Rhythm Pharmaceuticals Reports 48% Increase in Product Revenue, Net Loss Widens in Q3 2024

Rhythm Pharmaceuticals, Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company, which focuses on therapies for rare neuroendocrine diseases, particularly through its lead product IMCIVREE® (setmelanotide), experienced a notable increase in product revenue. For the three months ended September 30, 2024, product revenue reached $33.3 million, a 48% increase from $22.5 million in the same period of 2023. Total revenues for the nine months ended September 30, 2024, were $88.3 million, up 66% from $53.2 million year-over-year.

Despite the revenue growth, Rhythm Pharmaceuticals reported a net loss of $43.6 million for the third quarter of 2024, slightly improved from a net loss of $44.2 million in the same quarter of 2023. For the nine-month period, the net loss increased to $217.3 million from $143.0 million in the prior year, reflecting a 52% rise. The increase in losses was primarily attributed to higher research and development expenses, which surged to $196.8 million for the nine months ended September 30, 2024, compared to $105.1 million in the same period of 2023. This rise was largely due to $92.4 million in acquired in-process research and development costs related to the acquisition of the proprietary compound bivamelagon (LB54640).

The company’s total costs and expenses for the third quarter of 2024 were $77.1 million, up from $66.5 million in the same quarter of 2023. The increase was driven by higher costs in research and development, as well as selling, general, and administrative expenses, which rose to $35.4 million from $30.5 million year-over-year.

As of September 30, 2024, Rhythm Pharmaceuticals reported total current assets of $340.3 million, an increase from $308.3 million at the end of 2023. However, total current liabilities also rose significantly to $97.6 million from $55.2 million, contributing to a total liabilities increase to $210.9 million from $163.0 million. The accumulated deficit grew to $1.1 billion, up from $894.7 million at the end of 2023.

In terms of strategic developments, the company entered into a license agreement with LG Chem in January 2024, acquiring worldwide rights to develop bivamelagon and assuming sponsorship of two ongoing Phase 2 studies. The total purchase consideration for this agreement was approximately $92.4 million, which has been recorded as research and development expense.

Rhythm Pharmaceuticals continues to rely on various funding sources, including equity sales and collaborations, to support its operations. The company anticipates ongoing operating losses and plans to finance its future capital requirements through additional equity or debt offerings, collaborations, and licensing arrangements.