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What changed in RHYTHM PHARMACEUTICALS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of RHYTHM PHARMACEUTICALS, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+709 added−691 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-28)

Top changes in RHYTHM PHARMACEUTICALS, INC.'s 2025 10-K

709 paragraphs added · 691 removed · 525 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

208 edited+102 added−64 removed361 unchanged
Biggest changeThe rates of response from Stage 1 of the trial were: ● 30% of patients (12 of 40) with variants in the SEMA3 gene cohort; ● 35.6% of patients (16 of 45) with variants in the PLXNAs gene cohort; ● 56.3% of patients (9 of 16) with variants in the PHIP gene cohort; ● 40% of patients (2 of 5) with variants in the TBX3 gene cohort; ● 30% of patients (3 of 10) with variants in the MAGEL2 gene cohort; and ● 25% of patients (5 of 20) with variants in the SIM1 gene cohort. ​ For those who completed Stage 1, the rates of response of patients who achieved a BMI reduction of greater than 5% from a post-hoc analysis were: ● 44.4% of patients (12 of 27) with variants in the PLXNs gene cohort; ● 61.5% of patients (16 of 26) with variants in the SEMA3 gene cohort; and ● 69.2% of patients (9 of 13) with variants in the PHIP gene cohort. ​ We believe these data and analyses from DAYBREAK provide valuable insight into the MCR4 pathway, and we will continue our work to better understand which gene variants have loss of function and maybe disease causing as opposed to those variants which are benign.
Biggest changeFor those who completed Stage 1, the rates of response of patients who achieved a BMI reduction of greater than 5% from a post-hoc analysis were: • 44.4% of patients (12 of 27) with variants in the PLXNs gene cohort; • 61.5% of patients (16 of 26) with variants in the SEMA3 gene cohort; and • 69.2% of patients (9 of 13) with variants in the PHIP gene cohort.
Our genetic testing programs fuel MC4R pathway research, disease education and awareness and patient finding.
Our genetic testing programs fuel MC4R pathway research, disease education, awareness, and patient finding.
Key features of PWS include an excess weight gain due to a combination of low resting energy expenditure and a severe, constant hyperphagia with onset in early-mid childhood.
Key features of PWS include an excess weight gain due to a combination of low resting energy expenditure and severe, constant hyperphagia with onset in early-mid childhood.
Upon expiration of the term of the agreement, the licensed rights granted to us under the agreement, to the extent they remain in effect at the time of expiration, will thereafter become irrevocable, perpetual and fully paid-up licenses that survive the expiration of the term.
Upon expiration of the term of the agreement, the licensed rights granted to us under the agreement, to the extent they remain in effect at the time of expiration, will thereafter become irrevocable, perpetual and fully paid-up licenses that survive the expiration of the term.
Highlights of these data, as of a cut-off date of March 16, 2021, include: ● Nine of 30 (or 30%) of patients achieved a clinically meaningful response to setmelanotide at three months, as defined by weight loss of 5% or greater from baseline, or for patients under 18 years old, a reduction of at least 0.15 in BMI Z score: ​ o In adult patients 18 years or older, six of 20 (or 30%) achieved 5% or greater weight loss at three months; ​ o In patients younger than 18 years, three of 10 (or 30%) achieved a BMI Z reduction of 0.15% or more at three months. ​ ● Across all enrolled patients, the mean overall weight loss from baseline to three months among patients 18 years and older (a sample of 20) was -4.0% (a standard deviation of 3.3%), and the mean overall BMI Z score reduction from baseline to three months among patients younger than 18 years (n=10) was -0.21 (a standard deviation of 0.23).
Highlights of these data, as of a cut-off date of March 16, 2021, include: • Nine of 30 (or 30%) of patients achieved a clinically meaningful response to setmelanotide at three months, as defined by weight loss of 5% or greater from baseline, or for patients under 18 years old, a reduction of at least 0.15 in BMI Z score: ◦ In adult patients 18 years or older, six of 20 (or 30%) achieved 5% or greater weight loss at three months; ◦ In patients younger than 18 years, three of 10 (or 30%) achieved a BMI Z reduction of 0.15% or more at three months. • Across all enrolled patients, the mean overall weight loss from baseline to three months among patients 18 years and older (a sample of 20) was -4.0% (a standard deviation of 3.3%), and the mean overall BMI Z score reduction from baseline to three months among patients younger than 18 years (n=10) was -0.21 (a standard deviation of 0.23).
Data highlights among patients with BBS (n=32) after 52 weeks of setmelanotide include: ● Fifteen (15) patients ≥18 years achieved a mean (SD) percent reduction in BMI of -9.1% (6.8%; 95% CI, −13.4%, −4.8%); ● Fourteen (14) patients ● Fourteen (14) patients ≥12 years who reported hunger scores achieved reduction of -30.5% in maximal hunger score.
Data highlights in patients with BBS (n=32) after 52 weeks of setmelanotide include: • Fifteen (15) patients ≥18 years achieved a mean (SD) percent reduction in BMI of -9.1% (6.8%; 95% CI, −13.4%, −4.8%); • Fourteen (14) patients • Fourteen (14) patients ≥12 years who reported hunger scores achieved reduction of -30.5% in maximal hunger score.
Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice (GLP) as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes) .
Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes) .
Our review of certain tumor registries and claims data in Japan point to a higher per-capita prevalence and incidence rate of this disease than in Europe and the United States. We estimate there are approximately 5,000 to 8,000 patients in Japan with hypothalamic obesity.
Our review of certain tumor registries and claims data in Japan point to a higher per-capita prevalence and incidence rate of this disease than in Europe and the United States. We estimate there are approximately 5,000 to 8,000 patients in Japan with acquired hypothalamic obesity.
While our projected estimates of the aggregate total addressable population continue to expand with the addition of new genes, the addressable population faces the challenges of a rare disease population. h. As announced on December 6, 2023, during our ‘Update on MC4R Pathway Programs’ event for investors and analysts.
While our projected estimates of the aggregate total addressable population continue to expand with the addition of new genes, the addressable population faces the challenges of a rare disease population. As announced on December 6, 2023, during our ‘Update on MC4R Pathway Programs’ event for investors and analysts.
There is little or no awareness about rare MC4R pathway diseases, and the patients suffering from them are lost in the health care system, with limited educational resources and no effective treatments for their condition.
There is little or no awareness about rare MC4R pathway diseases, and the patients suffering from them are often lost in the health care system, with limited educational resources and no effective treatments for their condition.
Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan if its sponsor can establish that: (1) the product is intended for the diagnosis, prevention or 43 Table of Contents treatment of a life threatening or chronically debilitating condition; (2) either (a) such condition affects not more than five in ten thousand persons in the EU when the application is made, or (b) the product, without the benefits derived from the orphan status, would not generate sufficient return in the EU to justify the necessary investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the medicinal product will be of significant benefit to those affected by that condition.
Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan if its sponsor can establish that: (1) the product is intended for the diagnosis, prevention or treatment of a life threatening or chronically debilitating condition; (2) either (a) such condition affects not more than five in ten thousand persons in the EU when the application is made, or (b) the product, without the benefits derived from the orphan status, would not generate sufficient return in the EU to justify the necessary investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the medicinal product will be of significant benefit to those affected by that condition.
Our preliminary estimate of the prevalence of congenital hypothalamic obesity is in excess of 1,000 patients in the United States with a similar prevalence in Europe, and this is in addition to the prevalence for acquired hypothalamic obesity above.
Our preliminary estimate of the prevalence of congenital hypothalamic obesity is in excess of 1,000 patients in the United States with a similar prevalence in Europe, and this is in addition to the prevalence for acquired hypothalamic obesity.
Our sequencing-based epidemiology estimates show that each of these genetically-defined MC4R pathway deficiencies are considered rare diseases, according to established definitions based on patient populations. Our epidemiology estimates are approximately 4,600 to 7,500 for U.S. patients in initial FDA-approved indications, including obesity due to BBS and biallelic POMC, PCSK1 or LEPR deficiencies.
Our sequencing-based epidemiology estimates show that each of these genetically-defined MC4R pathway deficiencies we are focused on are considered rare diseases, according to established definitions based on patient populations. Our epidemiology estimates are approximately 4,600 to 7,500 for U.S. patients in initial FDA-approved indications, including obesity due to BBS and biallelic POMC, PCSK1 or LEPR deficiencies.
Microscopic analysis showed minimal to moderate increased pigment of the epidermis of the skin of the muzzle at ≥10 mg/kg/doses, and we believe this result is probably species-specific and the result of MC1R stimulation. Chronic toxicology studies in non-human primates (NHP) and rats (39 and 26 weeks, respectively) have recently completed and we believe support long-term dosing in patients.
Microscopic analysis showed minimal to moderate increased pigment of the epidermis of the skin of the muzzle at ≥10 mg/kg/doses, and we believe this result is probably species-specific and the result of MC1R stimulation. We believe completed chronic toxicology studies in non-human primates (NHP) and rats (39 and 26 weeks, respectively) support long-term dosing in patients.
While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing 34 Table of Contents suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
Patents issuing in these patent families will have a standard 20-year term and expire between 2026 and 2045, in each instance provided that all appropriate maintenance fees are paid and not including any patent term adjustment, patent term extension, or supplementary protection certificates that may be available on a country-by-country basis.
Patents issuing in these patent families will have a standard 20-year term and expire between 2026 and 2046, in each instance provided that all appropriate maintenance fees are paid and not including any patent term adjustment, patent term extension, or supplementary protection certificates that may be available on a country-by-country basis.
As of December 31, 2024, we have made $2.3 million of milestone payments to Camurus. In addition, Camurus is eligible to receive tiered, mid to mid-high, single-digit royalties on future sales of the product. The term of the agreement continues until the expiration of the applicable royalty term on a country-by-country and product-by-product basis.
As of December 31, 2025, we have made $2.3 million of milestone payments to Camurus. In addition, Camurus is eligible to receive tiered, mid to mid-high, single-digit royalties on future sales of the product. The term of the agreement continues until the expiration of the applicable royalty term on a country-by-country and product-by-product basis.
Substantially, all of the aggregate payments under the Ipsen license agreement are for milestones that may be achieved no earlier than first commercial sale of the applicable licensed product, and as of December 31, 2024, we have paid $4.0 million in clinical and regulatory milestones and $9.0 million in commercial milestones.
Substantially, all of the aggregate payments under the Ipsen license agreement are for milestones that may be achieved no earlier than first commercial sale of the applicable licensed product, and as of December 31, 2025, we have paid $4.0 million in clinical and regulatory milestones and $9.0 million in commercial milestones.
We are focused on developing our MC4R agonists, including our lead asset setmelanotide, as a precision treatment for certain rare MC4R pathway diseases. In addition to acquired hypothalamic obesity, congenital hypothalamic obesity and PWS, we are evaluating setmelanotide for the treatment of obesity due to variants in one of a number of genes associated with the MC4R pathway.
We are focused on developing our MC4R agonists, including our lead asset setmelanotide, as precision treatments for certain rare MC4R pathway diseases. In addition to acquired hypothalamic obesity, congenital hypothalamic obesity and PWS, we are evaluating setmelanotide for the treatment of obesity due to variants in a number of genes associated with the MC4R pathway.
Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP and adequate to assure consistent production of the product within required specifications.
Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP and adequate to ensure consistent production of the product within required specifications.
In vitro diagnostic medical devices had to comply with the requirements provided for in the Directive, and with further requirements implemented at national level (as the case may be). The regulation of companion diagnostics is subject to further requirements since the in vitro diagnostic medical devices Regulation No 2017/746 (IVDR) became applicable on May 26, 2022.
In vitro diagnostic medical devices had to comply with the requirements provided for in the IVDD, and with further requirements implemented at national level (as the case may be). The regulation of companion diagnostics is subject to further requirements since the in vitro diagnostic medical devices Regulation No 2017/746 (IVDR) became applicable on May 26, 2022.
Moreover, the federal government and individual states in the United States have become increasingly active in developing proposals, passing legislation and implementing regulations designed to control drug pricing, including price or patient reimbursement constraints, discounts, formulary flexibility, marketing cost disclosure, drug price increase disclosure and other transparency measures.
Moreover, the individual states in the United States have become increasingly active in developing proposals, passing legislation and implementing regulations designed to control drug pricing, including price or patient reimbursement constraints, discounts, formulary flexibility, marketing cost disclosure, drug price increase disclosure and other transparency measures.
While obesity affects hundreds of millions of people worldwide, we are developing therapies for a subset of individuals who have hyperphagia, a pathological, insatiable hunger and impaired satiety accompanied by persistent and abnormal food-seeking behaviors, decreased energy expenditure and severe obesity due to diseases such as acquired or congenital hypothalamic obesity, Bardet-Biedl syndrome (BBS) or other diseases caused by impaired MC4R pathway signaling.
While obesity affects hundreds of millions of people worldwide, we are developing therapies for a subset of individuals who have hyperphagia, a pathological, insatiable hunger and impaired satiety accompanied by persistent and abnormal food-seeking behaviors, decreased energy expenditure and severe obesity due to diseases such as acquired or congenital hypothalamic obesity, Bardet-Biedl syndrome (BBS), Prader-Willi syndrome (PWS) and other diseases caused by impaired MC4R pathway signaling.
In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if a second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if a second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs relating to the approved indication or use of patients with the rare disease or condition.
Review and Approval Process Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, including results from preclinical and other non-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the 35 Table of Contents product.
Review and Approval Process Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, including results from preclinical and other non-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product.
Item 1. Busines s Overview We are a global, commercial-stage biopharmaceutical company dedicated to transforming the lives of patients living with rare neuroendocrine diseases. We are focused on advancing our melanocortin-4 receptor (MC4R) agonists, including our lead asset, IMCIVREE ® (setmelanotide), as precision medicines designed to treat hyperphagia and severe obesity caused by rare MC4R pathway diseases.
Item 1. Business Overview We are a global, commercial-stage biopharmaceutical company dedicated to transforming the lives of patients living with rare neuroendocrine diseases. We are focused on advancing melanocortin-4 receptor (MC4R) agonists, including our lead asset, IMCIVREE ® (setmelanotide), as precision medicines designed to treat hyperphagia and severe obesity caused by rare MC4R pathway diseases.
These data were published in the peer-reviewed journal The Lancet Diabetes & Endocrinology in November 2024: ● 83 percent of all patients (10 of 12) achieved ≥ 0.2 reduction in BMI-Z score from baseline to week 52; ● 18 percent mean reduction from baseline in BMI at week 52 (N=12); ● 3.04 mean reduction from baseline in BMI-Z score at week 52 (N=12); and 15 Table of Contents ● The safety profile was consistent with past trials evaluating setmelanotide.
These data were published in the peer-reviewed journal The Lancet Diabetes & Endocrinology in November 2024: • 83 percent of all patients (10 of 12) achieved ≥ 0.2 reduction in BMI-Z score from baseline to week 52; • 18 percent mean reduction from baseline in BMI at week 52 (N=12); • 3.04 mean reduction from baseline in BMI-Z score at week 52 (N=12); and • The safety profile was consistent with past trials evaluating setmelanotide.
While the EU Clinical Trials Directive required a separate clinical trial application (CTA) to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent 41 Table of Contents ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
While the EU Clinical Trials Directive required a separate clinical trial application (CTA) to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition 38 Table of Contents of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial 32 Table of Conten ts if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
The chemical name for setmelanotide acetate is acetyl-L-arginyl-L-cysteinyl-D-alanyl-L-histidinyl-D-phenylalanyl-L-arginyl-L-tryptophanyl-L-cysteinamide cyclic (2→8)-disulfide 13 Table of Contents acetate. Its molecular formula is C49H68N18O9S2 (anhydrous, free-base), and molecular mass is 1117.3 Daltons (anhydrous, free-base). The chemical structure of setmelanotide is: IMCIVREE injection is a sterile, clear to slightly opalescent, colorless to slightly yellow solution.
The chemical name for setmelanotide acetate is acetyl-L-arginyl-L-cysteinyl-D-alanyl-L-histidinyl-D-phenylalanyl-L-arginyl-L-tryptophanyl-L-cysteinamide cyclic (2→8)-disulfide acetate. Its molecular formula is C49H68N18O9S2 (anhydrous, free-base), and molecular mass is 1117.3 Daltons (anhydrous, free-base). The chemical structure of setmelanotide is: IMCIVREE injection is a sterile, clear to slightly opalescent, colorless to slightly yellow solution.
In the United States, the estimated incidence rate for CHI is 1:29,000 to 1:31,000, according to the literature. With the acquisition, Rhythm acquired a suite of assets designed to treat patients with this disease. In our CHI Program, we are focused on identifying 26 Table of Contents and nominating a development candidate to advance into IND-enabling studies.
In the United States, the estimated incidence rate for CHI is 1:29,000 to 1:31,000, according to the literature. With the acquisition, Rhythm acquired a suite of assets designed to treat patients with this disease. In our CHI Program, we are focused on identifying and nominating a development candidate to advance into IND-enabling studies.
As previously disclosed, treatment with setmelanotide resulted in significant weight and hunger reductions after one year of treatment among patients with BBS. The primary endpoint was achieved by 32.3% (95% confidence interval (CI), 16.7%, 51.4%; p=0.0006) of patients ≥12 years old, all 14 Table of Contents of whom were patients with BBS.
As previously disclosed, treatment with setmelanotide resulted in significant weight and hunger reductions after one year of treatment among patients with BBS. The primary endpoint was achieved by 32.3% (95% confidence interval (CI), 16.7%, 51.4%; p=0.0006) of patients ≥12 years old, all of whom were patients with BBS.
The primary endpoint for each substudy is the difference in mean percent change in BMI from baseline to 52 weeks in setmelanotide arm compared to placebo arm. We anticipate reporting topline data in the first half of 2026.
The primary endpoint for each substudy is the difference in mean percent change in BMI from baseline to 52 weeks in setmelanotide arm compared to placebo arm. We anticipate reporting topline data in the first quarter of 2026.
Royalties may further increase to a low, double-digit percent royalty, though such royalty would only be applicable on net sales of bivamelagon in a region if bivamelagon is covered by a composition of matter or method of use patent controlled by LGC in such region and our MC4R portfolio is not covered by any composition of matter or 30 Table of Contents method of use patents controlled by us in such region.
Royalties may further increase to a low, double-digit percent royalty, though such royalty would only be applicable on net sales of bivamelagon in a region if bivamelagon is covered by a composition of matter or method of use patent controlled by LGC in such region and our MC4R portfolio is not covered by any composition of matter or method of use patents controlled by us in such region.
The FDCA alternatively provides three years of non-patent exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, including, for example, new indications or 39 Table of Contents dosages , of an existing drug.
The FDCA alternatively provides three years of non-patent exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, including, for example, new indications or dosages , of an existing drug.
In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. 37 Table of Contents Fast Track designation, Breakthrough Therapy designation, priority review, and accelerated approval do not change the standards for approval, but may expedite the development or approval process.
In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. Fast Track designation, Breakthrough Therapy designation, priority review, and accelerated approval do not change the standards for approval, but may expedite the development or approval process.
In addition, pursuant to Directive 48 Table of Contents 2011/24/EU on the application of patients’ rights in cross-border healthcare, a voluntary network of national authorities or bodies responsible for HTA in the individual EU member states was established. The purpose of the network is to facilitate and support the exchange of scientific information concerning HTAs.
In addition, pursuant to Directive 2011/24/EU on the application of patients’ rights in cross-border healthcare, a voluntary network of national authorities or bodies responsible for HTA in the individual EU member states was established. The purpose of the network is to facilitate and support the exchange of scientific information concerning HTAs.
It is noteworthy that the pattern of effects differed among each of the other MC4R therapies, 23 Table of Contents underscoring the complex physiology of MC4R. With setmelanotide, there has been little, if any, evidence of blood pressure or heart rate changes, preliminarily supporting an important differentiation of setmelanotide from previous MC4R therapies.
It is noteworthy that the pattern of effects differed among each of the other MC4R therapies, underscoring the complex physiology of MC4R. With setmelanotide, there has been little, if any, evidence of blood pressure or heart rate changes, preliminarily supporting an important differentiation of setmelanotide from previous MC4R therapies.
All our efforts and services described above are designed to address the challenges of rare diseases and lay the groundwork for potential future launches, with a focus on scalability. Competition The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.
All our efforts and services described above are designed to address the challenges of rare diseases and lay the groundwork for potential future launches, with a focus on scalability. Competition The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. See “Item 1A.
We believe our deep developmental experience and global commercial presence uniquely position us to develop this molecule with the goal of offering a portfolio of treatment options to patients struggling with hyperphagia and severe obesity enabling the treatment that is right for them. In a Phase 1 trial in healthy overweight adults, bivamelagon demonstrated dose-dependent weight reduction.
We believe our deep developmental experience and global commercial presence uniquely position us to develop this molecule with the goal of offering a portfolio of treatment options to patients struggling with hyperphagia and severe obesity enabling the treatment that is right for them. 23 Table of Conten ts In a Phase 1 trial in healthy overweight adults, bivamelagon demonstrated dose-dependent weight reduction.
Center for Disease Control (CDC) estimates that there are approximately 5 million individuals whose severe obesity had onset between the ages of 2 and 5 years old. The tables below summarizes the estimated prevalence for indications currently approved or under pivotal clinical investigation.
Center for Disease Control (CDC) estimates that there are approximately 5 million individuals whose severe obesity had onset between the ages of 2 and 5 years old. The tables below summarize the estimated prevalence for indications currently approved or under clinical investigation.
Limitations of Current Therapies Although drugs approved for general obesity potentially can be used in patients with obesity and rare MC4R pathway diseases, other than IMCIVREE, all currently available products have limited efficacy and treat symptoms without addressing the underlying biology of MC4R impairment.
Limitations of Current Therapies Although drugs approved for general obesity potentially can be used in patients with obesity and rare MC4R pathway diseases, all currently available obesity products have limited efficacy and treat symptoms without addressing the underlying biology of MC4R impairment.
Pursuant to the license, we have a non-exclusive, sublicensable, worldwide license to certain 28 Table of Contents patents and other intellectual property rights that were licensed by Ipsen from a third-party or that Ipsen may develop in the future to research, develop, and commercialize any of the compounds exclusively licensed by Ipsen pursuant to the license.
Pursuant to the license, we have a non-exclusive, sublicensable, worldwide license to certain patents and other intellectual property rights that were licensed by Ipsen from a third-party or that Ipsen may develop in the future to research, develop, and commercialize any of the compounds exclusively licensed by Ipsen pursuant to the license.
IMCIVREE is approved by the FDA to reduce excess body weight and maintain weight reduction long term in adult and pediatric patients aged 2 years and older with syndromic or monogenic 27 Table of Contents obesity due to BBS or POMC, PCSK1, or LEPR deficiency, as determined by an FDA-approved test demonstrating variants in POMC, PCSK1 , or LEPR genes that are interpreted as pathogenic, likely pathogenic, or VUS.
IMCIVREE is approved by the FDA to reduce excess body weight and maintain weight reduction long term in adult and pediatric patients aged 2 years and older with syndromic or monogenic obesity due to BBS or POMC, PCSK1, or LEPR deficiency, as determined by an FDA-approved test demonstrating variants in POMC, PCSK1, or LEPR genes that are interpreted as pathogenic, likely pathogenic, or VUS.
An NDA for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
An NDA for a Fast Track product candidate may also be eligible for rolling 34 Table of Conten ts review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
The overall ten-year period can be extended to a maximum of eleven years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
The overall ten-year period can be extended to a maximum of eleven years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a 40 Table of Conten ts significant clinical benefit in comparison with existing therapies.
Setmelanotide is distributed in the United States through our specialty pharmacy and in the EU/UK through third-party service providers that deliver the medication to patients. We plan to continue building out our network for commercial distribution in jurisdictions in which setmelanotide is approved.
IMCIVREE is distributed in the United States through a specialty pharmacy and in the EU/UK through third-party service providers that deliver the medication to patients. We plan to continue building out our network for commercial distribution in jurisdictions in which IMCIVREE is approved.
Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports (PSURs). All new MAA must include a risk management plan (RMP) describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.
Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports (PSURs). 41 Table of Conten ts All new MAA must include a risk management plan (RMP) describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.
Our partner CGC Genetics Unilabs conducts the genetic testing for ROAD. This program covers the cost of the test, the kit and shipment. As of the end of 2024, we have collected samples from approximately 100,000 individuals with severe obesity, primarily through our URO and ROAD programs, which now are our primary source of sequencing samples.
Our partner CGC Genetics Unilabs conducts genetic testing for ROAD. This program covers the cost of the test, the kit and shipment. As of the end of 2025, we have collected samples from approximately 120,000 individuals with severe obesity, primarily through our URO and ROAD programs, which now are our primary source of sequencing samples.
These calculations rely on internal and proprietary sequencing data and current estimated responder rates to setmelanotide therapy, and they assume a U.S. population of 327 million, of which 1.7% have early-onset, severe obesity (Hales et al in JAMA – April 2018: Trends in Obesity and Severe Obesity Prevalence in US Youth and Adults by Sex and Age , 2007-2008 to 2015-2016). ​ 10 Table of Contents ​ Approved by the U.S.
These calculations rely on internal and proprietary sequencing data and current estimated responder rates to setmelanotide therapy, and they assume a U.S. population of 327 million, of which 1.7% have early-onset, severe obesity (Hales et al in JAMA – April 2018: Trends in Obesity and Severe Obesity Prevalence in US Youth and Adults by Sex and Age, 2007-2008 to 2015-2016).
The study consists of Part A: single ascending doses (SAD) of RM-718 in healthy participants 18 to 55 years old with obesity; Part B: multiple ascending doses (MAD) of RM-718 in healthy participants 18 to 55 years old with obesity; and Part C: MAD of RM-718 in patients 25 Table of Contents 12 to 65 years old with hypothalamic obesity.
The study consists of Part A: single ascending doses (SAD) of RM-718 in healthy participants 18 to 55 years old with obesity; Part B: multiple ascending doses (MAD) of RM-718 in healthy participants 18 to 55 years old with obesity; and Part C: MAD of RM-718 in patients 12 to 65 years old with hypothalamic obesity.
Drug manufacturers must report such payments to the government by the 90th day of each calendar year. 49 Table of Contents State and foreign laws and regulations restrict business practices in the pharmaceutical industry and complicate our compliance efforts.
Drug manufacturers must report such payments to the government by the 90th day of each calendar year. State and foreign laws and regulations restrict business practices in the pharmaceutical industry and complicate our compliance efforts.
We are leveraging what we believe is the largest known DNA database focused on obesity - with approximately 100,000 sequencing samples as of December 31, 2024 - to improve the understanding, diagnosis and care of people living with severe obesity due to certain variants in genes associated with the MC4R pathway.
We are leveraging what we believe is the largest known DNA database focused on obesity—with approximately 120,000 sequencing samples as of December 31, 2025—to improve the understanding, diagnosis and care of people living with severe obesity due to certain variants in genes associated with the MC4R pathway.
These presentations included analyses that showed setmelanotide achieved clinically meaningful weight loss or BMI Z reduction in 30% (9 of 30) of study participants with obesity due to variants of the SRC1 gene and clinically meaningful weight loss or BMI Z reduction in 43% (15 of 35) of study participants with obesity due to variants of the SH2B1 gene, including 16p11.2 chromosomal deletions.
These presentations included analyses that showed setmelanotide 19 Table of Conten ts achieved clinically meaningful weight loss or BMI Z reduction in 30% (9 of 30) of study participants with obesity due to variants of the SRC1 gene and clinically meaningful weight loss or BMI Z reduction in 43% (15 of 35) of study participants with obesity due to variants of the SH2B1 gene, including 16p11.2 chromosomal deletions.
In addition, under FDA regulations, combination products are subject to cGMP requirements applicable to both drugs and devices, including the QSR applicable to medical devices.
In addition, under FDA regulations, combination products are subject to cGMP requirements applicable to both drugs and devices, including the QMSR applicable to medical devices.
Similarly, our epidemiology estimates for patients with genetic indications who demonstrated an initial response following stage 1 of our Phase 2 DAYBREAK trial is approximately 65,300. All these patients face similar challenges as other patients with rare diseases, namely lack of awareness, resources, tests, tools and especially therapeutic options. We are working to expand access to IMCIVREE globally.
Similarly, our epidemiology estimates for patients with genetic indications who demonstrated an initial response in our Phase 2 DAYBREAK trial is approximately 65,300. All these patients face similar challenges to other patients with rare diseases, namely lack of awareness, resources, tests, tools and especially therapeutic options. We are working to expand access to IMCIVREE globally.
It is 40 Table of Contents also responsible for developing guidance and regulations to clarify the regulation of combination products, and for assignment of the FDA center that has primary jurisdiction for review of combination products where the jurisdiction is unclear or in dispute.
It is also responsible for developing guidance and regulations to clarify the regulation of combination products, and for assignment of the FDA center that has primary jurisdiction for review of combination products where the jurisdiction is unclear or in dispute.
The aforementioned EU rules are generally applicable in the EEA. 45 Table of Contents Regulation of Companion Diagnostics in the European Union In the EU, in vitro diagnostic medical devices were regulated by Directive 98/79/EC (IVDD) which regulated the placing on the market, the CE marking, the essential requirements, the conformity assessment procedures, the registration obligations for manufactures and devices as well as the vigilance procedure.
The aforementioned EU rules are generally applicable in the EEA. 42 Table of Conten ts Regulation of Companion Diagnostics in the European Union In the EU, in vitro diagnostic medical devices were regulated by Directive 98/79/EC (IVDD) which regulated the placing on the market, the CE marking, the essential requirements, the conformity assessment procedures, the registration obligations for manufactures and devices as well as the vigilance procedure.
We may need to engage additional third-party suppliers to manufacture our clinical and commercial drug supplies in the future. In connection with our commercialization of setmelanotide or any future product candidate, we have engaged and could need to engage other third parties to assist in manufacturing and/or supply chain related aspects.
We may need to engage additional third-party suppliers to manufacture our clinical and commercial drug supplies in the future. In connection with our commercialization of IMCIVREE or any future product candidate, we have engaged and could engage other third parties to assist in manufacturing and/or supply chain related activities.
The most common adverse events (AEs) in the primary trial included nausea (61.1%), vomiting (33.3%), skin hyperpigmentation (33.3%), diarrhea (22.2%), and COVID-19 (22.2%). Two patients discontinued due to AEs and a third patient was non-compliant. No new safety concerns were observed during the long-term extension trial.
The most common 15 Table of Conten ts adverse events (AEs) in the primary trial included nausea (61.1%), vomiting (33.3%), skin hyperpigmentation (33.3%), diarrhea (22.2%), and COVID-19 (22.2%). Two patients discontinued due to AEs and a third patient was non-compliant. No new safety concerns were observed during the long-term extension trial.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.
The FDA and other agencies actively enforce the laws and regulations 36 Table of Conten ts prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.
Under the Prescription Drug User Fee Act (PDUFA) guidelines that are currently in effect, the FDA has a goal of ten months from the filing date to complete a standard review of an NDA for a drug that is a new molecular entity.
Under the Prescription Drug User Fee Act (PDUFA) guidelines that are currently in effect, the FDA has a goal of ten months from the 33 Table of Conten ts filing date to complete a standard review of an NDA for a drug that is a new molecular entity.
Under the decentralized procedure an identical dossier is submitted to the competent authorities of each of the member states in which the MA is sought, one of which is selected by the applicant as the reference member state. A MA has an initial validity for five years in principle.
Under the decentralized procedure an identical dossier 39 Table of Conten ts is submitted to the competent authorities of each of the member states in which the MA is sought, one of which is selected by the applicant as the reference member state. A MA has an initial validity for five years in principle.
As such, we are investing in a work environment where our employees feel inspired and included; it is our policy to pursue the best talent and to not make employment (including hiring, promotion, 52 Table of Contents or compensation) or other contracting decisions on the basis of any legally protected characteristics.
As such, we are investing in a work environment where our employees feel inspired and included; it is our policy to pursue the best talent and to not make employment (including hiring, promotion, 49 Table of Conten ts or compensation) or other contracting decisions on the basis of any legally protected characteristics.
While we are focused on commercial access for IMCIVREE for BBS and POMC and LEPR deficiencies, we are working with the broader community of patients and families, physicians, scientists and more to engage with them on the impact of hyperphagia and severe obesity caused by rare MC4R pathway diseases.
While we are focused on commercial access for IMCIVREE, we are working with the broader community of patients and families, physicians, scientists and more to engage with them on the impact of hyperphagia and severe obesity caused by rare MC4R pathway diseases.
Under the terms of the license agreement, we obtained worldwide rights to exploit LGC’s proprietary compound bivamelagon and have assumed sponsorship of two ongoing LGC Phase 2 studies designed to evaluate safety, tolerability, pharmacokinetics and weight loss efficacy of bivamelagon.
Under the terms of the license agreement, we obtained worldwide rights to exploit LGC’s proprietary compound 28 Table of Conten ts bivamelagon and have assumed sponsorship of two ongoing LGC Phase 2 studies designed to evaluate safety, tolerability, pharmacokinetics and weight loss efficacy of bivamelagon.
We have been named to The Boston Globe’s Top Places to Work in Massachusetts list for 2023 and 2024. We believe that our future success largely depends upon our continued ability to attract, hire and retain highly skilled employees.
We have been named to The Boston Globe’s Top Places to Work in Massachusetts list for three consecutive years, in 2023, 2024 and 2025. We believe that our future success largely depends upon our continued ability to attract, hire and retain highly skilled employees.
The publication also included preliminary data from our long-term extension of the Phase 2 study that were disclosed at ObesityWeek ® 2023. These data show patients with hypothalamic obesity (n=12) achieved mean BMI reduction of approximately 26% at one year on setmelanotide treatment. Consistent with prior experience, setmelanotide was generally well tolerated.
The publication also included preliminary data from our long-term extension of the Phase 2 study . These data show patients with hypothalamic obesity (n=12) achieved mean BMI reduction of approximately 26% at one year on setmelanotide treatment. Consistent with prior experience, setmelanotide was generally well tolerated.
Specifically, SRC1 is a transcriptional coactivator that has links 18 Table of Contents to both the leptin receptor and to POMC. When the leptin receptor is activated, SRC1 is activated through a cascade of events that then drives the expression of POMC.
Specifically, SRC1 is a transcriptional coactivator that has links to both the leptin receptor and to POMC. When the leptin receptor is activated, SRC1 is activated through a cascade of events that then drives the expression of POMC.
In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance.
In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and 37 Table of Conten ts distribution, export and import, and post-market surveillance.
Clinical Development to Address Additional MC4R Pathway Diseases We also are advancing a broad clinical development program evaluating setmelanotide, and we are leveraging the largest known DNA database focused on obesity - with approximately 100,000 sequencing samples as of December 2024 - to improve the understanding, diagnosis and care of people living with hyperphagia and severe obesity due to certain variants in genes associated with the MC4R pathway.
Clinical Development to Address Additional Genetically-caused MC4R Pathway Diseases We also are advancing a broad clinical development program evaluating setmelanotide, and we are leveraging the largest known DNA database focused on obesity—with approximately 120,000 sequencing samples as of December 2025—to improve the understanding, diagnosis and care of people living with hyperphagia and severe obesity due to certain variants in genes associated with the MC4R pathway.
The pivotal Phase 3 trial follows positive efficacy results from our 16-week Phase 2 trial, as well as data demonstrating durable and deepening weight loss in patients who transitioned from the Phase 2 trial to our open-label, long-term extension trial.
The pivotal Phase 3 trial followed positive efficacy results from our 18-patient, 16-week Phase 2 trial, as well as data demonstrating durable and deepening weight loss in patients who transitioned from the Phase 2 trial to our open-label, long-term extension trial.
We anticipate nominating a product candidate in 2025. Genetic Sequencing and Patient Finding We continue to expand our sequencing efforts in individuals living with early-onset, severe obesity to support research, patient finding and community building efforts to better understand rare MC4R pathway diseases. Our obesity DNA database contains sequencing data from approximately 100,000 individuals, as of December 31, 2024.
We anticipate nominating a development candidate in 2026. Genetic Sequencing and Patient Finding We continue to expand our sequencing efforts in individuals living with early-onset, severe obesity to support research, patient finding and community building efforts to better understand rare MC4R pathway diseases. Our obesity DNA database contains sequencing data from approximately 120,000 individuals, as of December 31, 2025.
In the key patent families directed to selected peptide-based MC4R receptor agonists, including the composition of matter for setmelanotide, we have 10 issued United States patents and over 225 issued non-United States patents in various jurisdictions.
In the key patent families directed to selected peptide-based MC4R receptor agonists, including the composition of matter for setmelanotide, we have 20 issued United States patents and over 240 issued non-United States patents in various jurisdictions.
Instead, the MHRA will review applications for orphan designation in parallel to the corresponding MA application. The criteria are essentially the same, but have been tailored for the market, i.e., the prevalence of the condition in GB, rather than the EU, must not be more than five in 10,000.
Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding MA application. The criteria are essentially the same, but have been tailored for the market, i.e., the prevalence of the condition in the UK, rather than the EU, must not be more than five in 10,000.
As genetics of obesity remains an emerging 19 Table of Contents field, the vast majority of variants in genes associated with the MC4R pathway are classified as VUS.
As genetics of obesity remains an emerging field, the vast majority of variants in genes associated with the MC4R pathway are classified as VUS.
This may lead to harmonization of the criteria taken into account in the conduct of HTAs between EU member states and in pricing and reimbursement decisions and may negatively affect price in at least some EU member states.
This may lead to harmonization of the criteria taken into 45 Table of Conten ts account in the conduct of HTAs between EU member states and in pricing and reimbursement decisions and may negatively affect price in at least some EU member states.
Certain states also mandate implementation of commercial compliance programs, impose restrictions on drug manufacturer marketing practices and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians.
Certain states also mandate implementation of commercial compliance programs, impose restrictions 46 Table of Conten ts on drug manufacturer marketing practices and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians.
EU laws which have been transposed into UK law through secondary legislation continue to be applicable as “retained EU law”, however new EU legislation such as the EU CTR or in relation to orphan medicines is not be applicable.
EU laws which have been transposed into UK law through secondary legislation continue to be applicable as “retained EU law”, however new EU legislation such as the EU CTR is not applicable in the UK.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn the United States, IMCIVREE is approved to reduce excess body weight and maintain weight reduction long term in adult and pediatric patients aged 2 years and older with syndromic or monogenic obesity due to Bardet-Biedl syndrome (BBS) or pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1), or leptin receptor (LEPR) deficiency as determined by an FDA-approved test demonstrating variants in POMC, PCSK1, or LEPR genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance (VUS).
Biggest changeFollowing the FDA’s approval in December 2024 of the expanded indication for IMCIVREE to include patients as young as 2 years of age, in March 2025, the FDA expanded the scope of the current orphan drug exclusivity for IMCIVREE to provide for seven years of orphan-drug exclusivity for setmelanotide to reduce excess body weight and maintain weight reduction long term in pediatric patients aged 2 years to less than 6 years with syndromic or monogenic obesity due to POMC, PCSK1, LEPR deficiency as determined by an FDA-approved test demonstrating variants in POMC, PCSK1, or LEPR genes that are interpreted as pathogenic, likely pathogenic, or VUS.
Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements and could cause us to fail to meet our periodic reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock.
Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements and could cause us to fail to meet our periodic reporting obligations, any of which could diminish investor confidence in us, which could diminish investor confidence and cause a decline in the price of our common stock.
We do not know whether our planned clinical trials will begin or whether any of our clinical trials will be completed on schedule, if at all, as the commencement and successful completion of clinical trials can be delayed or prevented for a number of reasons, including but not limited to: ● inability to generate sufficient preclinical or other in vivo or in vitro data to support the initiation of clinical studies; ● delays in the completion of preclinical laboratory tests, animal studies and formulation studies in accordance with FDA’s good laboratory practice requirements and other applicable regulations; ● the FDA or other equivalent competent authorities in foreign jurisdictions may deny permission to proceed with our ongoing or planned trials or any other clinical trials we may initiate, or may place a clinical trial on hold or such trial may be suspended; ● delays in filing or receiving authorization to proceed under an additional investigational new drug application, or IND, or similar foreign application if required; ● delays in reaching a consensus with the FDA and other regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials; ● delays in reaching or failing to reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● difficulties in obtaining or maintaining Institutional Review Board, or IRB, and/or ethics committee approval or opinion to conduct a clinical trial at a prospective site or sites; 64 Table of Contents ● since many already diagnosed patients are at academic sites, delays in conducting clinical trials at academic sites due to the particular challenges and delays typically associated with those sites, as well as the lack of alternatives to these sites which have already diagnosed patients; ● inadequate quantity or quality of setmelanotide, RM-718, bivamelagon or other materials necessary to conduct clinical trials, including delays in the manufacturing of sufficient supply of finished drug product; ● challenges in identifying, recruiting and training suitable clinical investigators; ● challenges in recruiting and enrolling suitable patients to participate in clinical trials; ● severe or unexpected drug related side effects experienced by patients in a clinical trial, including side effects previously identified in our completed clinical trials; ● difficulty collaborating with patient groups and investigators; ● failure by our CROs, other third parties or us to perform in accordance with the FDA’s or any other regulatory authority’s GCPs or applicable regulatory guidelines in other countries; ● occurrence of adverse events associated with setmelanotide, RM-718 or bivamelagon that are viewed to outweigh their potential benefits, or occurrence of adverse events in trial of the same or similar class of agents conducted by other companies; ● changes to the clinical trial protocols; ● clinical sites deviating from trial protocol or dropping out of a trial; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; ● selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; ● the cost of clinical trials of our product candidates being greater than we anticipate; ● clinical trials or related non-clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or delay or abandon development of such product candidates; and ● development of antibodies to the drug or adjuvants may result in loss of efficacy or safety events.
We do not know whether our planned clinical trials will begin or whether any of our clinical trials will be completed on schedule, if at all, as the commencement and successful completion of clinical trials can be delayed or prevented for a number of reasons, including but not limited to: • inability to generate sufficient preclinical or other in vivo or in vitro data to support the initiation of clinical studies; • delays in the completion of preclinical laboratory tests, animal studies and formulation studies in accordance with FDA’s good laboratory practice requirements and other applicable regulations; • the FDA or other equivalent competent authorities in foreign jurisdictions may deny permission to proceed with our ongoing or planned trials or any other clinical trials we may initiate, or may place a clinical trial on hold or such trial may be suspended; • delays in filing or receiving authorization to proceed under an additional investigational new drug application, or IND, or similar foreign application if required; • delays in reaching a consensus with the FDA and other regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials; • delays in reaching or failing to reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • difficulties in obtaining or maintaining Institutional Review Board, or IRB, and/or ethics committee approval or opinion to conduct a clinical trial at a prospective site or sites; • since many already diagnosed patients are at academic sites, delays in conducting clinical trials at academic sites due to the particular challenges and delays typically associated with those sites, as well as the lack of alternatives to these sites which have already diagnosed patients; • inadequate quantity or quality of setmelanotide, RM-718, bivamelagon or other materials necessary to conduct clinical trials, including delays in the manufacturing of sufficient supply of finished drug product; • challenges in identifying, recruiting and training suitable clinical investigators; • challenges in recruiting and enrolling suitable patients to participate in clinical trials; • severe or unexpected drug related side effects experienced by patients in a clinical trial, including side effects previously identified in our completed clinical trials; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties or us to perform in accordance with the FDA’s or any other regulatory authority’s GCPs or applicable regulatory guidelines in other countries; • occurrence of adverse events associated with setmelanotide, RM-718 or bivamelagon that are viewed to outweigh their potential benefits, or occurrence of adverse events in trial of the same or similar class of agents conducted by other companies; • changes to the clinical trial protocols; • clinical sites deviating from trial protocol or dropping out of a trial; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; 60 Table of Conten ts • changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; • selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; • the cost of clinical trials of our product candidates being greater than we anticipate; • clinical trials or related non-clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or delay or abandon development of such product candidates; and • development of antibodies to the drug or adjuvants may result in loss of efficacy or safety events.
In addition, on July 10, 2023, we filed with the SEC a prospectus supplement to the prospectus included in the Company’s registration statement on Form S-3ASR filed with the SEC on March 2, 2023, covering the resale from time to time by the holders of the Convertible Preferred Stock of up to an aggregate of 3,124,995 shares of common stock, to satisfy registration rights that the Company granted to such holders in connection with the issuance of the Convertible Preferred Stock.
In addition, on July 10, 2024, we filed with the SEC a prospectus supplement to the prospectus included in the Company’s registration statement on Form S-3ASR filed with the SEC on March 2, 2023, covering the resale from time to time by the holders of the Convertible Preferred Stock of up to an aggregate of 3,124,995 shares of common stock, to satisfy registration rights that the Company granted to such holders in connection with the issuance of the Convertible Preferred Stock.
We have demonstrated statistically significant and clinically meaningful reductions in weight and hunger in Phase 3 clinical trials in obesity due to POMC, PCSK1 or LEPR deficiencies and BBS, and believe we have demonstrated proof of concept in Phase 2 clinical trials in impairments due to a variant in one of the two alleles in the POMC, PCSK1, or LEPR genes (HET obesity), as well as the SRC1 and SH2B1 genes, all genetic diseases of extreme and unrelenting appetite and obesity.
We have demonstrated statistically significant and clinically meaningful reductions in weight and hunger in Phase 3 clinical trials in obesity due to POMC, PCSK1 or LEPR deficiencies, BBS and hypothalamic obesity, and believe we have demonstrated proof of concept in Phase 2 clinical trials in impairments due to a variant in one of the two alleles in the POMC, PCSK1, or LEPR genes (HET obesity), as well as the SRC1 and SH2B1 genes, all genetic diseases of extreme and unrelenting appetite and obesity.
However, like any emerging technology, AI presents its own set of risks, many of which are not yet known or fully understood. For example, AI algorithms may have inherent flaws, and data sets could be insufficient, low-quality, or biased. Additionally, inappropriate or controversial data practices by data scientists, engineers, and end-users could compromise results of AI processes.
However, like any emerging technology, AI presents its own set of risks, many of which are not yet fully understood. For example, AI algorithms may have inherent flaws, and data sets could be insufficient, low-quality, or biased. Additionally, inappropriate or controversial data practices by data scientists, engineers, and end-users could compromise results of AI processes.
However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements, or a combination of these approaches.
Our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements, or a combination of these approaches.
Patient enrollment for our current or any future clinical trials may be affected by other factors, including: ● size and nature of the patient population; ● severity of the disease under investigation; ● availability and efficacy of approved drugs for the disease under investigation; ● patient eligibility criteria for the trial in question as defined in the protocol; ● perceived risks and benefits of the product candidate under study; ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved or future product candidates being investigated for the indications we are investigating; ● clinicians’ willingness to screen their patients for genetic markers to indicate which patients may be eligible for enrollment in our clinical trials; ● delays in or temporary suspension of the enrollment of patients in our planned clinical trial due to public health emergencies; ● ability to obtain and maintain patient consents; ● patient referral practices of physicians; ● the ability to monitor patients adequately during and after treatment; 63 Table of Contents ● proximity and availability of clinical trial sites for prospective patients; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion, including as a result of health conditions or being forced to quarantine, or, because they may be late-stage cancer patients or for other reasons, will not survive the full terms of the clinical trials.
Patient enrollment for our current or any future clinical trials may be affected by other factors, including: • size and nature of the patient population; • severity of the disease under investigation; • availability and efficacy of approved drugs for the disease under investigation; • patient eligibility criteria for the trial in question as defined in the protocol; • perceived risks and benefits of the product candidate under study; • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved or future product candidates being investigated for the indications we are investigating; • clinicians’ willingness to screen their patients for genetic markers to indicate which patients may be eligible for enrollment in our clinical trials; • delays in or temporary suspension of the enrollment of patients in our planned clinical trial due to public health emergencies; • ability to obtain and maintain patient consents; • patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • proximity and availability of clinical trial sites for prospective patients; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion, including as a result of health conditions or being forced to quarantine, or, because they may be late-stage cancer patients or for other reasons, will not survive the full terms of the clinical trials.
See above, under the heading “ Our common stock is subordinated to our Convertible Preferred Stock .” Unfavorable global political or economic conditions could adversely affect our business, financial condition or results of operations. Our results of operations could be adversely affected by general conditions in the global political system, economy and in the global financial markets.
See above, under the heading “Our common stock is subordinated to our Convertible Preferred Stock.” Unfavorable global political or economic conditions could adversely affect our business, financial condition or results of operations. Our results of operations could be adversely affected by general conditions in the global political system, economy and in the global financial markets.
Market acceptance of IMCIVREE will depend on a number of factors, including, among others: ● the ability of IMCIVREE to provide chronic weight management in patients with obesity caused by certain genetic deficiencies affecting the MC4R pathway and, if required by any competent authority in connection with the approval for these indications, to provide patients with incremental health benefits, as compared with other available treatments, therapies, devices or surgeries; ● the complexities of clinical diagnosis and/or genetic testing, as needed, for certain of IMCIVREE’s indications, including obtaining and interpreting clinical or genetic results that support patient treatment with IMCIVREE; ● the relative convenience and ease of SC injections as the necessary method of administration of IMCIVREE, including as compared with other treatments for patients with obesity; ● the prevalence and severity of any adverse side effects associated with IMCIVREE; ● limitations or warnings contained in the labeling approved for IMCIVREE by the FDA or the specific obligations imposed as a condition for marketing authorization imposed by other equivalent competent authorities in foreign jurisdictions, particularly by the EC; ● availability of alternative treatments, including a number of obesity therapies already approved or expected to be commercially launched in the near future; ● our ability to increase awareness of these diseases among our target populations through marketing and other cross-functional efforts; ● the size of the target patient population, and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the ability of IMCIVREE to treat the maximum range of pediatric patients, and any limitations on its indications for use; ● the strength of marketing and distribution support and timing of market introduction of competitive products; ● publicity concerning IMCIVREE or competing products and treatments; ● pricing and cost effectiveness; ● the effectiveness of our sales and marketing strategies and our ability to increase awareness of IMCIVREE through marketing efforts; ● our ability to obtain sufficient third-party coverage or reimbursement; 78 Table of Contents ● the willingness of patients to pay out-of-pocket in the absence of third-party coverage (including in the case of named patient sales, which can be a costly and uncertain source of revenues) and the willingness of healthcare providers to obtain reimbursement, which can be challenging and may factor into their decision to prescribe IMCIVREE; and ● the likelihood that competent authorities in foreign jurisdictions may require development of a REMS or other specific obligations as a condition of approval or post-approval, may not agree with our proposed REMS or other specific obligations, or may impose additional requirements that limit the promotion, advertising, distribution or sales of IMCIVREE.
Market acceptance of IMCIVREE will depend on a number of factors, including, among others: • the ability of IMCIVREE to provide chronic weight management in patients with obesity caused by certain genetic deficiencies affecting the MC4R pathway and, if required by any competent authority in connection with the approval for these indications, to provide patients with incremental health benefits, as compared with other available treatments, therapies, devices or surgeries; • the complexities of clinical diagnosis and/or genetic testing, as needed, for certain of IMCIVREE’s indications, including obtaining and interpreting clinical or genetic results that support patient treatment with IMCIVREE; • the relative convenience and ease of SC injections as the necessary method of administration of IMCIVREE, including as compared with other treatments for patients with obesity; • the prevalence and severity of any adverse side effects associated with IMCIVREE; • limitations or warnings contained in the labeling approved for IMCIVREE by the FDA or the specific obligations imposed as a condition for marketing authorization imposed by other equivalent competent authorities in foreign jurisdictions, particularly by the EC; • availability of alternative treatments, including a number of obesity therapies already approved or expected to be commercially launched in the near future; • our ability to increase awareness of these diseases among our target populations through marketing and other cross-functional efforts; 72 Table of Conten ts • the size of the target patient population, and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the ability of IMCIVREE to treat the maximum range of pediatric patients, and any limitations on its indications for use; • the strength of marketing and distribution support and timing of market introduction of competitive products; • publicity concerning IMCIVREE or competing products and treatments; • pricing and cost effectiveness; • the effectiveness of our sales and marketing strategies and our ability to increase awareness of IMCIVREE through marketing efforts; • our ability to obtain sufficient third-party coverage or reimbursement; • the willingness of patients to pay out-of-pocket in the absence of third-party coverage (including in the case of named patient sales, which can be a costly and uncertain source of revenues) and the willingness of healthcare providers to obtain reimbursement, which can be challenging and may factor into their decision to prescribe IMCIVREE; and • the likelihood that competent authorities in foreign jurisdictions may require development of a REMS or other specific obligations as a condition of approval or post-approval, may not agree with our proposed REMS or other specific obligations, or may impose additional requirements that limit the promotion, advertising, distribution or sales of IMCIVREE.
Interim, “topline” and preliminary data from our preclinical and clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
Interim, “topline” and preliminary data from our preclinical and clinical trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.
The recently-enacted IRA imposes rebates under Medicare Part B and Medicare Part D that are triggered by price increases that outpace inflation (first due in 2023), as described under the risk factor “ Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of and commercialize setmelanotide and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations ,” above.
The recently-enacted IRA imposes rebates under Medicare Part B and Medicare Part D that are triggered by price increases that outpace inflation (first due in 2023), as described under the risk factor “Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of and commercialize setmelanotide and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations,” above.
For example, the potential unblinding of setmelanotide studies due to easily identifiable AEs may raise the concern that potential bias has affected the clinical trial results; ● the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may disagree with the number, size, conduct or implementation of our clinical trials; ● the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may require that we conduct additional clinical trials or pre-clinical studies; ● the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions or the applicable foreign regulatory agency may identify deficiencies in our chemistry, manufacturing or controls of our product candidates, or in the commercial production of such product candidates that may be required to support product approval; 89 Table of Contents ● the CROs that we retain to conduct our clinical trials may take actions outside of our control that materially adversely impact our clinical trials; ● the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may find the data from preclinical studies and clinical trials insufficient to demonstrate that clinical and other benefits of a product candidate outweigh its safety risks; ● the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may disagree with our interpretation of data from our preclinical studies and clinical trials; ● the FDA or other equivalent competent authorities in foreign jurisdictions may not approve the formulation, labeling or specifications of our product candidates; ● the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may not accept data generated at our clinical trial sites; ● the FDA, the EMA, or the equivalent competent authorities in foreign jurisdictions may require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; ● we may not be able to meet any post-market requirements or commitments agreed to in connection with regulatory approvals ● the FDA may require development of a REMS as a condition of additional approvals or may impose additional requirements that limit the promotion, advertising, distribution, or sales of our product candidate; ● the EC may grant only conditional marketing authorization or based on the EMA’s opinion impose specific obligations as a condition for marketing authorization, or may require us to conduct post authorization safety studies as a condition of grant of marketing authorization; ● the FDA or other equivalent competent foreign regulatory agencies may deem our manufacturing processes or our facilities or the facilities of our CMOs inadequate to preserve the identity, strength, quality, purity, or potency of our product; or ● the FDA or the equivalent competent authorities in foreign jurisdictions may change its approval policies or adopt new regulations and guidance.
For example, the potential unblinding of setmelanotide studies due to easily identifiable AEs may raise the concern that potential bias has affected the clinical trial results; • the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may disagree with the number, size, conduct or implementation of our clinical trials; • the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may require that we conduct additional clinical trials or pre-clinical studies; • the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions or the applicable foreign regulatory agency may identify deficiencies in our chemistry, manufacturing or controls of our product candidates, or in the commercial production of such product candidates that may be required to support product approval; • the CROs that we retain to conduct our clinical trials may take actions outside of our control that materially adversely impact our clinical trials; • the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may find the data from preclinical studies and clinical trials insufficient to demonstrate that clinical and other benefits of a product candidate outweigh its safety risks; • the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may disagree with our interpretation of data from our preclinical studies and clinical trials; • the FDA or other equivalent competent authorities in foreign jurisdictions may not approve the formulation, labeling or specifications of our product candidates; • the FDA, the EMA, or other equivalent competent authorities in foreign jurisdictions may not accept data generated at our clinical trial sites; • the FDA, the EMA, or the equivalent competent authorities in foreign jurisdictions may require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; • we may not be able to meet any post-market requirements or commitments agreed to in connection with regulatory approvals 82 Table of Conten ts • the FDA may require development of a REMS as a condition of additional approvals or may impose additional requirements that limit the promotion, advertising, distribution, or sales of our product candidate; • the EC may grant only conditional marketing authorization or based on the EMA’s opinion impose specific obligations as a condition for marketing authorization, or may require us to conduct post authorization safety studies as a condition of grant of marketing authorization; • the FDA or other equivalent competent foreign regulatory agencies may deem our manufacturing processes or our facilities or the facilities of our CMOs inadequate to preserve the identity, strength, quality, purity, or potency of our product; or • the FDA or the equivalent competent authorities in foreign jurisdictions may change its approval policies or adopt new regulations and guidance.
In addition, there are many other difficulties and uncertainties inherent in pharmaceutical research and development that could significantly delay or otherwise materially impair our ability to develop future product candidates, including the following: ● Conditions imposed by regulators, ethics committees or institutional review boards for preclinical testing and clinical trials relating to the scope or design of our clinical trials, including selection of endpoints and number of required patients or clinical sites; ● Challenges in designing clinical trials that may support any potential claims of superiority over current standard of care or future competitive therapies; ● Restrictions placed upon, or other difficulties with respect to, clinical trials and clinical trial sites, including with respect to potential clinical holds or suspension or termination of clinical trials due to, among other things, potential safety or ethical concerns or noncompliance with regulatory requirements; 67 Table of Contents ● Delayed or reduced enrollment in clinical trials, high discontinuation rates or overly concentrated patient enrollment in specific geographic regions; ● Failure by third-party contractors, contract research organizations, or CROs, clinical investigators, clinical laboratories, or suppliers to comply with regulatory requirements or meet their contractual obligations in a timely manner; ● Greater than anticipated cost of our clinical trials; and ● Insufficient product supply or inadequate product quality. ● Evolving competitive landscape for our products and product candidates, which could cause us to modify our development programs, notwithstanding positive data or trial results in existing trials, in order to seek alternate indications or routes of administration or to substitute or otherwise modify our product candidates in light of the evolving competitive landscape and changing commercial prospects for our product and product candidates.
In addition, there are many other difficulties and uncertainties inherent in pharmaceutical research and development that could significantly delay or otherwise materially impair our ability to develop future product candidates, including the following: • Conditions imposed by regulators, ethics committees or institutional review boards for preclinical testing and clinical trials relating to the scope or design of our clinical trials, including selection of endpoints and number of required patients or clinical sites; • Challenges in designing clinical trials that may support any potential claims of superiority over current standard of care or future competitive therapies; 62 Table of Conten ts • Restrictions placed upon, or other difficulties with respect to, clinical trials and clinical trial sites, including with respect to potential clinical holds or suspension or termination of clinical trials due to, among other things, potential safety or ethical concerns or noncompliance with regulatory requirements; • Delayed or reduced enrollment in clinical trials, high discontinuation rates or overly concentrated patient enrollment in specific geographic regions; • Failure by third-party contractors, contract research organizations, or CROs, clinical investigators, clinical laboratories, or suppliers to comply with regulatory requirements or meet their contractual obligations in a timely manner; • Greater than anticipated cost of our clinical trials; and • Insufficient product supply or inadequate product quality. • Evolving competitive landscape for our products and product candidates, which could cause us to modify our development programs, notwithstanding positive data or trial results in existing trials, in order to seek alternate indications or routes of administration or to substitute or otherwise modify our product candidates in light of the evolving competitive landscape and changing commercial prospects for our product and product candidates.
Further, if we or others identify undesirable side effects associated with or caused by the products, or any other similar product, before or after regulatory approvals, a number of potentially significant negative consequences could result, including: ● regulatory authorities may request that we withdraw the product from the market or may limit or vary their approval of the product through labeling or other means; ● regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication; ● the FDA, the EU competent authorities and other equivalent competent authorities in foreign jurisdictions may require the addition of a Risk Evaluation and Mitigation Strategy, or REMS, or other specific obligations as a condition for marketing authorization due to the need to limit treatment to rare patient populations, or to address safety concerns; ● we may be required to change the way the product is distributed or administered or change the labeling of the product; ● we may be required to conduct additional studies and clinical trials or comply with other post-market requirements to assess possible serious risks; 69 Table of Contents ● we may be required to conduct long term safety follow-up evaluations, including setting up disease and drug based registries; ● we may decide to remove the product from the marketplace; ● our other MC4 agonist products or product candidates may be perceived by regulators or other third parties as unsafe, which could adversely affect our development efforts and product portfolio; ● we could be sued and held liable for injury caused to individuals exposed to or taking the product; and ● our reputation may suffer.
Further, if we or others identify undesirable side effects associated with or caused by the products, or any other similar product, before or after regulatory approvals, a number of potentially significant negative consequences could result, including: • regulatory authorities may request that we withdraw the product from the market or may limit or vary their approval of the product through labeling or other means; • regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication; • the FDA, the EU competent authorities and other equivalent competent authorities in foreign jurisdictions may require the addition of a Risk Evaluation and Mitigation Strategy, or REMS, or other specific obligations as a condition for marketing authorization due to the need to limit treatment to rare patient populations, or to address safety concerns; • we may be required to change the way the product is distributed or administered or change the labeling of the product; • we may be required to conduct additional studies and clinical trials or comply with other post-market requirements to assess possible serious risks; • we may be required to conduct long term safety follow-up evaluations, including setting up disease and drug based registries; • we may decide to remove the product from the marketplace; • our other MC4 agonist products or product candidates may be perceived by regulators or other third parties as unsafe, which could adversely affect our development efforts and product portfolio; 64 Table of Conten ts • we could be sued and held liable for injury caused to individuals exposed to or taking the product; and • our reputation may suffer.
In addition, a clinical trial may be suspended or terminated by us, the FDA or other equivalent competent authorities in foreign jurisdictions, the IRB at the sites where the IRBs are overseeing a clinical trial, a data and safety monitoring board, or DSMB, or Safety Monitoring Committee, or SMC, overseeing the clinical trial at issue or other equivalent competent authorities due to a number of factors, including, among others: ● failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols; 65 Table of Contents ● inspection of the clinical trial operations or trial sites by the FDA or other equivalent competent authorities that reveals deficiencies or violations that require us to undertake corrective action, including the imposition of a clinical hold; ● inconclusive results, unforeseen safety issues, adverse side effects or lack of effectiveness; ● changes in government regulations or administrative actions; ● problems with clinical trial supply materials; and ● lack of adequate funding to continue the clinical trial.
In addition, a clinical trial may be suspended or terminated by us, the FDA or other equivalent competent authorities in foreign jurisdictions, the IRB at the sites where the IRBs are overseeing a clinical trial, a data and safety monitoring board, or DSMB, or Safety Monitoring Committee, or SMC, overseeing the clinical trial at issue or other equivalent competent authorities due to a number of factors, including, among others: • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols; • inspection of the clinical trial operations or trial sites by the FDA or other equivalent competent authorities that reveals deficiencies or violations that require us to undertake corrective action, including the imposition of a clinical hold; • inconclusive results, unforeseen safety issues, adverse side effects or lack of effectiveness; • changes in government regulations or administrative actions; • problems with clinical trial supply materials; and • lack of adequate funding to continue the clinical trial.
Our obligations under the RIFA could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: ● increasing our vulnerability to adverse economic and industry conditions; ● limiting our ability to obtain additional financing or enter into IMCIVREE collaboration or other business agreements; ● requiring the dedication of a portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; ● limiting our flexibility to plan for, or react to, changes in our business; ● placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital; and ● if we fail to comply with the terms of the RIFA, resulting in an event of default that is not cured or waived, Investors could seek to enforce their security interest in our cash and cash equivalents and all assets relating to IMCIVREE that secures such indebtedness.
Our obligations under the RIFA could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing or enter into IMCIVREE collaboration or other business agreements; • requiring the dedication of a portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital; and 53 Table of Conten ts • if we fail to comply with the terms of the RIFA, resulting in an event of default that is not cured or waived, Investors could seek to enforce their security interest in our cash and cash equivalents and all assets relating to IMCIVREE that secures such indebtedness.
In the United States, IMCIVREE is approved to reduce excess body weight and maintain weight reduction long term in adults and pediatric patients 2 years of age and older with syndromic or monogenic obesity due to BBS or POMC, PCSK1 or LEPR deficiency as determined by a FDA-approved test demonstrating variants in POMC , PCSK1 or LEPR genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance.
In the United States, IMCIVREE is approved to reduce excess body weight and maintain weight reduction long term in adults and pediatric patients 2 years of age and older with syndromic or monogenic obesity due to BBS or POMC, PCSK1 or LEPR deficiency as determined by an FDA-approved test demonstrating variants in POMC, PCSK1 or LEPR genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance.
Census Bureau figures for adults and children and CDC prevalence numbers for adults with severe obesity (BMI, greater than 40 kg/m 2 ) and for children with severe early-onset obesity (99th percentile at ages two to 17 years old); ● with wider availability of genetic testing expected for LEPR deficiency obesity and increased awareness of new treatments, our belief that up to 40% of patients with these diseases may eventually be diagnosed; and ● our internal sequencing yield for LEPR deficiency obesity patients, defined as patients having biallelic variants in the LEPR gene that are interpreted as pathogenic, likely pathogenic, or of uncertain significance, of approximately 0.09%. ● Bardet-Biedl Syndrome .
Census Bureau figures for adults and children and CDC prevalence numbers for adults with severe obesity (BMI, greater than 40 kg/m2) and for children with severe early-onset obesity (99th percentile at ages two to 17 years old); • with wider availability of genetic testing expected for LEPR deficiency obesity and increased awareness of new treatments, our belief that up to 40% of patients with these diseases may eventually be diagnosed; and • our internal sequencing yield for LEPR deficiency obesity patients, defined as patients having biallelic variants in the LEPR gene that are interpreted as pathogenic, likely pathogenic, or of uncertain significance, of approximately 0.09%. • Bardet-Biedl Syndrome .
We have put into place safeguards with technology, process and education to mitigate the risks inherent in our information technology systems and to defend against cyberattacks and security incidents.
We have put into place certain safeguards with technology, process and education to mitigate the risks inherent in our information technology systems and to defend against cyberattacks and security incidents.
Additionally, certain matters will require the approval of the holders of two-thirds of the outstanding Convertible Preferred Stock, voting as a separate class, including (1) the authorization, creation, increase in 111 Table of Contents the authorized amount of, or issuance of any class or series of senior or pari passu equity securities or any security convertible into, or exchangeable or exercisable for, shares of senior or pari passu equity securities, (2) amendments, modifications or repeal of any provision of the Company’s charter or of the Amended and Restated Certificate of Designations that would adversely affect the rights, preferences or voting powers of the Convertible Preferred Stock, and (3) certain business combinations and binding or statutory share exchanges or involving the Convertible Preferred Stock unless such events do not adversely affect the rights, preferences or voting powers of the Convertible Preferred Stock.
Additionally, certain matters will require the approval of the holders of two-thirds of the outstanding Convertible Preferred Stock, voting as a separate class, including (1) the authorization, creation, increase in the authorized amount of, or issuance of any class or series of senior or pari passu equity securities or any security convertible into, or exchangeable or exercisable for, shares of senior or pari passu equity securities, (2) amendments, modifications or repeal of any provision of the Company’s charter or of the Amended and Restated Certificate of Designations that would adversely affect the rights, preferences or voting powers of the Convertible Preferred Stock, and (3) certain business combinations and binding or statutory share exchanges or involving the Convertible Preferred Stock unless such events do not adversely affect the rights, preferences or voting powers of the Convertible Preferred Stock.
If we or the manufacturing facilities for setmelanotide fail to comply with applicable regulatory requirements, a regulatory agency may, among other things: ● issue warning letters or untitled letters; ● seek an injunction or impose civil or criminal penalties or monetary fines; ● vary, suspend or withdraw marketing approval; ● suspend any ongoing clinical trials; ● refuse to approve pending applications or supplements to applications submitted by us; 92 Table of Contents ● suspend or impose restrictions on operations, including costly new manufacturing requirements; or ● seize or detain setmelanotide, refuse to permit the import or export of setmelanotide, or request that we initiate a product recall.
If we or the manufacturing facilities for setmelanotide fail to comply with applicable regulatory requirements, a regulatory agency may, among other things: • issue warning letters or untitled letters; • seek an injunction or impose civil or criminal penalties or monetary fines; • vary, suspend or withdraw marketing approval; • suspend any ongoing clinical trials; • refuse to approve pending applications or supplements to applications submitted by us; • suspend or impose restrictions on operations, including costly new manufacturing requirements; or • seize or detain setmelanotide, refuse to permit the import or export of setmelanotide, or request that we initiate a product recall.
Our net loss and other operating results will be affected by numerous factors, including: ● variations in the level of expenses related to our development programs; ● addition or termination of clinical trials; ● any lawsuit, including any intellectual property infringement lawsuit in which we may become involved; 109 Table of Contents ● regulatory developments affecting setmelanotide and our other product candidates; ● our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements; ● the achievement and timing of milestone payments under our existing collaboration and license agreements; and ● the level of underlying demand for setmelanotide and our customers’ buying patterns.
Our net loss and other operating results will be affected by numerous factors, including: • variations in the level of expenses related to our development programs; • addition or termination of clinical trials; • any lawsuit, including any intellectual property infringement lawsuit in which we may become involved; • regulatory developments affecting setmelanotide and our other product candidates; • our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements; • the achievement and timing of milestone payments under our existing collaboration and license agreements; and • the level of underlying demand for setmelanotide and our customers’ buying patterns.
As we continue to commercialize setmelanotide in foreign markets, we will be subject to additional risks and uncertainties, including: ● our customers’ ability to obtain reimbursement for setmelanotide in foreign markets; ● our inability to directly control commercial activities because we are relying on third parties; ● the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements; ● different medical practices and customs in foreign countries affecting acceptance in the marketplace; ● import or export licensing requirements; ● longer accounts receivable collection times; ● longer lead times for shipping; ● language barriers for technical training; ● reduced protection of intellectual property rights in some foreign countries; ● foreign currency exchange rate fluctuations; and ● the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
As we continue to commercialize setmelanotide in foreign markets, we will be subject to additional risks and uncertainties, including: • our customers’ ability to obtain reimbursement for setmelanotide in foreign markets; • our inability to directly control commercial activities because we are relying on third parties; 95 Table of Conten ts • the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • import or export licensing requirements; • longer accounts receivable collection times; • longer lead times for shipping; • language barriers for technical training; • reduced protection of intellectual property rights in some foreign countries; • foreign currency exchange rate fluctuations; and • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
You should carefully consider the risks described below and the other information in this Annual Report on Form 10-K for the period ended December 31, 2024 (the “Annual Report”), including our audited condensed consolidated financial statements and the related notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Risks Related to Our Financial Position and Need for Capital ​ We are a commercial stage biopharmaceutical company with a limited operating history and have not generated significant revenue from product sales.
You should carefully consider the risks described below and the other information in this Annual Report on Form 10-K for the period ended December 31, 2025 (the “Annual Report”), including our audited consolidated financial statements and the related notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Risks Related to Our Financial Position and Need for Capital We are a commercial stage biopharmaceutical company with a limited operating history and have not generated significant revenue from product sales.
Our ability to generate revenue depends on a number of factors, including, but not limited to, our ability to: ● continue to commercialize setmelanotide by building a commercial organization and/or entering into collaborations with third parties; ● ensure IMCIVREE is available to patients; ● continue to achieve market acceptance of setmelanotide in the medical community and with third-party payors; ● continue to initiate and successfully complete later-stage clinical trials for setmelanotide, RM-718, bivamelagon, or other product candidates that meet their clinical endpoints; ● continue to initiate and successfully complete all studies required to obtain U.S. and foreign marketing approvals for setmelanotide as a treatment to address patients with deficiencies affecting the MC4R pathway; and ● successfully manufacture or contract with others to manufacture setmelanotide, or RM-718 and bivamelagon if approved.
Our ability to generate revenue depends on a number of factors, including, but not limited to, our ability to: • continue to commercialize setmelanotide by building a commercial organization and/or entering into collaborations with third parties; • ensure IMCIVREE is available to patients; • continue to achieve market acceptance of setmelanotide in the medical community and with third-party payors; • continue to initiate and successfully complete later-stage clinical trials for setmelanotide, RM-718, bivamelagon, or other product candidates that meet their clinical endpoints; 51 Table of Conten ts • continue to initiate and successfully complete all studies required to obtain U.S. and foreign marketing approvals for setmelanotide as a treatment to address patients with deficiencies affecting the MC4R pathway; and • successfully manufacture or contract with others to manufacture setmelanotide, or RM-718 and bivamelagon if approved.
Although we are not directly subject to HIPAA, other than potentially with respect to providing certain employee benefits, we could be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA.
Although we do not believe that we are directly subject to HIPAA, other than potentially with respect to providing certain employee benefits, we could be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA.
The failure to comply with laws governing international business practices may result in substantial civil and criminal penalties and suspension or debarment from government contracting. The Securities and Exchange Commission, or SEC, also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions.
The failure to comply with laws governing international business practices may result in substantial civil and criminal penalties and suspension or debarment from government contracting. The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions.
In 70 Table of Contents addition to a range of other benefits during the development and regulatory review, orphan medicinal products are, upon grant of marketing authorization and assuming the requirement for orphan designation are also met at the time the marketing authorization is granted, entitled to ten years of exclusivity in all EU member states for the approved therapeutic indication, which means that the competent authorities cannot accept another MAA, grant a marketing authorization, or accept an application to extend a marketing authorization for a similar product for the same indication for a period of ten years.
In addition to a range of other benefits during the development and regulatory review, orphan medicinal products are, upon grant of marketing authorization and assuming the requirement for orphan designation are also met at the time the marketing authorization is granted, entitled to ten years of exclusivity in all EU member states for the approved therapeutic indication, which means that the competent authorities cannot accept another MAA, grant a marketing authorization, or accept an application to extend a marketing authorization for a similar product for the same indication for a period of ten years.
Recent legislation enacted by Congress created, among other things, new causes of action against innovator companies that refuse to offer samples of drugs for purposes of testing and developing generic or biosimilar products or to allow companies to participate in a shared Risk Evaluation and Mitigation Strategy (REMS).
Legislation enacted by Congress has created, among other things, new causes of action against innovator companies that refuse to offer samples of drugs for purposes of testing and developing generic or biosimilar products or to allow companies to participate in a shared Risk Evaluation and Mitigation Strategy (REMS).
Moreover, the federal government and the individual states in the United States have become increasingly active in developing proposals, passing legislation and implementing regulations designed to control drug pricing, including price or patient reimbursement constraints, discounts, formulary flexibility, marketing cost disclosure, drug price increase reporting, and other transparency measures.
Moreover, the individual states in the United States have become increasingly active in developing proposals, passing legislation and implementing regulations designed to control drug pricing, including price or patient reimbursement constraints, discounts, formulary flexibility, marketing cost disclosure, drug price increase reporting, and other transparency measures.
The market price for our common stock has been volatile and may continue to fluctuate significantly in response to a number of factors, most of which we cannot control, including, among others: ● plans for, progress of, or results from preclinical studies and clinical trials of setmelanotide and our other product candidates; ● the failure of the FDA or EMA to approve IMCIVREE for additional indications or to initially approve our other product candidates; ● announcements of new products, technologies, commercial relationships, acquisitions or other events by us or our competitors; ● the success or failure of other weight loss therapies and companies targeting the rare diseases we intend to address; ● regulatory or legal developments in the United States and other countries; ● failure of setmelanotide or our other product candidates, if approved, to achieve commercial success; 108 Table of Contents ● fluctuations in stock market prices and trading volumes of similar companies; ● general market conditions and overall fluctuations in U.S. equity markets; ● global macroeconomic conditions or instability, including with respect to inflation rates or interest rates, curtailment of trade and other business restrictions such as tariffs, boycotts, labor shortages, supply chain shortages, disruptions and instability in the banking industry and other parts of the financial services sector, outbreak of disease or epidemics, or other economic, political or legal changes, uncertainties or adverse developments; ● terrorism and/or political instability, unrest and wars, such as the conflicts involving Ukraine and Russia or Israel and Hamas, which could delay or disrupt our business, and if such political unrest escalates or spills over to or otherwise impacts additional regions it could heighten many of the other risk factors included in this sections; ● natural disasters and other extreme weather events (including as a result of climate change), which could cause significant damage to the infrastructure upon which our business operations rely, and the timing, nature or severity of which we may be unable to prepare for; ● global political changes and uncertainty, including in the United States with the changes arising from a new presidential administration and resulting changes and uncertainty in administrative agencies with authority over our business; ● variations in our quarterly operating results; ● changes in our financial guidance or securities analysts’ estimates of our financial performance; ● changes in accounting principles; ● our ability to raise additional capital and the terms on which we can raise it; ● sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; ● additions or departures of key personnel; ● discussion of us or our stock price by the press and by online investor communities; and ● other risks and uncertainties described in these risk factors.
The market price for our common stock has been volatile and may continue to fluctuate significantly in response to a number of factors, most of which we cannot control, including, among others: 99 Table of Conten ts • plans for, progress of, or results from preclinical studies and clinical trials of setmelanotide and our other product candidates; • the failure of the FDA or EMA to approve IMCIVREE for additional indications or to initially approve our other product candidates; • announcements of new products, technologies, commercial relationships, acquisitions or other events by us or our competitors; • the success or failure of other weight loss therapies and companies targeting the rare diseases we intend to address; • regulatory or legal developments in the United States and other countries; • failure of setmelanotide or our other product candidates, if approved, to achieve commercial success; • fluctuations in stock market prices and trading volumes of similar companies; • general market conditions and overall fluctuations in U.S. and global equity markets; • global macroeconomic conditions or instability, including with respect to inflation rates or interest rates, curtailment of trade and other business restrictions such as tariffs or trade wars, boycotts, labor shortages, supply chain shortages, disruptions and instability in the banking industry and other parts of the financial services sector, outbreak of disease or epidemics, or other economic, political or legal changes, uncertainties or adverse developments; • terrorism and/or political instability, unrest and wars, which could delay or disrupt our business, and if such political unrest escalates or spills over to or otherwise impacts additional regions it could heighten many of the other risk factors included in this sections; • natural disasters and other extreme weather events (including as a result of climate change), which could cause significant damage to the infrastructure upon which our business operations rely, and the timing, nature or severity of which we may be unable to prepare for; • global political changes and uncertainty, including in the United States with the changes arising from a new presidential administration and resulting changes and uncertainty in administrative agencies with authority over our business; • variations in our quarterly operating results; • changes in our financial guidance or securities analysts’ estimates of our financial performance; • changes in accounting principles; • our ability to raise additional capital and the terms on which we can raise it; • sales of large blocks of our common stock, including sales by our executive officers, directors and significant stockholders; • additions or departures of key personnel; • discussion of us or our stock price by the press and by online investor communities; and • other risks and uncertainties described in these risk factors.
Such enforcement for our failure or our CROs or CMOs’ failure to comply with these regulations could result in import delays, detention of products, and, depending on criteria such as the history of violative activities, the FDA could place a foreign firm or certain drug substances or products on Import Alert and require that all such drug substances or products be subject to detention without physical examination 80 Table of Contents which could significantly impact the global supply chain for setmelanotide, RM-718, and bivamelagon.
Such enforcement for our failure or our CROs or CMOs’ failure to comply with these regulations could result in import delays, detention of products, and, depending on criteria such as the history of violative activities, the FDA could place a foreign firm or certain drug substances or products on Import Alert and require that all such drug substances or products be subject to detention without physical examination which could significantly impact the global supply chain for setmelanotide, RM-718, and bivamelagon.
Risks Related to Regulatory Approval and Marketing of Setmelanotide and Other Legal and Compliance Matters Even if we complete the necessary clinical trials, the regulatory and marketing approval process is expensive, time consuming and uncertain and may prevent us from obtaining additional approvals for the commercialization of our product candidates.
Risks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters Even if we complete the necessary clinical trials, the regulatory and marketing approval process is expensive, time consuming and uncertain and may prevent us from obtaining additional approvals for the commercialization of our product candidates.
We have incurred and will continue to incur substantial costs as a result of operating as a public company, our management will continue to devote substantial time to existing and new compliance initiatives and corporation governance policies, and we will need to hire additional qualified accounting, financial, legal and compliance personnel with appropriate public company experience.
We have incurred and will continue to incur substantial costs as a result of operating as a public company, our management will continue to devote substantial time to existing and new compliance initiatives and corporate governance policies, and we will need to hire additional qualified accounting, financial, legal and compliance personnel with appropriate public company experience.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: ● any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect setmelanotide, RM-718, or bivamelagon; ● any of our pending patent applications will issue as patents; ● we will be able to successfully commercialize IMCIVREE or our other product candidates before our relevant patents expire; ● we were the first to make the inventions covered by each of our patents and pending patent applications; ● we were the first to file patent applications for these inventions; 83 Table of Contents ● others will not develop similar or alternative technologies that do not infringe our patents; ● any of our patents will be found to ultimately be valid and enforceable; ● any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties; ● we will develop additional proprietary technologies or product candidates that are separately patentable; or ● our commercial activities or products will not infringe upon the patents of others.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: 76 Table of Conten ts • any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect setmelanotide, RM-718, or bivamelagon; • any of our pending patent applications will issue as patents; • we will be able to successfully commercialize IMCIVREE or our other product candidates before our relevant patents expire; • we were the first to make the inventions covered by each of our patents and pending patent applications; • we were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe our patents; • any of our patents will be found to ultimately be valid and enforceable; • any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies or product candidates that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
We expect our research and development expenses to significantly increase in connection with our additional clinical trials of setmelanotide, with clinical trials of our product candidates (RM-718), which is designed to be a more selective MC4R agonist with weekly administration (now in Phase 1 trials), and bivamelagon, an investigational oral small molecule, which is also designed to be a more selective MC4R agonist, (now in Phase 2 clinical trials), and with the development of any other product candidates we may choose to pursue, including a product candidate for CHI, yet to be identified.
We expect our research and development expenses to significantly increase in connection with our additional clinical trials of setmelanotide, with clinical trials of our product candidates (RM-718), which is designed to be a more selective MC4R agonist with weekly administration (now in Phase 1 trials), and bivamelagon, an investigational oral small molecule, which is also designed to be a more selective MC4R agonist, (recently completed a Phase 2 clinical trial), and with the development of any other product candidates we may choose to pursue, including a product candidate for CHI, yet to be identified.
If we fail to obtain positive results in our Phase 3 clinical trials 58 Table of Contents of setmelanotide, the development timeline and regulatory approval and commercialization prospects for setmelanotide and, correspondingly, our business and financial prospects, would be materially adversely affected, but even if we obtain results in our Phase 3 clinical trials that we believe are positive, there is no guarantee that the FDA or the EC or foreign regulatory authorities will agree that such results are sufficient to support submission or approval of an NDA or NDA supplement.
If we fail to obtain positive results in our Phase 3 clinical trials of setmelanotide, the development timeline and regulatory approval and commercialization prospects for setmelanotide and, correspondingly, our business and financial prospects, would be materially adversely affected, but even if we obtain results in our Phase 3 clinical trials that we believe are positive, there is no guarantee that the FDA or the EC or foreign regulatory authorities will agree that such results are sufficient to support submission or approval of an NDA or NDA supplement.
Census Bureau population data and CDC prevalence numbers for early onset obesity (≥120% the 95th percentile with onset prior to 6 years of age); ● our internal sequencing yield of patients with POMC, PCSK1, or LEPR heterozygous, SRC1 or SH2B1 variants interpreted as pathogenic, likely pathogenic, or of uncertain significance of approximately 10-15%; and 61 Table of Contents ● a clinical response rate of 40% for patients carrying pathogenic or likely pathogenic variants, and 20% for patients carrying a variant of uncertain significance.
Census Bureau population data and CDC prevalence numbers for early onset obesity (≥120% the 95th percentile with onset prior to 6 years of age); • our internal sequencing yield of patients with POMC, PCSK1, or LEPR heterozygous, SRC1 or SH2B1 variants interpreted as pathogenic, likely pathogenic, or of uncertain significance of approximately 10-15%; and • a clinical response rate of 40% for patients carrying pathogenic or likely pathogenic variants, and 20% for patients carrying a variant of uncertain significance.
We will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
We expect we may need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
Pharmaceutical and other healthcare companies also are subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs. ● The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HIPAA, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program, including private third-party payors, and also imposes obligations, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
Pharmaceutical and other healthcare companies also are subject to other federal false 91 Table of Conten ts claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs. • The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HIPAA, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program, including private third-party payors, and also imposes obligations, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. 84 Table of Contents We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing IMCIVREE or our other product candidates.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing IMCIVREE or our other product candidates.
Laws (including those governing promotion, marketing and anti-kickback provisions), industry regulations and professional codes of conduct often are strictly enforced. Even in those countries where we may 100 Table of Contents decide not to directly promote or market our products, inappropriate activity by our international distribution partners could have implications for us.
Laws (including those governing promotion, marketing and anti-kickback provisions), industry regulations and professional codes of conduct often are strictly enforced. Even in those countries where we may decide not to directly promote or market our products, inappropriate activity by our international distribution partners could have implications for us.
Royalties may further increase to a low double digit percent royalty, though such royalty would only be applicable on net sales of bivamelagon in a region if bivamelagon is covered by a composition of matter or method of use patent controlled by LGC in such region and the Company’s MC4R portfolio is not covered by any composition of matter or method of use patents controlled by 59 Table of Contents the Company in such region.
Royalties may further increase to a low double-digit percent royalty, though such royalty would only be applicable on net sales of bivamelagon in a region if bivamelagon is covered by a composition of matter or method of use patent controlled by LGC in such region and the Company’s MC4R portfolio is not covered by any composition of matter or method of use patents controlled by the Company in such region.
Whilst the EU-UK Trade and Cooperation Agreement (TCA) includes the mutual recognition of GMP inspections of manufacturing facilities for medicinal products and GMP documents issued, it does not contain wholesale mutual recognition of UK and EU pharmaceutical regulations and product standards.
While the EU-UK Trade and Cooperation Agreement (TCA) includes the mutual recognition of GMP inspections of manufacturing facilities for medicinal products and GMP documents issued, it does not contain wholesale mutual recognition of UK and EU pharmaceutical regulations and product standards.
In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things: ● withdrawal of patients from our clinical trials; ● substantial monetary awards to patients or other claimants; ● decreased demand for IMCIVREE or any future product candidates following marketing approval, if obtained; ● damage to our reputation and exposure to adverse publicity; ● litigation costs; ● distraction of management’s attention from our primary business; ● loss of revenue; and ● the inability to successfully commercialize IMCIVREE or any future product candidates, if approved.
In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things: 73 Table of Conten ts • withdrawal of patients from our clinical trials; • substantial monetary awards to patients or other claimants; • decreased demand for IMCIVREE or any future product candidates following marketing approval, if obtained; • damage to our reputation and exposure to adverse publicity; • litigation costs; • distraction of management’s attention from our primary business; • loss of revenue; and • the inability to successfully commercialize IMCIVREE or any future product candidates, if approved.
This could result in future uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We have in the past failed and may in the future fail to maintain an effective system of internal control over financial reporting. This may prevent us from accurately reporting our financial results or preventing fraud.
This could result in future uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We may in the future fail to maintain an effective system of internal control over financial reporting. This may prevent us from accurately reporting our financial results or preventing fraud.
In addition, in the EU, pursuant to Directive 2011/24/EU on the application of patients’ rights in cross border healthcare, a voluntary network of national authorities or bodies responsible for HTA in the individual EU member states was established. The 76 Table of Contents purpose of the network is to facilitate and support the exchange of scientific information concerning HTAs.
In addition, in the EU, pursuant to Directive 2011/24/EU on the application of patients’ rights in cross border healthcare, a voluntary network of national authorities or bodies responsible for HTA in the individual EU member states was established. The purpose of the network is to facilitate and support the exchange of scientific information concerning HTAs.
These laws may further limit or restrict the advertising and promotion of our products to the general public and may also impose limitations on our promotional activities with health care professionals. 98 Table of Contents We may be subject to federal, state and foreign healthcare laws and regulations, including fraud and abuse laws, health information privacy and security laws, and antitrust laws.
These laws may further limit or restrict the advertising and promotion of our products to the general public and may also impose limitations on our promotional activities with health care professionals. We may be subject to federal, state and foreign healthcare laws and regulations, including fraud and abuse laws, health information privacy and security laws, and antitrust laws.
Thus, any access, disclosure, damage or other loss of information, including our data being breached at our partners or third-party providers, could result 107 Table of Contents in legal claims or proceedings and liability under state, federal and international privacy laws, disruption of our operations, and damage to our reputation, which could adversely affect our business.
Thus, any access, disclosure, damage or other loss of information, including our data being breached at our partners or third-party providers, could result in legal claims or proceedings and liability under state, federal and international privacy laws, disruption of our operations, and damage to our reputation, which could adversely affect our business.
Our licenses with Ipsen and LGC impose various obligations on us, and provide Ipsen and LGC the right to terminate the license in the 86 Table of Contents event of our material breach of the license agreement, our failure to initiate or complete certain development of a licensed product, or our commencement of an action seeking to have an Ipsen or LGC licensed patent right declared invalid.
Our licenses with Ipsen and LGC impose various obligations on us, and provide Ipsen and LGC the right to terminate the license in the event of our material breach of the license agreement, our failure to initiate or complete certain development of a licensed product, or our commencement of an action seeking to have an Ipsen or LGC licensed patent right declared invalid.
In the United States, numerous federal and state laws and regulations, including HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and regulations implemented thereunder, collectively HIPAA, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws, including Section 5 of the Federal Trade Commission Act, which govern the collection, use, disclosure and protection of health-related and other personal information, may apply to our operations and the operations of current and future collaborators.
In the United States, numerous federal and state laws and regulations, including HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and regulations implemented thereunder, collectively HIPAA, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws, including Section 5 of the Federal Trade Commission Act, which govern the collection, use, disclosure and protection of health-related and other personal information, may apply to our operations and the operations 93 Table of Conten ts of current and future collaborators.
The amendments contained in the Amended and Restated Certificate of Designations (x) limited the voting rights of the Convertible Preferred Stock to 24.9438 shares of the Company’s common stock per $1,000 liquidation preference of Convertible Preferred Stock and (y) eliminated a 1% step up in the interest rate that otherwise would have applied in the unlikely event that the Company was required to obtain and failed to obtain stockholder approval for certain conversion shares underlying the Convertible Preferred Stock.
The amendments contained in the Amended and Restated Certificate of Designations (x) limited the voting rights of the Convertible Preferred Stock to 24.9438 shares of the Company’s common stock per $1,000 liquidation preference of Convertible Preferred Stock and (y) eliminated a 1% step up in the interest rate that otherwise would have applied in the unlikely event that the Company was required to obtain and failed to obtain stockholder approval for certain conversion shares underlying 102 Table of Conten ts the Convertible Preferred Stock.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our financial performance, business and operating results.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures, our contracts governing our processing of personal information, or other privacy and security obligations could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our financial performance, business and operating results.
We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, including executive orders, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or any future collaborators, may receive for IMCIVREE or any product candidates approved for sale.
We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the price that we, or any future collaborators, may receive for IMCIVREE or any product candidates approved for sale.
This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more 101 Table of Contents onerous obligations in our contracts, result in liability or impose additional costs on us.
This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us.
We could also be required to seek funds through arrangements with collaborative partners or other third parties at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to setmelanotide or technologies or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
We could also be required to seek funds through arrangements with collaborative partners or other third parties at an earlier stage than otherwise would be desirable and we may be required to 52 Table of Conten ts relinquish rights to setmelanotide or technologies or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
Each of the four sub-studies will be entirely independent of the others and, if successful, is designed to support separate regulatory submissions to the FDA and EMA in each studied population.
Each of the four sub-studies is entirely independent of the others and, if successful, is designed to support separate regulatory submissions to the FDA and EMA in each studied population.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted. 66 Table of Contents Research and development in the pharmaceutical industry is costly, risky, time-intensive and complicated.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted. Research and development in the pharmaceutical industry is costly, risky, time-intensive and complicated.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product 95 Table of Contents candidates or additional pricing pressures.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
Because of the potential for large monetary exposure, healthcare and pharmaceutical companies often resolve allegations without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages and per claim penalties that may be awarded 99 Table of Contents in litigation proceedings.
Because of the potential for large monetary exposure, healthcare and pharmaceutical companies often resolve allegations without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages and per claim penalties that may be awarded in litigation proceedings.
Our clinical trials will compete with other clinical trials that are in the same therapeutic areas as our product candidates, including general obesity, and this competition reduces the number and types of patients available to us, as some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
Our clinical trials will compete with other clinical trials that are in the same therapeutic areas as our product candidates, including general obesity, and this competition reduces the number and types of patients available to us, as 58 Table of Conten ts some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
The ten-year market exclusivity in the EU may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for which it received orphan designation, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity, or where the prevalence of the condition has increased above the threshold.
The ten-year market exclusivity in the EU may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for which it received orphan designation, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity, or where the prevalence 65 Table of Conten ts of the condition has increased above the threshold.
Additional compliance investment and potential business process changes may also be required. Similar laws have passed in other states, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
Additional compliance investment and potential business process changes may also be required. Similar laws have been enacted in numerous other states, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
We plan to continue to rely upon CMOs and, potentially, collaboration partners to manufacture commercial quantities of setmelanotide, RM-718, and bivamelagon, if approved. Our current scale of manufacturing appears adequate 81 Table of Contents to support all of our current needs for clinical trial and initial commercial supplies for setmelanotide, RM-718, and bivamelagon, if approved.
We plan to continue to rely upon CMOs and, potentially, collaboration partners to manufacture commercial quantities of setmelanotide, RM-718, and bivamelagon, if approved. Our current scale of manufacturing appears adequate to support all of our current needs for clinical trial and initial commercial supplies for setmelanotide, RM-718, and bivamelagon, if approved.
Census Bureau figures for adults and children, and Centers for Disease Control and Prevention, or CDC, prevalence numbers for adults with severe obesity (body mass index, or BMI, greater than 40 kg/m 2 ) and for children with severe early-onset obesity (99th percentile at ages two to 17 years old); and ● our internal sequencing yield for POMC deficiency obesity patients (including both POMC and PCSK1 gene diseases), defined as patients having biallelic variants in the POMC or PCSK1 genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance, of approximately 0.05%. 60 Table of Contents ● LEPR Deficiency Obesity .
Census Bureau figures for adults and children, and Centers for Disease Control and Prevention, or CDC, prevalence numbers for adults with severe obesity (body mass index, or BMI, greater than 40 kg/m2) and for children with severe early-onset obesity (99th percentile at ages two to 17 years old); and • our internal sequencing yield for POMC deficiency obesity patients (including both POMC and PCSK1 gene diseases), defined as patients having biallelic variants in the POMC or PCSK1 genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance, of approximately 0.05%. • LEPR Deficiency Obesity .
As a result, the coverage determination process is often a time-consuming and costly process that may require us to provide scientific and clinical support for the use of IMCIVREE to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance or that step edits or other conditions on reimbursement will not be imposed.
As a result, the coverage determination process is often a time-consuming and costly process that may require us to provide scientific and clinical support for the use of IMCIVREE to each payor separately, and coverage and adequate reimbursement may not be applied consistently or obtained in the first instance or that step edits or other conditions on reimbursement may be imposed.
Although the material weakness identified above did not result in any material misstatements in our consolidated financial statements for the periods presented and there were no changes to previously released financial results, our management concluded that these control deficiencies constitute a material weakness and that our internal control over financial reporting was not effective as of December 31, 2023.
Although the material weakness identified above did not result in any material misstatements in our consolidated financial statements for the periods presented and there were no changes to previously released financial results, our management 106 Table of Conten ts concluded that these control deficiencies constitute a material weakness and that our internal control over financial reporting was not effective as of December 31, 2023.
However, we remain responsible for the conduct of these activities and these trials and are subject to enforcement which may include civil and criminal liabilities for any 74 Table of Contents violations of FDA rules and regulations and the comparable foreign regulatory provisions during the conduct of our clinical trials.
However, we remain responsible for the conduct of these activities and these trials and are subject to enforcement which may include civil and criminal liabilities for any violations of FDA rules and regulations and the comparable foreign regulatory provisions during the conduct of our clinical trials.
The changes arising from a new presidential administration in the United States and the prospect of new leadership in key administrative agencies (such as the FDA and SEC) as well as volatile political conditions in other countries in which we do business could also create additional uncertainty for our industry and our business, including in ways that we cannot foresee.
The changes arising from a new presidential administration in the United States and the prospect of new leadership and reductions in the workforce or other resources in key administrative agencies (such as the FDA and SEC) as well as volatile political conditions in other countries in which we do business could also create additional uncertainty for our industry and our business, including in ways that we cannot foresee.
The 73 Table of Contents regulation of companion diagnostics is now subject to further requirements set forth in the IVDR. Following subsequent legislative changes, European institutions adopted a “progressive” roll-out of the IVDR to prevent disruption in the supply of in vitro diagnostic medical devices.
The regulation of companion diagnostics is now subject to further requirements set forth in the IVDR. Following subsequent legislative changes, European institutions adopted a “progressive” roll-out of the IVDR to prevent disruption in the supply of in vitro diagnostic medical devices.
The EC has authorized setmelanotide for the treatment of obesity and the control of hunger 88 Table of Contents associated with genetically confirmed BBS or genetically confirmed loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 2 years of age and above.
The EC has authorized setmelanotide for the treatment of obesity and the control of hunger associated with genetically confirmed BBS or genetically confirmed loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 2 years of age and above.
Even with the implementation of strong security measures, our information technology systems and those of our third-party CROs, CMOs and other contractors and consultants are susceptible to attack, damage, or interruption from computer security incidents and cyberattacks such as malware (e.g., ransomware), phishing and other social engineering attacks employee or contractor theft, misuse or human error, denial or degradation of service attacks, supply chain attacks, advanced persistent threats from nation-state actors and unauthorized access or use by persons inside or outside our organization.
Even with the implementation of security measures, our information technology systems and those of our third-party CROs, CMOs and other contractors and consultants are susceptible to attack, damage, or interruption from computer security incidents and cyberattacks such as malware (e.g., ransomware), phishing and other social engineering attacks employee or contractor theft, misuse or human error, denial or degradation of service attacks, supply chain attacks, advanced persistent threats from nation-state actors, attacks developed or enhanced using artificial intelligence, and unauthorized access or use by persons inside or outside our organization.
In particular, these requirements include certain obligations concerning the consent of the individuals to whom the personal data relates, the information provided to the individuals, the transfer of personal data out of the EEA, security breach notifications, and security and confidentiality of the personal data, and violations of these requirements could result in substantial fines, up to the greater of 20 million Euros or 4% of total global annual turnover.
In particular, these requirements include certain obligations concerning the consent of the individuals to whom the personal data relates, the information provided to the individuals, the transfer of personal data out of the EEA or UK, security breach notifications, and security and confidentiality of the personal data, and violations of these requirements could result in substantial fines, up to the greater of 20 million Euros / 17.5 million GBP or 4% of total global annual turnover.
On September 12, 2023, we received the remaining $24.4 million of the RIFA Investment Amount, net of debt issuance 56 Table of Contents costs, following the achievement of a specified amount of cumulative net sales of IMCIVREE between July 1, 2022 and September 30, 2023.
On September 12, 2023, we received the remaining $24.4 million of the RIFA Investment Amount, net of debt issuance costs, following the achievement of a specified amount of cumulative net sales of IMCIVREE between July 1, 2022 and September 30, 2023.
We participate in the 340B program, which is administered by the Health Resources and Services Administration, or HRSA, and requires us to charge statutorily defined covered entities no more than the 340B “ceiling price” for our covered outpatient drugs.
We participate in the 340B program, which is administered by the Health Resources and Services Administration (“HRSA”), and requires us to charge statutorily defined covered entities no more than the 340B “ceiling price” for our covered outpatient drugs.
The EU Clinical Trials Regulation (CTR) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.
For instance, the EU Clinical Trials Regulation (CTR) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or 77 Table of Conten ts developments.
Our operations are vulnerable to interruption by fire, severe weather conditions, power loss, telecommunications failure, terrorist activity, public health crises and pandemic diseases, and other natural and man-made disasters or events 114 Table of Contents beyond our control. Our facilities and employees are located in regions that experience severe weather from time to time.
Our operations are vulnerable to interruption by fire, severe weather conditions, power loss, telecommunications failure, terrorist activity, public health crises and pandemic diseases, and other natural and man-made disasters or events beyond our control. Our facilities and employees are located in regions that experience severe weather from time to time.
Risks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates The successful commercialization of IMCIVREE and any other product candidates for which we obtain approval will depend in part on the extent to which governmental authorities, private health insurers, and other third-party payors provide coverage and adequate reimbursement.
Risks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates 69 Table of Conten ts The successful commercialization of IMCIVREE and any other product candidates for which we obtain approval will depend in part on the extent to which governmental authorities, private health insurers, and other third-party payors provide coverage and adequate reimbursement.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel and other information obtained from governmental, public, or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the IT environment. 118 Table of Contents
Biggest changeThe current Cybersecurity Director has extensive information security and program management experience and has held past positions as the head of cybersecurity for a wide range of organizations. 108 Table of Conten ts Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel and other information obtained from governmental, public, or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the IT environment.
The Senior Cybersecurity Manager, with the help of our IT and Legal team is responsible for assessing and managing our material risks from cybersecurity threats. This position has the primary responsibility for our overall cybersecurity risk management program and supervises both our internal personnel and our retained external cybersecurity consultants.
The Cybersecurity Director, with the help of our IT and Legal team is responsible for assessing and managing our material risks from cybersecurity threats. This position has the primary responsibility for our overall cybersecurity risk management program and supervises both our internal personnel and our retained external cybersecurity consultants.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our cybersecurity program based on the NIST Cybersecurity Framework (CSF).
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. 107 Table of Conten ts We design and assess our cybersecurity program based on the NIST Cybersecurity Framework (CSF).
For more information, see the section titled “Risk Factors— Our information technology systems, or those of our third-party CROs, CMOs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of setmelanotide development programs, regulatory investigations, enforcement actions and lawsuits.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity risks.
For more information, see the section titled “Risk Factors— Our information technology systems, or those of our third-party CROs, CMOs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of setmelanotide development programs, regulatory investigations, enforcement actions and lawsuits.” Cybersecurity Governance Our Board considers oversight of cybersecurity risk to be an essential component of its enterprise risk oversight responsibility and directly oversees management’s implementation of our cybersecurity program.
The Committee reports to the full Board regarding its activities and risk management functions, including those related to cybersecurity. Board members receive presentations on cybersecurity risk and strategy from our Senior Cybersecurity Manager, as part of the Board’s continuing education on topics that impact public companies.
The Board receives periodic reports from management on our cybersecurity program and risks. In addition, management updates the Board, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant. Board members receive presentations on cybersecurity risk and strategy from our Cybersecurity Director, as part of the Board’s continuing education on topics that impact public companies.
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To this end, we have implemented a cybersecurity program that includes the following key elements: ● A Cybersecurity Manager responsible for, among other things, developing and maintaining our administrative, technical, and physical cybersecurity controls. ● Risk assessments using the CIS Risk Assessment Method (RAM), which identify material cybersecurity risks to our critical systems and information. 117 Table of Contents ● A vulnerability management program that involves the continuous monitoring of information systems for vulnerabilities, and a process to effectively remediate those vulnerabilities based on criticality level. ● A comprehensive Disaster Recovery plan to ensure IT personnel and Business owners are prepared for any disruption to Rhythm’s business. ● A constantly available Security Operations Center (SOC) to monitor our critical infrastructure and execute immediate, human-led responses to confirmed threats. ● External technology and security providers to assess, test or otherwise assist with aspects of our cybersecurity program. ● Cybersecurity awareness training for employees, including supplemental training for senior management and other personnel who access highly sensitive information. ● A trained incident response team and written procedures to effectively respond to potential computer security incidents. ● A third-party risk management process to evaluate the business risk of working with key service providers and vendors who access sensitive information.
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To this end, we have implemented a cybersecurity program that includes, but is not limited to, the following key elements: • Governance : The Board of Directors oversees our cybersecurity risk management strategy, regularly reviewing threats, risks, and mitigation measures.
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The Committee oversees management’s implementation of our cybersecurity program. The Committee receives periodic reports from management on our cybersecurity program and risks. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
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These reviews include both internal and independent evaluations of risks, controls, and effectiveness. • Vigilance : Our global cybersecurity operations are designed to detect, prevent, contain, and respond to cyber threats and incidents, aiming to minimize business disruptions. • Safeguards : We use administrative, technical, and physical controls designed to secure our personnel, information systems, operations, and sensitive data from cyber threats, such as cybersecurity policies and procedures, risk assessments, cybersecurity training, secure facility access, surveillance systems, firewalls, intrusion detection and prevention systems, disaster recovery capabilities, malware and ransomware defenses, access controls, and data protection. • Education : Personnel receive periodic cybersecurity training.
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The current Senior Cybersecurity Manager has extensive information security and program management experience and has held past positions as a virtual CISO for a wide range of organizations.
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Our policies require employees to report any actual or suspected cybersecurity events. • Third Party Risk Management : We strive to apply our cybersecurity standards to our third-party ecosystem, identifying and managing risks posed by third parties. • Incident Response : We have established an incident response plan that guides how we handle cybersecurity events and incidents.
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This plan includes procedures to detect, analyze, contain, and eradicate threats, and communicate significant incidents to executive management, the Board of Directors, regulators, and shareholders when appropriate. • Enterprise-Wide Coordination : Relevant stakeholders across the company—such as R&D, commercial, technology, legal, compliance, and other departments—work together to identify emerging risks and respond to cybersecurity threats through a cross-functional approach. • External Service Providers : We use external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our cybersecurity processes.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters are located in Boston, Massachusetts, where we lease approximately 13,600 square feet of office space pursuant to lease agreements expiring in July 2030. This facility houses our research, clinical, regulatory, commercial and administrative personnel. See Note 6 to our audited consolidated financial statements included in this report for additional information about this lease.
Biggest changeItem 2. Properties Our corporate headquarters are located in Boston, Massachusetts, where we lease approximately 13,600 square feet of office space pursuant to lease agreements expiring in July 2030. This facility houses our research, clinical, regulatory, commercial and administrative personnel.
We believe that our existing facilities are adequate for our near-term needs, but we may need additional space as we grow and expand our operations. We believe that suitable additional or alternative office space would be available as required in the future on commercially reasonable terms.
We believe that our existing facilities are adequate for our near-term needs, but we may need additional space as we grow and expand our operations. We believe that suitable additional or alternative office space would be available as required in the future on commercially reasonable terms. Item 3.
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Legal Proceedings We are not currently a party to any material legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 109 Table of Conten ts PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePayment of future cash dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of current or then-existing debt instruments and other factors the board of directors deems relevant. ​ 120 Table of Contents Performance Graph This graph is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of Rhythm Pharmaceuticals, Inc. under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Biggest changePerformance Graph This graph is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of Rhythm Pharmaceuticals, Inc. under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Item 5. M arket for Registrant’s Common Equity , Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock has been listed on The Nasdaq Global Market under the symbol “RYTM” since October 5, 2017. Prior to that date, there was no public trading market for our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock has been listed on The Nasdaq Global Market under the symbol “RYTM” since October 5, 2017. Prior to that date, there was no public trading market for our common stock.
The following graph shows the total stockholder return of an investment of $100 in cash at market close on December 31, 2017 through December 31, 2024 for (1) our common stock, (2) the Nasdaq Composite Index (U.S.) and (3) the Nasdaq Biotechnology Index.
The following graph shows the total stockholder return of an investment of $100 in cash at market close on December 31, 2017 through December 31, 2025 for (1) our common stock, (2) the Nasdaq Composite Index (U.S.) and (3) the Nasdaq Biotechnology Index.
Holders of Common Stock As of February 24, 2025, there were 17 holders of record of our common stock. This number does not reflect beneficial owners whose shares are held in street name.
Holders of Common Stock As of February 24, 2026, there were 13 holders of record of our common stock. This number does not reflect beneficial owners whose shares are held in street name.
The stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. ​ Recent Sales of Unregistered Securities Except as previously disclosed in Current Reports on Form 8-K filed on January 4, 2024 and April 1, 2024, we did not make any unregistered sales of equity securities during the period covered by the report.
Recent Sales of Unregistered Securities Except as previously disclosed in Current Reports on Form 8-K filed on January 4, 2024 and April 1, 2024, we did not make any unregistered sales of equity securities during the period covered by the report. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. Reserved
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ​ Item 6. [Reserved ] ​ ​
Added
Payment of future cash dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of current or then-existing debt instruments and other factors the board of directors deems relevant.
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The stockholder return shown on the 110 Table of Conten ts graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIn general, an ownership change, as defined by Section 382, occurs when there is a greater than 50% change in the ownership of stock among certain 5% shareholders over a three-year period. 129 Table of Contents Results of Operations Comparison of years ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023, together with the changes in those items in dollars and as a percentage: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ 2024 2023 $ ​ % ​ ​ (in thousands) Statement of Operations Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 130,126 ​ $ 77,428 ​ $ 52,698 ​ 68 % Total revenues ​ ​ 130,126 ​ ​ 77,428 ​ ​ 52,698 ​ 68 % Costs and expenses: ​ ​ ​ ​ ​ Cost of sales ​ ​ 13,368 ​ ​ 9,302 ​ ​ 4,066 ​ 44 % Research and development ​ ​ 237,957 ​ ​ 134,951 ​ ​ 103,006 ​ 76 % Selling, general, and administrative ​ 144,304 ​ 117,532 ​ 26,772 ​ 23 % Total costs and expenses ​ 395,629 ​ 261,785 ​ 133,844 ​ 51 % Loss from operations ​ (265,503) ​ (184,357) ​ (81,146) ​ 44 % Other income (expense), net ​ 5,247 ​ 243 ​ 5,004 ​ 2,059 % Loss before income taxes ​ ​ (260,256) ​ ​ (184,114) ​ ​ (76,142) ​ 41 % Provision for income taxes ​ ​ 346 ​ ​ 564 ​ ​ (218) ​ (39) % Net loss ​ $ (260,602) ​ $ (184,678) ​ $ (75,924) ​ 41 % ​ Product revenue, net increased by $52.7 million to $130.1 million in 2024 from $77.4 million in 2023, an increase of 68%.
Biggest changeResults of Operations Comparison of years ended December 31, 2025 and 2024 The following table summarizes our results of operations for the years ended December 31, 2025 and 2024, together with the changes in those items in dollars and as a percentage: Year Ended December 31, Change 2025 2024 $ % (in thousands) Statement of Operations Data: Product revenue, net $ 194,771 $ 130,126 $ 64,645 50 % License revenue (5,014) — (5,014) 100 % Total revenues 189,757 130,126 59,631 46 % Costs and expenses: Cost of sales 19,492 13,368 6,124 46 % Research and development 167,340 237,957 (70,617) (30) % Selling, general, and administrative 194,941 144,304 50,637 35 % Total costs and expenses 381,773 395,629 (13,856) (4) % Loss from operations (192,016) (265,503) 73,487 (28) % Other income (expense), net (4,026) 5,247 (9,273) (177) % Loss before income taxes (196,042) (260,256) 64,214 (25) % Provision for income taxes 497 346 151 44 % Net loss $ (196,539) $ (260,602) $ 64,063 (25) % Product revenue, net increased by $64.6 million to $194.8 million in 2025 from $130.1 million in 2024 , an increase of 50%, due primarily to higher volume of product sold both domestically and internationally.
We have also agreed to pay LG Chem up to $205 million in cash upon achieving various regulatory and sales milestones based on net sales of bivamelagon .
We have also agreed to pay LG Chem up to $205 million in cash upon achieving various regulatory milestones and sales milestones based on net sales of bivamelagon.
Milestone and royalty payments associated with our license agreements with Ipsen, Camurus, and LG Chem, have not been included as contractual obligations as we cannot reasonably estimate if or when they will occur.
Future milestone and royalty payments associated with our license agreements with Ipsen, Camurus, and LG Chem, have not been included as contractual obligations as we cannot reasonably estimate if or when they will occur.
Net cash used in operating activities was $113.9 million for the year ended December 31, 2024, and consisted primarily of a net loss of $260.6 million adjusted for non-cash items of $43.8 million, which consisted of stock-based compensation, depreciation and amortization, non-cash interest expense, non-cash accretion and amortization of short-term investments, non-cash accretion of other current liability, non-cash rent expense, gain on settlement of forward contract, and the change in the fair value of our embedded derivative liability.
Net cash used in operating activities was $113.9 million for the year ended December 31, 2024, and consisted primarily of a net loss of $260.6 million adjusted for non-cash items of $43.8 million, which consisted of stock-based compensation, depreciation and amortization, non-cash interest expense, non-cash accretion and amortization of short-term investments, non-cash rent expense, gain on settlement of forward contract, and the change in the fair value of our embedded derivative liability.
Selling, general and administrative expenses Selling expenses consist of professional fees related to preparation for the commercialization of setmelanotide as well as salaries and related benefits for commercial employees, including stock-based compensation.
Selling, general and administrative expenses Selling expenses consist of professional fees related to preparation for the continued commercialization of setmelanotide as well as salaries and related benefits for commercial employees, including stock-based compensation.
Our sequencing-based epidemiology estimates show that each of these genetically-defined MC4R pathway deficiencies are considered rare diseases, according to established definitions based on patient populations. Our epidemiology estimates are approximately 4,600 to 7,500 for U.S. patients in initial FDA-approved indications, including obesity due to BBS and biallelic POMC, PCSK1 or LEPR deficiencies.
Our sequencing-based epidemiology estimates show that each of these genetically-defined MC4R pathway deficiencies we are focused on are considered rare diseases, according to established definitions based on patient populations. Our epidemiology estimates are approximately 4,600 to 7,500 for U.S. patients in initial FDA-approved indications, including obesity due to BBS and biallelic POMC, PCSK1 or LEPR deficiencies.
Net cash provided by financing activities Net cash provided by financing activities was $191.2 million for the year ended December 31, 2024, and consisted of net proceeds of $147.8 million from the issuance of Convertible Perferred Stock as well as net proceeds from our ATM equity offering of $39.1 million.
Net cash provided by financing activities was $191.2 million for the year ended December 31, 2024, and consisted of net proceeds of $147.8 million from the issuance of Convertible Preferred Stock as well as net proceeds from our ATM equity offering of $39.1 million.
The duration, costs, and timing of clinical trials and development of setmelanotide, RM-718, bivamelagon, and a potential therapeutic product candidate for congenital hyperinsulinism (CHI) will depend on a variety of factors, including: ● the scope, rate of progress, and expense of our ongoing, as well as any additional, clinical trials and other research and development activities; ● the rate of enrollment in clinical trials; ● the safety and efficacy demonstrated by setmelanotide in future clinical trials; ● changes in regulatory requirements; ● changes in clinical trial design; and ● the timing and receipt of any regulatory approvals. 125 Table of Contents A change in the outcome of any of these variables with respect to the development of our product candidates would significantly change the costs and timing associated with its development and potential commercialization.
The duration, costs, and timing of clinical trials and development of setmelanotide, RM-718, bivamelagon, and a potential therapeutic product candidate for congenital hyperinsulinism (CHI) will depend on a variety of factors, including: • the scope, rate of progress, and expense of our ongoing, as well as any additional, clinical trials and other research and development activities; • the rate of enrollment in clinical trials; • the safety and efficacy demonstrated by setmelanotide in future clinical trials; • changes in regulatory requirements; • changes in clinical trial design; and • the timing and receipt of any regulatory approvals. 114 Table of Conten ts A change in the outcome of any of these variables with respect to the development of our product candidates would significantly change the costs and timing associated with its development and potential commercialization.
The issuances and sales under the Sales Agreement, as amended by the Amendment, will be made pursuant to the Registration Statement and the New Prospectus. Beginning on December 10, 2024 the company sold 744,595 shares of common stock in the ATM program for net proceeds of $41.2 million as of December 31, 2024.
The issuances and sales under the Sales Agreement, as amended by the Amendment, will be made pursuant to the Registration Statement and the New Prospectus. From December 10, 2024 to December 31, 2024, the Company sold 744,595 shares of common stock in the ATM Program for net proceeds of $41.2 million as of December 31, 2024.
IMCIVREE was approval by the FDA and the EC in adult and pediatric patients six years of age and older with obesity due to BBS in June and September 2022, respectively.
IMCIVREE was approved by the FDA and the EC in adult and pediatric patients six years of age and older with obesity due to BBS in June and September 2022, respectively.
In the United States, which accounts for the largest portion of our total revenues, the Company sells its product to one material specialty pharmacy. The product is distributed through third-party logistics, or 3PL, distribution agent that does not take title to the product.
In the United States, which accounts for the largest portion of our total revenues, the Company sells its product through a specialty pharmacy. The product is distributed through a third-party logistics, or 3PL, distribution agent that does not take title to the product.
To determine revenue recognition for arrangements within the scope of ASC 606, we perform the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation.
To determine revenue recognition for arrangements within the scope of ASC 606, we perform the following five steps: (1) identify the contracts with a customer; 115 Table of Conten ts (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation.
We also received proceeds of $17.2 million from the exercise of stock options and the issuance of common stock from our 2017 Employee Stock Purchase Plan, or the ESPP. These proceeds were offset by $12.9 million of repayments on our deferred royalty obligation.
We also received proceeds of $17.2 million from the exercise of stock options and the issuance of common stock from our 2017 Employee Stock Purchase Plan. These proceeds were offset by $12.9 million of repayments of our deferred royalty obligation.
Corporate Background We are a Delaware corporation organized in February 2013 under the name Rhythm Metabolic, Inc., and as of October 2015, under the name Rhythm Pharmaceuticals, Inc. Financial Operations Overview Revenue To date, we have generated approximately $227.6 million of revenue from product sales.
Corporate Background We are a Delaware corporation organized in February 2013 under the name Rhythm Metabolic, Inc., and as of October 2015, under the name Rhythm Pharmaceuticals, Inc. Financial Operations Overview Revenue To date, we have generated approximately $422.5 million of revenue from product sales.
We computed the historical volatility data using the daily closing prices for the selected companies' shares during the equivalent period of the 128 Table of Contents calculated expected term of our stock-based awards.
We computed the historical volatility data using the daily closing prices for the selected companies' shares during the equivalent period of the calculated expected term of our stock-based awards.
Our MC4R pathway program is designed to expand the total number of patients who we believe could benefit from setmelanotide therapy or from one of our new drug candidates. Our Phase 3 EMANATE trial, comprised of four independent substudies evaluating setmelanotide in genetically caused MC4R pathway diseases is ongoing.
Our MC4R pathway program is designed to expand the total number of patients who we believe could benefit from setmelanotide therapy or from one of our new drug candidates. Our Phase 3 EMANATE trial, comprised of four independent substudies evaluating setmelanotide in genetically caused MC4R pathway diseases, is ongoing with topline data expected in March 2026.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2024, we did not have any uncertain tax positions.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as 117 Table of Conten ts consideration of the available facts and circumstances. As of December 31, 2025, we did not have any uncertain tax positions.
We are leveraging what we believe is the largest known DNA database focused on obesity - with approximately 100,000 sequencing samples as of December 31, 2024 - to improve the understanding, diagnosis and care of people living 122 Table of Contents with severe obesity due to certain variants in genes associated with the MC4R pathway.
We are leveraging what we believe is the largest known DNA database focused on obesity - with approximately 120,000 sequencing samples as of December 31, 2025 - to improve the understanding, diagnosis and care of people living with severe obesity due to certain variants in genes associated with the MC4R pathway.
In April 2024, we received $147.8 million in net proceeds under the Investment Agreement, with certain affiliates of Perceptive Advisors LLC, or Perceptive, and certain other investors, relating to the issuance and sale of 150,000 shares of a new series of the Company’s Convertible Preferred Stock for an aggregate purchase price of $150.0 million, or $1,000 per share.
In April 2024, we received $147.8 million in net proceeds under the Investment Agreement, with certain affiliates of Perceptive Advisors LLC, or Perceptive, and certain other investors, relating to the issuance and sale of 150,000 shares of a new series of the Company’s Convertible Preferred Stock for an aggregate purchase price of $150.0 million, or $1,000 per share - see Note 9 to our consolidated financial statements - Series A Convertible Preferred Stock for additional information.
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, relating to our full-time employees not involved in R&D or commercial activities. Other significant costs include rent, legal fees relating to patent and corporate matters and fees for accounting and consulting services.
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, relating to our full-time employees not involved in R&D or commercial activities. Other significant costs include rent, information technology, legal fees relating to patent and corporate matters and fees for accounting and consulting services. The following table summarizes our current selling, general and administrative expenses.
We expense research and development costs to operations as incurred. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses.
We expense research and development costs to operations as incurred. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The capitalized amounts are expensed as the related goods are delivered or the services are performed.
The following table summarizes our current selling, general and administrative expenses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, Selling, general and administrative summary 2024 2023 Selling, general and administrative expense ​ $ 144,304 ​ $ 117,532 ​ We anticipate that our selling, general and administrative expenses will increase in the future to support continued and expanding commercialization efforts for IMCIVREE in the United States and the European Union as well as increased costs of operating as a global commercial stage biopharmaceutical public company.
December 31, Selling, general and administrative summary 2025 2024 Selling, general and administrative expense 194,941 144,304 We anticipate that our selling, general and administrative expenses will increase in the future to support continued and expanding commercialization efforts for IMCIVREE in the United States and the European Union as well as increased costs of operating as a global commercial stage biopharmaceutical public company.
We expect cost of sales to increase in 2025 as we continue to sell inventory that is produced after we began capitalizing manufacturing costs for IMCIVREE commercial inventory. 124 Table of Contents Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery and genetic sequencing efforts, and the clinical development of setmelanotide, which include: ● expenses incurred under agreements with third parties, including CROs that conduct research and development and preclinical activities on our behalf, and the cost of consultants and CMOs that manufacture drug products for use in our preclinical studies and clinical trials; ● employee-related expenses including salaries, benefits and stock-based compensation expense; ● the cost of lab supplies and acquiring, developing and manufacturing preclinical and clinical study materials; ● the cost of genetic sequencing of potential patients in clinical studies; ● facilities, depreciation, and other expenses, which include rent and maintenance of facilities, insurance and other operating costs; ● acquired in process research and development costs associated with the acquisition of Xinvento B.V., or Xinvento in the three months ended March 31, 2023; and ● acquired in process research and development costs associated with the acquisition of LG Chem, Ltd.’s, or LGC’s, proprietary compound bivamelagon in the three months ended March 31, 2024.
Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery and genetic sequencing efforts, and the clinical development of setmelanotide, which include: • expenses incurred under agreements with third parties, including CROs that conduct research and development and preclinical activities on our behalf, and the cost of consultants and CMOs that manufacture drug products for use in our preclinical studies and clinical trials; • employee-related expenses including salaries, benefits and stock-based compensation expense; • the cost of lab supplies and acquiring, developing and manufacturing preclinical and clinical study materials; • the cost of genetic sequencing of potential patients in clinical studies; • facilities, depreciation, and other expenses, which include rent and maintenance of facilities, insurance and other operating costs; • acquired in process research and development costs associated with the acquisition of Xinvento B.V., or Xinvento in the three months ended March 31, 2023; and • acquired in process research and development costs associated with the acquisition of LG Chem, Ltd.’s, or LGC’s, proprietary compound bivamelagon in the three months ended March 31, 2024.
For the years ended December 31, 2024 and 2023, a substantial amount of our product revenue, or 74% and 77%, respectively, was generated from sales of our product to patients in the United States. Cost of sales.
For the years ended December 31, 2025 and 2024, a substantial amount of our product revenue, or 69% and 74%, respectively, was generated from sales of our product to patients in the United States. License revenue .
We have achieved market access for IMCIVREE for BBS or POMC and LEPR deficiencies, or both, in more than 15 countries outside the United States, and we continue to collaborate with authorities to achieve access in additional markets.
We expect our sales of IMCIVREE to continue to increase. We have achieved market access for IMCIVREE for BBS or POMC and LEPR deficiencies, or both, in more than 25 countries outside the United States, and we continue to collaborate with authorities to achieve access in additional markets.
Specifically, the $4.1 million increase in cost of sales in 2024 was due to $2.6 million of additional royalties due to our growth in sales and $1.5 million due to higher product costs from higher net product revenue.
Specifically, the $6.1 million increase in cost of sales in 2025 was due to $3.2 million of additional royalties due to our growth in sales and $2.9 million due to higher product costs from higher net product revenue.
Similarly, our epidemiology estimates for patients with genetic indications who demonstrated an initial response following stage 1 of our Phase 2 DAYBREAK trial is approximately 65,300. All these patients face similar challenges as other patients with rare diseases, namely lack of awareness, resources, tests, tools and, especially, therapeutic options.
Similarly, our epidemiology 112 Table of Conten ts estimates for patients with genetic indications who demonstrated an initial response in our Phase 2 DAYBREAK trial is approximately 65,300. All these patients face similar challenges to other patients with rare diseases, namely lack of awareness, resources, tests, tools and especially therapeutic options.
Under the terms of the Ipsen license agreement, assuming that setmelanotide is successfully developed, receives regulatory approval and is commercialized, Ipsen may receive aggregate payments of up to $40.0 million upon the achievement of certain development and commercial milestones under the license agreement and royalties on future product sales and at December 31, 2024 there were $27.0 million of remaining milestones that may be achieved and due to Ipsen at a future date.
Under the terms of the Ipsen license agreement, Ipsen may receive aggregate payments of up to $40.0 million upon the achievement of certain development and commercial milestones under the license agreement and royalties on future product sales and at December 31, 2025 there were $27.0 million of remaining milestones that may be achieved and due to Ipsen at a future date.
As of December 31, 2024, there were $62.5 million of remaining milestones that may be achieved and for which Camurus would receive payment at a future date. We paid Camurus a $1.0 million milestone in 2022 upon the achievement of a development milestone. We did not make any milestone payments to Camurus during 2023 or 2024.
As of December 31, 2025, there were $62.5 million of remaining milestones that may be achieved and for which Camurus would receive payment at a future date. We did not make milestone payments to Camurus during 2023, 2024 or 2025.
As of December 31, 2024, we had reserved 12,475,344 shares of common stock under the 2017 Plan. Shares of common stock issued pursuant to awards are generally issued from authorized but unissued shares.
As of December 31, 2025, we had reserved 13,717,040 shares of common stock under the 2017 Plan. Shares of common stock issued pursuant to awards are generally issued from authorized but unissued shares.
Cash flows The following table provides information regarding our cash flows for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 ​ (in thousands) Net cash (used in) provided by: ​ ​ ​ ​ ​ Operating activities $ (113,879) ​ $ (136,157) Investing activities (48,173) ​ (5,665) Financing activities 191,242 ​ 74,368 Effect of exchange rates on cash ​ 2 ​ ​ (142) Net increase (decrease) in cash, cash equivalents and restricted cash $ 29,192 ​ (67,596) ​ Net cash used in operating activities The use of cash in all periods resulted primarily from our net losses, adjusted for non-cash charges and changes in components of operating assets and liabilities .
Cash flows The following table provides information regarding our cash flows for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands) Net cash (used in) provided by: Operating activities $ (115,675) $ (113,879) Investing activities $ (137,153) $ (48,173) Financing activities $ 217,963 $ 191,242 Effect of exchange rates on cash $ 87 $ 2 Net increase (decrease) in cash, cash equivalents and restricted cash $ (34,778) $ 29,192 Net cash used in operating activities The use of cash in all periods resulted primarily from our net losses, adjusted for non-cash charges and changes in components of operating assets and liabilities .
We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this report, including those set forth under Item 1A.
We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this report, including those set forth under Item 1A. “Risk Factors” and under “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report.
The significant estimates in our accrued research and development expenses include fees paid to CROs, CMOs and consultants in connection with research and development activities. 127 Table of Contents We accrue our expenses related to CROs, CMOs and consultants based on our estimates of the services received and efforts expended pursuant to quotes and contracts with CROs, CMOs and consultants that conduct research and development and manufacturing on our behalf.
We accrue our expenses related to CROs, CMOs and consultants based on our estimates of the services received and efforts expended pursuant to quotes and contracts with CROs, CMOs and consultants that conduct research and development and manufacturing on our behalf.
Cost of sales increased by $4.1 million to $13.4 million in 2024 from $9.3 million in 2023, an increase of 44%, which was driven primarily by the increase in product revenue in 2024 .
Cost of sales increased by $6.1 million to $19.5 million in 2025 from $13.4 million in 2024, an increase of 46%, which was driven primarily by the increase in product revenue in 2025.
Stock options granted under the 2022 Inducement Plan expire no more than 10 years from the date of grant. As of December 31, 2024, there were 495,978 stock option awards outstanding, 317,554 restricted stock unit awards outstanding and 14,586 shares of common stock available for future grant under the 2022 Inducement Plan.
Stock options granted under the 2022 Inducement Plan expire no more than 10 years from the date of grant. As of December 31, 2025 , there were 371,148 stock option awards outstanding, 194,419 restricted stock unit awards outstanding and 59,067 shares of common stock available for future grant under the 2022 Inducement Plan.
Stock-based compensation We maintain the Rhythm Pharmaceuticals, Inc. 2017 Equity Incentive Plan, (the “2017 Plan”) which provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, performance units, restricted stock awards, restricted stock units and stock grants to employees, consultants, advisors and directors, as determined by the board of directors.
To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred. 116 Table of Conten ts Stock-based compensation We maintain the Rhythm Pharmaceuticals, Inc. 2017 Equity Incentive Plan, (the “2017 Plan”) which provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, performance units, restricted stock awards, restricted stock units and stock grants to employees, consultants, advisors and directors, as determined by the board of directors.
The capitalized amounts are expensed as the related goods are delivered or the services are performed. ​ The following table summarizes our current research and development expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, Research and development summary 2024 2023 Research and development expense ​ $ 237,957 ​ $ 134,951 ​ We are unable to predict the duration and costs of the current or future clinical trials of our product candidates.
The following table summarizes our current research and development expenses: December 31, Research and development summary 2025 2024 Research and development expense $ 167,340 $ 237,957 We are unable to predict the duration and costs of the current or future clinical trials of our product candidates.
Our future capital requirements will depend on many factors, including: ● the costs to commercialize setmelanotide, by building an internal sales force or entering into collaborations with third parties and providing support services for patients; ● the scope, progress, results and costs of clinical trials for our setmelanotide program, as well as for RM-718 and bivamelagon , and in connection with a therapeutic product candidate for CHI; ● the costs, timing and outcome of regulatory review of our setmelanotide program; as well as for RM-718 and bivamelagon , and in connection with a therapeutic product candidate for CHI; 133 Table of Contents ● the costs related to the acquisition, integration, research and development and commercialization efforts related to the acquisition of Xinvento B.V. and any related therapeutic product candidates; ● the obligations owed to Ipsen, Camurus and LG Chem, pursuant to our license agreements; ● the extent to which we acquire or in-license other product candidates and technologies; ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; ● our ability to establish and maintain additional collaborations on favorable terms, if at all; and ● the costs of operating as a public company and losing our emerging growth company status.
Our future capital requirements will depend on many factors, including: • the cost to continue to commercialize setmelanotide, by growing our internal sales force or entering into collaborations with third parties and providing support services for patients; • the scope, progress, results and costs of clinical trials for our setmelanotide program, as well as for RM-718 and bivamelagon , and in connection with a therapeutic product candidate for CHI; • the costs, timing and outcome of regulatory review of our setmelanotide program; as well as for RM-718 and bivamelagon , and in connection with a therapeutic product candidate for CHI; • the obligations owed to Ipsen, Camurus AB and LGC, pursuant to our license agreements; • the extent to which we acquire or in-license other product candidates and technologies; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • our ability to establish and maintain additional collaborations on favorable terms, if at all; and • the costs of operating as a public company. 121 Table of Conten ts Although IMCIVREE has been approved by the FDA in certain indications, and became commercially available in the first quarter of 2021, IMCIVREE may not achieve commercial success.
We expect cost of sales as a percentage of product revenue, net to continue to be in a range of 10% to 12% in foreseeable future. Research and development expense. Research and development expense increased by $103.0 million to $238.0 million in 2024 from $135.0 million in 2023, an increase of 76%.
We expect cost of sales as a percentage of product revenue, net to continue to be in a range of 10% to 12% in foreseeable future. Research and development expense. Research and development expense decreased by $70.6 million to $167.3 million in 2025 from $238.0 million in 2024, a decrease of 30%.
Funding requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the clinical development of and seek marketing approval for setmelanotide for future indications and build out our global organization.
For additional information, see Note 11, Long-term Obligations, to the consolidated financial statements included elsewhere in this Annual Report. Funding requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the clinical development of and seek marketing approval for setmelanotide for future indications and build out our global organization.
Between August 10, 2023 and August 21, 2023, we sold approximately two million shares of our common stock in the ATM Program for net proceeds of approximately $48.9 million. 134 Table of Contents On February 29, 2024, we and Cowen entered into Amendment No. 1 to Sales Agreement (the “Amendment”) to increase the aggregate offering price of the shares of common stock that may be issued and sold pursuant to the Sales Agreement to $200.0 million (excluding the aggregate offering price of shares of common stock issued and sold pursuant to the Sales Agreement prior to February 29, 2024).
On February 29, 2024, we and Cowen entered into Amendment No. 1 to Sales Agreement (the “Amendment”) to increase the aggregate offering price of the shares of common stock that may be issued and sold pursuant to the Sales Agreement to $200.0 million (excluding the aggregate offering price of shares of common stock issued and sold pursuant to the Sales Agreement prior to February 29, 2024).
Our net losses were $260.6 million and $184.7 million for the years ended December 31, 2024 and 2023, respectively. We expect to continue to incur significant expenses and increasing operating losses over the foreseeable future.
As of December 31, 2025, we had an accumulated deficit of $1.4 billion. Our net losses were $196.5 million and $260.6 million for the years ended December 31, 2025 and 2024, respectively. We expect to continue to incur significant expenses and increasing operating losses over the foreseeable future.
IMCIVREE, an MC4R agonist for which we hold worldwide rights, is the first-ever therapy developed for patients with certain rare diseases that is approved or authorized in the United States, European Union (EU), United Kingdom, Canada and several other countries and regions. IMCIVREE is approved by the U.S.
IMCIVREE, our most advanced MC4R agonist for which we hold worldwide rights, is the first-ever therapy that is marketed in the United States, European Union (EU), United Kingdom, Canada and several other countries and regions for certain rare MC4R pathway diseases, including BBS.
Overview We are a global, commercial-stage biopharmaceutical company dedicated to transforming the lives of patients living with rare neuroendocrine diseases. We are focused on advancing our melanocortin-4 receptor (MC4R) agonists, including our lead asset, IMCIVREE® (setmelanotide), as precision medicines designed to treat hyperphagia and severe obesity caused by MC4R pathway diseases.
We are focused on advancing our melanocortin-4 receptor (MC4R) agonists, including our lead asset, IMCIVREE (setmelanotide), as precision medicines designed to treat hyperphagia and severe obesity caused by MC4R pathway diseases.
Discussion and analysis of our 2022 fiscal year, as well as the year-over-year comparison of our 2023 financial performance to 2022, are located in Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024.
Discussion and analysis of our 2024 fiscal year, as well as the year-over-year comparison of our 2024 financial performance to 2023, are located in Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025. 111 Table of Conten ts Overview We are a global, commercial-stage biopharmaceutical company dedicated to transforming the lives of patients living with rare neuroendocrine diseases.
Net cash used in operating activities was $136.2 million for the year ended December 31, 2023, and consisted primarily of a net loss of $184.7 million adjusted for non-cash items of $38.0 million, which consisted of stock-based compensation, depreciation and amortization, non-cash rent expense, accretion and amortization of our short-term investments and the change in the fair value of our embedded derivative liability.
Net cash used in operating activities was $115.7 million for the year ended December 31, 2025, and consisted primarily of a net loss of $196.5 million adjusted for $81.8 million of non-cash charges, which consisted of stock-based compensation, depreciation and amortization, non-cash interest expense, non-cash accretion and amortization of short-term investments, non-cash rent expense, and the change in the fair value of our embedded derivative liability, which we expect to continue to have these add-backs to net income.
Net cash used in investing activities Net cash used in investing activities was $48.2 million for the year ended December 31, 2024 and related to purchases of short term investments for $268.3 million and cash used for the purchase of LGC’s proprietary compound bivamelagon for $40.0 million in January 2024, offset by gross maturities of short-term investments of $260.6 million.
Net cash used in investing activities Net cash used in investing activities was $137.2 million for the year ended December 31, 2025 and related to purchases of short term investments for $348.7 million and cash used for the final payment we made in July 2025 for LGC’s proprietary compound bivamelagon for $40.0 million, offset by gross maturities and sales of short-term investments of $252.5 million.
The increase was primarily due to the following: ● an increase of $18.7 million due to increased compensation and benefits related costs associated with additional headcount to support our expanding business operations as well as to establish commercial operations in international regions ; ● an increase of $6.7 million related to increased marketing and promotion costs to support continued revenue growth; and ● an increase of $3.1 million related to professional services costs, including legal, consulting and tax services.
The increase was primarily due to the following: • an increase of $19.9 million increase in compensation and benefits-related costs associated with additional headcount to support our expanding business operations as well as to establish commercial operations in international regions; as well as an increase of $17.8 million of stock-based compensation due to increases in stock price and headcount, as well as the achievement of certain clinical and/or regulatory milestones related to performance units, and • an increase of $6.6 million related to increased marketing and promotion costs to support continued revenue growth, and our anticipated product launch for Hypothalamic Obesity. • an increase of $4.2 million related to professional services costs, including legal, consulting and tax services.
We expect that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operations into 2027. Our cash and cash equivalents are maintained at financial institutions in amounts that exceed federally-insured limits.
We expect that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operations for at least 24 months from the date of filing of this Annual Report on Form 10-K. Our cash and cash equivalents are maintained at financial institutions in amounts that exceed federally-insured limits.
On a quarterly basis, we update our estimates and record any necessary adjustments in the period identified. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the applicable contract.
Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract.
“Risk Factors” and under “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report. 121 Table of Contents In this Item 7, we discuss the results of operations for the years ended December 31, 2024 and 2023 and comparisons of our cash flows for the year ended December 31, 2024 to the year ended December 31, 2023.
In this Item 7, we discuss the results of operations for the years ended December 31, 2025 and 2024 and comparisons of our cash flows for the year ended December 31, 2025 to the year ended December 31, 2024.
Selling, general and administrative expense. Selling, general and administrative expense increased by $26.8 million to $144.3 million in 2024 from $117.5 million in 2023, an increase of 23%.
Selling, general and administrative expense. Selling, general and administrative expense increased by $50.6 million to $194.9 million in 2025 from $144.3 million in 2024, an increase of 35%.
However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all.
However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such other arrangements as, and when, needed, we may have to significantly delay, scale back or discontinue the development or commercialization of setmelanotide.
As of December 31, 2024, our cash and cash equivalents and short-term investments were approximately $320.6 million. We expect that our cash and cash equivalents and short-term investments as of December 31, 2024, will enable us to fund our operating expenses into 2027.
As of December 31, 2025, our cash and cash equivalents and short-term investments were approximately $388.9 million. We expect that our cash and cash equivalents and short-term investments as of December 31, 2025, will enable us to fund our operations for at least 24 months.
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. ​ ​ 126 Table of Contents Revenue Recognition In accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, we recognize revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration we expect to receive in exchange for the goods or services provided.
Revenue Recognition In accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, we recognize revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration we expect to receive in exchange for the goods or services provided.
Following these approvals for BBS, sales of IMCIVREE have grown, and we expect will continue to grow as we identify and treat more patients with this disease and obtain reimbursement throughout the international markets in which we operate. Cost of sales All of our inventory of IMCIVREE produced prior to FDA approval is available for commercial or clinical use.
Following these initial approvals, sales of IMCIVREE have grown, and we expect will continue to grow. 113 Table of Conten ts Cost of sales All of our inventory of IMCIVREE produced prior to FDA approval is available for commercial or clinical use. Most of the manufacturing costs have been recorded as research and development expenses in prior periods.
We received $116,887 in net proceeds after deducting underwriting discounts, commissions and offering expenses. In addition, we granted the underwriters a 30-day option to purchase up to an additional 720,000 shares of its common stock at the price to the public, less underwriting discounts and commissions.
In addition, under the terms of the Underwriting Agreement, we granted the Underwriters a 30-day option to purchase up to 308,823 additional shares of Common Stock, at the public offering price per share, less underwriting discounts and commissions. On July 10, 2025, the Underwriters exercised the option in full.
We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary.
We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development expenses include fees paid to CROs, CMOs and consultants in connection with research and development activities.
Recent Accounting Pronouncements For a discussion of pending and recently adopted accounting pronouncements, see Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report. ​
Under the amendment, the current lease was extended for five years through July 31, 2030. The lease includes approximately 13,600 square feet of office space. Recent Accounting Pronouncements For a discussion of pending and recently adopted accounting pronouncements, see Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report. 123 Table of Conten ts
These proceeds were partially offset by $7.4 million of repayments of our deferred royalty obligation. Revenue Interest Financing Agreement On June 16, 2022, we entered into the RIFA with HealthCare Royalty, for a total investment amount of up to $100 million.
Revenue Interest Financing Agreement On June 16, 2022, we entered into the RIFA with HealthCare Royalty, for a total investment amount of up to $100 million. In exchange for the total investment amount to be received by us, HealthCare Royalty will receive a tiered royalty based on global net product sales generated by IMCIVREE.
Ownership changes may limit the amount of net operating losses and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.
Ownership changes may limit the amount of net operating losses and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, occurs when there is a greater than 50% change in the ownership of stock among certain 5% shareholders over a three-year period.
Milestones generally become due and payable upon achievement of such milestones or sales. When the achievement of these milestones or sales have not occurred, such contingencies are not recorded in our financial statements and are excluded from the table below.
When the achievement of these milestones or sales have not occurred, such contingencies are not recorded in our financial statements and are excluded from the table below. On May 2, 2024, we entered into an agreement to amend the current operating lease agreement for our head office facility in Boston, Massachusetts .
With our efforts in hypothalamic obesity and other potential indications, we are advancing what we believe is the most comprehensive clinical research and development program ever initiated in MC4R pathway diseases, with multiple ongoing and planned clinical trials.
Following the disclosure of these positive preliminary results in December 2025, we announced plans to further develop setmelanotide and RM-718 for PWS. We are advancing what we believe is the most comprehensive clinical research and development program ever initiated in MC4R pathway diseases, with setmelanotide, bivamelagon and RM-718 in multiple ongoing and planned clinical trials.
Following the completion of our Phase 2 DAYBREAK trial, we identified six genetically-defined cohorts that we believe merit further investigation for potential setmelanotide efficacy. We also are evaluating setmelanotide for the treatment of Prader-Willi syndrome (PWS) in a 26-week, open-label Phase 2 trial which was initiated at a single site in the United States during the first quarter of 2025.
Following the completion of our Phase 2 DAYBREAK trial, we identified six genetically-defined cohorts that we believe merit further investigation for potential setmelanotide efficacy.
If actual results in the future vary from estimates, we adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Provisions for trade discounts, chargebacks and allowances are recorded as reductions to accounts receivable, and returns, government rebates, and other incentives are recorded as a component of accrued expenses.
Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.
The company sold an additional 587,510 shares of common stock in the ATM program through January 21, 2025 for net proceeds of approximately $32.1 million. Other funding On September 19, 2022, we completed a public offering of 4,800,000 shares of common stock at a price to the public of $26.00 per share.
The Company sold an additional 587,510 shares of common stock in the ATM Program from January 1, 2025 through January 21, 2025 for net proceeds of approximately $32.1 million in the quarter ending March 31, 2025. Other funding On July 9, 2025, we entered into an underwriting agreement (the “Underwriting Agreement”) with Morgan Stanley & Co.
The increase was primarily due to the following: ● acquired in-process research and development costs associated with the acquisition of LGC’s proprietary compound bivamelagon of $92.4 million; ● an increase of $8.1 million in salaries, benefits and stock-based compensation related to the hiring of additional full-time employees in order to support the growth of our research and development programs; ● an increase of $7.5 million in our Phase 3 acquired hypothalamic obesity trial, our Phase 1 clinical trial of RM-718 and the Phase 2 bivamelagon trial acquired from LGC.
The above decreases were partially offset by: • an increase of $8.0 million related to salaries, benefits and other compensation costs related to the hiring of additional full-time employees in order to support the growth of our research and development programs, as well as an increase of $9.3 million of stock-based compensation due to increases in stock price and headcount, as well as the achievement of certain clinical and/or regulatory milestones related to performance units, and • an increase of $7.2 million associated with chemistry, manufacturing, and controls (CMC) costs for drug formulation and autoinjector development to support RM-718 and our ongoing Phase 1 clinical trial of RM-718.
Other income (expense), net increased by $5.0 million to $5.2 million in 2024 from $0.2 million in 2023, which was due to the following: ● a gain of $8.9 million recognized for the change in fair value of a forward contract recorded with the issuance of Convertible Preferred Stock; and ● a change in fair value of the embedded derivative in our debt royalty obligation of $1.2 million, realized foreign currency gains of $0.4 million and other income of $0.4 million; and ● an increase in interest income of $0.8 million earned on our short-term investments, based on higher investment balances from the net proceeds of $147.8 million from the convertible preferred stock issuance.
This change of $(9.3) million was due to the following: • a one-time gain of $8.9 million that was recognized for the settlement of a forward contract recorded with the issuance of Convertible Preferred Stock during the year ended December 31, 2024; which did not recur in 2025, and • a decrease in other income of $0.9 million primarily due to the change in fair value of the embedded derivative on our deferred royalty obligation and less foreign exchange gains in 2025. 119 Table of Conten ts Liquidity and Capital Resources As of December 31, 2025, our cash and cash equivalents and short-term investments were approximately $388.9 million.
The majority of the aggregate payments under the Camurus license agreement are for milestones that may be achieved no earlier than first commercial sale of this weekly formulation of setmelanotide. 135 Table of Contents Under the terms of the LG Chem license agreement, we have paid LG Chem $40 million in cash, issued shares of our common stock with an aggregate value of $20 million and agreed to make a $40 million payment in cash 18 months after the effective date of the license agreement.
Under the terms of the LG Chem license agreement, we have paid LG Chem $80 million in cash and issued shares to them of our common stock with an aggregate value of $20 million.
During 2022, we paid Ipsen a $4.0 million milestone upon our first commercial sale of IMCIVREE in Europe. We did not make additional milestone payments to Ipsen during 2023 or 2024.
We did not make milestone payments to Ipsen during 2023, 2024 or 2025.
Net cash used in investing activities was $5.7 million for the year ended December 31, 2023 which related primarily to cash used to purchase Xinvento’s IPR&D assets in February 2023. Our gross purchases of short-term 132 Table of Contents investments of $354.9 million were generally offset by gross proceeds from maturities of short-term investments of $355.0 million.
Net cash used in investing activities was $48.2 million for the year ended December 31, 2024 and related to purchases of short term investments for $268.3 million and cash used for the purchase of LGC’s proprietary compound bivamelagon for $40.0 million in January 2024, offset by gross maturities of short-term investments of $260.6 million. 120 Table of Conten ts Net cash provided by financing activities Net cash provided by financing activities was $218.0 million for the year ended December 31, 2025, which consisted of net proceeds of $188.7 million from a follow-on offering of our common stock in July 2025, and net proceeds from our ATM equity offering of $34.0 million.
In addition to setmelanotide, we have two earlier-stage investigational MC4R agonists in clinical development, RM-718, designed for weekly administration, and bivamelagon, an oral small molecule, which are each advancing in Phase 1 and 2 clinical trials, respectively. These investigational assets are designed to be highly selective for the MC4R and MC1R sparing and thereby not cause hyperpigmentation.
We also are developing two earlier-stage investigational MC4R agonists, bivamelagon (formerly LB54640), an oral small molecule, and RM-718, designed for weekly subcutaneous administration.
The change in operating assets and liabilities reflected a total net source of cash of approximately $4.8 million primarily driven by a net increase in accounts payable and accrued expenses of $14.8 million, decreases in long term assets of $1.7 million and decreases in prepaid expenses and other current assets of $2.7 million.
Additionally, the change in operating assets and liabilities used net cash of approximately $1.0 million, and was primarily driven by total net increases of accounts receivable of $7.6 million, which corresponds to the increase in our revenue, $7.5 million increase in inventory as we work to build up our supply ahead of anticipated demand, and an increase of $6.3 million in prepaid expenses and other current assets due primarily to prepayments being reclassed from long-term to short-term, offset by total net increases to accounts payable and accrued expenses of $21.9 million primarily driven by the increase in our sales allowance for pricing rebates as our revenue continues to grow.
The above increases were partially offset by: ● the purchase of in-process research and development assets of $5.7 million from Xinvento in 2023, which did not recur in 2024; and ● a decrease in our clinical trial costs associated with decreased activity in our Phase 2 DAYBREAK trial and pediatrics trial for setmelanotide therapy of approximately $3.6 million.
The net decrease was primarily due to the following: • a decrease of $92.4 million related to acquired In-Process Research and Development (“IPR&D”) costs associated with the acquisition of LGC’s proprietary compound bivamelagon in the year ended December 31, 2024, which did not recur in 2025; and • a net decrease of $6.7 million in our clinical trial costs due to the completion and/or wind down of various trials including our Setmelanotide long-term extension trial, DAYBREAK phase 2 trial, Phase 3 pediatrics trial, and Phase 3 HO Setmelanotide trial; partially offset with an increase in our Bivamelagon HO Phase 2 and Bivamelagon long-term extension trials, as well as our Prader-Willi Syndrome Setmelanotide trial.
Removed
In addition to the United States, we have achieved market access or named patient sales for IMCIVREE for BBS or POMC and LEPR deficiencies, or both, in 15 countries outside the United States, and we continue to collaborate with authorities to achieve access in additional markets.
Added
On February 26, 2026 we announced we completed a positive end-of-Phase-2 meeting with FDA regarding bivamelagon in acquired HO and disclosed open-label extension data from our Phase 2 trial that showed bivamelagon achieved persistent BMI reductions at six and nine months of therapy. IMCIVREE is approved by the U.S.
Removed
We completed enrollment in our Phase 2 trial evaluating bivamelagon, in acquired hypothalamic obesity in the first quarter of 2025. With RM-718, we anticipate initiating Part C of our Phase 1 trial to evaluate this weekly MC4R agonist in patients with acquired hypothalamic obesity in the first quarter of 2025.
Added
Reviews of our regulatory submissions seeking approval and marketing authorization for setmelanotide as a treatment for acquired hypothalamic obesity are ongoing in the United States and Europe with an FDA-assigned Prescription Drug User Fee Act (PDUFA) goal date of March 20, 2026.
Removed
We are developing setmelanotide to address additional patients with acquired hypothalamic obesity.
Added
We anticipate disclosing topline data from a 12-patient Japanese cohort of our Phase 3 trial evaluating setmelanotide for acquired hypothalamic obesity in March 2026, and pending positive data, completing a new drug application submission in Japan. Regulatory decisions in Europe and Japan are anticipated later in 2026 or 2027.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFinancial Statements and Supplementary Dat a See the consolidated financial statements filed as part of this Annual Report as listed under Item 15 below. ​ Item 9. Changes in and Disagreements with Accountant s on Accounting and Financial Disclosures Not Applicable. ​ 136 Table of Contents
Biggest changeOur exposure to foreign currency risk is not material for the year ended December 31, 2025; we consider this exposure as part of our overall risk management process. Item 8. Financial Statements and Supplementary Data See the consolidated financial statements filed as part of this Annual Report as listed under Item 15 below. Item 9.
Treasury and U.S. government agency obligations. Due to the short-term maturities and low risk profiles of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our investments. We are not materially exposed to market risk related to changes in foreign currency exchange rates. ​ Item 8.
Treasury and U.S. government agency obligations. Due to the short-term maturities and low risk profiles of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our investments. We are also exposed to market risks related to fluctuations in foreign currency exchange rates.
Added
These risks arise primarily from our international operations, including foreign currency‑denominated revenues, expenses, assets, liabilities, and intercompany transactions. Changes in exchange rates can impact our results of operations, financial position, and cash flows, as well as the U.S. dollar value of our foreign currency‑denominated balances.
Added
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures Not Applicable.

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