and preclinical evidence suggests an apparent MC4 deficiency in these patients, the impact of the injury to the hypothalamus and its effect on the MC4 receptor itself remain difficult to ascertain. Currently, therapeutic options are very limited for patients with hypothalamic obesity. Slide 16.

Today, we announced that we completed enrollment in our Phase 2 open-label proof of concept study evaluating setmelanotide in individual's hypothalamic obesity. We enrolled 18 patients older than six years in this study.

The trial consists of 16 weeks of treatment with setmelanotide administered once daily by subcutaneous injection, including an initial dose titration period.

The primary endpoint is the proportion of patients with 5% or greater reduction in BMI from baseline after 16 weeks of setmelanotide treatment compared to a historic control of less than 5% in this patient population.

We're fortunate to have one of the country's leading key opinion leaders of hypothalamic obesity as a principal investigator for this trial, Dr. Christian Roth of the Endocrine Division of Seattle Children's Hospital. We're looking forward to sharing preliminary data from this trial in the middle of this year.

And with that, I'll turn the call over to Yann for an update on international. .

Thanks, Linda, and good morning, everyone. As most of you know, it is crucial to be in Europe and in other key international markets to build a successful rare disease company. Over the last 18 months, we've made a lot of progress building out our international organization.

We're now 20 people, with most of the position being across EU4 plus the United Kingdom and also for position in four other regions of country with strong potential, namely the Netherlands, the Nordics, Turkey and Argentina.

We are highly skilled and a very engaged team, relentlessly working closely with the main European centers of excellence and their regional networks to increase the awareness and drive diagnosis, engaging and partnering with local payers and providing operational support for Rhythm's robust clinical operations, as Linda just described for you.

Before I talk to you about our market access highlights, I want to say a few words about the European rare disease landscape and how both the patients we serve and Rhythm will benefit from it. In the last 20 years, I've had the privilege to launch and commercialize more than 10 rare disease drugs in Europe, in Latin America and in the U.S.

And the European rare disease ecosystem is by far better organized than any of the others.

More than 20 years ago, European countries began a very well structured approach to rare disease, beginning with rare disease national plans with dedicated budget and National Centers of Excellence, leading to better diagnosis and care for patients with rare disease.

Then we saw the advent of the European rare disease networks, ultimately leading to increased expertise and diagnosis acceleration.

Specifically for the rare genetic disorder affability [ph], we are extremely lucky as a company to leverage more than 30 years of research and clinical excellence in many large university hospitals in the most important European cities.

Before us, before Rhythm, there were already patients with rare genetic disorders over the [indiscernible] diagnosis. It has accelerated and increased since we started many clinical trials back in 2014.

And there are now more than 100 patients diagnosed with biallelic POMC, PCSK1 or LEPR deficiency obesity being cared for in three European centers of excellence.

Another example, in France where the French HAS and the National Reference Center for rare genetic disease of obesity introduced last summer formal guidelines for the diagnosis and management of patients with rare genetic disease of obesity. Next slide.

As you can see on this timeline, we've made tremendous progress in the international markets since Q3 2020 from submitting our Market Authorization Application for IMCIVREE in POMC, PCSK1 and LEPR on July 2020, followed by the European and United Kingdom authorization in July and September of 2021. We have been very busy.

We have engaged very early with the most important European HTA bodies, which is without any doubt the number one key success factor in terms of market access.

And today, I'm happy to report many significant successes across Europe, and more importantly of first commercial sales which are expected in Germany and France in the second quarter of this year. Next slide.

And just before to give you some details about these two countries, I am proud to say that there is a genuine excitement about IMCIVREE in Europe and on this line, I'm very proud to report that IMCIVREE has been highlighted two weeks ago in the EMA's 2021 edition of its Human Medicines Highlights and listed as one of the eight drugs with an outstanding contribution to public health within a total of 92 positive opinions last year.

Next slide. So Germany is, as you know, the largest and most important country in Europe from a healthcare business point of view. In Germany, drugs classified as lifestyle drugs, which includes those designed to effect weight loss, smoking cessation, hair loss are not eligible for reimbursement.

Today, we are excited to announce that the German Federal Joint Committee, or GB-A, excluded IMCIVREE from its lifestyle work for POMC, PCSK1 or LEPR deficiency obesity.

Its first ever exclusion marks an important recognition that in theory is designed to treat rare genetic disease that manifests as obesity and that this group of disease is distinct from general obesity.

With this exemption status, IMCIVREE will now be eligible for national coverage and reimbursement, and we are looking forward to first commercial sales in Germany in the second quarter of 2022. Next slide. France now.

Last month, on the 19th of January, so five weeks ago, the French Haute Autorité de Santé, or HAS, granted paid early access for IMCIVREE for patients with POMC, PCSK1 or LEPR deficiency obesity, which means that any obesity specialist in France can now prescribe for genetically confirmed POMC, PCSK1 or LEPR patients six years ago.

This is a very strong recognition of the important medical need on the value of setmelanotide but also a testament to strong support coming from the obesity and rare genetic communities and KOL, which we enjoy in France. Next slide. We will have more pending commercial status to report in the coming months.

In 2021, we have submitted from POMC, PCSK1 or LEPR [indiscernible] plus the United Kingdom plus the Netherlands plus Israel, and we have already started to work [indiscernible] for Bardet-Biedl syndrome. You just heard about Germany and France. Initial feedback from Spain and Italy are very positive.

And in the UK, following the selection of highly specialized technology which is by the way a very high bar to reach, we've had so far very positive interactions with NICE and are on time for market access. Next slide. Last but not least, the [indiscernible] Bardet-Biedl syndrome indication in Europe.

We are expecting a CHMP approval in the second semester of this year. The estimated European prevalence is 2,500 patients. And here again there are a lot of patients already diagnosed, more than 1,500 actually.

And here I would like to say that we are in a very good place in the most important European countries, while opening new horizons in other key countries around the globe with a high sense of privatization and focus. Now I would like to turn the call over to Hunter to review our fourth quarter and full year 2021 financial results. .

Thank you, Yann. Turning to Slide 26, as David mentioned at the start of the call, we were pleased to report product revenue of 1.8 million in the fourth quarter of 2021, an increase of 80% over the third quarter. For the full year 2021, which is effectively three quarters of sales, revenues were 3.2 million.

All revenue came from sales of IMCIVREE in the United States. There were no revenues during the comparable period of 2020. Loss from operations was 50.9 million in the quarter, an increase of 15 million over the comparable quarter of 2020. For the full year 2021, loss from operations was 170.1 million, an increase of 33.5 million over the prior year.

For both periods, these increases were due to increases in both clinical trial activity as well as higher headcount across our research and development, commercial and G&A functions.

We expect our operating expenses to continue to increase during 2022, due to costs associated with our expanding clinical development efforts as well as commercialization activities related to potential IMCIVREE launch in BBS and ongoing efforts across Europe.

Our share count was 50.3 million basic and diluted shares and common loss per share was $0.85, an increase of $0.06 over the fourth quarter of 2020. And for the full year, our share count was 49.6 million basic and diluted shares and loss per common share was $1.40, a decrease of $1.64 over the full year 2020.

We concluded the year in a strong financial position with cash, cash equivalents and short-term investments of 295 million, which we believe will be sufficient to fund Rhythm's operations into the second half of 2023. And now, I'll turn the call back over to David for concluding remarks. Thank you..

Great. Thank you, Hunter. So I hope what you're taking away from this initial part of the presentation is that we feel great about 2021, but we're even more excited as we look ahead to 2022. The number of milestones, Linda took us through. Some of them have already been achieved with initiation of a number of these trials.

We're looking forward to some additional data readouts, which again it's obviously not in a position to predict but these are exciting questions. How will we do in the hypothalamic obesity world or MC4 receptor deficiency world? So again, we look forward to reporting those results from those studies in and around the mid year.

Also, we'll have the long-term data that we will continue to roll forward as we collect more data on those patients with biallelic deficiencies, genetic variants and those patients who we have studied in our existing ongoing Basket Study and have rolled into the long-term extension.

And finally, the BBS world, as we've highlighted and will continue to highlight, this remains an incredibly strong focus for Rhythm. It's extremely important that we get this right. There's a big unmet need. We think we have a meaningful solution. And again, feel good about our preparations to date for that.

So with that, we'll turn it back to the operator and open it up for questions..

Certainly. [Operator Instructions]. Our first question comes from the line of Phil Nadeau from Cowen and Company. Your question please..

Good morning. Thanks for taking our question and congratulations on the progress. First question on the BBS launch.

Can you discuss in a bit more detail what you can do between now and the June PDUFA to identify patients and physicians who could be amenable to consider it?.

Yes. Thanks, Phil. So Jennifer? Jen is joining us..

Thanks for the question. Although we were disappointed just in terms of the news of the delay, I will say that a lot of the work that we are doing right now until approval would be similar just in terms of the engagement that we are doing currently.

So as David mentioned, there are various different areas that we have opportunities in terms of one, validating the number of patients that were within our sphere already through the work that was done by our field teams and MSLs on ground, that work is ongoing.

In addition, there are several other opportunities in terms of one, really finding the BBS patients that have already been diagnosed and are lost in this system. And we have very targeted ways to go about that activity. And two, then finding and diagnosing and expediting the diagnosis of patients who yet have not yet found a diagnosis.

So a lot of those activities and engagement with physicians are ongoing, and we will also support an excellent launch as we move forward..

That's very helpful..

Go ahead, Phil..

Sorry, David. You go ahead..

No. I was just going to build on that. Referring you back to -- Jennifer and the team took everybody through it in a little more detail of the different tools that they're using, which including our genetic screening and an exercise working with IQVIA on ICD-10 coding and algorithmically finding. So there's a number of things that we can do.

In a rare disease world, this never stops. You continue. You don't saturate a market in a sense. You don't reach full penetration ever. I think it's an endless journey of continuing to increase awareness, and these activities will over time continue to bear fruit. Back to you, Phil..

Perfect. That's very helpful. Same questions on the Phase 2 data in hypothalamic obesity.

Can you discuss a bit what would be considered proof of concept there? How much weight loss versus changes in hyperphagia would you need to see to progress development?.

Linda?.

Sure. Thank you for that question. So similar to our other programs, demonstrating a clinically meaningful improvement in weight or body mass index, or BMI Z score would be adequate to demonstrate that proof of concept, and that's why we've designed the trial and set up a primary endpoint..

Perfect. That's helpful. And then last question is on Germany. I think in the press release you mentioned that the exclusion from the lifestyle list is a one-year exclusion.

Did I interpret that correctly? And if so, does that decision have to be revisited every year, or is there a point at which it becomes a final decision that is perpetual?.

Thank you. No, it's not a one-year exclusion. It’s exclusion for life..

Perfect. Thanks for taking our questions..

Thank you. Our next question comes from the line of Derek Archila from Wells Fargo. Your question please..

Hi. This is Adam [ph] on for Derek. Thank you for taking our questions. I have just a few for you this morning.

Do you believe the FDA requested additional analyses because they are questioning the efficacy in Bardet-Biedl, or is it more a labeling consideration? And is there a possibility that the FDA could complete their review before June?.

Thanks, Adam. So just to clarify on that. So what the FDA requested with analyses which were not part of our pre-specified endpoint. So when we put the file and we put it in as, of course, you always do is based on your statistical analysis plan and your protocol.

And they came back and asked for some which specifically had to do -- driven largely around analyzing the data by less than 18 and greater than 18. Our primary endpoint to analyze the group of patients was 12 and above.

And of course, this introduced a confounding variable that those patients of which there were a number, almost half of the primary analyses group, who were between 12 and 18. And so that group is still growing. And so weight in that case was confounding. So I think what they asked for, we’re fully supportive.

It's how we talked about the data, but these were not pre-specified. So no, I don't think it introduces a risk, if you will, to the overall approval. But I do think the requests that made sense.

In terms of their ability to complete it at an earlier time point, again, if they were focused on this, and we were the only file in front of them, I think for sure they could complete this review in shorter than three months. That said, we're not the only file in front of them.

And so we have little expectation that we're going to get an approval in advance of the pre-specified June 16 date..

That makes sense.

And then I suppose related to my last question, how large is that amended data package?.

Thank you. That's a good question. In reality, it was over 300 pages. That was 100 plus data outputs of cutting the data, as David mentioned, across the age groups, also cross gender with looking at weight, BMI, BMI Z score, every which way you could imagine cutting the data that they asked us to cut the data.

So it was quite a large package and therefore justifies their decision to take three months to review it. The very encouraging news is, no matter how we cut the data and looked at it, it was all supportive of the same thing. So there wasn't a subgroup by any of those cuts where setmelanotide did not demonstrate a clinically meaningful improvement.

So that was very encouraging. And now it's just a matter of time for FDA to review all those data that they requested..

Okay. Thank you very much..

Thank you. Our next question comes from the line of Joseph Stringer from Needham & Company. Your question please..

Hi. Good morning. Thanks for taking our questions. Two from us.

One, just given the recent requests from FDA on BBS and Alström, just curious if that's changed your thinking or design of the Phase 3 EMANATE trial in any way just in terms of data analysis there? And secondly, on the diagnosed BBS patients who may not be in the system or identified at an academic or medical center, what's the reasons for why these diagnosed BBS patients are not sort of part of this system? Is it just that they had a less severe phenotype or these are sort of older patients that have kind of gone to sort of live with the disease? And it does make up a significant portion of the BBS population and maybe more specifically, what are the specifics around sort of capturing these potential patients? Thanks for taking our questions..

Yes. Thanks, Joe. So Jennifer will take your second question on the BBS diagnosis. With regard to the FDA and whether this recent communication changes our plans for EMANATE? No, there's no change. This was a set of requests, which were very specific to our somewhat unique trial design, which incorporated BBS and Alström. We analyze them together.

And as I explained, we have the age greater than 12 issue. So they were very specific to the existing file. So no change to EMANATE.

Jennifer?.

So on the second question, I just wanted to make maybe a clarifying point. I think similar to many different rare diseases, there's certainly a large pool of patients that have not yet gotten to a diagnosis, but there also may be patients that are diagnosed but may not be visible to the company.

So for us, that's where it really lies because we have had field teams on ground, really educating different positions and interacting with them and also trying to understand if they do have a BBS patient on hand.

However, through those efforts, they may not have gotten to all of the physicians who have BBS patients on hand, because our efforts were focused initially on [indiscernible]. And some of these patients may be in the hands of other specialties, including PCPs and GPs as well.

The mechanism though -- one of the mechanisms that we are using just in terms of trying to identify those additional patients is although there's not a specific BBS ICD-10 code, there is a code where BBS is one of several indications.

And the ability to use different claims to try to identify HEPs [ph] that more likely has a BBS patient, because of the symptoms is one targeted way of really going about and trying to educate the right physician and interact with them. And then, once again, try to understand if they have an already diagnosed patient under their care. .

And maybe Jennifer just kind of one -- other part of the question was, do you think these patients are sitting out there because they have a less severe form, or they're just equally severe and unrecognized?.

Yes. So I think that it could -- it does not necessarily mean that they're less severe. I think that in the case of different diseases where there are no therapeutic options, they may have been more persistent in terms of trying to identify the appropriate options in terms of managing their care.

But over time, as they've gone to physician to physician and realize that there isn't anything effective, they may have been less persistent because there are just no therapeutic options. So the potential availability of the therapy [indiscernible] may provide or hope in terms of engagement and opportunity from that perspective..

Thanks, Jennifer..

Thanks, Joe.

Next question?.

Thank you. Our next question comes from the line of Michael Higgins from Ladenburg Thalmann. Your question please..

Thanks, operator. Good morning, guys. Thanks for taking some questions this morning. My questions I guess are really focused on the upcoming data here before midyear. In hypothalamic obesity, it's not genetically driven.

So the outcomes that you're expecting with these would be different from the previous data set that you had before, maybe in terms of hyperphagia or weight loss? Thanks..

Linda?.

Thank you. That's a great question. So you're correct. Although the etiology is not genetic, it's acquired. Presentation is similar. So the outcomes actually are similar, even though the etiology is different.

So we are looking at the changes in weight and the numbers for us similarly, and would anticipate a similar act of setmelanotide in the patient population..

Okay. And a couple quick follow ups from that.

If you could review for us, again, the control arm, I believe you had mentioned historic controls, what you're expecting for that? And then relatedly to the number of patients we may be seeing in that study set?.

Sure. So in the study, we have 18 patients who've been enrolled. It's an open-label treatment arm. So that control is a historic control. And the space time data of patients who gained weight year-over-year after having the treatment for their craniopharyngioma or whatever tumor and therefore the resultant hypothalamic obesity.

Many of these patients have been tracked very closely since the diagnosis of their tumor and their treatment. And so we have natural history on them. And then the intervention of setmelanotide and we're looking at the change in that trajectory curve as well as the absolute change of the treatment period..

So am I hearing their control is -- this is kind of a self control based on their own natural history, not in the group of hypothalamic obesity patients?.

No. No, that's just an additional layer. So the historic control is the opposite to these patients, but we are able to get an additional layer up to the individual as well..

I appreciate it..

Michael, maybe I just want to kind of add. It’s acquired, as Linda said, and it's a much better organized defined community. And so there is more information out there in that sense and there's been a number of big unmet medical need.

Again, if you look into that as we obviously are doing, a number of things have been tried, none with really significant medical effect here. So a large unmet medical need. We'll see how we do here. But this is clearly a group that's presenting with impairment in this pathway, consistent presentation.

And therefore the hope that a drug like setmelanotide can make a difference.

Next question?.

Our next question comes from the line of Jeff Hung from Morgan Stanley. Your question please..

Hi. Thanks for taking the questions. Of the over 350 BBS patients that Rhythm has identified, how many of them are in the CRIBBS registry? And then I have a follow up..

Jennifer?.

So the 350 patients that have been identified have really been through the Rhythm specific effort. We at this point of time do not know or have access to the physicians or patients that are in the CRIBBS registry. So I wouldn't be able to outline how much overlap there is between CRIBBS versus the patients that we have identified..

Okay, understood. And then in the past, you've talked about the potential launch in BBS as a potentially slow ramp.

Now that you've identified the 350 patients, what are your expectations for how long it might take to treat those patients once you have approval on BBS? Are there any constraints or gating factors on why they can't all be treated in relatively short order? Thanks..

Yes, Jeff, I think you're taking those comments from comments I've made in a number of different conversations. I wouldn't characterize it necessarily as a slow ramp. I'd characterize it as a characteristic rare disease ramp.

And by that I just mean that if you have a well organized community, a large indication, write a script and somebody goes to a local CVS and picks it up. But that's a very different setting than the world that we live in. We need to get the whole system working.

As I pointed out, we have physicians who are perhaps writing for the first time a prescription for a drug at a rare disease price point, a $300,000 plus drug. We have a reimbursement process, which invariably requires a prior authorization.

In a number of cases, patients will need to go through appeal, not necessarily because they were judged as not worthy. It's just that the system automatically says no. And then you go back and you educate and get the approval through. So these are the factors that cause the start-up to be quite lumpy.

The additional three months, if you will, of course continues to put us in a stronger and stronger position since that the building of that community that more patients were putting up their hand and wanting to go on therapy. Jen referenced you back to these stories, Mary's story. You can hear the story we heard yesterday at our All Hands meeting.

These are individuals who need therapy today. And soon once the drug is approved, we'll continue to put pressure on the system to respond. So I'm not going to project. It's very difficult to project exactly what that means in terms of patient numbers over the first 6 to 12.

But our confidence in where this is going, the opportunity here continues to grow. And we'll be further along in June than we were in March or --.

Great, thanks..

Thank you. Our next question comes from the line of Corinne Jenkins from Goldman Sachs. Your question please..

Yes, good morning. So I think that the approval in BBS in Europe is going to come relatively shortly or kind of around the same time as a lot of those market access decisions you're talking about.

But I'm curious if they apply across the multiple indications?.

Sorry.

Whether the exemption that we got from Germany --?.

So like world market access apply to BBS once you've kind of had those conversations with payers in Europe, does that apply to multiple applications or will you have to go back to them once you have the approval in BBS as well?.

Yes. So the specific question is we're going through presenting the initial approval for the POMC biallelic group, then we'll get BBS. You have to go back again and represent each one of these health authorities the BBS case..

Thank you for the question. Yes, indeed, we have to do that. We have already started, by the way, both from a non-medical need point of view and also a drug point of view. We have started and we are moving forward into filing and then submission..

Corinne, it's an important question. And as Yann said, I'll just reinforce what he just said there is I think the success we've had to date and looking forward the success we anticipate, it is the early interactions and it's the relationships.

And Yann and his team well over a year in advance have been working with these different health technology assessment groups and reimbursement teams within the country. So that's what allows -- we'll be going there with a new indication, but not as a new company or a new set of relationships..

Okay, that's helpful.

And then with respect to the BBS launch and this kind of idea of 350 identified patients even more potentially out there, do you think about how quickly you should be able to drive that patient identification? And what are some of the efforts that are specifically required to help bring additional patients into that identified and undiagnosed population?.

So Jennifer, maybe you can speak a little bit. We've highlighted a few of the things Jennifer just spoke to, including things like the testing. So we're doing broad-based genetic screening in patients who have this history of early onset obesity. BBS is one of the clear causes or drivers of that.

Secondly, we've talked about the algorithmically defined, if you will, ICD-10 coding exercise where we can simply say that larger group, we can narrow down in that. So those are two areas which will continue to generate fresh leads. But Jennifer, maybe you can just speak a little more about the network effects.

And as we reach out and how to get connected with different and you grow from there. It's not random..

Yes. So I would say that there's been one, to the point that David just made leading to specific opportunities for diagnosis. I think that over the years, we've made strides just in terms of becoming much more efficient in our targeted disease education efforts than we were 10 plus years ago. And so hopefully, that is helping.

And I will say that in terms of the various different opportunities that we have outlined in terms of how we are going about our specific disease education efforts for a field perspective, we have identified additional patients through those efforts and they've been encouraging, which was also one of the reasons why we decided to increase our field teams as well to support these efforts and really expedite that patient identification.

So I think the other aspect is once you do get physicians who are educated and suspecting, that can also have a trickle effect in terms of those physicians also being able to continue to identify additional patients along the way.

So it is a trickle effect in terms of our initial education efforts as well as the sustainability for those educated communities to be able to continue to identify patients moving forward as well..

And Corinne, to that point, as Jennifer said, there's a little bit of -- if you build it, they will come. She mentioned earlier, many patients have disengaged from the system because there's nothing there and they're tired of being told to go on a diet. Suddenly there's a therapy and they're reengaged, so they come out.

Second is as we build a community and you identify physicians who have an interest, there's a therapy, there's something to do, they decide they want to make this a little bigger part of their overall practice.

That's the building they will come and that news begins to circulate through the community and they say, doctor so and so has a special interest, maybe you should go see that person. And so again, these are the networking kind of effects that as you go and they’re a bit exponential, hopefully it starts maybe a little bit slow.

But as you get it going, this becomes a very important driver of the overall process. .

And maybe going back to a question that was asked is in terms of severity and such, I do think that it is indeed the case that people who over time may get disheartened because of the lack of therapeutic options.

And going back to a comment that we made in an earlier call, a lot of the patients that we have within our sphere, a lot of the patients that are within the sphere of the CRIBBS are younger, under 18 years of age.

So there's still a lot of adults that likely have been diagnosed, that are also in need of therapeutic options to be able to control and treat their disease..

And the percentage of patients in the CRIBBS who are under 18?.

So the percentage of patients that were under 18 was 80% in the CRIBBS registry..

Thank you, Jennifer.

Corinne, any other questions?.

That's all. Thank you very much..

Thank you. [Operator Instructions]. Our next question comes from the line of Tazeen Ahmad from Bank of America. Your question please..

Good morning. David, can you give a little bit more color about what you mean by the metrics will be like a rare disease launch? Now you are an expert on rare disease launches, no doubt. But in this world, there appear to be quite a wide array of qualities of launches.

So we're following an HAE launch right now that's going much better than people had expected. But we're also looking at other launches for other rare diseases, GHD, et cetera, which people are expecting to be slower.

So where would you kind of comp the genetic obesity launch that you're managing and will continue to expand upon if there is to another rare disease just so that we have a better sense of what ramp expectations could look like? That's my first question.

And then secondly, in a real world setting for BBS, what would you expect the discontinuation rate to be with users? And based on your conversations with physicians, how long do you think a doctor would keep a patient on drugs before deciding if it's working or not? Thank you..

Tazeen, thank you and thanks for helping organize my answer to your first part of the question. So a, it is hard to fully or specifically define these because a lot of unknowns. But I think as you framed it, so HAE, hereditary angioedema, that's a population with existing therapies. It's been very well organized.

So if you're entering into that world today, you have the benefit of coming in on the back of all the work that's been done previously. Patients are identified. What to expect from therapies there. Treaters are in place. So that for sure if you have a compelling offering is a world where you could have a rapid uptake in a rare disease sense.

Cystic fibrosis, another example of a very well organized community. There's newborn screening. Patients are diagnosed early. There's well established centers of excellence around the world. Again, you bring a therapy, compelling offering into that group, rapid uptake in a relative sense.

The other groups that are worse, I think BBS is in that other group. We’re the first therapy in. And in a disease which has all of the classic elements here and have no attention, nothing to do about disengagement, as Jennifer highlighted over time, and so we have to build it. So yes, we are going to be in that group. I'll give you one other example.

Again, as you know coming out of Genzyme, the lysosomal storage disease world, those were diseases that when they first launched looked more like BBS or worse. In the sense that fewer patients identified, maybe not all of the signs and symptoms that BBS has -- a patient with BBS has which gives them, if you will, an advantage in getting diagnosed.

And so they started slowly. Subsequent offerings that came in after that world had been built and was well established had the potential for a much more rapid ramp. So I would measure it based on sort of obviously your starting point and the degree of organization within the community. So yes, we're in a bit more of a desert here.

But in a relative sense of those that are starting fresh, I going to say, having 350 plus, and I'll put the emphasis on plus, having 350 plus patients as a starting point in U.S. only, Europe much better organized and many more to start with. That's pretty good.

So I'm expecting us to do better than the others, but it's still going to be lumpy and it will [indiscernible]. The second part of your question is on real world discontinuation rates here, we're still getting our arms around this. Clearly not every patient responds in exactly the same way.

But I have to say what we're hearing over and over again is weight is not necessarily the best measure of response. And so some patients may lose very significant amounts of weight. Other patients may not be that overweight.

And we heard a story again yesterday that was told where the patient's family with just incredible discipline was managing the caloric intake. And so that patient's total weight was they were overweight or obese, but clearly not as great as it might be if they lived in an unrestricted environment.

That said, the hyperphagia that the child and the family were living with was devastating. And so they may not demonstrate so much change in weight from baseline because they were already so tightly controlled, but the opportunity to transform their life as much was equally great.

So I think the hyperphagia is the variable that is in many ways going to dictate the continuation rate. We'll lose people for many different reasons. Again, some related to the drug side effects, some unrelated to the drug. So I can't give you a number.

But I can tell you that I am optimistic or increasingly optimistic that there's a number of factors which will cause the patient to adhere. Remember, when they go off the drug and we've seen this in our trials where we had a randomized withdrawal in our POMC group, the hunger came back very quickly. You've heard this anecdotally as well.

And so there's a reminder that your drug was doing something. You go off, you feel it. You may want to go back on in that setting. So again, things that give me hope that we may have reasonably good compliance..

Thank you. Next question is a follow up from the line of Michael Higgins from Ladenburg Thalmann. Your question please..

Thanks, guys. For the follow up here, just looking ahead and to data coming up in the first half where we see initial data from Phase 2 in MC4 patients in the hypothalamic as well as the long-term data, just looking for some patient numbers. Can you share that with us at the time? Thanks..

Linda?.

Yes.

So the question is about the patient numbers in each of those groups, is that --?.

In general. We have a number reporting out there. So just maybe the hypothalamic obesity number, which we highlighted and then MC4 which we haven't shared, but we can give you a general sense. .

Right. So there's 18 patients in the hypothalamic obesity group. As we mentioned, the long-term data in Bardet-Biedl syndrome and that was presented by Dr. Haws has 19 patients at 24 months. We're all in the range of this, roughly a dozen patients plus or minus in each of these cohorts that we're anticipating reporting later this year..

I appreciate the color. Thanks, guys..

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to David Meeker for any further remarks..

Okay, great. Well, thanks to everyone again for tuning in and for your questions, and we look forward to updating you on our progress as we go through the year. It's going to be an exciting year. Thank you..

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day..