BOSTON - Shares of Rhythm Pharmaceuticals (NASDAQ:RYTM) fell 3% following the release of their fourth-quarter financial results, which revealed a revenue shortfall compared to analyst expectations. The biopharmaceutical company reported a fourth-quarter net revenue from global sales of IMCIVREE® (setmelanotide) of $24.2 million, falling short of the consensus estimate of $25.63 million.
The reported quarterly revenue, however, marks a significant increase from the $8.8 million reported in the same quarter of the previous year, indicating a substantial growth in sales. Despite the revenue miss, the company's adjusted earnings per share (EPS) for the quarter met analyst projections at ($0.70).
David Meeker, M.D., Chair, President, and Chief Executive Officer of Rhythm, commented on the year's progress, "2023 was a strong year for us as we delivered IMCIVREE® and provided support for patients and families living with hyperphagia and severe obesity caused by rare melanocortin-4 receptor (MC4R) pathway diseases in 14 countries, including the United States." He also highlighted the company's focus on developing setmelanotide for hypothalamic obesity, a condition with no approved therapies, and noted the completion of enrollment in a global Phase 3 trial.
The company's research and development (R&D) expenses for the quarter were $29.9 million, up from $23.5 million in the fourth quarter of the previous year, reflecting increased investment in clinical trials and the hiring of additional employees. Selling, general, and administrative (SG&A) expenses also rose to $32.4 million from $26.3 million in the same period last year, primarily due to the expansion of business operations and commercial activities.
Looking ahead, Rhythm anticipates non-GAAP Operating Expenses for the year ending December 31, 2024, to be between $250 million and $270 million. This forecast includes significant R&D investment and the costs associated with the development of LB54640, an investigational oral small molecule MC4R agonist.
The company's cash position remains strong, with approximately $275.8 million in cash, cash equivalents, and short-term investments as of December 31, 2023, which is expected to fund operations into the second half of 2025.
Investors reacted negatively to the revenue miss, with the stock declining by 3%, reflecting concerns over the company's ability to meet market expectations. Despite this, Rhythm Pharmaceuticals continues to advance its clinical development program and expand the commercial reach of its lead product, IMCIVREE®.
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