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

Ladies and gentlemen, thank you for standing by, and welcome to Rhythm Pharmaceuticals Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to David Connolly, Head of Investor Relations and Corporate Communications at Rhythm Pharmaceuticals. Please go ahead.

Thank you, Michelle. Good morning, everyone, and welcome. Earlier this morning, we issued a press release with highlights from the positive Phase III top line results for setmelanotide in acquired hypothalamic obesity. You can access the press release as well as the slides that we will be reviewing today by going to the Investors section of our website. Listed on Slide 3 are the speakers for today's call. First, we are pleased that Dr. Susan Phillips, Pediatric Endocrinologist at Rady Children's Hospital, San Diego and Professor of Pediatrics at UC San Diego School of Medicine is joining us for the call from California. She was also an investigator on the Phase III TRANSCEND trial of setmelanotide in acquired hypothalamic obesity. From Rhythm are David Meeker, Chair, President and Chief Executive Officer; and Hunter Smith, our CFO, is available to answer questions on this call as well. Before we get started, I would like to remind everyone that the statements we make on this conference call will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of our SEC filings. In addition, any forward-looking statement made on this call represents our views only as of today and should not be relied upon as representing our views as of any subsequent dates. Except as required by law, we specifically disclaim any obligation to update or revise any forward-looking statements. With that, I'll turn the call over to David.

Thank you, Dave. Good morning, everybody, and thank you for joining. So this morning, we reported out compelling top line data from our Phase III trial of setmelanotide in acquired HO. We're early in our analysis of the data and obviously incredibly excited by the top line, but equally excited by the story behind the top line numbers, which is emerging, and we'll get into a little bit of that in a few moments. So I'd like to start, if you'll indulge me with a few thoughts on our current context. It's an interesting time to be releasing great data. So we're all working to understand the rapidly evolving geopolitical landscape, the massive disruption to our healthcare ecosystem and of most immediate relevance to changes at FDA. We have no unique insights into how all this will evolve, recognizing the FDA wasn't perfect. Change is inevitable and not always bad and that it will take some time for the dust to settle, which it will. What we do know is the fundamentals driving this industry have not changed. Individually and as a society, we value our help, safe and effective innovative solutions to unmet medical needs will be approved and rewarded. And this, of course, remains a high-risk, high-reward industry. We try, we fail, we try again, learning with each attempt. Unfortunately, in biotechnology, unlike in many other industries, our attempts may take longer than planned, are expensive and are often public. However, unlike many other industries, the business of health will never go away and the fundamental principles will not change. With regard to the regulatory landscape, I've worked in the industry for 30 years with a deep connection to clinical development. I have not always agreed with the FDA, but I'm a huge fan of the FDA. It is an incredibly hard job, not adequately rewarded and performed by dedicated people. The vast majority work there because they believe in the mission, and they are good at it. Most people will not be leaving the FDA. The reviews will go on. Paradoxically, I can argue that the reviews that are most straightforward with the fewest issues could move more quickly. We will file our supplementary NDA for setmelanotide in acquired HO based on what we believe to be outstanding data as fast as possible. I do believe if that category exists, we will be in it. Now to the data, so on Slide 7, you have the demographic information. Let's start on Slide 5, apologies. First, I want to thank the patients and their families and the dedicated investigators and healthcare professionals for their commitment to this trial. It was 60 weeks with an intense testing schedule and for 1/3 of the patients who are on placebo, no discernible benefit. Their commitment allowed us to understand the safety and efficacy of setmelanotide in the placebo group specifically provides robust insights into the natural history of this disease. That is a major contribution by the placebo patients to the overall HO community. This is a severe disease, devastating for the patient and for the family. Dr. Phillips will elaborate. It is a classic unmet need, nothing works consistently or for the most part, well. Patients stayed in this trial because it was their best chance to get access to a potentially meaningful therapy. The population we have targeted is largely diagnosed, although the undiagnosed pool may be larger than originally thought. And unlike a more classic ultra-rare disease, which may be dispersed in the community, this patient population is concentrated in the endocrinologist call point. They are engaged, and the data is clear and convincing. So on Slide 6, this is the trial design we have shown you many times, double-blind, 2:1 randomization, placebo-controlled trial with an 8-week titration period with patients followed for 52 weeks. The trial was overenrolled, and we added a separate 12-patient Japanese cohort, which will remain blinded with an expected readout in Q1 2026. So on Slide 7, you see the demographic information. The age ranges were reasonably balanced between under 12, 12 to 18 and the adult population. Importantly, we had approximately 50 adults. The mean BMI was 36 with a range from 21 to 70. I remind you, we had children as young as 4 in the trial accounting for some of the lower absolute values of BMI in an individual who is 66 years old. The upper limit of both BMI and BMI-Z with a top value of 10 for BMI-Z, which indicates that child with 10 standard deviations away from normal for their age and sex, highlight how incredibly severe this disease can be simply related to the weight, although other aspects of the disease contribute to the severity. On Slide 8, 120 patients were enrolled analyzed the pivotal cohort with 106 completing the study. 14 patients discontinued, 7 due to an AE and 7 withdrew consent. The AEs were consistent with the known safety profile of the drug, including GI complaints and hyperpigmentation. Other reasons for withdrawing consent including coexisting comorbidities such as the development of COVID and the need for surgery or simply an inability to keep up with testing requirements. There was one death during the study period itself, which was unrelated to study drug in a patient with a prior seizure disorder. 101 of the 106 completers remain enrolled in the open-label extension study. On Slide 9, the efficacy results. The top line placebo-adjusted change in BMI was 19.8% with a 16.5% decrease in BMI in the active arm and a 3.3% BMI increase in the placebo arm. We had many questions coming into the data, as you all know, as to what the percent change might be, and we worked hard to make the point that this is a unique trial population in a disease with its own unique biology and tested in a unique clinical trial design. One should not make an apples-to-oranges comparison to the general obesity population. Despite that, we had a remarkably positive effect on average BMI decrease. Of equal note is the fact that the placebo population increased their BMI. There is no placebo effect, which you do see in general obesity, which would be consistent with our understanding of the biology. If you have a deficit in the hormone alpha MSH, approaches like diet and exercise can't overcome the physiologic effect of the deficit. On Slide 10 shows the data, which robustly answers the question as to whether there will be an expected meaningful difference between children and adults. The answer is no. Patients older than 18 had a placebo-adjusted change of 19.2%, whereas those younger than 18 had a placebo-adjusted decrease in BMI of 20.2%. I remind you again that BMI in children who are growing is not an optimal measure since you would expect it to increase over time as they grow. I will provide a couple of examples later of 2 children with modest decreases in their BMI, but significant decreases in their BMI-Z score. On Slide 11 shows the distribution of results with 80% losing 5% or more in BMI and 43% losing 20% or more. As we have highlighted, based on our Phase II data and the early-access France experience, what has been remarkable is the consistency of response in this indication. As always, the most interesting parts of a data set are often those aspects that don't perform as expected. In this larger data set, what we are currently analyzing and we will work further to understand are the stories behind those patients who failed to decrease their BMI by 5% or more in the setmelanotide arm. And similarly, those placebo patients who succeeded in decreasing their BMI by more than 5%. In the setmelanotide treated group, we expect they will fall basically into 3 buckets. Those patients who truly did not seem to respond and our early analysis, which suggests this might be a relatively small percentage of the total. Two, those patients who had some initial indication of a response, but then started to regain raising the questions of compliance during the trial. And three, those younger patients where BMI-Z scores improved significantly, but BMI did not as they continue to grow and increase their BMI over the course of the year. On the next slide, we'll show a few examples as well as the story behind the one placebo patient who lost 17% of their BMI. And by virtue of the relatively small number of patients in the placebo arm, which was 39, this patient had a disproportionate effect on the mean values and represented 1 of the 2 patients in the placebo group, which lost more than 10% of their BMI. On Slide 12, here are the examples. So the first patient I'd like to highlight is a 23-year-old female, who had no decrease in her BMI despite some evidence of hyperpigmentation, which would suggest she was at least minimally compliant. However, upon entering the open-label extension period, her BMI has now decreased by 27% from baseline. The overall clinical picture that's at 9 months post -- 9 months into the open-label period. So the overall clinical picture is absolutely unclear for this patient, to be honest, but the patient had a clear ability to respond to the drug as shown in that open label period. The next group are the younger children who are growing and their BMI is increasing, suggesting in this trial a nonresponse to drug because BMI was our primary endpoint, whereas their significant improvement in BMI-Z shows a clear improvement. The first patient is a 6-year-old male whose BMI only decreased by 2.5% during the trial, whereas his BMI-Z score had a meaningful 0.35 change, reminding you that anything greater than 0.2 is clinically meaningful. The second patient is a 7-year old female who had a good initial response with a decrease in her BMI by 13% at visit 8, but as she grew, her BMI increased. So by the end of the trial, her BMI percent change was only minus 2.8%. Her BMI-Z, however, showed a very meaningful 1.3 point decrease. These BMI-Z scores are well above, as I said, the 0.2 reduction threshold for clinically meaningful results. Finally, the last patient on the right, in the placebo group, the most significant outlier was a 12-year-old female who went through puberty during this year, lost 17% of her BMI during the trial. She had a history of severe adrenal crisis with associated nausea and vomiting and multiple hormonal adjustments during the trial. She enrolled in the open-label extension and immediately lost significantly more weight in a shorter period of time with the BMI decreased to 33% from baseline and overall clinical improvement as per the investigator. So again, I think she highlights how incredibly complex many of these patients were taking many, many medications with multiple medical problems, which can confound the analysis of some of this. Slide 13. We had many questions about GLP-1 use during the trial. There were a total of 16 patients who had previously used a GLP-1 during the trial and 15 patients who remained on a GLP-1 during the trial. No patient could start a GLP-1 during the trial. They had to be stable on their GLP-1 coming into the trial. So we don't have all the details with regard to which GLP-1 and there's lots -- multiple for sure used in earlier generation, how many had diabetes or on a GLP-1 for diabetes management, et cetera. So I can't answer those questions today. However, what we can share, as is shown on this slide, is that the placebo-adjusted change for those previously on GLP-1s, but not currently was 24.7% as compared to a placebo-adjusted change of 27% in patients concurrently on GLP-1s. The slightly higher numbers in both of these groups likely reflects the fact that these patients probably represented a more homogeneous group without as many of the outliers as were present in the total population. Slide 14 shows the change in average weekly daily hunger score. This showed a highly significant placebo-adjusted change of 1.4. I will note, we have struggled to capture the change in hunger across trials. The ability to compare your hunger to a baseline measure taken 60 weeks earlier is, of course, difficult. I have seen the preliminary results from 30 exit interviews, in draft form now. We'll get that published, of course, over time. And the qualitative descriptions of how disruptive the symptoms of hyperphagia are to both the patient and the family and how it was impacted by setmelanotide is really quite remarkable, to be honest. On Slide 15, the last 2 slides in this section show the safety profile, which is quite consistent with the overall safety profile we have seen across trials. All patients experienced an AE, most experienced a drug-related AE. There was only one serious AE, which was attributed to setmelanotide, which was hypernatremia. The one death in the trial period was in a child with a severe seizure disorder and was not drug related. We have had one additional death in the open-label period in the bridging study, and this was in a patient who had suffered a cortical stroke, which was also judged to be unrelated to drug. And Slide 16 shows the AEs with the most common being hyperpigmentation, injection site reactions and GI complaints. Of note, there was a relatively high background frequency of nausea in the placebo group, which is consistent with the severity of their underlying disease, which is often associated with GI symptomatology. And with that, I will now turn the call over to Dr. Phillips to talk more about HO in general.

Thank you, David. Given the clear need for treatment options for people affected by hypothalamic obesity, the setmelanotide Phase III top line data are very impressive. As we know, acquired hypothalamic obesity is a life-changing disorder that results from damage to the hypothalamus, a brain region responsible for the regulation of hunger, food intake and energy expenditure and ultimately, body weight. Damage to the hypothalamus impairs signaling of the melanocortin-4 receptor pathway disrupting innate society signals leading to hyperphagia, which is a pathologic condition of food-seeking and overeating with reductions in energy expenditure. Moving on to Slide 18. This is a schematic of the MC4 pathway and directing your attention to the bottom left, this is where we have afferent nutrient signals converging on the arcuate nucleus of the hypothalamus and 2 key neurons within that hypothalamic nuclei. The POMC in blue and the AgRP neurons in pink. As shown, the POMC and the AgRP neurons project upward to the overlapping areas of the paraventricular nucleus of the hypothalamus. POMC neurons then release alpha-MSH that binds to the melanocortin-4 receptor, which then signals satiety and changes in energy expenditure via the MC4R receptor. And there are downstream extensions, which affect MCR signaling within the brain and the spinal cord. AgRP neurons in pink release AgRP, which is an antagonist of the MC4R receptor and signals hunger with decreases in energy expenditure and resultant weight gain. When the MC4R pathway is functioning normally, a balance is achieved between energy intake and energy expenditure and there is stability in the body weight. Moving on to Slide 19. Hypothalamic damage can impair the signaling in the melanocortin-4 receptor pathway and lead to acquired hypothalamic obesity. In the center, the hypothalamus is shown and damage from a number of causes listed below it can result in dysfunction. And this dysfunction seen in the lower left in the arcuate nucleus then can result in disruption of the POMC neurons in blue and their signaling into the paraventricular nucleus such that alpha-MSH is less and there is a reduction in MC4R pathway activation by that alpha-MSH. The result of these changes can be in the paraventricular nucleus, MC4R signaling of satiety and the downstream brainstem and spinal cord effects of the MC4R pathway. The decreases in alpha-MSH activation of the MC4R result in hyperphagia, reduced energy expenditure and accelerated and sustained weight gain. Moving on to Slide 20. So this is a pie chart of causes of hypothalamic obesity, which acquired hypothalamic obesity is a rare disease. It is characterized by the abrupt onset of accelerated weight gain following various injuries to the hypothalamic region. It differs from monogenic obesity with its onset at birth and for more generalized forms of obesity, which are somewhat nebulous in their onset and slowly progressive in their severity. And hypothalamic obesity is due to, as we've just discussed, disruption in the melanocortin-4 pathway following various injuries. And this reduces -- sorry, this produces a loss of alpha-MSH, MC4 signaling and the reductions in energy expenditure, hyperphagia and sustained weight gain. The most common cause of acquired hypothalamic obesity is craniopharyngioma. As you can see here in the pie chart, 72% of the cases of acquired hypothalamic obesity are attributed to this cause. But other tumors are also responsible and the treatment of the tumors with resection, surgery, radiation also contribute to the development of hypothalamic obesity. Unfortunately, there are no approved treatments for this condition. There have been over the past 20 years, providers trying lifestyle management with little or no success and the use of weight loss medications and bariatric surgery also have not had great success in this -- in the treatment of this condition. So certainly, this condition is an unmet need. Moving on to the next slide. So I wanted to -- as an investigator on the Phase II and Phase III trials of setmelanotide in acquired HO, I'd like to provide you with a case report of a patient with HO and their response to setmelanotide and MC4R agonist. For the Phase III trial, we have 14 patients enrolled in the trial at Rady UCSD and given that the patients remain active in the trial, including the 12 mentioned by David in Japan, I'm presenting a patient from the Phase II trial to protect the blind. So [Technical Difficulty] and prior to diagnosis, you can see from the BMI chart on the left, she was thin with a BMI of less than 15 and 15% to 20% on the graph for her BMI percentile. Unfortunately, at age 8, she was diagnosed with craniopharyngioma and underwent surgical resection and then had a recurrence at age 9 and had a repeat surgical resection. She had, as you can see from the [ ARO ] designation of surgery, a significant gain in weight, which is not uncommon and is actually characteristic of the condition of acquired hypothalamic obesity. She was almost 30 -- with a BMI of 30 by age 10 and then entered our study, the Phase II study in 2021 at 16 years of age with a BMI of 41 and a weight of 122.8 kilos. At 16 weeks on setmelanotide therapy, she had a reduction in her BMI of 22.7% to 31.8% and a weight of 94.6 kilos. Moving to Slide 22. Paisley was happy to share her journey with us. She provided photos of herself at age 7 before diagnosis, as you can see here, happy on the beach. And then in August of 2021, around the time she entered our study, and then in August of 2024 here on the right. Paisley wanted to make sure that we communicated how this was a life-changing medication for her. She used to be nonstop, as she said, 24/7 thinking about eating. She said she had a cooking show that she watched religiously daily. Her mother said this was a way that she connected with food on a daily basis. She was "obsessed with food." She said she's now free of this obsession and she is able to go between meals without thinking about food. She comes to a meal and she says she feels full after eating and stops eating, whereas before she would eat a huge meal and then shortly thereafter, feel hungry again. I think that Paisley's story is not alone. I see many young patients with acquired hypothalamic obesity, at least 15 to 20 in my experience in pediatric endocrinology over the years. In the patients that are on this trial, the parents report that there has been a horrible stigma associated with their obesity and their loss of satiety and that this has now gone on this medication. I look forward to continuing my work with Rhythm to improve the lives of people living with MC4 pathway disease. I'll now turn this over to David.

Great. Thank you, Dr. Phillips. So I think it's clear why we are excited about this opportunity. There's a significant unmet medical need, as Su highlighted, and I think we have the ability to make a significant impact in the lives of many of these patients and their families. The numbers are large for a rare disease. We think about it as an ultrarare and as I've said many times, not so different maybe at one level from our BBS world of 4,000 to 5,000 in BBS and 5,000 to 10,000 in HO, but it's a very different setting, as we've discussed earlier, and we'll discuss more going forward. So we think the 5,000 to 10,000 number probably represents a population that is largely diagnosed, which is a major difference and concentrated in the endocrinologist office. But it is clear that there's a significant population that's probably undiagnosed. And one thing when you get a therapy approved for severe unmet medical need, then awareness increases and the rate of diagnosis is certainly likely to increase. And as we learn more about Japan, we are increasingly eager to get started there. Slide 26, we anticipate submitting the supplemental NDA to the FDA under breakthrough designation with a request for priority review in the third quarter of 2025, and we expect to complete and submit our request for type 2 variation to the EMA, also in the third quarter. The submission for Canada is expected by the end of this year. And for the United Kingdom, we'll leverage the Reliance Procedure like we did for BBS, which is to file following EMA approval. In Japan, we have the ongoing cohort of 12 patients as part of the global Phase III trial, which will enable us to seek marketing approval there in 2026. We anticipate data from this cohort in the first quarter of next year. So on Slide 27, lastly, while today's data release marks perhaps the most significant milestone in Rhythm's history, we do have more going on. We have several additional milestones coming in the near future, as listed on this slide. On our next-generation MC4 agonist, we anticipate dosing the first patient in acquired HO in our trial of the weekly 718 this month and reading out data from the Phase II trial of the oral bivamelagon in acquired HO in the third quarter. Both RM-718 and bivamelagon were designed to be more targeted than setmelanotide, thereby eliminating hyperpigmentation and both offer administration improvements over the daily injection of setmelanotide. Importantly, we have patent protection of these 2 investigational drugs into the 2040s. And more importantly, the data released today increase our confidence in the potential success for both of these trials and acquired hypothalamic obesity. Prader-Willi, we began enrolling patients at Dr. Miller's site, University of Florida, ages 6 to 65 in a 26-week open-label Phase II trial during the first quarter, and we expect to complete enrollment of up to 20 patients by the third quarter of 2025. And we're looking forward to data from the Phase III EMANATE study in the first quarter next year. Importantly, we remain well capitalized with cash runway through many of these value-driving milestones into 2027. In summary, today is probably the most significant milestone in Rhythm's history. We're in a good place. The importance of the MC4R biology has been confirmed, and we are making good progress on our indication expansion strategy, coupled with the development of our next-generation therapies. With that, I'll turn the call over to Q&A.

[Operator Instructions] And our first question will come from Derek Archila with Wells Fargo.

Let me be the first to congratulate you on the data here, well done. So just 2 questions for us, one for Dr. Phillips and then one for the Rhythm team. So for Dr. Phillips, maybe could you just discuss how common seizures and seizure disorders are in HO patients? And maybe just put some context around the broader health issues HO patients face beyond just the weight gain and the hyperphagia. And then just one simple one for the Rhythm team. Just curious to know what percent of patients in the trial were able to normalize their BMI completely?

Okay. Just to recap your question, you wanted to know, number one, how common seizures are among HO patients? And the second is to discuss the other issues -- health issues that this patient population suffers from? Is that correct?

That is correct.

Okay. So seizure disorders are not that common among the HO -- acquired HO population. The one intersection there is in those patients who might suffer from hypoglycemic seizure. But in the HO patients that I have followed in the past and in the HO patients that I currently have in the Phase III, I do not believe that seizures are something that any one of those patients has suffered. Secondly, in terms of other issues that this population deals with, the health burden among HO patients is enormous. It's staggering. These patients have injury to their hypothalamic and pituitary centers of hormonal control. And these areas affect the signals that direct the thyroid to make thyroid hormone, the adrenal gland to make cortisol. The gonads to make testosterone or estrogen and the liver to make IGF-1 in response to growth hormone. They take DDAVP to help with water balance. And so they have a high medical morbidity with the management of all these different hormones. As a group, however, they do adjust and they do come into a stability, but the weight gain is something that really has an effect because of the stigma of the weight gain.

And Derek, in terms of -- sorry, what was the second part of that question?

Patients normalize?

Oh, how many patients normalized? How many patients normalized? Yes. So we will have -- I don't have that today. Obviously, we'll -- that's an analysis we do. We're super interested in that. And it is -- what's interesting about this is, as we said, physiologically, if we're replacing a hormone I mean, people who are otherwise relatively normal prior to getting their injury, in theory, assuming nothing else intervenes, why couldn't we get them back to their prior state. Now, they're over -- if their prior state was overweight, we might be getting them back to a normal state. But -- and we will look at that and we will report that in the future.

And our next question comes from Phil Nadeau with TD Cowen.

Congratulations on the data. Great day for Rhythm. Two questions from us as well. First for Dr. Phillips. Dr. Phillips, could you give us some sense of how you'll integrate IMCIVREE into your treatment paradigm for HO patients, now that you've seen the Phase III data? That's the first question. And then second, for Rhythm, we're curious whether there was any correlation in the study between the changes in hyperphagia scores and BMI reduction?

Thank you for the question. Yes, to reiterate the question, this is where -- where do I -- what place do I see for setmelanotide in my acquired HO population or perhaps my population of acquired obesity overall. I think quite -- my place for setmelanotide is in those patients who have acquired hypothalamic obesity. This is, as David alluded to, a clear deficiency of the hormone alpha-MSH, which setmelanotide nicely fills. And just like I replace thyroid hormone, growth hormone, cortisol, I'm going to be replacing with setmelanotide. I see this as targeted therapy that has an incredible success at addressing the significant weight gain.

Is it safe to say you'd use it in all your patients with weight gain?

No. Again, it's in acquired hypothalamic obesity. Of course, it has other indications that are approved by the FDA, which we will use in those situations. But in the current unmet need area, these patients with acquired hypothalamic obesity, there is no treatment that really works, and this works beautifully. So I see its use in this area. And as the testing is done in other areas to see whether it's efficacious, I look forward to seeing those results.

Yes. And Phil, on your correlation hyperphagia question, apologies, I'm going to answer a lot of these this way. I just don't have that at this point. Yes, I just -- I can't predict there. I can say on our Phase II study, I mean, which was again, super small, right, it -- even the patients who had a low baseline score for their hyperphagia of 4 had a change in that score. So even though they weren't describing significant discomfort perhaps from their hyperphagia, that symptomatology went down. So I don't know if that's going to happen in this trial as well, but that would say a change, I'm guessing, may be relatively universal across patients. So I don't know if that gives us some insight whether it will correlate or not, but I'm guessing it's not going to differentiate significantly probably.

And the next question comes from Tazeen Ahmad with Bank of America.

This is Jeremiah, on for Tazeen. Congrats on the Phase III results. We were wondering if you could provide any color on the profile of acquired HO patients that were unable to achieve the greater than 5% BMI reduction at 52 weeks. And I know you had highlighted that there was a case where one patient saw BMI reduction accelerate during the open-label extension portion of the study. Just curious on how you think this phenomenon could potentially affect how health care providers are thinking about the treatment trial periods when they utilize in the real world?

Yes, Jeremiah, thanks for the question. Again, I can't answer definitively. I mean I shared a few examples today, and the goal of sharing those examples was just to give you a sense that I think there are going to be stories behind many of these patients. I just -- I don't have the summary number that you're looking for. That first patient I shared basically because it's remarkable, but I can't explain the delay in response, why that patient went a year without losing and then in the open label did start using and maybe we'll be able to figure this out as we get deeper into our history. But that's -- it was an example of a patient who was in that group, but in fact, did respond. And then, of course, the 2 kids, just another category, as I said, of where their BMI change may not be there, but they, in fact, were responding. So yes, that's the best I can do today.

Got it. Are you able to provide any color on the average trial period for patients, let's say, BBS patients enrolled?

The average trial period?

Yes, I guess how long are KOLs willing to have patients on drug before they classify them as either a responder or a nonresponder?

No. Well, I'd go back to the label. I think the world has really adhered to the label in the sense that when we had our first label for POMC and LEPR, there was a relatively short period. I think the label might even have been 3 months and evaluated 3 months and see if you had a 5% weight loss or not. We've learned a lot since then. That was based on our pivotal trial. There were 12 and 13 patients in those 2 groups. BBS, the FDA totally got it, that it takes time and -- or it may take time. And so that label is out at a year, which is why many of these patients have to get their reauthorization done at a year. And as you know, we've done incredibly well with the vast majority of patients being reauthorized at a year. So this won't be any different in that sense. I don't expect it to be longer than a year. I don't even know if they'll require a 5% sort of recheck on this, but it won't be worse than a year if there is something there.

And the next question comes from Seamus Fernandez with Guggenheim.

So a couple here. I just wanted to ask, I think there was one patient in the open-label period that suffered a cortical stroke. Just wanted to get a better sense of the patient history there, if you could help us understand that. And if that cortical stroke was attributed to drug or not. And then as it relates to the question around the patient who experienced the seizure in the study, it may not be sort of a frequent occurrence in the -- with setmelanotide or in this patient population. But what were the underlying kind of characteristics of the patients? Was it really related to -- were the seizures related to sort of an underlying epileptic condition that the patient was allowed into the study for? Just trying to get a little bit more color around those details. And then just my last question, when you look at the progression of these patients to other sort of related conditions, this is a question for the doctor. The progression to diabetes and perhaps even the ability to prevent progression to diabetes or reverse it, how would you sort of predict that setmelanotide might actually benefit patients in that regard and really contribute to reducing costs within the system?

Thanks, Seamus. Let me go first here. Again, so I don't -- that death actually was relatively recent. So I don't have all the data, the specific on the cortical stroke. It was an adult patient. And I'll make the general comment that this population does have an increased morbidity related to this disease, and it's predominantly related to the cardiovascular impact of this complication. So the cardiovascular risk factors are higher given the metabolic abnormalities and the increased weight. So we'll provide more background on that as we get it. But again, that -- and it was absolutely considered unrelated. I mean this was not -- and there's no biologic rationale for why you would have something like that other than this background risk factor, which gets to the question you have for Dr. Phillips about, will this drug modify some of the comorbidities going forward. The seizure patient, as Dr. Phillips indicated, not so common overall, perhaps seizures. I can say looking at our larger population of patients, there absolutely are patients in there who have seizure disorders and are on medications for seizures as was this patient. This specific event was complicated by developing hypernatremia, which is due to -- as Dr. Phillips highlighted, they have adrenal issues, which can often result in disruption in their electrolytes. That disruption in their electrolytes can be associated with seizures or lower their seizure threshold. So there was a constellation of factors here. And this was a kid, who've done amazingly well. The child has lost 19% of their BMI and was essentially at the end of the trial when this happened. So judged unrelated. Again, and your question was, were there other factors on top of the seizure? And yes, there were. So maybe can you just talk a little bit about the role of this medication in potentially preventing some of the comorbidities that may develop over time?

Yes. So it's the duration and the severity of obesity that often leads to the occurrence of complications. We understand this most as it occurs with type 2 diabetes that patients who live with obesity as it progresses over time are at higher risk for the occurrence of diabetes, and that interventions such as lifestyle in the generalized obesity population and in medications, the old troglitazone and rosiglitazone and metformin studies showed that there were significant reductions in the occurrence of type 2 diabetes in at-risk patients if you could improve lifestyle and lose even low amounts of weight in the 5% to 7% range. So although this trial was very short and one cannot see such long-term assessment and outcomes, one is hopeful that one could reduce the metabolic complications of obesity by interventions that cause significant weight loss. I think we have to wait over time to see that it happens in this group. But based on what we know in other examples of weight loss, we do see reductions in the occurrence of type 2. But the other metabolic complications are equally concerning. These would include the metabolic liver disease that's associated with very high rates of cirrhosis in this country with sleep apnea, which is something that leads to other complications and heart disease. So I see that in acting now early in childhood because we have the children on this protocol that we will be able to reduce the long-term metabolic complications of obesity. Did I answer the question?

Yes, that's perfect.

I also think it's important to realize that this medication has been highly effective in the acquired hypothalamic obesity patients that were presented today. But one could envision that if there is really extensive destruction of the pituitary and hypothalamus such that, that patient -- that unusual patient didn't have the MC4R receptors of significant numbers to respond to the alpha-MSH analog that, that would be a reason where the drug didn't work as well in those patients because you need to have those receptors available. I haven't run across -- well, I could say that some people who have repeat surgeries might be more at risk for extensive destruction of their hypothalamus. So another reason for the drug not working in some patient populations, but it would be a rare cause.

Our next question comes from Paul Matteis with Stifel.

Let me add my congrats. Two data questions and then one regulatory question. So on the data, I appreciate the granularity you guys have shared. I don't know if you have this data point, but can you just talk about median versus mean and any meaningful difference there? Second, on the SAEs that occurred in at least one patient, any more color you can give on what was observed on the drug arm and your confidence that there's no new safety signal that's emerged in the study? And then lastly, David, I appreciate your comments on the kind of uncertain environment on the macro and the FDA side at the beginning of this call. I know you guys are watching this all play out like we are. Do you have any insight into your review division specifically for this sNDA as it relates to the continuity at the leadership or review team levels? Any comments you could make would be helpful.

Yes. So let me take the last one first. So we don't have great insight. We continue to interact with the FDA and our group remains active. So there's been no hint looking at the website, all those our "reviewers" look to remain in place. So yes, there's no sign at all that we -- that our specific division, diabetes metabolism has been impacted yet. So we're optimistic. And as I said earlier, I'm optimistic in general about the whole process. Your question about [indiscernible], I do not have those numbers right in front of me. We do have those numbers. We can -- I may have to get back to you off-line on that. It wasn't -- I will say, I have seen that, and it's not a distorted analysis. So we can come back with that. I'm sorry, what was just your second question there?

It was on the SAEs that occurred at least in one patient. And just any more color you can give there?

Yes. No, I mean -- yes. I mean, these patients, Dr. Phillips said, and we can see when you look at their -- in general, their medication list, it's pages, usually 1 to 2 pages. So there's just a ton of stuff going on in any given patient. You have to work around these as the background elements. Overall, I mean, the picture -- this drug is incredibly well behaved. It's an approved drug. We've treated over 2,000 patients and growing number of patients, of course, with acquired HO. And the pattern is entirely similar. So with the exception of these 2 deaths, both of which I think, had their own specific background issues here, and I misspoke on the patient with a cortical stroke. That was actually an 8-year-old who had -- who was hospitalized with thrombosis and end up having evidence of multiple strokes, cortical infarcts in his brain on imaging and they tried to go through and do a thrombectomy to open up one of the arteries in the brain. And so again, a complex background, which I don't understand all of the issues leading specifically to that stroke, but he had panhypopituitarism. He had stool cultures, which suggested a gastroenteritis complicating this, the hypernatremia, superimposed on top of that. And so again, a complex background, but not felt to be drug related. And we've had no indication of that in any of our other patients that have been treated with setmelanotide.

Our next question comes from Whitney Ijem with Canaccord.

Adding my congrats on the data. A quick follow-up on the GLP-1 patients. I know you showed the placebo-adjusted BMI change. What was the actual placebo change? And how many -- what was the end of that placebo change? And then one for Dr. Phillips, just a follow-up question on kind of how you plan to this in your practice. Just to confirm, are there any patients for whatever reason you think would not be a good fit for setmelanotide based on the data today? And just how do you think about the potential next-gen oral or once-weekly more targeted therapies as well?

Susan, I'm going to let you go first, take that one.

Okay. So the first part of the question is where do I see setmelanotide in my therapeutics in my patients? Did I get that correct?

Well, specifically, just because someone had already asked it, but just wanted to confirm, are there any patients you think would not be a fit for any reason?

Okay. Okay. No. In acquired hypothalamic obesity, no. There's just nothing available that works in this patient population. It's been very disappointing, and it's truly an unmet need, and this medication works really well. It's just amazing. It's a perfect fit. So if I have a patient who has had a craniopharyngioma, hamartoma, astrocytoma, and I'm looking at that patient coming in for obesity, and I see a straight up weight curve, which is characteristic of this condition, then the go-to is setmelanotide because it fits those population well. Okay. And the second part of your patient was -- your question was something about the GLPs and the other...

Yes. That's right. That's for me. So I don't have that specific -- the overall -- the BMI decrease in the -- well, we're looking it up. I don't know if we can get that here before. I'm going to -- we'll get back to you. I don't have that number right in front of me.

And our next question will come from Mike Ulz with Morgan Stanley.

Congratulations on the data as well. Maybe just one for me related to the ongoing Japanese cohorts in terms of any potential read-through you see from here? Is it fair to assume similar results in the Japanese cohorts? Are there any sort of key differences maybe in the patient population we should consider as we think through that?

Yes. So tough to answer that question. I think -- so just based on BMI in Japanese population tending to be lighter overall on average. But we've seen that the drug clearly works in patients who have lesser BMIs and those who have very severely increased BMI. So I don't think that's going to be a differentiator. There's no reason to believe that there's a cultural element here where the drug would act differently in the Japanese population. That's obviously why you need to run trials there. I think that's more often as a function of making sure you have the PK right as opposed to that the drug may not work biologically, the biology is the same. So it's a long answer to say. I don't think there's going to be any difference, but we have no insight.

And our next question comes from Dennis Ding with Jefferies.

And congrats on the data. Two from us. On the pipeline, as the data from the daily oral and the weekly subcu readout over the next 6 to 12 months, how are you going to compare that data to the setmelanotide Phase III data? What are you looking for there? And what would constitute a success on your end? And then as a follow-up, I had a question on the dosing in the Phase III. What was the average dose in the drug arm? And how much incremental efficacy do you think is left on the table as you transition from the daily subcu to a daily oral or even the weekly injectable?

Yes. So your first question was how are we going to compare? I mean, again, we've discussed this many times, I guess, with many of you. We're looking to be in the ballpark. I mean, clearly, if there was no effect, then we wouldn't go forward with one or both of these. If we're in the ballpark, plus or minus what now looks like a 15%, 16% on the active response rate over a year period, then clearly, even if it was a little below, you'd still have a drug based on better tolerability and perhaps a better safety profile overall. So bottom line is that's how we'll be thinking about it. I don't have a number. I mean you'll know it when you see it. And what's been, again, really, and I've tried to highlight that today, maybe not very well, but what's interesting about this drug in this indication is most patients should respond and they should respond to an MC4 agonist, which means I expect them to respond to the next generations. And if they don't respond, then more often than not, there's a story behind in terms of why they may not be responding. And so we'll seek to understand that, and that will be true in our Phase II studies for the next gen, which is we'll have a number, but then we'll look patient by patient to see how to interpret it in its fullness. Sorry, what was your last question? The second part of that question?

Just around dosing.

Dosing. Yes. No, no, we'll have that. I don't -- again, we got the data on Friday here, and apologies for not being as tight on all of this as you'd like, but we'll get that over time. I would say my gestalt is we're going to be in between 2 and 3 overall. We've had back to our Phase II, we had a few patients who were managed on one. So again, particularly the younger patients were much lighter, but we'll get that data.

And our next question comes from Joey Stringer with Needham & Company.

We have 2 for Dr. Phillips. Dr. Phillips, you mentioned before that you would recommend setmelanotide to all of your acquired HO patients. I guess, in your view, what would be the potential barriers to a broad uptake of the drug? And secondly, based on the Phase III data and in your experience, how compliant in a real-world setting do you think your average HO patient would be if they were on setmelanotide? In general, do you think HO patients would be more or less compliant relative to, say, Bardet-Biedl patients?

Can you restate your first -- the first part of the question?

Sure. It was around the -- in your view, what would be potential barriers to broad uptake of the drug?

I think it would relate to an understanding of the medication by providers. I don't see any significant issue regarding the uptake and use of this medication other than the normal for any medication that one uses, one always has to apply, get authorization and then use. But from a provider's perspective, I don't see any big negatives. For patients using the medication and adherence to it, this is a highly motivated patient population. On the pediatric side, the stigma associated with severe obesity and uncontrolled eating or hyperphagia is something that there's a very strong desire on the part of the family and the patient to get some control over this. So I have not run into any aspect of this therapy that is a signal for difficulty in adherence. The side effect of hyperpigmentation is not sufficient in the mind's eye of the patients that I've come across to stop the medication. They are very, very -- exceedingly happy with the weight loss and are highly protective of staying on medication because of the success when other things have failed in using this medication.

And Joey, I think the other thing that to build on what Dr. Phillips said, the fact that we got 106 patients out of the 120 completed the trial. And in that group, I think it's early on, and we'll get to understand this better. But based on sort of anecdotal feedback so far, compliance was pretty high. And again, patients are seeing the benefit and then they stick with it. So it's when patients are struggling with seeing the benefit and then they're not so happy with some aspect of a drug that you tend to have poor compliance. But in this case, I think compliance has been pretty high.

And our next question will come from Jonathan Wolleben with Citizens.

Congrats on the data. Two for me. The first clarification. On Slide 8, you list 7 discontinuations due to adverse events, but then on Slide 15, you only have 4 on setmelanotide arm. So I'm wondering about kind of what's the difference there? And then what should we think about long-term use for setmelanotide in HO patients in terms of long-term effects? Are you seeing plateauing of BMI? Should we expect normalization or to get back to prior hypothalamic injury like levels? And then how does a growing population factor into that as well?

Yes. So I don't have long-term data, obviously, in HO. I mean I look at the POMC population. I mean, again, that's a small population, but we have patients who are out there 7 years and staying on the dose doing incredibly well. Think about it like -- it's back to the hormonal therapy issue again, Dr. Phillips spoke about. It's like hypothyroidism. I mean you replace the thyroid, you get back to a normal state. You can't stop your thyroid med because you just go back to the hypo state. So I think patients will stay on to this. Obviously, if they're benefiting and they've gotten to a normalization of their life. The story is, right? I mean way you -- why does the drug work? I mean it tells you you're full. So you stop taking the medicine and suddenly your back is not feeling full again and you're eating. So all of that would say that those that benefit and respond are likely to stay on. And I think in general, that's been our experience -- early experience with HO. What was the other one? Sorry.

The AEs. You had forwarded 7 discontinuations and then 4 in the table. So wondering about the other 3?

There were 7 discontinued AEs. So there may be a mistake in the table there, but 7 is the correct number. And for the set patients, discontinued doing AEs. These were -- again, there's a lot of stuff going on, but injection site pruritus, that was one, muscle spasms, increased reflux, seizures on 2 different occasions, nausea and vomiting in a patient, although -- one thing, and we highlighted on that table, you can see the background severity of GI complaints in this population is pretty high. So obviously, this drug can do that, but you tolerize to that over time. And so for most patients, they handled it incredibly well, but for some patients, it was enough. We did have one who stopped because of skin hyperpigmentation, so it's not a nonissue. And we had 2 placebo patients who had AEs in that 7. These were -- one was an injection site reaction and the other had what looked like a hypersensitivity reaction, even though they were on placebo.

And Jon, I would just point out, the patients who discontinued study due to an AE were not solely -- on Slide 8, were not solely in the active arm. So discontinuations could occur in the placebo arm as well.

Yes. Got it. There was just 0 listed for placebo on Slide 15. So I was wondering about the difference there, but that's helpful color.

Yes. I just realized one note I hopefully answered your question. I didn't answer Dennis' full question there on how much efficacy is left on the table here. I don't know. I'm not sure there's a lot of efficacy in the sense that I think setmelanotide, we do a good job agonizing the MC4 receptor. So I'm not sure that there's a strong possibility you can do better from a pure efficacy standpoint. Now if patients tolerate the drug, if they're a little more better, they're a little more compliant, et cetera, all that, of course, could translate to better efficacy.

And the next question will come from Raghuram Selvaraju with H.C. Wainwright.

Congratulations on the data. I just wanted to ask about what your previous interactions with payers have been regarding the prospects of setmelanotide in hypothalamic obesity. And if you would characterize this data set as constituting either a best case scenario or close to a best case scenario as far as payers are concerned, what you think their response might be to this data set? And in particular, if you have any sense of how they are going to be approaching the deployment and management of this drug in the context of this population, given the heterogeneity of response, but also the prospect of a significant magnitude of BMI change?

Yes. So several things there around payers. So we have begun our interactions with payers. We've had some small focus groups, have had some individual interactions around this. I think HO is coming in at a really fortunate time or this indication is coming at a fortunate time in the sense that we benefit hugely from having been an approved drug. We're approved for POMC, LEPR for BBS. Those approvals have given us the opportunity to do a lot of education with payers around the pathway, the fact that this is a distinct disease. These are distinct diseases as compared to general obesity. In other words, all weight gain anti-obesity medications are not the same. So I think that's -- we've done really well there, as you know. And I think that level of education is high. That's going to help us hugely here. Then you get to the data. I totally agree. This is the best case scenario. I mean we're going to go in with unequivocally strong data. And the one thing payers don't like is to pay for a drug that's not working. And your point about heterogeneity, like I said, we'll understand that better. And I'm not at all convinced that there's a huge heterogeneity in response in the sense that I'm thinking either you had a good response, meaning, I don't know you are 10% or greater in a world where nothing works. And in fact, if you're not treated, you tend to gain and as we saw in the placebo group here, on average, they gained down 3% over the course of the year or you do really well. But the point is the vast majority, I think, are going to be able to fall in a bucket and make the case that they're getting a good clinical response here, and it's a relatively small percentage who don't. So again, less heterogeneity than I think you were implying in that question, but we'll let the data speak for itself, but I feel good about that. So overall, for the payers, we're not going to change price. I think I'm not expecting any difference. We don't expect step edits. We did not have any step edit it for -- we haven't had any to date. There's no reason to do it. They tend to be very religious in the sense of following the label. So there's no other approved drugs.

I show no further questions at this time. I would now like to turn the call back over to Dr. David Meeker for closing remarks.

Okay. Well, thanks, everybody, for tuning in this morning on a relatively short notice. As you can tell, we're excited. We do think that this is transformative for this patient population and ultimately, it's going to be transformative to Rhythm laying the groundwork for a really exciting next chapter. So we look forward to our next communication. Thanks all.

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