Rhythm Pharmaceuticals Inc. shares continued to make gains for a second day, recently up 17% at $4.56 after the company received federal approval for a supplemental new drug application.
The commercial-stage biopharmaceutical company after the bell Thursday said the U.S. Food and Drug Administration approved the supplemental new drug application for Imcivree in patients with Bardet-Biedl syndrome.
With the approval, Imcivree is indicated for chronic weight management in adult and pediatric patients 6 years and older with monogenic or syndromic obesity due to proopiomelanocortin, proprotein convertase subtilisin/kexin type 1 or leptin receptor deficiency, or BBS. BBS is a rare genetic disease that affects approximately 1,500 to 2,500 people in the U.S. People living with BBS may experience insatiable hunger.
Stifel analysts in a research report note the approval expands the addressable market.
"We are positive on the uptake for 3 reasons: 1) lack of approved therapies, 2) inclusive label (includes patients with severe renal impairment), and 3) possible jumpstart in commercial activities with 350+ patients identified/diagnosed," the analysts said.
Rhythm Pharmaceuticals also said Thursday it has entered into a revenue interest financing agreement with HealthCare Royalty Partners for a total investment amount of up to $100 million. Rhythm will receive an initial investment of $37.5 million with the FDA approval in BBS. Rhythm will get an additional $37.5 million following European Commission marketing authorization for Imcivree for BBS, which is seen in the second half of 2022. The final investment amount of $25 million will be payable upon Rhythm's achievement of sales milestones in 2023.
"All eyes will now be focused on the important BBS launch. We model $16.5M...in 2022 WW sales, but are slightly lowering our 2023+ estimates," Needham analysts Joseph Stringer and Ben Ricard said in a note.
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