On Tuesday, Rhythm Pharmaceuticals (NASDAQ:RYTM) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

Rhythm Pharmaceuticals reported first quarter 2026 PBS revenues of $60 million, reflecting growth in patient diagnosis and therapy candidates.

The company's strategic expansion includes FDA approval of Insivri for acquired HO and European marketing authorization, with more than 150 start forms and positive payer reception.

The estimated prevalence of HO presents significant opportunities, with Japan positioned as the second largest market behind the US.

The company anticipates approval in Japan before the end of 2026 and plans to start a phase three trial with Vivamelagon in HO by the end of 2026.

Financial results show $60.1 million in global net revenues, with 61% from the US and a strong growth in international regions, particularly in Germany, France, and named patient sales markets.

Full Transcript

OPERATOR

Ladies and gentlemen, thank you for standing by and welcome to The Rhythm Pharmaceuticals first quarter 2026 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 11 on your telephone and you will then hear an automated message advising your hand is raised and to withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Dave Conley. Please go ahead.

Dave Connelly

Thank you, Michelle. Dave, I'm Dave Connelly here at Rhythm Pharmaceuticals. For those of you participating on the conference call, our slides can be accessed and controlled by going to the investors SECtion of our website ir.rhythmtx.com. this morning we issued our press release that provides first quarter 2026 financial results and a business update. And that press release is available on our website. Our agenda is listed on slide 2. On the call today are David Meager, Chairman, Chief Executive Officer and President, Jennifer Lee, Executive Vice President, Head of North America, Hunter Smith, Chief Financial Officer and Jan Massabrou, Executive Vice President, Head of International is on the line joining us from Europe on slide 3. 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 reports on file with the SEC. In addition, any forward looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent dates. We specifically disclaim any obligation to update such statements. With that, I'll turn the call over to David Meeker who will begin on slide 5. Thank you Dave. Good morning and thank you for joining. So we had another good quarter. Now, before we dive into some of the more recent events, I do want to highlight the ongoing progress in our base business. Predominantly PBS revenues for the quarter were 60 million. As we would expect with an ultra rare disease, awareness of the disease continues to grow leading to more patients diagnosed or potential candidates for therapy. We have learned much through this initial launch and we continue to adapt and optimize use of available data to connect with the right healthcare providers who may have a BBS patient. There is still more long term opportunity to unlock with BBS. With the FDA approval of Insivri for acquired HO on our PDUFA date and European marketing authorization which came early, we have expanded our focus as with the BBS launch, our plan will be to share a few of the early launch metrics with the goal of giving you a sense of how it is working, with the usual caveat that it is extremely early. That said, we are pleased with a strong start with more than 150 start forms to date and a good reception at the payer level. Jennifer will provide more details. Slide 6 is to remind you again of the significant opportunity in HO. With an estimated prevalence of 10,000 patients in the US and Europe and 5,000 to 8,000 patients in Japan and with a much more concentrated call point than BBS, this is a meaningfully larger opportunity. Japan is positioned to be the SECond largest opportunity for HO behind the us. As we have shared, we have been extremely appreciative of the highly collaborative, encouraging nature of our interactions with the Japanese regulatory authority, the PMDA. All Japanese patients have completed the 12 month trial, eight patients on treatment and four on placebo. One patient discontinued early SECondary to hyperpigmentation. Slide 7 shows the BMI change as compared to the values for the full 142 patients. As you can see from the results, the results were similar to the full cohort. The placebo adjusted differences were slightly less, mostly due or due in part at least to the fact that the placebo group did not gain weight in the same way their Western counterparts did. Although the numbers are small, this may reflect the cultural differences with a more obesity prone environment in the West. The team has moved rapidly to complete the filing, putting us in the position of an anticipated approval before the end of the year. The Japanese team is fully in place and Yann will talk more about the opportunity and the organizational build. Finally, as we have previously shared, we look forward to a number of milestones this year pending late breaking abstract acceptance. Our goal is to share Dr. Miller's six month data in PWS at the ENDO meeting in June. Similar to what was presented in December. We would expect to share BMI data, HQCT data and DEXA scan data for those patients who have completed the scans. We anticipate sharing 718 data mid year and we are targeting the Q2 earnings call at which time we would share the Part C results in HO and potentially the available data in PWS. CMC work and BIVIM. Bioequivalence studies for the new formulation are underway with the goal of being in a position to start the phase three trial with Vivamagon and HO by the end of the of 2026. I will now turn the call over to Jennifer.

Jennifer Lee (Executive Vice President, Head of North America)

Thank you David. I'm going to be starting today on slide 10. It is an exciting time for rhythm with the acquired HO approval and our US commercial launch is off to a strong start. The early reception has been positive. Physicians are prescribing in CIVRI for patients with acquired ho. Payers, especially those with experience through bbs, have begun approving reimbursement and we have patients with acquired HO who have started therapy. Emcivia was first approved in 2020 for Pom C and Lepr and we launched in 2022 for Bardet-Biedl syndrome. BBS is an ultra rare disease with an estimated prevalence of 5,000 in the US disease awareness and diagnosis rates were low at the time of launch. Over the last three years we helped build an active community of engaged physicians who support the earlier identification and treatment of patients and we have worked to expand reimbursement of in civri. In doing so, we delivered steady, consistent growth over the last three years. It wasn't always easy, but we learned from the challenges along the way and laid a solid foundation for future launches, including our recent one in acquired hypothemic obesity for BBS. In the first quarter of 2026 we had steady growth in prescriptions similar to Q1. Last year we had patients that transitioned to new insurance plans leading to a temporary increase in patients provided free drug through our Bridge program. As of mid April, we had transitioned most of these patients back to reimbursed therapy and we are seeing steady growth in commercial patients now moving to the acquired HO opportunity, which we estimate is approximately twice the size of BBS at 10,000 patients. We've grown our commercial organization to extend our reach in this larger opportunity, going from 16 sales reps for BBS to a total of 42 sales reps deployed across the country. We have similarly scaled our patient services team as well. The FDA approval on March 19 and the broad label which goes beyond tumor and tumor treatment related HO to include other injuries that may lead to acquired ho, has opened the doors for our team to engage with more physicians. Our team's continued engagement with HCPs around the causes of acquired HO, the role of MC4A pathway and the compelling efficacy data and the product profile of msivris. This has resulted in the identification of more acquired HO patients and we've seen steady progress of patients moving to diagnosis from suspected as physicians gain a better understanding of this unique disease and its causes. Next slide. The initial response from patients and the physician community reflects a high amount need for treatment for acquired HO. We have received more than 150 start forms in the six weeks since approval. Of these start forms, approximately 40 are for clinical trial patients. During the first six weeks of launch, there have been approximately 110 unique prescribers for acquired HO, of which about 80% are new prescribers of MCIVRI. To date, the large majority of prescribers have written one script for an acquired HO patient. In these early days of launch, approximately 80% of prescribers are endos. Along with some pediatricians and primary care physicians. We're seeing encouraging receptivity among payers too. Having approval in place enables us to get back in front of payers to continue education around acquired HO and MSIVRI for this new indication. Our prior education that led to MSIVRI coverage for BBS has facilitated our discussions with payers and supported their understanding of acquired ho as an MC4 pathway disease. We are pleased to see initial approvals for reimbursement for acquired HO prescriptions during this early phase of launch, but we continue to expect it will take approximately three to nine months from approval for HO specific MSIVRI policies to be established. The early launch indicators are highly encouraging, reinforcing our confidence in the long term potential of IMSIFRI in hypothalamic obesity. We look forward to updating you on our progress with that. Let me hand it over to Jan.

Jan Massabrou (Executive Vice President, Head of International)

Thank you Jennifer. I will begin on slide 13. We are very excited about the EHO opportunity in the international region as we achieved significant milestones and our path towards bringing IMCIVRI to more patients. Just last week the European Commission granted marketing authorization for IMCIVRI for the treatment of obesity and control of hunger in patients 4 years old and older with acquired hypothalamic obesity due to hypothalamic injury or impairment. Our dialogue with European regulators was very constructive and efficient, resulting in the EMAS positive CHMP opinion coming sooner than we originally expected with marketing authorization following just one month later. Despite this process typically taking two months, this is a tremendous achievement and the result of years of work and collaboration between RIZAM and our investigators, the European HO experts and the regulatory authorities, all of whom focused on bringing the first ever therapy specifically approved for patients with HO with an estimated prevalence of approximately 10,000 patients in Europe. This is a meaningful opportunity and we have a very experienced market access team that will lead us through country level negotiations with launches anticipated to begin in 2027. Similar to the process we previously followed for approved indications of phamsi, LE par ndbs, we have begun efforts to seek an exemption from the German Federal Joint Committee, the GBA from its exclusion list that prohibits reimbursement for lifestyle drugs such as drugs indicated for smoking cessation and general obesity. The CHMP opinion enabled us to begin this process, which can take six to nine months, putting us on track for launch in Germany in 2027. In addition, the key local reimbursement dossiers are finalized and will begin negotiations in France, Italy, Spain and other countries. For the uk, we leveraged our EU submission through the international recognition procedures IRP to seek authorization from the Medicines and Healthcare Products Regulatory Agency or mhra. This was already submitted last week based on the positive CHMP opinion. Of course, there is already much enthusiasm in Europe as we have seen with the reimbursed early access programs for HO in France and Italy, which account for a meaningful portion of of patients on reimbursed therapy in the international region. These early access programs have enabled many of the leading physicians in France and Italy to begin patients on setmelanotide gain experience with the drug and see the benefit in patients. The French AP1 program in particular has generated real world efficacy results for publication, adding to the body of evidence supporting sepan natide therapy for ho. Next week at the European Congress of Endocrinology in Prague, French physicians will present real world data for more than 60 patients with HO on cetpen natide in the early access program, including a cohort on therapy for up to 12 months. Next slide we are also rapidly advancing towards achieving anticipated marketing authorization and commercialization in Japan with an estimated 5 to 8,000 patients with acquired hypothalamic obesity. In Japan, where the prevalence and incidence rates are higher on a per capita basis than Europe and the us, the unmet need for an effective therapy is quite pronounced. There has been strong KOL support since we first disclosed our phase two data in ho and our commitment to quickly bringing EMCI to Japanese patients in need has enabled positive and open dialogue with Japanese regulators. We now have almost 50 employees in Japan and we've begun executing on our pre launch tactics focused on disease awareness, including face to face interactions, webinars and symposia and patient identifications. These activities provide us with a strong understanding of the disease landscape and position us well to begin pricing negotiations upon approval. Just last month in Japan, I joined the team for a series of meetings with KOLs and Japanese government officials. In addition to the excitement for the potential impact melanotide will have on these patients, these KOLs and officials told us they were very appreciative of the speed and urgency with which we enter Japan. Of particular note, our team has moved fast, potentially securing approval in Japan less than a year from the US approval when many companies wait years or partner with someone else to pursue approval. As we announced today, the PMDA has accepted and is reviewing our NDA filing for NCVR for acquired hypothalamic obesity. Japanese regulators do not publish or announce a timeline for approval as it is done in the US and Europe, but we anticipate approval and launch by the end of 2026. Slide 15 lastly, Q1 2026 was another strong quarter for the international region. We saw double digit percent growth in patients on reimbursed therapy throughout the region, which includes more than 25 countries where MCV is available through national reimbursement on inpatient cells. BBS was a primary driver of growth from Q04 2025 to Q1 2026 with the early Access programs in France and Italy for HO contribute meaningfully. CIMTIM CEBRI was first authorized in Europe for PUBC and Lepr in 2021. We have built a very strong foundation with positive and collaborative relationships in place with many experts and market access officials. This experience will serve us well with ho. With that I will turn it over to Hunter.

Hunter Smith (Chief Financial Officer)

Thank you Jan. I begin on slide 17. Rhythm is well capitalized and off to a strong start of what promises to be a transformational 2026. The initial phase of the US launch and acquired HO is quite encouraging and we're excited about the significant ongoing progress in the international region as well. We had a solid first quarter of 2026 with $60.1 million in global net revenues from sales of MSIVRI, which represents 5% sequential growth over Q4 2025. During the first quarter, 61% of revenue was generated in the United States with the remainder generated outside the US Reflecting continued strong performance across those geographies. Globally, we saw continued growth in patients on reimbursed therapy with an 8% increase over the prior quarter driven primarily by BBS. On slide 18, I'll walk through the revenue quarter over quarter as revenue increased from 57 million in Q4 2025 to 60 million in Q1 2026. First, the US while the number of patients on reimbursed therapy in the United States increased from the end of Q1 to the end of Q4 to the end of Q1, the specialty pharmacy inventory increase of approximately 1.8 million in Q4 had the effect of pulling sales forward, which affected U.S. revenue during the quarter. Separately during Q1 shipments and dispense shipments to RSP and dispenses to patients were pretty balanced. Therefore, especially pharmacy inventory changes during the quarter did not have a significant impact on revenue. In addition, as we saw last year during the first quarter and as Jennifer mentioned, a number of patients transitioned insurance plans in the new year and as a result they received free drug from our bridging program for some or much of the quarter. Due to the strong collaborative efforts, our patient support teams working closely with patients payers and HCPs, the number of patients on bridge therapy has since returned to Q4 levels. Revenue outside the United States increased from 18.3 million to 23.2 million in Q1, reflecting a 27% sequential quarter over quarter increase. This growth was driven by increased sales volumes in Germany and France as well as certain named patient sales markets, particularly Saudi Arabia and Greece. As we have said previously, some of these named patient sales markets order with longer lead times which can result in more variable quarterly revenue growth. On slide 19 is the financial snapshot of the first quarter of 2026 results compared to the first quarter of 2025. Gross to net for US sales in Q1 was 84%, which is consistent with recent quarters. Cost of goods sold in this quarter was 11.9% of product revenue within our normal range and primarily driven by cost of materials and royalty payments on set melanotide in connection with higher product revenue during the quarter. As a percentage of product revenue, cogs can vary quarter to quarter based on changes in inventory balances and manufacturing activity. R and D expenses were 41.7 million for the first quarter of 2026 compared to 37 million in the same period last year. Sequentially, R and D expenses were flat compared to the fourth quarter of 2025. During the quarter, an increase in headcount or related costs was offset by a decrease in clinical trial costs and costs related to chemistry, manufacturing and controls or CMC work. The year over year increase is primarily attributable to an increase in headcount related costs. SG and A expenses were 63.6 million for the first quarter of 2026 compared to 39.1 million in the prior year period. Sequentially, SGA expenses increased by 6.1 million or approximately 11% compared to the fourth quarter of 2025. The change in SGA expenses primarily reflected higher headcount related costs including stock based compensation and marketing activities in support of the anticipated launch of IMCIBRI in acquired hypothalamic obesity Weighted average common shares outstanding were 68 million in Q1. Cash used in operations was approximately 44.2 million during the quarter. GAAP EPS for the first quarter of 2026 was a net loss per basic and diluted share of $0.83 including $0.02 per share from accrued dividends on convertible preferred stock of $1.1 million. We ended the first quarter with approximately $341 million in cash, cash equivalents and short term investments which we continue to expect will be sufficient to fund planned operations for at least 24 months. Lastly for me on slide 20 there is further detail on operating expenses for the first quarter and our full year operating expense guidance for the first quarter. Operating expenses of approximately 105.3 million included 23.1 million of stock based compensation. Non GAAP operating expenses for Q1 were 82.2 million. We expect this increase on a quarterly basis throughout we expect this to increase on a quarterly basis throughout 2026 due to investments in CMC supporting RM718 increased spending on clinical trials Increased spending on clinical supply of Vivamagon ahead of our planned Phase 3 trial in hypothalamic obesity and the ongoing build out of our team in Japan and preclinical work associated with our CHI program. Our guidance is unchanged as we anticipate approximately 385 to 415 million in non-GAAP operating expenses in fiscal year 2026 comprised of non-GAAP R&D of approximately 197 to 213 million and non-GAAP SG and A expenses of approximately 188 to 202 million. With that, I'll turn the call back over to David.

David Meeker

Thanks Hunter. So in closing, I hope it's clear why we're excited about building the next phase of rhythm. We see three clear pillars supporting this phase. Work is continuing on the genetic causes MC4R pathway impairment. That work is focused on improving our understanding of the specific genetic variants to better clarify those variants which have true loss of function. Those patients would be the focus of our next trials which will be done with one of our next generation therapies. That work will continue through 2026. The second pillar as we have focused on today is hypothalamic obesity, either due to injury or hypothalamic dysfunction due to failure of the hypothalamus to develop normally. And the third pillar is Prader Willi syndrome, an extremely complicated disease with a huge unmet need. Where we believe the MC4R pathway plays an important role. We are aggressively pursuing our lifecycle management strategy with the next generation therapies. And and we are building out our early research function focused on a small number of programs, which includes our program for CHI. With that, we can now open the call for Q and A.

OPERATOR

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 11 again. And we do ask that you please limit to one question. And the first question will come from Phil Natto with TD Co. And your line is open.

Phil Natto

Good morning. Thanks for taking our question and congrats on the HO launch. Question is on those patient star forms and patient identification. I think the last number you gave us for number of patients identified was approximately 2,000, but you've said you've identified more since. Any update to that number today? And of the of the patient start forms you've received, how many were from that patient pool versus how many were newly discovered patients since launch? Thank you, Jennifer.

Jennifer Lee (Executive Vice President, Head of North America)

Sure. So we've continued to make progress. We had a tiered list of groups that our sales reps were out targeting just in terms of disease education, and we've continued to make inroads in terms of penetrating that list. As I outlined, the 2000 number has continued to increase even since that September date. It's not a number that we are updating moving forward as we're focusing more on metrics, including start forms. So many of those start forms that we received, if you take a look at them, have come from the list of physicians that we educated prior to approval. I would say that overall, the vast majority of these start forms were from physicians that our field teams had some type of engagement with prior to approval.

Phil Natto

That's very helpful. Thank you. Thanks so much.

OPERATOR

Thank you. And the next question is going to come from Paul Matthias with Stifel. Your lines open.

Paul Matthias

Great. Good morning. Congrats on the early launch progress. Taking a step back, it feels like with a number of rare disease launches lately, the street just debates whether early success is a bolus or linear and sustainable. It looks like outside of the patients who are converting from clinical trials, you're adding around 20. Do you feel like that's a cadence based on your visibility and conversations with physicians that you know could be sustainable for 20, 26 or if not, how are you thinking about the kinetics? Thanks so much.

Jennifer Lee (Executive Vice President, Head of North America)

Sure. So I would say, like, overall, we were very pleased just in terms of the early first six weeks, just in terms of how we were progressing. As you mentioned, we did have 40 of those prescriptions coming from trial conversions and our teams continue to work with our clinical teams just in terms of pulling those forward. I would say that from the trial conversion piece, the remaining patients really are going to be based on the last visit that is actually set. So we continue to work through those in the next quarter. And so moving forward in terms of additional patients beyond the trial conversion. You know, you talked about bolus. I would say that in any launch, as expected, there's going to be physicians who are quite activated just in terms of waiting for approval. We had some that had proactively reached out to their patients upon approval to let them know about the availability. But the vast majority of the patients or the physicians are waiting to have those conversations with their patients as they come in for their regularly scheduled visits. So that will flow through on, I would say more of a steady pace moving forward. And we still have a lot of opportunity in terms of education as we move forward into the lots

Paul Matthias

that answer your question, Paul. Yep. Thanks very much.

OPERATOR

Thank you. And the next question is going to come from Derek Archilla with Wells Fargo. Your line's open.

Derek Archilla

Hey, good morning and thanks for taking the question. Congrats on the progress here. Yeah. Just had a question on the 110 prescribers. What's the makeup of these positions? Are these mostly in centers of excellence or these more one offs?

Jennifer Lee (Executive Vice President, Head of North America)

So in terms of the prescribers, one, I will say that we were very happy to see that there is a nice breadth of physicians with patients that have been activated just in terms of interest to prescribe and IMCIVRI for their patients. And that's something that we will continue to focus on as we move forward. As there were many physicians on our targeted list with potential patients to date, I would say that the vast majority, similar to other rare diseases of these physicians, have written one script for their patients. But I would also say that there's still opportunity that remains with some of these physicians just in terms of having additional within their practice. And that is aligned with sort of the flow that I outlined in terms of those patients coming in so that physician can have that ongoing dialogue regarding diagnosis as well as incipient potential. And then relating to the concentration within the centers of excess. In the past, we have outlined that we are focused in terms of these 42 priority accounts. However, I would say that our list follows also the patients that we have identified in the claims and the physicians who actually have these patients potentially that are ho patients. And so that breadth goes beyond these priority accounts. And we have received Definitely scripts that are outside of these priority accounts as well.

Derek Archilla

Thanks, Jennifer.

OPERATOR

Thank you. And the next question is going to come from Dennis Singh with Jefferies. Your line is open.

Jennifer Lee (Executive Vice President, Head of North America)

Hi. Thanks for taking my question, and congrats on the quarter. So we're trying to get a sense of underlying demand here. So for the doctors who have prescribed inciviri to an HO patient, what's primarily been the gating factor preventing them from prescribing it to their second or third patient? Is it, you know, is it doctors getting comfortable with the product profile and reimbursement since it seems like the vast majority of them are new to msivi? Or perhaps it's just the timing of patient visit. Thanks. So I would say that the primary gating factors could be two pieces. The primary one is the pace and the schedule just in terms of those patients coming in to have that dialogue around emsifra. So that is really preplanned just in terms of what that normal visit may look like for that patient. I think the other factor is, as we also continued with our education with HCPs, there were some patients that may have come top of mind or had already been diagnosed, but through our education, they also had several aha moments just in terms of other patients that they suspected may also have aho. And going back in terms of our breadth, we were very pleased in terms of the label that we got upon approval that was broader than just brain tumor and brain tumor management related causes of aho. So there's still opportunity just in terms of educating about the other potential causes of HO and getting those patients also to a diagnosis.

Dennis Singh

Perfect. Thank you.

OPERATOR

Next question.

Corinne Johnson

Next question comes from Corinne Johnson with Goldman Sachs. Your line's open. Maybe you could just quantify a bit more the reimbursement dynamics here for these HO patients that are getting on therapy and translate that to how we should think about maybe net price per patient as this becomes a bigger portion of contribution to revenues. Thanks.

Jeff

Yeah, yeah. So, Jeff, So just the reimbursement. So a little bit of sense for the mix of payers here. And then I think Corinne's getting at the, you know, Medicaid, of course, would have the discount and the like and so.

Jennifer Lee (Executive Vice President, Head of North America)

Sure. So we are very early in the launch with both, you know, just in terms of understanding what that pair mix will look like. And with that said, what we have seen is we've received scripts from basically all different payer types. I would say that just from the access perspective moving forward, I think there was a lot of benefit just in terms of the education that we had done with the BBS. and the payers who have experience with bbs also understanding that this is, is very different than general obesity.

Jennifer Lee (Executive Vice President, Head of North America)

So once again, very pleased in terms of the fact that we did and already do have patients who have been approved for reimbursement this early in the process. You know, the caveat here is that in terms of actually having those policies in place, I reiterate that expectation continues to be approximately, you know, three to nine months from approval. So we're going to continue to monitor what that payer mix looks like as we move forward and update in future calls.

OPERATOR

Thank you. And the next question will come from Michael. It's with Morgan Stanley. Your line's open.

Jennifer Lee (Executive Vice President, Head of North America)

Good morning. Thanks for taking the question and congrats on the launch as well. Maybe just a follow up on the HO launch just in terms of the greater than 150 start forms. Maybe if you can compare that to your internal expectations at the beginning of the launch. And then secondly, just how should we think about converting those patients to revenues just given? It sounds like you're having sort of good traction with payers early on here. Thanks. So I would say that overall, just in terms of the start forms that we've received, we were really pleased with one, the speed just in terms of working and all the work had been done with planning for those clinical trial conversions. So once again, the number that we were able to convert to actually having a commercial RX was great. Just in terms of that collaborative effort to get to that point in terms of the other RXS that we've received, I think that, you know, it is a strong start right now. We still feel like there's a lot of opportunity that remains. Just in terms of physicians that we've spoken with that may potentially have a patient who will have that conversation as we move forward. So we do expect to see a steady growth throughout the year. Just in terms of the RXS we received moving forward from the payer dynamic piece, I would say that in terms of the approvals, if we also compare with bbs, well, one, the expectation in terms of these Rxs being denied up front because there isn't a specific HO policy in place just in terms of launch that did happen. However, like with the appropriate information that was provided. You know, we were seeing with some of these payers a quicker approval timeline than we did in the initial BBS launch. So I think that was a positive dynamic that we did see.

Michael

Very helpful. Thank you.

OPERATOR

Thank you. And the next question is Going to come from Simas Fernandez with Guggenheim. Your line's open.

David Meeker

Oh, great. Thanks for the question. So there's going to be some updates on PWS soon and just wanted to get a better sense of what you believe the sort of clinical value add of cetmelanotide in this space or at least targeting MC4R can be in this space. Is it going to be exclusively on weight loss without much benefit on satiety? Is it both weight loss and satiety benefits that are a possibility? Just trying to get a better sense of what you see, the overall kind of PWS target product profile that you're seeking in this setting and what we're likely to learn with the six month data versus potential update on the second quarter results conference call which may be incremental to the presentation in that setting. Thanks. Yeah, no, thanks. Jamus. Yeah, just to be clear, for the 718 data, that Prader-Willi data, whatever we have, and hopefully we'll have something that we can comment on at that point, but that'll be extremely early in a much smaller number of patients. So the most informative data set that's coming is Dr. Miller's data set which we'll put out at Endo. Our expectation is really just based on the biology here. Right. Which is MC4R. So one, as I said my opening comments there, I mean we're quite convinced that this MC4RR pathway is an important part of the biology in Prader-Willi. It's not the only thing. Correcting this does not fix or help correct a Prader-Willi patient's disease, but it can have, we believe, a significant impact. And that biology is it's a satiety signal. You decrease hunger and that we think an accompanying decrease in their hyperphagia symptoms, which are the behaviors that are driven by that severe hunger and increases energy expenditure and the net of that will be a decrease in their overall weight. We also know, and we highlighted this on our December call when we released the early data from Dr. Miller's trial. There's other reasons these patients eat. And we talked about the obsessive compulsive disorder part of this and the like. And so those are confounding elements of a very complicated disease. But specifically with regard to, you know what, we would hope it would be both, both a reduction in their hyperphagia symptoms and a decrease in their weight.

Simas Fernandez

Thank you.

OPERATOR

Thank you. And our next question will come from Samantha Simenco with Citi. Your line's open.

David Meeker

Hi, good morning. Thanks Very much for taking the question and congratulations on the early HO launch. I have one on Japan, just given the large potential market for HO in Japan, this has been in your prepared remarks, but could you elaborate more on some of the feedback you've received from Japanese KOLs on the impact INSBRI could have in this population? And then just pending the approval there later this year, how should we think about the trajectory of that launch in Japan relative to the early start we've seen thus far in the US for ho? Thanks very much. Yeah. So Jan, did you get that? So KOL reactions to.

Jan Massabrou (Executive Vice President, Head of International)

Yes, thank you for the question. So first of all, as I said in my remarks, I was in Japan a few weeks ago and I have met with many of the Japanese KOL and many of the investigators of the trial. So first, I think everybody in Japan is really concerned about the disease and it's because of the significant prevalence. Two, they saw firsthand the results on their patients, so they are already believers in the efficacy of the drug. The third aspect is that we have engaged with them extremely early on. So it's more than three years that we have interacted with them and they have been part of publications and they have worked with us on a lot of data. So there is almost already a long lasting relationship with them. So that the third aspect, the third aspect in terms of trajectories, still difficult to. So first I will not compare the US and Japan. A bit difficult to forecast. We have good results so far in terms of patient identification. We have identified 150 tier 1 hospital with the highest volume of brain tumor surgeries. And those hospitals are currently being visited by the Japanese field force. So again I will not give a number, but we think that we have a significant amount of Japanese patients who will start the treatment in 27 following the launch.

OPERATOR

Thanks guy. Next question.

Joseph Stringer

Thank you. And the next question will come from Joseph Stringer with Needham and company. Your lines open. Hi, good morning. Thanks for taking our questions. You mentioned the 150 star forms in the first six weeks of the ATO launch. 40 or so from clinical trial. How does this number, how do this number of start forms compare to the first six weeks of the BBS launch? And is this a fair comp at this point? And then our second question is on the patients, the 150 patients associated with these start forms, how many of these are tumor injury related patients and those who have had surgery? Just curious, given the broad label, what you're seeing in terms of a diverse patient pool, perhaps outside of the more common tumor related cause. Thank you.

David Meeker

Yeah, thanks, Joyce. Maybe I'll make a comment on the BBS and then Jennifer, comment on the mix of the tumors versus that. So, you know, is BBS a good comp? I mean, it's a rare disease. I think there's some fundamental differences here which we've highlighted just in terms of how the HO population, A, it's larger, but B, also being concentrated in the endo. So there is a difference there. So I'm not sure it's the best. That said, this is a steeper launch. I mean, the rate of start forms in the first six weeks is higher than we had in bbs. I'll make a few comments once we finish all the questions about maybe how to put all this together. But I think, you know, what you're hearing is we're really pleased with the 150. And yes, it is a more rapid start than we had with BBS then on the tumor side.

Jennifer Lee (Executive Vice President, Head of North America)

Sure. And I'll echo the point that David made. This in terms of the difference between the number of start forms in the first six weeks of the HO launch versus the BBS launch. The piece though, that I don't exactly remember is the number of trial conversions on the BBS side where that study had a much smaller number of total patients that were in the US in that BBS study. But definitely, even with that said, a higher number of RXS on this lunch versus the BBS one.

Joseph Stringer

In terms of the backgrounds of the

Jennifer Lee (Executive Vice President, Head of North America)

patients, the vast majority of these patients are with tumor or tumor treatment related backgrounds. However, our indication is broader and it covers things like stroke or TBI or inflammation. And we have received RXS from patients with these backgrounds as well. And I think that to date, of the physicians who are aware of acquired hypothetical obesity, I think their thinking is more around the tumor based backgrounds. So there's still a lot of opportunity in terms of even educating physicians holistically in terms of the various other backgrounds that may lead to acquired hypothalamic obesity moving forward as well.

Joseph Stringer

Next question.

OPERATOR

Okay, and our last question is going to come from Lisa Walter with RBC Capital. Your line's open. Oh, good morning.

David Meeker

Thanks for taking our question. Maybe just one on Prader Willi syndrome. I'm just curious how important you think it is for X US approval to have both hyperphasia and weight loss on the label. I think with vcat we saw that the EMA perhaps did not want to approve VCAT given some of the choose and endpoints. So Just curious how you are thinking about Prader Willi syndrome trial design here for success Both in the U.S. and ex U.S. yeah, thanks for the question. I think one just on back to the mechanism of this drug and this pathway. It's a satiety signal. We reduce hunger. We've shown that consistently across all of our trials. We haven't, you know, for some trial design reasons have had some challenges getting that into the US label, but we have gotten it into the European label. So the European label, it is indicated for the reduction of hunger and diseases that we're studying. So as I said before, our expectation is that we will seek a label that has both a hyperphasia reduction with the expectation that we would get that worldwide, globally, certainly in the three major regions that we've talked about today, and a reduction in weight bmi.

OPERATOR

Thank you. And I would now like to turn the call back over to David Meeker for closing remarks.

David Meeker

So thanks everybody for tuning in. I hope and thanks for your patience here. I realize everybody would like the specific numbers and the ability to provide guidance. And as we've said with BBS and as we all know, launches are enormously challenging to forecast and rare disease launches are even more difficult. So, you know, with that famous caveat that it is early, what you're hearing is, yeah, we're pleased, we're really pleased with the start here. I think this is a strong start. One, we're very happy about the breadth of prescribers that Jennifer highlighted. This is not a launch where we've got, you know, two or three believers and, you know, they're writing a bunch of scripts. This is where it's very broad, the dynamic. You know, that question was raised and as Jennifer highlighted and I think the good news about the dynamic is there's been some reasonable sense of urgency. And I was at the Pediatric Endocrine Society meeting over the weekend in San Francisco and I've been around a lot of rare disease type meetings and rare diseases tend to get lost in these larger meetings. And that wasn't a huge meeting. But I have to say I was struck by the level of awareness, the number of endocrinologists, pediatric endocrinologists, in this case, with awareness, tremendous amount of excitement and just really struggling with what they can do for their patients and excited about at least now that there's something to do. So all of those dynamics, again are very much in the positive category here. So we look forward to updating you. That'll be on our Q2 call but pretty excited about where we are out of the gates. Thanks.

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