Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rhythm Pharmaceuticals Inc (RYTM, Financial) reported strong revenue growth of 12% over the prior quarter, reaching $29.1 million in Q2 2024.
- The company achieved a significant regulatory milestone with the pediatric approval for IMCIVREE in the EU for patients aged two to younger than six.
- Positive progress in the hypothalamic obesity Phase 3 trial, with the trial being over-enrolled and a low dropout rate.
- Expansion of marketing authorization for IMCIVREE in the EU to include younger children, which underscores the significant unmet medical need.
- Steady growth in prescriptions and positive reimbursement decisions, with approximately 100 new prescriptions and 70 approvals for reimbursement in the US.
Negative Points
- R&D expenses were high at $30.2 million for the second quarter, although this was a decrease from the previous year.
- SG&A expenses increased to $36.4 million, up from $30 million in the same quarter last year.
- Challenges in gaining Medicare reimbursement for IMCIVREE, which remains an ongoing dialogue.
- The company faces stringent requirements from certain state Medicaid programs, impacting patient approvals.
- The overall compliance and persistence rates for IMCIVREE, while improving, still present challenges in patient management.
Q & A Highlights
Q: The number of new prescriptions for BBS has been consistent over the last three quarters with 100 new scripts and 70 payer approvals for reimbursement per quarter. What remaining levers do you have to further increase numbers of new scripts per quarter, or proportion of payer approvals? Or is the launch fairly mature for BBS, where numbers are likely to remain consistent or decrease over time?
A: David Meeker, Chairman, CEO & President: The consistency is somewhat remarkable for a rare disease. We acknowledge the fact that it's been somewhat consistent, but we do not necessarily anticipate a pure trend line even now that we're two years out. Jennifer Lee, EVP & Head, North America: We are happy with the steady number even two years out of launch. There is still a lot of opportunity that remains out there. We are constantly looking for new ways to supplement our efforts, such as understanding who are the physicians with positive BBS patients. From a payer perspective, we are very happy with our current status and the number of IMCIVREE-specific policies in place.
Q: Can you remind us of what you hope to see in Stage 2 of DAYBREAK later this year? What kind of placebo-adjusted benefit would be considered clinically meaningful? Would there be sufficient numbers of patients to get a sense by gene?
A: David Meeker, Chairman, CEO & President: The challenge with DAYBREAK is the relatively small number of patients per gene. By definition, patients who went into Phase 2 had a 5% or more decrease in their BMI. We expect to see if the DAYBREAK trial design worked, meaning if patients on placebo regained weight and those on IMCIVREE continued to lose more. We hope to identify minimally one to three additional genes that might be interesting to pursue.
Q: In North America, can you give us your most recent estimates for the persistence and compliance on therapy? Have the rates of compliance or persistence changed over the last few quarters?
A: David Meeker, Chairman, CEO & President: The discontinuation rate is still in the 20% to 30% range, pushing toward the upper end. We have less insight into overall compliance, which is more challenging to get at. Jennifer Lee, EVP & Head, North America: Patients tend to have a higher compliance rate overall when they feel something when they don't take the drug or experience a recurrence of symptoms.
Q: Can you talk about the kinetics of the uptake in the HO community in France? How quickly is it being adopted? Do you have any sense of the number of HO patients on therapy? Should we expect a similar rate of adoption in Italy now that early access is opening?
A: Yann Mazabraud, EVP & Head, International: We achieved pre-EMA approval access based on Phase 2 data, which is extremely rare. We are happy with the uptake and the willingness to treat from the rare endocrine disease community. For Italy, we expect significant traction with the first patients likely starting at the end of the year.
Q: Are there any data being collected on HO patients in France to put together some real-world data that could be used for reimbursement or other purposes?
A: Yann Mazabraud, EVP & Head, International: There is a national data collection led by the French Ministry of Health. We don't have direct access to these clinical data yet, but we know that the HCP and the Federal Joint Committee plan to publish on them soon. Physicians are very pleased with the efficacy of the drug.
Q: Can you expand on the progress of the 718 study and timelines? Are there any updated thoughts on the value of moving both the oral and 718 forward versus maybe just the oral?
A: David Meeker, Chairman, CEO & President: Assuming success in both trials, we will continue to move both forward. The goal is to have two options, a weekly injectable and a daily oral. The decision to add two higher dosing cohorts is to potentially avoid a dedicated QTC study, saving time and expense. The six-month talk study will finish in mid to late fall, which will be a key trigger for moving on to Part C.
Q: Can you talk about the overlap between the prescriber population for BBS and the potential prescribers for an HO launch?
A: Jennifer Lee, EVP & Head, North America: The product is the product, and everything we've learned about educating and onboarding patients applies to any future indication. The prescriber base for HO will likely overlap with those for BBS, as these patients are seen by endocrinologists and obesity specialists.
Q: Can you talk about the potential size of the opportunities for the mutations in the Basket Study? How big could these be compared to BBS and HO?
A: David Meeker, Chairman, CEO & President: The size of the population will range between BBS and HO. Some genes are incredibly rare, while others are more frequent. We hope to identify genes that are large enough to study and pursue.
Q: How should we think about pricing in Europe as more countries start selling products and you move away from high compensation countries like Germany?
A: Yann Mazabraud, EVP & Head, International: There is no strict rule, and pricing can vary. Some countries may have higher prices than expected, while others may be lower. Overall, we are pleased with our pricing in Europe, as PPL and BBS have been recognized as rare diseases and priced accordingly.
Q: Can you remind us of the addressable BBS patient population for the two to six-year-old age group? How soon should we expect an impact on sales, and how much of an impact do you think this will have?
A: Jennifer Lee, EVP & Head, North America: The label expansion will modestly expand the treatable population. Less than 10% of patients in the CRIBBS registry are younger than seven years of age. There may be some impact, but it is not expected to be significant.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
