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Rhythm Enters Financing Deal with HealthCare Royalty on Heels of FDA Approval of Imcivree for Bardet-Biedl Syndrome

June 17, 2022

The U.S. Food and Drug Administration approved Rhythm Pharmaceuticals’ supplemental New Drug Application for Imcivree, a melanocortin-4 receptor (MC4R) agonist, for chronic weight management in adult and pediatric patients 6 years of age and older with monogenic or syndromic obesity due to Bardet-Biedl syndrome.

Photo: David Meeker, chair, president, and CEO of Rhythm

At the same time, the company entered into a non-dilutive Revenue Interest Financing Agreement with HealthCare Royalty Partners for a total investment amount of up to $100 million, which will extend its cash runway into the second half of 2024 and will be used to use to support global commercialization efforts for Imcivree and ongoing clinical development.

Bardet-Biedl syndrome (BBS) is a rare genetic disease that affects approximately 1,500-2,500 people in the U.S. People living with BBS may experience insatiable hunger, also known as hyperphagia, and severe obesity beginning early in life. BBS may also be associated with cognitive impairment, polydactyly, renal dysfunction, hypogonadism, and visual impairment. Imcivree (setmelanotide) is the first and only FDA-approved therapy that targets impairment in the MC4R pathway, a root cause of early-onset, severe obesity and hyperphagia associated with BBS.

“This FDA approval represents a significant milestone for Rhythm, validating our strategy of developing Imcivree for people with hyperphagia and severe obesity caused by rare MC4R-pathway diseases and allowing us to provide our precision therapy to an established community of patients living with BBS and their families who are eagerly awaiting a new treatment option,” said David Meeker, chair, president, and CEO of Rhythm.

Imcivree is now indicated for chronic weight management in adult and pediatric patients 6 years old and older with monogenic or syndromic obesity due to proopiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1) or leptin receptor (LEPR) deficiency, or BBS.

FDA approval was based on phase 3 trial results that demonstrated statistically significant reductions in weight and hunger in patients with BBS. In the clinical trial, Imcivree delivered early, significant, and sustained weight reduction. The trial met its primary endpoint and all key secondary endpoints, with statistically significant reductions in weight and hunger at 52 weeks on therapy.

Imcivree was generally well-tolerated. The most common adverse reactions were skin hyperpigmentation, injection site reactions and nausea.

Rhythm also said that the FDA issued a complete response letter for the sNDA for setmelanotide in Alström syndrome, and the company plans to reevaluate potential paths forward in Alström syndrome in the United States. Rhythm’s Type II variation application to the European Medicines Agency for the treatment of obesity and control of hyperphagia in adult and pediatric patients 6 years of age and older with BBS is under review. The company is also continuing to advance a comprehensive clinical research program in MC4R pathway diseases, including the pivotal phase 3 EMANATE clinical trial evaluating setmelanotide in four independent sub-studies in patients with obesity due to POMC insufficiency caused by heterozygous variants in the POMC or PCSK1 genes, LEPR insufficiency caused by heterozygous variants in the LEPR gene, SRC1 deficiency caused by a variant in the NCOA1 gene, and SH2B1 deficiency caused by a variant in the SH2B1 gene or 16p11.2 deletion encompassing the SH2B1 gene. The phase 2 DAYBREAK trial is evaluating setmelanotide in patients with severe obesity and hyperphagia caused by rare variants associated with 10 prioritized MC4R-relevant genes. Rhythm has also initiated a phase 3 pediatric trial and a phase 3 trial evaluating a weekly formulation of setmelanotide.

Under the terms of its agreement with Healthcare Royalty, Rhythm will receive an initial investment amount of $37.5 million, as a result of the FDA approval of Imcivree for the treatment of BBS. Rhythm will receive an additional investment amount of $37.5 million following European Commission marketing authorization for Imcivree for BBS, which is anticipated in the second half of 2022. The final investment amount of $25 million will be payable upon Rhythm’s achievement of certain agreed sales milestones in 2023.

In exchange for the total investment amount received by Rhythm, HealthCare Royalty will receive a tiered royalty based on global net product sales generated by Imcivree. This royalty will begin in the low double digits and decrease to the low single digits upon the achievement of certain annual revenue thresholds. The total royalty payable by Rhythm to HealthCare Royalty is capped between 185 percent and 250 percent of the amount paid to Rhythm, dependent on the aggregate royalty paid between 2028 and 2032. Based on the total funding under this agreement, together with Rhythm’s current cash balance, Rhythm anticipates that it will be able to fund its operating expenses and capital expenditure requirements into the second half of 2024, regardless of whether the sales milestone relating to the third tranche is achieved.

Author: Rare Daily Staff

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