Let's get started. Good afternoon, everybody. I am Tazeen Ahmad. I'm one of the Senior SMID Biotech Analysts here at Bank of America. It's my pleasure to introduce my next presenting company, Rhythm Pharmaceuticals. Sitting right here next to me on stage is President, Chair, and CEO David Meeker. David, thanks so much for flying out from Boston to see us. Yeah, thank you, Tazeen. Am I good live? Yeah. Can you turn it on? Turn it on? Turn it on? I think it should be. Yeah. Yeah. Okay, perfect. Now everyone can hear you. Maybe we could start off with a little bit of an overview of Rhythm. For those who may not be as familiar with the company, just give us an overview of the platform, some of the recent key milestones, and then we can go into some future catalysts. Sounds good. So Rhythm, we're focused on this melanocortin-4 pathway, which is the pathway in our brain, the hypothalamus, which tells us that we're full. So the satiety signal and the patients we're trying to help are patients who have impaired signaling through that pathway. And if signaling is impaired through that pathway, you have a decrease in this alpha-melanocyte-stimulating hormone. And our drug, setmelanotide, is an analog of that hormone. So in our simplest view, we're hormonal replacement for a group of patients that have the defect. Our first approvals, so we have an approved drug in this space, were for three extremely rare, they were genetic defects, but the populations were extremely rare, tens of patients. We actually didn't put a sales force in the field, but we did launch the drug and the like. Our next approval was also for a genetic disorder, which is Bardet-Biedl syndrome, by definition syndrome, so multiple manifestations, more complex genetic background but impaired signaling. Again, same basic approach to that patient group. So that's been launched since June of 2022. So that's one. Then two, as a company from the very beginning, which is our sort of philosophy in approaching rare diseases, is you want to think globally. We've been thinking globally from the beginning. You develop your drugs globally, which is one of the most valuable things you can do to get established in a market. So we have an international organization, and we're gradually building out our European presence and have made good progress. The drugs are approved for those indications. We have revenues coming in. What really got people excited about that is a good foundation. As I said, this ultra-rare opportunity in Bardet-Biedl syndrome is just good, solid starting point. But what got people excited was hypothalamic obesity, which was a bit of a surprise because biologically it wasn't so clear that this drug would work and that the problem with that disease was impairment in the pathway. What that disease is, is kids predominantly, but they grow into adults, patients with benign tumors. So benign brain tumors that tend to grow in between the pituitary and the hypothalamus. It turns out they injure the hypothalamus, and more specifically, they injure this pathway. And so we ran a phase II, which had extraordinarily positive results. We'll probably talk more about that. But what was most surprising, not just was the degree of weight loss, which everybody's very focused on, of course, but was the consistency of the response, which told us that biologically we seem to be correcting something that's fundamental to the biology of that problem. So that's in phase III now, and we'll be reading out that phase III study next year. So that's probably the biggest milestone that people are focused on. And then the two other pieces about Rhythm, there's other genes in the pathway, and we're investigating 4 of those in a phase III trial now, 4 independent phase III trials for those 4 genes. And from a lifecycle management standpoint, we have next-generation programs for weekly injectable. Our current therapy is a daily injectable. And we also in-licensed a molecule from LG Chem in January of this year, which is a daily oral. Okay. Thank you for the summary of the company, and maybe we can go into some details. Let's maybe spend a couple of minutes focusing on the commercial opportunity right now. BBS, as you mentioned, is the bigger of the indications that you have current approval for. Can you talk to what's the type of timeline for a patient to be found, pitched the idea to by a physician, and when that patient might actually get the drug in hand? Because I think that's something that still is evolving, and we'd be curious to get your thoughts on where it is now and where it could go. Yeah. So I don't have a specific answer to that in terms of the timeline because I don't know it. But the reason I don't know it is, and what's amazing about, at least it was amazing to me about Bardet-Biedl syndrome is, and I've been in rare diseases for much of my career, these patients present with obesity and hyperphagia. Hyperphagia is this severe preoccupation with food, hunger, and the like. The problem is that the healthcare system does not recognize hunger as a pathology, right? We all get hungry, and so therefore it's not a problem. And so they're very focused on obesity. And the problem with obesity is it's prevalent. Everybody knows what obesity is. Doctors are the worst, right? We know what to do with it. We know it's your fault, or we know diet and exercise. Now maybe it's a GLP world. But the point is that they're not seeing that initial presenting sign or symptom as a clue to a genetic disease necessarily. So our biggest challenge and the patient's biggest challenge we actually don't I don't think of us as selling a drug. Our sales reps aren't out there promoting. The biggest contribution we can make is getting patients to a diagnosis, which is your question. And that is exactly like Bardet-Biedl is just a classic rare disease where they see on order 5-10 specialists before they get a diagnosis. It's all a matter of having the luck of seeing a specialist who's heard of it, seen it before, and connects the dots. And it's a world—it's syndromic. So there's multiple clues. And if you know what you're looking for, it's obvious. The reality is in medicine, and particularly, I think, increasingly in our world, physicians are busy. The system isn't set up. The most obvious clues get missed, which is why they're on this endless journey. That's number one. Number two, when they do get a diagnosis, because there's nothing to do for them specifically, they go from their specialist back to their primary care. The world we're trying to source patients from, some of them continue to sit with their specialists and peds endos and the like, and we're very focused on that world. But many of them are, as I said, back with their primary care, internal medicine primary. Some of them may be with this rising number of obesity specialists, for example, trying to help them manage it. But that's not a world that we can reach by knocking on doors. Again, it's just classic rare disease. So you have to find other ways to connect with these populations through patient organizations, through non-direct personal promotion and the like. In 2024, things are getting increasingly sophisticated. So that helps rare diseases get to a diagnosis earlier. But sorry, long answer. I'll shorten it. We think there's about 4,000-5,000 patients in the U.S. with Bardet-Biedl syndrome. The majority, which is the case for virtually every rare disease of this nature, are undiagnosed. So we work our way through, but each quarter we have to do the work. You're out there. And again, we're not promoting or selling necessarily. We're out there trying to help this patient get to a diagnosis. Once they do, then there is this whole process of, A, the patient's got to get to come to grips with the fact that they have a chronic disease, a lifelong chronic disease. No, there is no cure. There is a treatment that can help you, and this is what it is. It's a daily injectable. It has some side effects. And so there's a whole process. It's not like you go into the doctor and you walk out with your script and you fill it the next day. I mean, there's often a lot of discussion and getting people used to this idea that, yes, it's a severe disease, and yes, there is a treatment, and yes, you're going to have to commit to it and the like. So those are all barriers to getting to that treatment. Right. So part of the reason I asked you the question was to get a better sense of how the company thinks about guiding to sales. That's not an easy thing to do. This alone seems like a challenging aspect of it. But what else about launching into these diseases, as you're learning them, do you think makes it a bit challenging to provide any kind of yearly sales guidance to analysts, for example? Yeah, it's a great question. Tazeen and I have discussed this multiple times. And we don't guide. And we don't guide because we have our internal estimates, but we don't know. And if you look at any rare disease, when they start to smooth out is once numbers, any number, once it gets big enough. And part of the reason, when you're global and you begin to have multiple countries that are contributing and the like, and I spent 20+ years at Genzyme, and I can tell you on products that had a 10-year history, so you would think after 10-year-plus history, you would know exactly sort of what you could predict from any given market and the like. And I can tell you it's absolutely unpredictable, meaning that you might think, "We're going to find X from the U.S., and we would be way off the U.S., but we'd be surprised by what came in from the Middle East." And the key to smoothing it out is that you have a global presence. And for any particular quarter, if you're following and marking lines, that's what smooths it out. In the beginning, and I've used the word lumpy, and it's inherently lumpy because there's elements of this that do not lend itself to a quarter. And you can do a ton of work and have very few patients come in, and the next quarter, whatever, that harvest, and they suddenly go through. I mean, there's just elements that disrupt this. What you do have with this kind of rare disease opportunity is you have it for a long time. And so I can't tell you how fast we're going to get there, but I could speak to with reasonable confidence what you might ultimately end up. So you've talked about, for the current indications, that you think that this could be anywhere from $300 million-$500 million opportunity for the company. And for the reasons you said, hard to say when it would get there. Right now, it looks like you're roughly on a $100 million run rate or so for this year. What do you think needs to happen in order for that run rate to meaningfully speed up from here? Yeah, great question. So it's, unfortunately, not necessarily a resource-responsive. So you could say, "Well, let's double the size of the sales force, and we'll just get there twice as fast." It doesn't work that way. So you just try to be smart about it. And as I said, for us, it's not, and we try to help the world that's watching us, to get off the quarter-by-quarter focus on this because it's not really the right question. The right question, I think, is, "What is the longer-term opportunity, and do you have confidence you can get to the longer-term opportunity?" We can debate the timing, but how do you have confidence that you can get to the longer opportunity is, do you believe in the epidemiology numbers? And I think about rare diseases in many different ways, but maybe there's two buckets. One is you have a rare disease opportunity where you're struggling to find the patients, and you're inflating, or you're trying to generate numbers that make it seem like a real business opportunity, but you're having trouble finding them. And I can tell you, if you're having trouble finding them in the beginning, you're not going to find them any more easily at year five. Conversely, if you have an opportunity where you are finding patients regularly in the beginning, that's a pretty good marker that you're going to continue to find those over time. And so I think we're in that bucket for Bardet-Biedl syndrome, which is we're finding patients very reliably, very consistently, number one. Number two, the system's working. And two years ago, I didn't have the same level of confidence, right? An obesity drug, priced at a rare disease price point, was the system going to pay, and were the docs going to write scripts and the like? Very reassuringly, that's all working. Doctors are writing scripts. Payers are paying. And they're paying because they're not seeing it as an obesity drug per se. They're seeing it as the only approved therapy for this rare disease, which it is, and it works. One other aspect that we've noted in our checks with key opinion leaders is that it's a rare disease drug, and it's priced as a rare disease drug. There is still some pushback from payers on reimbursement, even from private payers. How do you think that will evolve over time? Is it just simply that payers need to go through this process with a couple of patients, and then it becomes a lot faster? Or is it something that's going to be more involved? Yeah, I think we know the answer to that. And again, I'm, to be honest, a bit amazed as to literally where we are. So Medicaid, 85% of the lives in the U.S. are covered. So vast majority, I think, for a rare disease drug to be 100% covered by Medicaid is pretty unusual. I mean, there are certain states that are just pretty hard line about that. So we've done incredibly well, and we continue to make progress. The famous last mile will be a little slower and more difficult to get closer to that 100%. But that's a hugely positive part of the story. On the commercial side, the ones that aren't paying are the small self-insured plans. And that's not us. They don't tend to cover rare disease drugs in general. They exclude them or whatever. And again, part of the rare disease playbook is, as a company, you look to take care of everybody. You're not looking just to treat the ones who can pay. So we have a free drug program. It's not insignificant. It's about 20% of our overall scripts right now. Included in that are 10% of the or half of that. 10% is Medicare. And Medicare does not cover obesity drugs. And so for Medicare, they're not looking at us as a rare disease drug. They're just looking at us as an obesity drug. By statute, they can't cover obesity drugs, and so they don't cover you. So we keep working that, and we're in dialogue with Medicare as well. But point being is that there are certain elements that just aren't going to work. So on that point of Medicare coverage, GLPs, I think people have viewed GLPs as a challenge to setmelanotide because they're weight loss drugs, and they cost a lot less. They're not specific to gene mutations, though. But as it relates to Medicare coverage, there's a lot of effort being put into collecting evidence to force Medicare, basically, to start covering GLPs. Wouldn't that be a good thing for Rhythm as well if that were to occur? Great thing. I mean, I think in Medicare, again, the people who sit in decision-making roles in these entities, they want to do the right thing, I mean, "for the right." I mean, they want to help the patient. They're not there just to shut the door, and particularly Medicare. So no, statute has prevented them. And so to the extent that now additional data around the GLPs allows Medicare to begin to amend or modify its policy, that's a bit of an opening of the door. So yes, good thing. Okay. Now, let's talk about HO, which you mentioned a few minutes ago. Relative to some of the dynamics we've talked about for your currently approved indications, can you talk about some of the potential advantages HO would have when it launches, we expect it to launch in a couple of years' time? Yeah. So unlike Bardet-Biedl syndrome, which, as I said, the patient gets diagnosed by a specialist and then ends up perhaps back with their primary care to a large extent, and many patients are not even diagnosed, hypothalamic obesity, because they have a tumor, they get surgery in most cases and/or radiation, they know an otherwise normal individual had a dramatic health event. So it's not like you're born with something you don't know what's going on. Something happened. And then the diagnosis of HO is only about 50%, interestingly, of the patients who have the tumor and go to surgery come out with HO. And that's, by definition, almost for sure, the extent to which how much damage occurs, right? So if you have a small tumor and minimal damage, you're not going to get hypothalamic obesity. But if you injure sufficiently, then you do. So that's about 50% of that population. That's number one. Number two is 80%+ of these patients also injure the pituitary, which means that they need one or more pituitary hormonal replacements. And so by definition, that tends to be a treatment that is managed by specialists. They stay with their endo or peds endo, and so they are in the system. They don't get sent back. And so they're concentrated in a specialist call point, and for the most part, they know what they're doing. So the difference between BBS and HO is if BBS has 4,000-5,000 patients in the US, we think there's probably 5,000-10,000 HO patients. And that's a pretty good number because the numbers around tumor registries and the like give you a very solid feel for the number of patients who may end up with this complication. So the epidemiology is good. They're in a call point with a high rate of diagnosis, a call point that we're calling on and with a high rate of diagnosis. So it's a very different dynamic than BBS, which, as I said, is just a classic challenging rare disease. You just work at it over decades. And you can think about I didn't draw too many analogies, but there are certain rare diseases which are very organized. I would say the ultimate example is cystic fibrosis, right? I mean, if you have a definitive therapy in the CF world, that's an extremely well-organized world, and you can enter that quickly. HO is not that good, but it's closer to that than it is to the BBS world. Okay. So if you think about the opportunity in HO, we have to talk about the pivotal study that's underway. What is it basically designed to show? What would be good data in terms of weight loss? Yeah. So it's a 120-patient trial, randomized 2-to-1 treatment to placebo over the course of a year plus a 2-month dose escalation period, so 60 weeks in total for the whole trial. The primary endpoint is looking at BMI, percentage change in BMI, because that's what the world looks like. Unlike the GLP world and other obesity medicines who tend to run trials in segments of the population, so they do the adult population, and then they do teenagers, and maybe they get down to kids, this trial will include patients from the age of 4- 60 and above. So you mix it, and that obviously creates some challenges around your endpoint and the like. Why is that okay? It's okay because what we've come to appreciate through the phase II data is that the consistency of the results were so strong, and it didn't matter whether you were a child or an adult and the like, that that endpoint is going to work, number one. Two, the trial is fully enrolled and enrolled quite quickly. And interestingly enough, probably the best biomarker to have some sense of what might happen or what people think is going to happen is that the number of dropouts is single- digits, and we're well into it. So 131 patients dosed single-digit dropouts. And this is in a world where a third of those patients are on placebo. And in this kind of trial, if you're not losing weight or you're not I mean, you might guess that you're on the placebo group, right? And if there was another therapy, GLPs, for example, which you were convinced was going to solve your problem, and these patients are relatively desperate, you would go and get that medicine, and they're not. And even the patients who have dropped out, some of them are staying in the trial to continue to provide their data, which is incredibly helpful from a statistical standpoint so they can get to the end of the trial and be eligible for the drug longer- term. So again, all those are really healthy, I think, overall biomarkers of how things are evolving here. What are doctors telling you in terms of percent weight loss they want to see? Yeah. So what we saw in the phase II trial, it was roughly 15% at 16 weeks. And the 12 patients who we had 12 months stayed on, it was 25%. So those are obviously very good numbers, but it's not really the right question. And we've really worked hard to try to get off of this arms race around percent weight loss and how people compare across because it's apples and oranges. This is a fundamentally different problem than patients with general obesity. And GLPs have been tried in this population, and we gain weight for different reasons. So almost everybody in the patient universe that we're trying to help, many of the patients in that universe could try a GLP and would lose some weight. But the GLPs would not be addressing the underlying defect, which is the satiety signal. So through other mechanisms, you might lose some weight, but you would not have addressed the severe underlying hyperphagia, this pathologic hunger, and the change in energy expenditure, which leads to the problem. So patients with HO, and I think the best summary there is that one of our investigators said about 20% of patients with HO might have some response to a GLP, and the extent of that would be 10% or less. And so it's just biologically different. So your question was, what would be a good outcome here? In a world where nothing works reliably, 5% or greater is good enough to be approved. If we get 5% or greater, we're going to declare victory and go. That would be incredibly disappointing. So what we're expecting from this trial, and we're 99% powered to show a 10% difference, is 10% or greater for sure, but we'll see. How important is the compliance part of the story? Because it's a daily injectable. It's a commitment. Some people also do get the side effect of hyperpigmentation. You've tried to address that by bringing on molecules in your pipeline, which are less frequently dosed and/or oral. But for setmelanotide, for HO, how do you expect compliance to be in the grand scheme of things? Yeah. So with regard to that specific, 5% of the patients discontinue because of hyperpigmentation, so that group and I don't know how that will change. I mean, again, it comes down to the individual patient. The BBS patients are suffering. The HO patients are suffering. So there will for sure be some discontinuations due to hyperpigmentation. But I lost track. What was the other part of that question in terms of? Oh, how are you thinking about compliance and? Oh, compliance. Yeah. It's a daily injectable. We don't have the same insight into compliance as we do to discontinuations. But when you come off this drug, the hyperphagia does come back. And again, we're replacing a physiologic hormone. So when we miss lunch, we're not signaling through this pathway. It's low, and that's why we feel hungry. When we eat a meal, then we begin to signal, and we feel full and satisfied. So there's a reminder to take the drug. So that's one thing that works in favor of keeping people on the drug in a relative way. Now, a daily injectable is far less preferable than an oral, daily oral, I think, which we're developing, or a weekly. So we do think our next generation therapies are going to do a lot toward addressing some of the limitations of the current therapy, setmelanotide. You've talked about reasons why patients drop off therapy, and the most prominent might be that they're not seeing the amount of weight loss that they would like. And so doesn't compliance come into that? If you're not compliant with taking your daily injections, you're not going to lose the amount of weight that you could be losing. And so what are sort of the mitigation strategies that Rhythm employs? You've talked about reminders for patients, but do you have a sense of what percentage of patients who are discontinuing are discontinuing because they're not losing weight, because they're not being compliant? Yeah. We don't know the number that are not discontinuing because of that and that are non-compliant. About 4% are discontinuing because they're not seeing the effect they want to see. And I think you're exactly right that some significant percentage of that group is probably not taking the medicine as they should for whatever reason. So I think those two things for sure go together. So yeah, I mean, compliance, I think we're doing reasonably well for those patients who are otherwise satisfied with the result they're getting. And I think the last thing just in terms of how to manage the patient and what you ask what we do about it is expectation setting is a critical factor here. And societies and physicians are so focused on weight. If the patient isn't seeing the dramatic weight loss, they may not have fully appreciated the change in their hunger, believe it or not. And so part of it is helping patients revisit their day and understand what has changed because they're on their medicine in addition to whatever potential weight loss they've seen. And that exercise, so what do we do internally? So we have 90%+ of the patients' consent to their willingness to talk to Genzyme, to Rhythm. And yeah. Freudian slip. Yeah, Freudian slip, which is an incredibly powerful part of this whole equation. And so that contact with that patient education manager is a critical part. And where the interactions are most intense is in the first part of their treatment, when they just start the treatment and they're learning how to take it. They're learning what to expect. And so you get expectations set in a reasonable way. Okay. For those of you who don't know, David used to work at Genzyme. Yeah, I mentioned that in the, so. Anyway. So do you think that there'll be different discontinuation rate for HO patients versus the currently approved indications? I don't know. I mean, so what would be the factors? So one is they have a greater degree of weight loss. So just from that effect, I mean, that might cause patients to see it differently and stay on it longer. They're going to have some of the same challenges. So we've talked about a 20%-30% discontinuation rate for the Bardet-Biedl syndrome patients. We'll see where this settles out. I wouldn't be surprised if that's, to be honest with you, where we ended up. But there are factors which would say they may be more compliant. Certainly, the patients that we have in our phase II study, which is a very small subset, have been pretty compliant, so. Is there a reason to believe that payers will be putting up less barriers for HO because of the way these patients develop this syndrome? I don't think so. And you mentioned the barriers earlier. I think for any given physician who's writing a script and depending which payer, I mean, there may be a lot of work to do at that individual payer. And increasingly, we've had policies put in place, and patients are going through on a simple prior auth. But there's still a number where there is no policy in place. You may get a no, and we're going through an appeal, first appeal, second appeal, third appeal. And that work has to be done by the physician, and they're busy, and that's painful. So we keep trying to lower those barriers. But that's a work in progress, and it'll be the same for HO. And then before we run out of time on the follow-on compounds, can you just remind us on when we're going to be seeing data on those? Yeah. So the small molecule, daily oral, is starting a phase II now. That's a relatively small, 30-patient-ish trial. And again, our expectation is that in 2025, hopefully in first half, we'll see how quickly that enrolls, and we would have data there. The weekly is beginning a phase I study, but it has 3 parts. So in addition to the single administration, multiple administration, there will be a part C, which will be in hypothalamic obesity. And for both of these programs, it's in hypothalamic obesity. And the big advantage we have with HO is that it's such a sensitive model. And when you're developing a drug, you want quick readouts. You want reliable readouts, and HO is that. So if it doesn't work in HO, we're done. I mean, that's the beauty of it. Hopefully, because it's so sensitive, it'll give us a lot of information, so we'll get a good sense around the dose and how to make the next step and so on. Are there other rare obesities that having an oral would allow you to pursue that you can't currently do with setmelanotide? I don't think so. I mean, the oral, again, there's different. The PK is a little different. Brain penetration is a little different. I mean, there may be some interesting aspects of this, but everything in a preclinical world and the initial phase I data would suggest that it's very similar. And again, we're precision medicine, and so there's nothing about the route of administration of setmelanotide that necessarily limits its applicability in anybody who has the biologic defect. Okay. With that, we're just about out of time. So I will say thank you so much for spending the last half hour with me. Everybody who came into the room, thanks for your time. I hope everybody has a great rest of the session, and thanks.