Rhythm (RYTM) Q2 Revenue Jumps 67%

Rhythm Pharmaceuticals (RYTM -1.85%), a biopharmaceutical company focused on rare genetic diseases related to obesity, reported its Q2 2025 earnings on August 5, 2025. However, the company reported a GAAP net loss per share of ($0.75). Increased operating expenses from research and development (R&D) and selling, general, and administrative (SG&A) costs drove this widening loss. Overall, the quarter reflected strong demand for IMCIVREE, the company’s approved treatment for rare MC4R pathway diseases, but also highlighted higher spending as Rhythm Pharmaceuticals advances its portfolio and global footprint.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Profile and Recent Strategic Focus

Rhythm Pharmaceuticals develops therapies for rare genetic disorders of obesity, focusing on the melanocortin-4 receptor (MC4R) biological pathway. Its core product, IMCIVREE, is the first approved therapy for certain MC4R pathway diseases like Bardet-Biedl syndrome (BBS) and specific genetic obesity conditions. Led by setmelanotide, an MC4R agonist, the company’s pipeline also includes other drugs for additional rare forms of obesity and metabolic conditions.

Recently, Rhythm Pharmaceuticals has prioritized expanding IMCIVREE’s global reach while investing heavily in R&D to advance clinical trials for new uses of its drugs. The company’s key success factors include achieving regulatory approvals in new indications and geographies, building out its commercial infrastructure, and demonstrating positive clinical trial outcomes. Protecting its intellectual property portfolio and executing partnerships for licensing drug rights are also central to its strategy.

Quarter Highlights: Growth, Pipeline, and Spending

Commercial sales of IMCIVREE, the peptide injectable for life-threatening rare obesity diseases, drove much of the company’s growth. GAAP revenue climbed approximately 66.5% year-over-year, with the United States accounted for 66% of revenue and while international markets represented 34% of product revenue. Sequentially, U.S. sales rose 31%, and International sales increased by 24% sequentially. The company’s commercial teams in both the U.S. and Europe played a vital role in this demand, and field operations are being prepared for further launches, notably in Japan.

On the drug development side, Rhythm Pharmaceuticals hit several milestones. The pivotal Phase 3 TRANSCEND study of setmelanotide in acquired hypothalamic obesity reported a 19.8% placebo-adjusted reduction in body mass index (BMI), with results consistent across age subgroups. The company also announced topline data from a Phase 2 trial of bivamelagon, a next-generation MC4R agonist, which achieved a 9.3% BMI reduction at the highest tested dose (600mg cohort) after 14 weeks of treatment in patients with acquired hypothalamic obesity. No new safety signals were observed for setmelanotide, and enrollment continues in clinical studies for Prader-Willi syndrome and congenital hypothalamic obesity—two rare disorders with significant unmet need.

Operating expenses (GAAP) rose compared to Q2 2024. R&D costs (GAAP) reached $42.3 million, up from $30.2 million in Q2 2024, driven by higher clinical trial activity, drug formulation work, and increased headcount. SG&A expenses (GAAP) rose to $45.9 million, up from $36.4 million in Q2 2024, reflecting additional headcount to support expanding business operations and to establish commercial operations in international regions, increased marketing and promotion costs, and increased professional services costs. The company’s total quarterly net loss (GAAP) expanded year-over-year, reflecting a combination of higher investment and only partial offset from increased sales.

Management completed a public stock offering in July 2025, raising approximately $189.2 million in net proceeds and strengthening the company’s liquidity position. At the close of Q2 2025, cash, cash equivalents, and short-term investments stood at $291.0 million, a 9.2% decline from December 2024, not including proceeds from the July capital raise but including $40 million paid to LG Chem, Ltd. According to management, ongoing cash resources plus this new capital provide the company with an operating runway for at least 24 months as of June 30, 2025.

Pipeline Progress and Clinical Developments

The company’s MC4R-directed pipeline advanced during the quarter across several clinical fronts. In the Phase 3 TRANSCEND trial, setmelanotide showed robust BMI reductions in acquired hypothalamic obesity, including consistent results in adults, adolescents, and children as young as four years old. The company highlighted that 80% of treated patients experienced a clinically meaningful BMI reduction of at least 5% at 52 weeks—a key regulatory and clinical benchmark. Regulatory submissions for setmelanotide in this new indication are planned in both the United States and Europe by Q3 2025.

Bivamelagon, an oral MC4R agonist, also posted positive results in a mid-stage (Phase 2) clinical trial for acquired hypothalamic obesity, with Rhythm announcing on July 9, 2025, that the trial achieved statistically significant and clinically meaningful reductions in body mass index (BMI) at 14 weeks of treatment, including a 9.3% BMI reduction from baseline in the 600mg cohort (n=8) and a 7.7% BMI reduction from baseline in the 400mg cohort (n=7). The treatment reduced BMI by 9.3% in the 600mg dose group and by 7.7% in the 400mg group at 14 weeks of treatment in the Phase 2 trial in patients with acquired hypothalamic obesity. Safety and tolerability results for bivamelagon were consistent with MC4R agonism and its mechanism of action during the placebo-controlled portion of the trial. These results support planned further studies, including a pivotal Phase 3 trial, with the aim of diversifying the product portfolio and addressing additional rare diseases in the MC4R pathway.

The company’s third pipeline candidate, RM-718, a once-weekly MC4R agonist, continued enrolling patients in early-phase studies for acquired hypothalamic obesity. These new formats and indications reflect a broad strategy to reach more patients with rare genetic obesity diseases and to lengthen the commercial life of the company’s MC4R franchise.

During the period, Rhythm Pharmaceuticals also reacquired rights to IMCIVREE for China and received orphan drug designation in Japan for setmelanotide, which will support future market launches. The company’s intellectual property portfolio consists of 45 patent families, and it has licensing agreements with companies including Ipsen, Camurus, and LG Chem.

Financial Outlook and What to Watch

Rhythm Pharmaceuticals reiterated its guidance for full-year 2025 non-GAAP operating expenses between $285 million and $315 million, split between $135–$145 million for SG&A and $150–$170 million for R&D—both figures exclude the impact of stock-based compensation. The company expects to maintain at least 24 months of operational funding after accounting for the proceeds from its July 2025 stock offering, based on its cash, cash equivalents, and short-term investments as of June 30, 2025, combined with the net proceeds from the July 2025 offering. No dividend is currently paid by the company.

Investors should watch for several key catalysts in coming quarters. These include regulatory filing and approval progress for setmelanotide in acquired hypothalamic obesity, additional clinical data (including from the Japanese cohort and ongoing studies in Prader-Willi syndrome), and any signals regarding further global expansion. Monitoring the balance of revenue growth against elevated levels of R&D and SG&A investment will be important, as will observing how efficiently the company executes new product launches and controls its cash burn as pipeline programs advance.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.