Business
Rhythm Pharmaceuticals Enters into a Non-dilutive Revenue Interest Financing Agreement with HealthCare Royalty for up to $100 Million
Extends Cash Runway into 2H 2024 BOSTON, June 16, 2022 (GLOBE NEWSWIRE) -- Rhythm Pharmaceuticals, Inc. (Nasdaq: RYTM) (“Rhythm”), a commercial-stage
About this update from Rhythm Pharmaceuticals, Inc.
[{"type":"text","content":"Extends Cash Runway into 2H 2024\nBOSTON, June 16, 2022 (GLOBE NEWSWIRE) -- Rhythm Pharmaceuticals, Inc. (Nasdaq: RYTM) (“Rhythm”), a commercial-stage biopharmaceutical company committed to transforming the care of people living with rare genetic diseases of obesity, today announced that it has entered into a Revenue Interest Financing Agreement (the “Agreement”), with HealthCare Royalty Partners (“HealthCare Royalty”) for a total investment amount of up to $100 million. Rhythm intends to use the proceeds from the Agreement and its cash on hand to support global commercialization efforts for IMCIVREE® (setmelanotide) and ongoing clinical development. Under the terms of the Agreement, Rhythm will receive an initial investment amount of $37.5 million from HealthCare Royalty, as a result of the approval of IMCIVREE by the U.S. Food and Drug Administration (“FDA”) for the treatment of obesity and control of hunger in adult and pediatric patients 6 years old and older with Bardet-Biedl syndrome (“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. “This Agreement with HealthCare Royalty, a premier investment firm, underscores the significant opportunity for IMCIVREE as the first-ever treatment to address the unmet needs of hyperphagia and severe o...