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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 4, 2024
RHYTHM PHARMACEUTICALS, INC.
(Exact name of registrant as specified in
its charter)
Delaware |
|
001-38223 |
|
46-2159271 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification Number) |
222 Berkeley Street
12th Floor
Boston, MA 02116
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including
area code: (857) 264-4280
N/A
(Former name or former address, if changed since
last report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
Common Stock, $0.001 par value per share |
RYTM |
The Nasdaq Stock Market LLC (Nasdaq Global Market) |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. |
Entry into a Material Definitive Agreement. |
On January 4, 2024 (the “Effective Date”),
Rhythm Pharmaceuticals, Inc., a Delaware corporation (the “Company,” “we” and “our”), entered
into a License Agreement (the “License Agreement”) and Share Issuance Agreement (the “Share Issuance Agreement”)
with LG Chem, Ltd., a corporation organized and existing under the laws of the Republic of Korea (“LGC”).
Under the terms of the License Agreement, the Company will obtain worldwide rights to exploit LGC’s proprietary compound LB54640 and will assume sponsorship of two ongoing LGC Phase 2 studies designed
to evaluate safety, tolerability, pharmacokinetics and weight loss efficacy of LB54640. The SIGNAL trial is a randomized, placebo-controlled,
double-blind study designed to enroll and evaluate approximately 28 patients with acquired hypothalamic obesity. Participants will receive
one of three doses of LB54640 by oral administration once daily for up to 52 weeks, and the primary endpoint of the study is the change
from baseline in body mass index after 14 weeks of treatment. The open-label, single-arm, 16-week ROUTE trial is designed to enroll five
patients with POMC or LEPR deficiency obesity.
The Company has agreed to pay LGC a $40 million in cash and issue shares
of its common stock, par value of $0.001, with an aggregate value of $20 million (the “Shares”) within fifteen business days
from the Effective Date. The Shares will be issued at a per share price equal to the ten-day volume weighted average closing price for
the Company’s common stock, calculated as of the trading day immediately prior to January 4, 2024. The Company has also agreed to
make a $40 million payment in cash 18 months after the Effective Date.
In addition, under the terms of the License Agreement, the
Company has agreed to pay LGC up to $205 million in cash upon achieving various regulatory and sales milestones based on net sales
of LB54640. In addition and subject to the completion of Phase 2 development of LB54640, the Company has agreed to pay LGC
royalties of between low to mid single digit percent of net revenues from its MC4R portfolio, including LB54640,
commencing in 2029 and dependent upon achievement of various regulatory and indication approvals, and subject to customary deductions and anti-stacking.
The Company and LGC have made customary representations and warranties
in the License Agreement and have agreed to certain other customary covenants, including confidentiality, cooperation, and indemnity provisions.
The Share Issuance Agreement contains customary
representations and warranties by the Company and LGC, and the issuance of the Shares is subject to certain customary closing conditions.
The foregoing descriptions of the License
Agreement and Share Issuance Agreement are only a summary of their respective material terms and do not purport to be complete.
Item 3.02. | Unregistered Sales of Equity Securities. |
The information included in Item 1.01 above
regarding the Share Issuance Agreement is incorporated by reference under this Item 3.02. The Shares will be issued in reliance upon an
exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), contained in
Section 4(a)(2) of the Securities Act. LGC has represented that they are acquiring the securities for investment only and not
with a view towards, or for resale in connection with, the public sale or distribution thereof, and appropriate legends have been or will
be affixed to the securities.
In
light of the License Agreement, the Company is providing the following update to its cash guidance. Based on its current operating
plans, the Company expects that its existing cash, cash equivalents and short-term investments, taking into account a total of $80 million
in cash payments to LGC as fixed consideration pursuant to the License Agreement, as well as the incremental clinical development costs
associated with the two Phase 2 studies that the Company will assume following the transfer of study sponsorship, will be sufficient to
fund its operating expenses and capital expenditure requirements into the second half of 2025.
Forward-Looking Statements
This Current Report on Form 8-K contains
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in
this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements,
including without limitation statements regarding the regarding the potential, safety, efficacy, and regulatory and clinical
progress of setmelanotide and LB54640, the potential timing, payments due, and benefits of the global licensing agreement for
LB54640 including with respect to the consummation of the transaction, expectations regarding the design, enrollment, or outcome of
clinical trials of LB54640, the ability to reach any net sales or revenue milestones, obtaining regulatory approvals in connection
with the global licensing agreement, the price per Share to be paid by the Company pursuant to the Share Issuance Agreement and the
sufficiency of the Company’s existing cash, cash equivalents and short-term investments to fund its current or future
operating plans. Statements using word such as “expect”, “anticipate”, “believe”,
“may”, “will”, “aim” and similar terms are also forward-looking statements. Such statements are
subject to numerous risks and uncertainties, including, but not limited to, risks relating to the Company’s liquidity and
expenses, the Company’s ability to enroll patients in clinical trials, the design and outcome of clinical trials, the ability
to achieve necessary regulatory approvals, risks associated with data analysis and reporting, failure to identify and develop
additional product candidates, unfavorable pricing regulations, third-party reimbursement practices or healthcare reform
initiatives, risks associated with the laws and regulations governing our international operations and the costs of any related
compliance programs, the impact of competition, risks relating to product liability lawsuits, inability to maintain collaborations,
or the failure of these collaborations, the Company’s reliance on third parties, risks relating to intellectual property, the
Company’s ability to hire and retain necessary personnel, the impact of the COVID-19 pandemic and general economic conditions
on the Company’s business and operations, including its preclinical studies, clinical trials and commercialization prospects,
failure to realize the anticipated benefits of the Company’s acquisition of Xinvento B.V. or significant integration
difficulties related to the acquisition, and the other important factors discussed under the caption “Risk Factors” in
the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 and its other filings with the Securities
and Exchange Commission. Except as required by law, the Company undertakes no obligations to make any revisions to the
forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date
of this release, whether as a result of new information, future developments or otherwise.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
RHYTHM PHARMACEUTICALS, INC. |
|
|
|
Date: January 4, 2024 |
By: |
/s/ Hunter Smith |
|
|
Hunter Smith |
|
|
Chief Financial Officer |
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Entity Central Index Key |
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