Rhythm Secures $150 Million in Convertible Preferred Stock Financing

Rare Daily Staff

Rhythm Pharmaceuticals has signed an investment agreement with current shareholders, led by Perceptive Advisors LLC and its Discovery Fund and a life-sciences focused institutional investor, for the sale of its series A convertible preferred stock for gross proceeds of $150 million.

The company intends to use the proceeds from the offering to fund its clinical development programs and commercialization activities, for working capital, and for general corporate purposes. The transaction is expected to close on or about April 15, 2024, subject to the satisfaction of customary closing conditions.

“This financing is expected to extend our cash runway well into 2026 and beyond multiple potentially value-creating milestones including the topline data readout from our phase 3 trial in hypothalamic obesity in the first half of 2025,” said David Meeker, chairman, CEO, and president of Rhythm.

Rhythm’s lead asset, Imcivree, is an MC4R agonist designed to treat hyperphagia and severe obesity, approved by the U.S. Food and Drug Administration for chronic weight management in adult and pediatric patients 6 years of age and older with monogenic or syndromic obesity due to pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1) or leptin receptor (LEPR) deficiency confirmed by genetic testing, or patients with a clinical diagnosis of Bardet-Biedl syndrome (BBS).

Both the European Commission and the United Kingdom’s Medicines & Healthcare Products Regulatory Agency (MHRA) have authorized setmelanotide for the treatment of obesity and the control of hunger associated with genetically confirmed BBS or genetically confirmed loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 6 years of age and above.

Rhythm is also advancing a broad clinical development program for setmelanotide in other rare diseases, as well as investigational MC4R agonists LB54640 and RM-718, and a preclinical suite of small molecules for the treatment of congenital hyperinsulinism.

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