Rhythm Pharmaceuticals, Inc. (RYTM) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Rhythm Pharmaceuticals Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to your first speaker today, to Mr. David Connolly, Investor Relations and Corporate Communications. Please go ahead, sir.

Thank you and thank you for joining us today. For those of you participating via the conference call, the accompanying slides can be accessed and controlled by going to the Events section of the Investors page on our website at ir.rhythmtx.com. This afternoon, we issued 2 press releases, which are available on our website. Moving to Slide 2. I'll remind you that this call contains remarks concerning future expectations, plans and prospects, which constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent annual or quarterly report on file with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements. As listed here on Slide 3, today, we have in Boston for this conference call are David Meeker, our Chairman, President and Chief Executive Officer; Jennifer Chien, Executive Vice President and Head of North America; and Hunter Smith, our Chief Financial Officer. With that, I'll turn the call over to David, who will begin on Slide 5.

Thanks, David, and thanks to all of you for joining. Obviously, an incredibly important milestone for Rhythm, which we're quite excited about. Just like to start by thanking the key individuals who help make this happen. First and foremost, the Rhythm employees. This company is -- it's been a multi-year journey getting to this point, and a lot of incredibly good work done. Thanking our investigators and their teams who've been partnering with us all along the way. And then, of course, most importantly, the patients and their families. They've just been incredible. And these are not easy trials to run, and the commitment on their part has been, as I said, quite amazing. I'll remind you, as you all know, we think this is a very important, large opportunity for us. And there's a large number of patients in the U.S., we estimate on the 2,500-plus, and we walked you through some of the math there where I think the plus part is an important way to look at this. We've highlighted that more than 350 patients already identified. Jennifer is going to walk you through the fact that the patients and physicians, they are out there. They're ready. They're waiting and we're ready, and so you'll hear some of the preparatory steps that we've made and to put us in that position. So overall, this is a significant step in our journey to transform lives of patients and their families living with hyperphagia and severe obesity caused by the rare melanocortin-4 receptor pathway diseases. And it provides further validation, setmelanotide and the approach that we're taking to demonstrate its use in these different diseases. It builds on our success in PPL, and a lot of confidence in our ongoing clinical development strategy where we are pursuing a pipeline and a product approach. And I'll remind you, there's a lot yet to come. The EMANATE and DAYBREAK trials are running. We have trials for our weekly formulation in a trial of setmelanotide in children ages 2 to 6 ongoing, and we're very much looking forward to reading out our interim data in our Phase II hypothalamic obesity trial coming up this summer. And today, you saw we also announced a non-dilutive agreement with HealthCare Royalty Partners for up to $100 million to fund ongoing clinical development with EMANATE, DAYBREAK and other trials designed to help us expand the addressable patient population for setmelanotide along with our global commercial efforts. HealthCare Royalty is a premier biotech investment firm, and we're thrilled to have them as a partner. And this agreement comes following deep diligence on their part, demonstrating significant confidence in Rhythm's ability to execute, and Hunter will share more details on this agreement. Moving to Slide 6, and specifically, the approval. So IMCIVREE is now the first and only FDA-approved therapy that targets a root cause of early-onset severe obesity and hyperphagia associated with Bardet-Biedl syndrome. We're really happy about the indication statement, with further emphasis on the monogenic and syndromic obesity, which helps distinguish IMCIVREE further from general obesity and other potential drugs that might be used in that indication. We're disappointed. I'll talk more about the label in a moment on the next slide. But to speak briefly about [ Alström's ], we're obviously disappointed by the fact that we did not get approval for Alström's, although we realized that was a challenge in going into it. I'm very grateful to the agency who gave it a full consideration, and we'll obviously take their feedback into account as we try to determine a path forward here. The bottom line was quite simple. It's just the number of patients we have is, in their view, just inadequate to demonstrate efficacy in this population. And we had 6 patients total in the trial, of which only 3 were in the primary analysis cohort. So again, we knew it was a light submission from that standpoint. And as I said, we'll determine where we go with Alström's going forward. The patient populations out there, we'll continue to offer testing for the ALMS1 gene as part of our URO testing panel, which will hopefully support greater awareness and earlier diagnosis for Alström's syndrome and those who are affected. And as we learn more about this disease, that knowledge will potentially open the door to new therapies and new strategies for regulatory approval. And we're very grateful to the entire Alström's community for their participation and support, guidance, collaboration over the years. And we remain committed to this rare genetic disease in general, and we'll continue to evaluate options for Alström's. So on Slide 7, here's some more details about the label. So yes, we're excited about this label. I indicated -- as I indicated, the monogenic and syndromic obesity language and the indication statement is incredibly helpful from a payer's standpoint. This is our strategy. It's not about the numbers so much, it's just understanding that this is a very -- these are apples and oranges. When you you look at patients with obesity and recognize that obesity is a disease, patients suffering with obesity or suffering from a disease, but it's not just one disease. It's many diseases and we have a very specific way of defining those diseases, which would benefit from setmelanotide. So like PPL, we're approved for children 6 years and older. These are genetic diseases that manifest with hyperphagia and severe obesity early in life. So at 6 years and older is incredibly important. Half of our trial in the BBS were under the age of 18. Like PPL, the agency also included a stopping rule. But for BBS, that stopping rule is to look at efficacy at 1 year on drug with a 5% reduction in weight loss for BMI. And this is incredibly important. Not all weight loss drugs have a stopping rule. Simple fact, if you're not losing weight, you should not be subjected to any medication you're not benefiting from it, so that's normal. We had an earlier request for a look, if you will, in our PPL label, which was a function of language that we had in our protocol. This was very specific recognition on the part of the agency except to what we had proposed that the benefit to this drug continues to occur over time, and it extends over time. And so looking at 3 months invariably would leave some patients who were going to go on and show further benefit potentially without access to the drug. So we think a year, if you're not benefiting in a year, then they will not be a good candidate for the drug. But this provides a very solid amount of time to experience that benefit and have it recognized. No contraindications in the label allows for treating patients with mild and moderate renal impairment as well as prescribed dose titration regimen for patients 12 and older with severe renal impairment. So that's an expansion of the label, strong addition, particularly in BBS, where we do have some patients who have renal insufficiency. And then no basic change to the overall safety profile, which was consistent in our BBS development program. So very quickly on Slides 8, 9 and 10 are slides that just remind you of the biology here. Slide #8 is the normal biology. We eat, got hormone signal to the adipose side. The adipose side releases leptin. It signals through the leptin receptor, activation of the POMC neuron and release of the POMC protein, which is broken down into alpha melanocyte-stimulating hormone, the endogenous ligand for MC4 receptor. And that all allows us to not feel hungry and to have good balance in terms of our overall energy expenditure and hopefully weight. Slide 9, in Bardet-Biedl specifically, there is, as we've talked about previously, 23-plus genes. Many of those genes and the -- working hypothesis around Bardet-Biedl syndrome is a cilial defect, and many of those genes impact functioning of the BBSome, which is part of the cilia, and the belief and our thought is that the cilial dysfunction impairs signaling through the leptin receptor. So again, strong reinforcement of this idea that interfering in the pathway, previously, the left receptor itself was studied, and demonstrated efficacy here signaling through that receptor via the cilial dysfunction and a reduction in the amount of MC4 -- sorry, in the reduction amount of alpha MSH available to engage the MC4 receptor. And then on Slide 10, just the obvious that setmelanotide, an analogue for alpha MSH, bypass this upstream defect and engage its receptor directly, resulting in a decrease in hunger and an increase in energy expenditure and subsequent further weight loss. So to finish before I hand it over to Jennifer, just to remind you about Bardet-Biedl syndrome in general. It is syndromic. By definition, multiple organs involved. So cognitive defects, vision impairment, not insignificant. 80% plus, these individuals by the time they're 18 or 20 may have significant vision loss, some renal disease, hypogonadism and polydactyly. So multiple ways in which these patients may come to a diagnosis. Our visibility to the health care system and one of the very important reasons why there are many more patients with BBS identified. Our genetic testing is going to be a strong supporting element here, I think, in getting physicians and the community at large to be thinking more about BBS. Maybe when all the manifestations are present, particularly when they present with the obesity -- early onset obesity and hyperphagia, which shows off in between the ages of 2 and 5. Numbers are helpful to look at, but we've come to appreciate it. It is not so much about the numbers, it's really the story, and hearing the stories here will give you a deep understanding of this disease. Two quotes here, one from Izzy, diagnosed when she was 5 years old. "My weight is my biggest challenge, it affects every aspect of my daily activities. When I am hungry, I can't stop it because I don't have the signal from my stomach to my brain." And Leigh, Izzy's mom confirming, "The weight and hunger were the most prevalent issues in Izzy's life and our family life." And then the last slide here, 12, a few more quotes. Again, bottom left, "He can finish dinner and he's asking about a snack 5 minutes later. It's literally all day to anybody, me, dad, nanny requesting whatever the next food is." "When we go out, it's like a helicopter parent. I have to shadow my kid because he will take food from people." These are stories that we've just heard over and over again. And this, as I said previously, it's just a remarkable consistency for all of these patients and their families in terms of what they're living with. So finally, on Slide 12, safety information. And as I highlighted earlier, no surprises, no basic changes to the label. Hyperpigmentation, injection site reactions and nausea were the most common side effects in the Bardet-Biedl populations. And again, their resolution, the nausea, specifically the GI complaints, is very much early on in therapy, and Jennifer will highlight some of the things that we're thinking about with our patient support group and how we can manage and help patients through that early part of therapy. So with that, I will turn the call over to Jennifer.

Thank you, David. I am going to start on Slide 15. So we have really made tremendous strides since we first outlined our launch plans for BBS during an investor conference call in February. We are positioned for a successful launch, thanks not only to the wealth of experience that the team has in rare diseases, this is supplemented by the learnings for more than a year of commercial experience with patients with biallelic POMC, PCSK1 and LEPR deficiencies. Our territory managers for our BBS sales reps have been in the field engaging with and educating health care providers, and we also have advanced our payer relationships through the outreach of our corporate accounts team. And with our new Rhythm InTune services, we are ready to provide individualized support for consented patients moving forward. We have really been anxiously awaiting approval, and we are launching in a very strong position. Next slide. As you have heard us describe before, we estimate there are at least 1,500 to 2,500 patients in the U.S. And on an investor call in February of this year, we outlined we have already identified and validated more than 350 patients with BBS in the United States. We have ongoing engagements with more than 150 physicians who treat these patients. These physicians with BBS patients in their care are our #1 priority day 1, week 1. Next slide, please. We are deeply engaged with health care providers with one-on-one interactions of our 16 territory managers. Beyond the interactions with HCPs with already diagnosed patients, our territory managers continue to uncover additional HCPs with patients who have been previously diagnosed that had not yet been visible to us and to also help other HCPs diagnose additional patients through our BBS disease education efforts. We have supplemented our field team efforts with targeted speaker programs and conference participation, including our most recent presence at ENDO this week. The focus is to educate physicians on the MC4 pathway and its role in controlling hunger and weight in BBS patients, the ability for HCPs to clinically diagnose suspected patients and the benefit of IMCIVREE for indicated patients. Finally, our multi-channel, non-personal marketing efforts have even broader reach, targeting relevant treater and diagnoser specialties of interest. Next slide. Moving on to payers. Based off extensive market research and discussion with payers and ad boards and with our corporate accounts team, we are confident that payers are receptive to IMCIVREE for BBS. They understand the disease burden of hyperphagia and how early-onset obesity is unique to our patients. They also appreciate IMCIVREE's efficacy and safety profile. Based off these discussions and feedback, we anticipate strong coverage. When we set the original price for IMCIVREE for the biallelic POMC, PCSK1 and LEPR deficiency population, we had also tested pricing for BBS at the same time. We knew when we priced for the initial approval that we would continue with this price for BBS. IMCIVREE pricing will remain at $330 per milligram. For an adult, at the recommended dose of 3 milligrams per day, that translates to an approximate annualized cost of $360,000. If we take into account patients age 6 to 12 with the dose titration period and expected compliance rate, we estimated that the blended annualized cost per patient may be in the range of $290,000 to $300,000 per patient per year. Our corporate accounts team are ready to continue with payer engagement started since joining and build on it day 1 as scripts come in. Next slide. So more to our outreach to HCP, we use multiple channels for engagement with the patient community. I will say that our collaboration with patient advocacy groups has been really wonderful. The BBS Foundation and Family Association has several events planned this summer. We are sponsoring and participating in the organization's national annual conference in July and in all 5 local in-person events in Utah, Texas, Pennsylvania, Illinois and North Carolina. The timing of these meetings really could not have been better for us as we can now share information on IMCIVREE to the patients and families attending. In addition, we are developing a strong relationship with Foundation Fighting Blindness, as many patients with BBS suffer visual impairment and may be active members. We are partnering with this group to increase awareness and diagnosis of BBS by sharing our BBS Ophthalmology programs for physician audiences as well as our BBS Patient and Caregiver program. Next slide. As I outlined upfront, we are very excited to make Rhythm InTune available to patients living with BBS, providing them with a suite of services designed to facilitate helping patients on IMCIVREE. The program we have in place involves one-on-one interactions with a dedicated patient education manager that is the one point of contact for each patient or family to provide support on disease education, reimbursement and product initiation and maintenance. Each outreach is individualized to the patient's status and specific need. For example, prior to treatment initiation, patients are provided education on treatment expectations as well as injection training. There are multiple checkpoints to ensure any barriers are addressed. Further down the line, as patients become more accustomed to treatment, they may be more open to participation in other educational programs, including focus on nutrition and wellness. These 101 interactions are supplemented by timely e-mails to follow up each interaction on relevant topics discussed. In addition to the efforts of the patient education managers, we work as a collective team, including our specialty pharmacy, territory managers and a corporate accounts team with their respective customers. Next slide. We are coordinated in our approach with our customer-facing teams. The TMs educate physicians on the availability of InTune while also being available to follow up with relevant HCPs if issues need to be resolved during the reimbursement process. Our active team is there to engage with payers as script comes in to provide any required policy-specific support. Our specialty pharmacy not only distributes IMCIVREE, but also completes benefit verification and flags delays in shipment to the team for immediate follow-up. This cross-functional team effort with regular touch points is in place to quickly address and overcome any issues that may arise. Next slide. Speaking of cross-functional teams, we've just had our launch meeting in Boston last week, and the level of energy in the room was palpable. Now with the approval of BBS, everyone is excited to be in the field interacting with customers. Our territory managers are being trained on the final label and are prepared to engage with priority physicians. Our account directors have their key accounts identified for outreach. Rhythm InTune is ready to reach out to consented patients and begin the process to secure access and coverage for IMCIVREE. We are in a very strong starting point to launch IMCIVREE in BBS, and our teams are executing on day 1, week 1 plan. With that, let me turn it over to Hunter Smith.

Thanks so much, Jennifer. Turning to Slide 24. Rhythm is extremely excited to announce that HealthCare Royalty Partners has committed up to $100 million to Rhythm via a cap royalty structure. This $100 million will have 3 tranches, $37.5 million upon closing, $37.5 million upon BBS approval in the EU, and $25 million upon Rhythm's achievement of an agreed commercial milestone. We're very pleased with HCR's commitment, believing that it demonstrates confidence in the promise of IMCIVREE for patients with Bardet-Biedl syndrome, and Rhythm's potential to generate additional revenue through new indications and in Rhythm's ability to execute on this opportunity commercially in both the United States and key global markets. We firmly believe that this cash -- this cap structure enables us to access significant financial resources to fund continued growth of our business while avoiding equity dilution and preserving shareholder value. Commitment offers Rhythm a means to extend our cash runway into the second half of 2024, whether or not the commercial milestone is achieved. Very, very pleased with the working relationship that we've developed with HCR as this process has gone along and look forward to working with them as Rhythm's progress continues in the next several years. And with that, I'll hand it back to David.

Thanks, Hunter. So in closing, again, incredibly important milestone for us, and just wanted to remind you where we've been. The whole strategy here. So we're pursuing clear unmet medical needs, [ I say ], if you will, but it couldn't be more true in terms of the populations we're serving or trying to help here. We have a drug that works, and we are executing. And the milestones that have taken place in 2022. We've initiated a number of trials, the Phase II DAYBREAK trial, the switch study, the Phase III pediatrics study, initiated the EMANATE trial. Europe is opening up. You'll be hearing more about that. We achieved our first European sales of IMCIVREE, obviously, today with a PDUFA date for BBS and the financing announcement. In June -- early June, we announced the long-term data for a number of our Basket Study genes that we're looking at. Now studying an EMANATE, all positive and highly reinforcing. We launched IMCIVREE in Germany as a recent achievement. And then we look forward to releasing or reporting out on our hypothalamic obesity data, the MC4R [ respo ] patient data. We've got the CHMP decision coming up on BBS in the EU, and we'll be looking ahead to the launches in the U.K. and Italy. And the de novo study, which should be starting as well. So long story short, a lot accomplished, a lot to come, and we look forward to updating you on those events as they happen. And with that, we'll turn it back to the operator for Q&A.

[Operator Instructions] I show our first question comes from the line of Derek Archila from Wells Fargo.

Just congrats on the approval, well done. So just a few questions from us. So maybe first for David. Just with the label that you guys got with the BBS approval, what percentage of the Bardet-Biedl population do you think is addressable with IMCIVREE? So that's just question number one. And then question number two, you talked about the stopping rule. So I guess, do you expect payers to fully utilize this and kind of prescribe therapy for these patients for a minimum of 1 year, like, out of the gate? Like, how do they kind of use that and utilize that information?

I'll take the first one and then Jennifer will [ take ] the second one. So in terms of what the label does for us, label does exactly what we had hoped it to do. We think on the order of 80%, 85% of patients with BBS have this early-onset obesity and hyperphagia. We got the expansion of the renal indication or ability to use in patients with renal insufficiency. We previously had indicated for use in mild to moderate, which is the bulk of the patients who have renal involvement fall in that. It's a much smaller percentage of patients who have severe renal insufficiency. But now, specifically for children or individuals greater than the age of 12, we have recommended dosing for that patient population. So there's very, very few, if anybody, who is going to be excluded because of this label. If you're suffering from this, you should be eligible for that. Jen?

Yes. So the next question was just about payers and how they view the stopping rules. I'll just say like upfront that we were quite pleased with the length of time outlined, which was 1 year versus the 12 to 16 months that was for the PPL patient population. This -- what we saw in our clinical studies were that some of the patients at the stopping rule was that early. They would have not been able to see the benefit because over time, there were definitely patients that continue to decline just in terms of weight loss and BMI. So the 1-year point is really positive from our perspective. I will say that our experience in the initial indication, which did have, in the PI, a 12- to 16-week consideration point based off of the difference in that patient population of the global trial design. It's been variable just in terms of what time point payers have. Really had to check in just in terms of seeing efficacy as well as variable just in terms of the exact efficacy that they were seeing. What they're really looking for is that the physicians are seeing some type of clinical benefit, so I would assume that they would also want to make sure that patients that remain on drug are receiving some type of clinical benefit, and frankly, so would we as a company as well.

Got it. And then maybe just a question for Hunter on the agreement here, on the revenue interest agreement. How should we be thinking about modeling that? Does that come out of cost of goods, like -- or is there another line through SG&A? Like, how should we incorporate that into the income statement?

Sure. It -- like our other royalties, I believe it will come out of COGS. So it will be net sales will be reported as is, and then COGS will be increased by the royalty rate.

Got it. Perfect. Congratulations.

Decreased, obviously.

Yes. Yes. Got it.

I show our next question comes from the line of Phil Nadeau from Cowen.

This is Lyla for Phil. Congratulations on the approval. Maybe just a couple of questions from us. First, in terms of the identified and diagnosed patients, could you maybe talk a little bit about the timing to get these patients on therapy, given they're already identified, and then also maybe expectations for potential metrics you could provide going forward as we try and track the launch?

Yes. Jennifer? Expectations for timing?

Sure. Through the work of the territory managers, they like -- they have been engaging with the physicians who have the already identified patients. There are certainly physicians as well as patients who have been waiting for the approval, and those scripts can come in at any point in time, and we are ready to work to process them through just in terms of gaining reimbursement and being able to deliver drug to them. I would say that in terms of any rare disease drugs, in the beginning, it takes a little bit of time just in terms of getting them through the reimbursement process. It can take up to a month, 2 months just from scripts to actually getting reimbursement to then putting patients on drug. So we are doing everything we can to expedite this process and make it as painless as possible for all parties involved.

Maybe in terms of metrics, we haven't decided yet, and apologies for that. We're going to see a little bit how this plays forward. But things we would consider, as Jennifer said, the obvious points that will be informing us, if you will. I mean, so scripts is something we might look at sharing. We'll think about that. Health care providers who are engaged, just to sense of sort of the breadth of the community and how that goes. Some qualitative feedback, obviously, on how it's going in the payer world, and so we'll provide color around that. But again, I'm going to defer that and kick that can down the road a little bit here. We'll see how we open up.

Got it. That's very helpful, and congratulations again.

Thank you.

I show our next question comes from the line of Dae Gon Ha with Stifel.

Let me add my congrats to you on the approval this evening. Just wanted to go back to the question about patient segmentation. So on the stop rule, when we think about the 1 year and the 5%, I think in the label, it's a 61% from your clinical trial experience. Can you maybe take us back to your PPL, what number was sort of satisfying that stop rule in the 12 to 16 weeks in the trial perspective? And how much did that differ in the real world? I guess I'm trying to get a sense for what kind of strategies do you have to improve compliance to make sure it's not compliance that necessarily falters patients out of that stop rule? And then I've got a couple of follow-ups.

Yes. Let me make a few comments, then I'll let Jennifer follow on here. So one, the 60% greater than 5% in the label is the most conservative cut, if you will. In that there was 5 patients who were discontinued early on who -- their imputed value in the overall calculation was imputed at 0. They weren't at 0. Some of them discontinued after losing weight. And 2 of the 5 had cleared the 5% level. So one is the data itself is the most conservative. That's my message there, and there are patients who would not be -- were not counted in that. We are hopeful, to your question, that, that segment of the population will be able to pull through and support in a way that will allow them to stay on therapy. So maybe, Jennifer, just few more about InTune and how we think about -- maybe one other introductory comments. In a clinical trial, and this is -- again, it's a bit of a paradox. We always think about clinical trials as being more robust support for the patient, and that's often the case in many diseases that are being studied. In a rare disease world paradoxically, the company, through these support programs, can provide often much stronger support for that patient than the clinical trial sites can, so.

Yes. I think the other piece to also highlight just in terms of the clinical trial itself versus some of the other drugs that were studied. We didn't have any type of diet or exercise incorporated in the clinical study itself. As I mentioned, some of the programs that we will be offering patients if they're interested at the right time are also around nutrition and wellness. And so as patients are hopefully feeling better just in terms of the level of hunger, feeling more open also to learning more in terms of nutrition and wellness, that may also, of course, facilitate just in terms of ongoing well-being as low as weight loss on their journey.

Okay. Great. And then a question for Hunter on HCR. I guess the $25 million that's tied to milestones, just to clarify, that's for 2023 milestones that you guys haven't specified yet? And just an extension, when you -- in the press release say that it will be capped at 185% to 250%. Is that assuming full $100 million recognition? Or is that range also encompassing the $75 million should you not meet the sales? And then final question is just housekeeping. Does this approval come with a PRV?

So I'll address those in reverse order. So our understanding is that PRVs are only eligible one-time per compound regardless of the number of sNDAs that come with that [ comp ], so. And then speaking to the cap on repayment, the cap is the same regardless of how much is advanced. They only advance us $75 million. We still have to pay in that range during that time period because it's a percentage of what's advanced originally. And then the first question is, it's a cumulative sales milestone over a period of -- over a defined period of time. So it's -- and it begins with the beginning of the agreement and extends into next year.

Our next question comes from the line of Corinne Jenkins from Goldman Sachs.

This is [ Craig ] on for Corinne. I was wondering, for patients that do not respond and lose over 5% weight in their first year on drug, do they need to continue loss -- to continue to lose weight between subsequent years to stay on therapy?

No. I mean, the stopping rule is -- it's a one-time. I mean, you clear that. Now implicit in that is for any drug, right? I mean, physicians continue to evaluate patients, and if they're not responding by the physicians' definition, then drugs get stopped or changed. But there, that's just the practice of medicine. The rule itself is just a reminder to the physician that, look, you should be evaluating these patients. So it's a onetime piece. Beyond that, it's back to the physician.

Got it. That's very helpful. Just one more, if I may. So as the label highlights the effects of IMCIVREE on hunger as well as weight, how do you expect the inclusion to impact conversations with payers as you educate them on the benefit of IMCIVREE in this new indication?

So they're -- one, just in terms of the indication statement as David outlined, we were very happy to be able to get in the language that this is a drug for monogenic as well as syndromic obesity, further differentiating from the general obesity population in addition to the patient populations listed.

[indiscernible]. So how do you think the indication statement is going to impact those discussions?

And I think the other piece is, although it is focused in terms of BMI improvement in the PI itself, we actually do have the data outlining the efficacy also on hunger. And what resonated quite a bit in terms of the payer discussions and dialogues was understanding the cause in terms of what was actually really causing the hyperphagia in these patients and the [ quotes ], and really understanding that's different from normal hunger. So being able to also show that we have an impact on hunger itself will be quite positive in terms of the mechanism and what we are doing in the patient population in addition to the loss in terms of BMI.

Maybe just a quick reminder for people. The hunger data that's in there around the POMC in the left bar as a starting hunger score, if you will, of 7 to 8 and a 2-point decrease, and the BBS data is a 7 score and a 2-point decrease -- plus decrease. So it's -- I think what we're seeing here is that, that 2 points, we know from the stories, the history, is incredibly meaningful from a clinical standpoint, and it's very consistent across the indications that we've studied so far. So I think the hunger story is going to get -- is getting stronger and stronger, and the payers are very focused on that. They are attentive to that, and we can speak to it.

Awesome. Congratulations once again on the terrific news.

Thanks, [ Craig ].

Our next question comes from Michael Higgins with Ladenburg Thalmann.

Congrats, guys, David and the team for the approval. A big difference versus the prior indications in terms of trial -- patient size, sorry. David, a question for you. As you look at Alström's for ourselves, given the size of the database there, we weren't expecting approval here. But can you comment a bit more as to what you look to do here forward, possibly adding it to basket? What are your thoughts on Alström's?

Yes. Mike. Again, this rare disease world can be so difficult. We knew this was a small population. We confirm that as we try to run the trial and certainly able to enroll the 6 patients at that time. That said, we submitted the data because we felt there was a clear signal there. Again, when you look at the majority of those were children under 18. And when you look at their BMI-Z scores, they did have a signal. I think we're going to step back here in a moment. We have a lot to do. And so all things being equal, we will, and I want to come back to AS. What we'll need to do is to look at the options for a path forward and also, again, balance the timing a bit with all these other things that we're working on. So it's a non-answer to your question, but you should hear that we haven't -- we're not going to lose sight of Alström's.

Just a quick follow-up to that. Is it likely to be buoyed around by the vast results that are coming up here this summer?

Sorry, will it be impacted that decision by the Basket results?

Yes.

No, not so much. I think we would -- there's no question that the next step for Alström's is we need to add some additional patients and some clinical trial. I mean, that was the feedback from the FDA and the CRL, they will require another trial. They've asked, as always, that we come in and discuss that with them. So that would be the next step there. We don't have -- we have a few patients who are continuing to be treated in our long-term extension, and long-term data is always helpful in that sense. But the next step for Alström's is additional clinical trial.

Makes sense. And then one other one, Jennifer, you mentioned the timing here of the BBS meetings coming up are really timely, but also obviously, the ENDO data being so recent here. Any feedback from the docs you can share with us at the end of events that you held regarding their outlook at BBS?

So we had opportunities to have presentations as well as one-on-one dialogue. I think that there are remains ongoing opportunities just in terms of education, but there definitely is a consistency just in terms of patients as well as physicians who very excited and waiting, and we're waiting for the approval so that they could move forward just in terms of prescribing this for patients. A certain physician to -- we're waiting to be able to proactively reach out to patients as well, just in terms of letting them know about the approval and the option. So I think there is excitement just in terms of the community for a drug that is really specifically tailored to the needs of these particular patients, as many folks have tried different things and not always works for the needs of these particular patients.

So our next question comes from the line of Joseph Stringer with Needham.

Congrats on the approval. Two from us. One is on how should we think about the potential pool of patients coming on to commercial drug, say, in the second half of this year? And the second question has to do with your Slide 16, when you sort of bucket these BBS patients into -- you mentioned you have greater than 350 [ ID-ed ] and diagnosed. Just curious if you can give us a sense for what the size of the buckets are for the diagnosed patients that haven't been identified and the suspected patients? And just for clarification, can you help us distinguish or at least understand how you classify those in terms of -- are diagnosed patients, patients that are in, say, registry that haven't been [ ID-ed ]? And how is that different from a suspected patient?

No problem. So let me go backwards on that. So the -- through our efforts and through our one-on-one with physicians, we have a certain set of physicians who have outlined that they have BBS patients. There are other physicians out there that also have diagnosed BBS patients that we may not yet have had interactions with to identify and put into our CRM. So that's the diagnosed patient bucket. And as outlined in prior calls, one way that we are going about trying to tackle that group is that there is an ICD-10 code where there are several different indications that are listed, and BBS is one of them. So by being able to understand the various different symptoms of BBS patients and the codes associated, we can triangulate back to narrow down the broad category to physicians who are more likely to have diagnosed BBS patients under their care, and that is one target of our territory managers to expand the list of physicians that we are aware of with already diagnosed patients. The other piece is, like, for example, within the CRIBBS registry or through patients who are associated with patient -- the BBS patient association itself. We don't necessarily have visibility to all of those physicians who treat the patients or to the patients themselves, which is -- thankfully, we have strong relationships and collaboration with the folks at the Marshfield Clinic as well as strong collaboration, as I outlined, with the patient associations that -- this is another opportunity for us just in terms of broadening our reach to those diagnosed patients. When I say suspected, there are different patients that may have certain symptoms associated with BBS, but the physicians may not have enough information to be able to actually get to a clinical diagnosis. And through the education of our field teams, they're able to educate them so that the physician themselves can get to a clinical diagnosis and final diagnosis versus just remaining in the suspected but not yet diagnosed category. And there's no necessarily urgency to get to a diagnosis when there isn't a therapy available. There may be more of an urgency to get to a diagnosis when there is a specific therapy that's available to treat that specific patient population. Does that answer your question? And the second one was just around the bolus of patients. So there are definitely patient populations that is the initial focus. As I mentioned, it's -- there are physicians who already have diagnosed patients, and that is definitely a key priority for the territory managers on field at this point of time. There are also patients who were involved in our clinical studies that will be transitioning over to commercial drug, so there's a bolus of patients that we are going to be working through as we are anxiously awaiting to get in the field and interfacing with customers.

I show our next question comes from the line of Jeff Hung from Morgan Stanley.

This is Melina Santoro on for Jeff. Congrats again on the approval. Maybe just to clarify your previous comments, Jennifer. I think you had mentioned that the launch would still -- is still expected to be more gradual in BBS, but that you do kind of have this bolus of patients. So can you just kind of clarify what you're expecting for the early stages of the launch again? And then maybe another one from us. You talked about having extensive conversations with payers in recent months. How well do you think the payers and maybe the physician groups as well are really understanding the burden of the hyperphagia, and what additional work do you think needs to be done there?

Yes. I'll take just the first one. Again, what Jennifer said in terms of what is the early stages of the launch going to look like, we've talked about being engaged with 350 patients plus. In other words, the physicians who are treating the patients. We don't have the patient's name, but we know those physicians. We can target those, and that's where the focus is of the team. This early part of launch then gets stretched out. It's not like you write a script and you go to your local CVS and get the drug. And so where things get stretched out and where the uncertainty is introduced into this equation is there's lots of pieces in a rare disease world, which there's a bit of an inherent drag on the system. That said, and we've been asked many times, how do you feel about this, and are there any analogues? And many of us here at Rhythm have worked on multiple other rare disease drugs. This is about as good a starting point as we get. So I'm incredibly bullish about where we're starting from. We're not going to promise what the next 6 months are going to look like, and I'm not going to ask people not to judge us too much in the next 6 months. But I will tell you that the long-term opportunity here is extremely meaningful. And like I said, that is good as it gets. And then the other part of your question was just on payer, -- any other color on the payer piece.

Yes. It's always interesting because in different indications, the payer receptivity to think that are -- more what they may view as quality-of-life type of impacts in terms of hunger versus harder endpoint in terms of weight loss, it's interesting to just see what the reactions are. In this indication, the education around the root cause of the hunger and the early onset obesity was a piece that actually resonated, and it was an aha moment for the payers just in terms of the differentiation of our patient population versus the broader general obese population. So the -- and through the excellent work just in terms of our value and access team has been able to generate the voices of the caregivers and the voices of the patients to make this more predominantly known just in terms of what they are actually going through. So I think we're going to continue on with that work just to provide more evidence as we move forward with our development programs, but already with the information that we had, it was well received and understood just in terms of, okay, this is very different. It's not the -- it is because of a background defect within the pathway that is causing this hyperphagia. And understanding what hyperphagia actually means for not only the patients, but the caregivers, resonated very well. As did the fact that this is the early onset and also affects a lot of children. So I think that from that perspective, they've got quite receptive to the patient population as well as the drug.

I show our next question comes from the line of Tazeen Ahmad from Bank of America.

In a practical setting, can you just walk us through a patient's experience from the time they visit their doctor to the time that they actually start on drug? So how long does the script last for a patient? And what kind of instructions does your sales force have in terms of interacting with physicians, on kind of directing them to when it makes sense to take off a patient from the drug if it looks like the drug isn't as efficacious as it is in some other patients? Just trying to get a sense of how long you're advising doctors to keep a patient on drug in order to see efficacy. And then I might have another follow-up.

Yes. I'll take the last part, and then I'll let Jennifer walk through the sort of what that course is here from patients getting a script and the script in the -- maybe just very briefly, we can just highlight that pathway because it's very -- this is very well traveled. It's -- and it won't be different from us than it is for [indiscernible] or any other rare disease in that sense. In terms of the -- what our sales force is "guiding physicians to," I mean, they're just -- this is the label. They're not guiding the physician. He'll be making all of those decisions. I think our early experience with PPL is highly dependent on the payer also in terms of how rigorously or they're sort of seeking to check back in, if you will. It's been quite variable at the exact point even though 12 to 16 weeks is the recommended. But this is -- again, it's a label. Those are the guidance. And as a rule, many of the payers will follow that pretty closely. But our goal there is we will be supporting the process, supporting the physician, supporting the patient, but we don't provide guidance as to patients aren't responding, you should stop drug. That's obviously the physician. So Jennifer, on the [indiscernible]?

Yes. So from a process standpoint, once we get a start for our script, that's when our teams start to get activated. So the first touch point really from our team to consented patients is for our patient education managers, which is the one point of contact for the patients themselves throughout the whole process. So they will be educated just in terms of disease as well as products. As well as like the reimbursement process so that the patients are also educated in terms of step by step, what is happening and what is going on. As we get information, also working with like our specialty pharmacy in terms of benefit verification and such, the expectation is that every one of these patients is going to require a prior authorization form to be filled out, which will need to be done by the HCP. And then from that point on, based off of status and dialogues with the payers, our teams are working that process through until we get approval and reimbursement or access. From that point on, it is really about making sure that, that patient is educated and feels very comfortable in terms of the injection training. And then moving forward, even after first injection and such, follow-ups just to once again see if there are any additional needs that they may have or questions, the team is there to just support the patient throughout the entire process.

From the moment that first script is written, there's what Jennifer described as surround sound. So patient physician, high levels of engagement. It's not that a script is written and then things go silent for a period of months and the script would expire. So there's -- once it's written, there's no loss of sight.

Okay. Great. And I know I've asked this question before, but as of today, how many BBS patients have you identified? And how many of them do you think are amenable to being put on therapy?

I'll take that. So we've highlighted previously 350 plus. It is plus. We do continue to find patients. That was a number we updated back, I think, in February with our meeting there. So that process continues. What's interesting is that the -- for the most part, patients that are engaged with the system are engaged in seeking help. So I can't give you because we're working with the physician. We can speak obviously to the 350 exactly. But we would consider, and that's our clear focus right now are the physicians caring for that 350 plus that a very significant percentage of that population is in there seeing their physicians because they are seeking help. And now that there's a therapy, as Jennifer said, there should be a greater sense of urgency for those patients out there potentially who have disengaged a bit because there wasn't much to do. And now with the potential therapy, they make effect.

I've shown no further questions in the queue. At this time, I'd like to turn the call over to David Meeker for closing remarks.

Yes. So thanks to all of you. Thanks for your questions again. Thanks for your support over time. And again, a really good day for us, and we look forward to updating you down the line. Now, we'll disconnect.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.