What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-04 compared with 2025-08-05 · 126 added, 107 removed, 262 unchanged (47% of the section changed)

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the marketing, commercialization, and sales of IMCIVREE (setmelanotide), the design, success, cost and timing of our product development activities and clinical trials for setmelanotide, RM-718, bivamelagon, and our other product candidates;

our ability to obtain regulatory approval for setmelanotide in further indications, as well as for RM-718, bivamelagon, and our other product candidates;

our ability to obtain regulatory approval for setmelanotide in further indications, as well as for RM-718, bivamelagon, and our other product candidates (including PDUFA goal dates and Type II variation submissions);

our financial performance, including our expectations regarding our existing cash, operating losses, expenses and sources of future financing;

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our ability to protect our intellectual property;

ongoing activities under and our ability to

negotiate our collaboration and license agreements, if needed, and the impact of termination;

ongoing activities under and our ability to negotiate our collaboration and license agreements, if needed, and the impact of termination;

our marketing, commercial sales, revenue generation, and cost of revenue;

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We are focused on advancing our melanocortin-4 receptor (MC4R) agonists, including our lead asset, IMCIVREE ® (setmelanotide), as precision medicines designed to treat hyperphagia and severe obesity caused by MC4R pathway diseases.

While obesity affects hundreds of millions of people worldwide, we are advancing therapies for a subset of individuals who have hyperphagia, a pathological, insatiable hunger and impaired satiety accompanied by persistent and abnormal food-seeking behaviors, decreased energy expenditure and severe obesity due to diseases such as acquired or congenital hypothalamic obesity (HO), Bardet-Biedel syndrome (BBS) or other diseases caused by impaired MC4R pathway signaling.

The MC4R pathway is a neuro-endocrine pathway in the brain that is responsible for regulating hunger, caloric intake and energy expenditure, which consequently affect body weight.

While obesity affects hundreds of millions of people worldwide, we are advancing therapies for a subset of individuals who have hyperphagia, a pathological, insatiable hunger and impaired satiety accompanied by persistent and abnormal food-seeking behaviors, decreased energy expenditure and severe obesity due to diseases such as acquired or congenital hypothalamic obesity (HO), Bardet-Biedl syndrome (BBS) or other diseases caused by impaired MC4R pathway signaling.

The MC4R pathway is a neuroendocrine pathway in the brain that is responsible for regulating hunger, caloric intake and energy expenditure, which consequently affect body weight.

IMCIVREE, an MC4R agonist for which we hold worldwide rights, is the first-ever therapy developed for patients with certain rare diseases that is approved or authorized in the United States, European Union (EU), United Kingdom, Canada and other countries and regions.

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Food and Drug Administration (FDA) to reduce excess body weight and maintain weight reduction long term in adult and pediatric patients aged 2 years and older with syndromic or monogenic obesity due to Bardet-Biedl syndrome (BBS) or pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1), or leptin receptor (LEPR) deficiency as determined by an FDA-approved test demonstrating variants in POMC, PCSK1, or LEPR genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance (VUS).

The European Commission (EC) and the United Kingdom’s Medicines & Healthcare Products Regulatory Agency (MHRA) have authorized IMCIVREE for the treatment of obesity and the control of hunger associated with genetically confirmed BBS or loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 2 years of age and above.

The European Commission (EC) and the United Kingdom’s Medicines & Healthcare Products Regulatory Agency

(MHRA) have authorized IMCIVREE for the treatment of obesity and the control of hunger associated with genetically confirmed BBS or loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 2 years of age and above.

In addition to the United States, we have achieved market access or named patient sales of IMCIVREE for BBS or POMC and LEPR deficiencies, or both, in more than 25 countries outside the United States, and we continue to collaborate with authorities to achieve access in additional markets.

We anticipate submitting applications to seek regulatory approval for setmelanotide as a treatment for acquired hypothalamic obesity in multiple geographies in the near term.

Acquired hypothalamic obesity is a rare form of obesity that occurs following damage to the hypothalamic region of the brain.

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On April 7, 2025, we announced positive topline results from the pivotal Phase 3 TRANSCEND trial evaluating setmelanotide for the treatment of acquired hypothalamic obesity.

The global trial, which we believe is the largest and longest placebo-controlled trial to evaluate a therapy for patients with acquired hypothalamic obesity, met its primary

endpoint with a statistically significant and highly clinically meaningful reduction in body mass index (BMI) with setmelanotide in both adult and pediatric patients versus placebo.

The global trial, which we believe is the largest and longest placebo-controlled trial to evaluate a therapy for patients with acquired hypothalamic obesity, met its primary endpoint with a statistically significant and highly clinically meaningful reduction in body mass index (BMI) with setmelanotide in both adult and pediatric patients versus placebo.

No new safety signals with setmelanotide were observed, in line with setmelanotide’s well-established and well-understood safety profile.

Given these compelling new efficacy data with setmelanotide, we anticipate completing submissions of a supplemental New Drug Application to the FDA and a Type II variation request to the European Medicines Agency (the “EMA”) in the third quarter of 2025.

We completed applications to seek regulatory approval for setmelanotide as a treatment for acquired hypothalamic obesity in the United States and Europe in the third quarter of 2025.

On August 20, 2025, we announced that the U.S.

FDA accepted for filing our supplemental New Drug Application (sNDA) for setmelanotide seeking approval for the treatment of conditions associated with hypothalamic obesity.

The FDA granted Priority Review of the sNDA and assigned a Prescription Drug User Fee Act (PDUFA) goal date of December 20, 2025.

Additionally, the European Medicines Agency (EMA) confirmed validation or the Type II variation submissions to the Marketing Authorization Application (MAA) for setmelanotide.

The application review began on August 16, 2025, by the Committee for Medicinal Products for Human Use (CHMP), which will issue an opinion to the European Commission (EC) regarding potential approval.

We also anticipate reading out data from a 12-patient cohort in Japan in the first quarter of 2026 which we believe, if successful, could support registration of setmelanotide in Japan for this disease.

With these planned submissions, we believe setmelanotide has the potential to become the first-ever approved therapy for patients with acquired hypothalamic obesity.

We estimate there are 5,000 to 10,000 people living with hypothalamic obesity in the U.S., 5,000 to 8,000 people living with hypothalamic obesity in Japan, and 3,500 to 10,000 people living with hypothalamic obesity in the E.U.

We estimate there are approximately 10,000 people living with hypothalamic obesity in the U.S., 5,000 to 8,000 people living with hypothalamic obesity in Japan, and approximately 10,000 people living with hypothalamic obesity in the E.U.

In addition to our commercial efforts and inclusive of late-stage development efforts, we are advancing what we believe is the most comprehensive clinical research and development program ever initiated in MC4R pathway diseases, with multiple ongoing and planned clinical trials.

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We anticipate completing enrollment in Part C of the Phase 1 trial evaluating the weekly RM-718 in patients with acquired hypothalamic obesity in the first quarter of 2026.

Our Phase 3 EMANATE trial, comprised of four independent substudies evaluating setmelanotide in genetically caused MC4R pathway diseases is ongoing, and we completed our Phase 2 DAYBREAK trial evaluating setmelanotide in additional genetic indications in 2024.

We are leveraging what we believe is the largest known DNA database focused on obesity - with approximately 100,000 sequencing samples as of December 31, 2024 - to improve the understanding, diagnosis and care of people living with severe obesity due to certain variants in genes associated with the MC4R pathway.

Our Phase 3 EMANATE trial, comprising four independent substudies evaluating setmelanotide in genetically caused MC4R pathway diseases is ongoing, and we completed our Phase 2 DAYBREAK trial evaluating setmelanotide in additional genetic indications in 2024.

with severe obesity due to certain variants in genes associated with the MC4R pathway.

Our sequencing-based epidemiology estimates show that each of these genetically-defined MC4R pathway deficiencies are considered rare diseases, according to established definitions based on patient populations.

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Additional recent corporate and commercial updates include:

On August 5, 2025, we announced revenue from global sales of IMCIVREE was $48.5 million for the second quarter of 2025, an increase of 29% percent on a sequential basis from the first quarter of 2025, primarily driven by sales of IMCIVREE for the treatment of patients with BBS.

In the second quarter of 2025, revenue of $32.0 million, or 66% of product revenue, was generated in the United States, an increase of 31% on a sequential basis.

Revenue of $16.5 million, or 34% of product revenue, was generated outside of the United States, a sequential increase of 24%.

On July 11, 2025, we closed a public offering of 2,367,647 shares of its common stock at a public offering price of $85 per share, resulting in net proceeds of approximately $189.2 million, net of underwriting discounts and commissions, but excluding certain other offering expenses payable by the Company.

On November 4, 2025, we announced net product revenue from global sales of IMCIVREE® (setmelanotide) of $51.3 million for the third quarter of 2025, an increase of 6% percent on a sequential basis from the second quarter of 2025, primarily driven by sales of IMCIVREE for the treatment of patients with BBS.

In the third quarter of 2025, revenue of $38.2 million, or 74% of product revenue, was generated in the United States, an increase of 19% on a sequential basis.

Revenue of $13.1 million, or 26% of product revenue, was generated outside the United States, a sequential decrease of $3.4 million or 21%.

The decrease in ex-U.S.

revenue was primarily due to an agreement reached with the French Economic Committee for Health Products (CEPS) on final reimbursement pricing for IMCIVREE for BBS and POMC and LEPR deficiencies.

This resulted in a change to the Company’s price estimate associated with the paid, early-access program that began in 2022, reducing product revenue by approximately $3.2 million in the third quarter of 2025, of which approximately $1.7 million related to periods prior to 2025.

revenue also was affected modestly by European seasonality and variability in ordering patterns from named patient sales in certain countries.

On July 11, 2025, we closed a public offering of 2,367,647 shares of its common stock at a public offering price of $85 per share, resulting in net proceeds of approximately $188.7 million, net of underwriting discounts and commissions, and as well as other offering expenses incurred by the Company.

Additional recent clinical and regulatory updates include:

On November 4, 2025, we announced that four abstracts have been accepted for presentation – one oral presentation and three posters – at the Obesity Society’s Annual Meeting at ObesityWeek 2025 this week in Atlanta, GA:

“Efficacy of Setmelanotide in Patients with Acquired HO Previously or Concurrently on GLP-1 Therapy," an oral presentation by Christian Roth, M.D., Seattle Children’s Research Institute, Thursday, Nov.

6, 9:00–9:15 a.m.;

“Cardiometabolic Results from a Phase 3 Trial of Setmelanotide in Acquired Hypothalamic Obesity,” a poster presentation by Jill Garrison, Director, Medical Affairs, Rhythm Pharmaceuticals, Nov.

4, 7:30–8:30 p.m.;

“Patient- and Caregiver-Reported Experience with Acquired Hypothalamic Obesity in the TRANSCEND Trial,” a poster presentation by Dr.

4, 7:30–8:30 p.m.;

“Hyperphagia and the Identification of Genetic Variants in Patients with Early-Onset Obesity,” a poster presentation by Roohi Kharofa, M.D., Cincinnati Children’s Hospital Medical Center, Nov.

5, 2:30–3:30 p.m.

In September, researchers at the University Hospital Essen published results from a prospective, observational study that showed setmelanotide treatment was associated with improvement in measures of metabolic dysfunction-associated steatotic liver disease (MASLD) and kidney function in patients with BBS in the Journal of Clinical Endocrinology & Metabolism.

All patients (N=26) in this study had MASLD at baseline and after six months of setmelanotide treatment, more than 80% of them achieved either resolution of MASLD or stabilization at grade S1.

On August 5, 2025, we announced that we enrolled the first patient with hypothalamic obesity in Part C of our Phase 1 trial evaluating RM-718, a weekly-administered investigational MC4R agonist.

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Safety and tolerability results were consistent with MC4R agonism and mechanism of action during the placebo-controlled portion of the trial.

During the Joint Congress between the European Society for Paediatric Endocrinology and the European Society of Endocrinology (ESPE-ESE) and the European Congress on Obesity (ECO) in May 2025, we presented new, real-world data that showed consistent improvements in body mass index, BMI-z, and hunger scores in 30 patients with acquired hypothalamic obesity and five (5) patients with congenital hypothalamic obesity who were treated with setmelanotide for up to nine months.

We currently expect to achieve the following, near-term milestones:

● Complete submissions of a supplemental New Drug Application to FDA and a Type II variation request to the EMA seeking approval for setmelanotide for the treatment of acquired hypothalamic obesity in the third quarter of 2025;

● Disclose preliminary results from our setmelanotide Phase 2 trial in Prader-Willi syndrome in the second half of 2025;

● Disclose preliminary results from our Phase 2 trial evaluating setmelanotide in Prader-Willi syndrome in the fourth quarter of 2025;

● Receive a decision from the FDA on our sNDA (anticipated to be received by the PDUFA goal date of December 20, 2025) for setmelanotide in conditions associated with acquired hypothalamic obesity;

● Complete enrollment in the Phase 1, Part C trial evaluating the weekly, MC4R agonist RM-718 in patients with acquired hypothalamic obesity in the first quarter of 2026;

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● Complete enrollment in the setmelanotide Phase 3 trial substudy in congenital hypothalamic obesity in the first half of 2026;

● Pending alignment with U.S and European regulatory agencies, initiate a pivotal Phase 3 trial evaluating bivamelagon in acquired hypothalamic obesity in 2026.

● Pending further feedback from U.S and European regulatory agencies, initiate a pivotal Phase 3 trial evaluating bivamelagon in acquired hypothalamic obesity in 2026.

IMCIVREE first became commercially available to patients 6 years of age and older with obesity due to POMC, PCSK1 or LEPR deficiency in the U.S.

in the first quarter of 2021 and patients 6 years of age and older with obesity due to BBS during June 2022.

Following marketing authorizations in the EU, Great Britain and Canada, as well as expanded labels in the U.S., the EU and Great Britain and 2024 to make IMCIVREE available to patients as young as 2 years of age, we are continuing to pursue a country-by-country strategy to establish market access and reimbursement for IMCIVREE in additional countries.

We expect to continue to fund our operations through the sale of equity, debt financings or other sources.

Following marketing authorizations in the EU, Great Britain and Canada, as well as expanded

labels in the U.S., the EU and Great Britain to make IMCIVREE available to patients as young as 2 years of age, we are continuing to pursue a country-by-country strategy to establish market access and reimbursement for IMCIVREE in additional countries.

We expect we may need to continue to fund our operations through the sale of equity, debt financings or other sources.

We have built our own marketing and commercial sales infrastructure in the United States and are in the process of building a similar infrastructure in several European markets and the United Kingdom.

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From August 2015 through August 2017, we raised aggregate net proceeds of $80.8 million through our issuance of Convertible Preferred Stock.

Since our initial public offering, or IPO, on October 10, 2017, through our underwritten follow-on offerings and through our ATM program through June 30, 2025, we have raised aggregate net proceeds of approximately $864.8 million through the issuance of our common stock after deducting underwriting discounts, commissions and offering related transaction costs.

Additionally, on July 9, 2025, we entered into an underwriting agreement with Morgan Stanley & Co.

LLC and BofA Securities, Inc., as the representatives of the several underwriters, in connection with a follow-on offering, issuance and sale by the Company of 2,058,824 shares of the Company’s common stock, at $0.001 par value per share.

The offering price of the shares of Common Stock to the public was $85.00 per share.

In addition, the Company granted the Underwriters a 30-day option to purchase up to 308,823 additional shares of Common Stock, at the public offering price per share, less underwriting discounts and commissions.

On July 10, 2025, the Underwriters exercised the Option in full.

The Offering closed on July 11, 2025, for net proceeds of $189.2 million, net of certain costs including underwriting discounts and commissions, but excluding certain other offering expenses payable by the Company, for total share issuance of 2,367,647 (as disclosed in Note 16, Subsequent events ).

Since our initial public offering, or IPO, on October 10, 2017, through our underwritten follow-on offerings and through our ATM program through September 30, 2025, we have raised aggregate net proceeds of approximately $1,053.4 million through the issuance of our common stock after deducting underwriting discounts, commissions and offering related transaction costs.

This includes the follow-on offering that we closed on July 11, 2025, for net proceeds of $188.7 million, net of $12.6 million of certain costs including underwriting discounts and commissions as well as other offering expenses incurred by the Company, for total share issuance of 2,367,647.

We also received $100.0 million from the sale of our Rare Pediatric Disease Priority Review Voucher (“PRV”), to Alexion Pharmaceuticals, Inc.

in February 2021.

In June 2022, we entered into the Revenue Interest Financing Agreement (“RIFA”), with entities managed by HealthCare Royalty Partners, collectively referred to as the Investors, and through June 30, 2025 have received cumulative proceeds of $96.7 million, net of certain transaction costs.

In June 2022, we entered into the Revenue Interest Financing Agreement (“RIFA”), with entities managed by HealthCare Royalty Partners, collectively referred to as the Investors, and through September 30, 2025 have received cumulative proceeds of $96.7 million, net of certain transaction costs.

On April 1, 2024, we entered into an Investment Agreement with certain affiliates of Perceptive Advisors LLC, or Perceptive, and certain other investors, relating to the issuance and sale of 150,000 shares of a new series of the Company’s Series A Convertible Preferred Stock, par value $0.001 per share, titled the “Series A Convertible Preferred Stock”, or the Convertible Preferred Stock, for an aggregate purchase price of $150.0 million, or $1,000 per share (as disclosed in Note 9, Series A Preferred Stock ).

We received $147.8 million in net proceeds under the Investment Agreement.

We expect to continue to fund our operations through the sale of equity, debt financings or other sources.

We expect we may need to continue to fund our operations through the sale of equity, debt financings or other sources.

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If we fail to raise capital or enter into such other arrangements as, and when needed, we may have to significantly delay, scale back or discontinue the development or commercialization of setmelanotide.

As of June 30, 2025 we had an accumulated deficit of $1.3 billion.

Our net loss was $46.6 million and $32.3 million for the three months ended June 30, 2025 and June 30, 2024.

Our net loss was $96.1 million and $173.6 million

for the six months ended June 30, 2025 and June 30, 2024.

As of September 30, 2025 we had an accumulated deficit of $1.3 billion.

Our net loss was $52.9 million and $43.6 million for the three months ended September 30, 2025 and September 30, 2024.

Our net loss was $149.0 million and $217.3 million for the nine months ended September 30, 2025 and September 30, 2024.

We expect to continue to incur significant expenses and operating losses for the foreseeable future.

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● continue to operate as a public company.

As of June 30, 2025, our existing cash and cash equivalents and short-term investments were approximately $291.0 million.

We expect that our cash and cash equivalents and short-term investments as of June 30, 2025, combined with the net proceeds from our July 2025 offering, will be sufficient to fund our planned operations for at least 24 months.

As of September 30, 2025, our existing cash and cash equivalents and short-term investments were approximately $416.1 million.

We expect that our cash and cash equivalents and short-term investments as of September 30, 2025, will be sufficient to fund our planned operations for at least 24 months.

On October 1, 2025, the U.S.

government shut down and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical government employees and stop critical activities.

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

It could also our ability to access the public markets and obtain necessary capital in order to fund our operations.

See Risk Factors—Risks Related to Regulatory Approval and Marketing of Setmelanotide and Other Legal and Compliance Matters and Disruptions at the FDA, including those caused by changing presidential administrations and related priorities, funding shortages staffing or other resource limitations or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.

Financial Operations Overview

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License revenue

For the six months ended June 30, 2025, we recognized a reduction of previously-recognized license revenue of $5.0 million in connection with the termination of our exclusive license agreement with RareStone.

For the nine months ended September 30, 2025, we recognized a reduction of previously-recognized license revenue of $5.0 million in connection with the termination of our exclusive license agreement with RareStone.

See Note 12, Significant Agreements , to the unaudited condensed consolidated financial statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Most of the manufacturing costs have been recorded as research and development expenses in prior periods.

We expect cost of sales to increase in 2025 as we continue to sell inventory that is produced after we began capitalizing manufacturing costs for IMCIVREE commercial inventory.

We expect cost of sales to increase in 2025 as we continue to support our revenue growth.

Research and development expenses

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development summary

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Selling, general and administrative summary

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The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods.

These items are monitored and analyzed by us for changes in facts and circumstances on an ongoing basis, and material changes in these

estimates could occur in the future.

We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

These items are monitored and analyzed by us for changes in facts and circumstances on an ongoing basis, and material changes in these estimates could occur in the future.

We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the

carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

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Results of Operations

Comparison of the three months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024, together with the changes in those items in dollars and as a percentage:

Comparison of the three months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024, together with the changes in those items in dollars and as a percentage:

Three Months Ended

September 30,

(in thousands)

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Product revenue, net .

Product revenue, net increased by $19.4 million to $48.5 million for the three months ended June 30, 2025 from $29.1 million for the three months ending June 30, 2024, an increase of 67%.

Product revenue, net increased by $18.0 million to $51.3 million for the three months ended September 30, 2025 from $33.3 million for the three months ended September 30, 2024, an increase of 54%, primarily due to an increase in sales volume.

Additionally, in the third quarter of 2025 we reached an agreement with French authorities on a final reimbursement price for IMCIVREE sales in France, which resulted in an adjustment of $3.2 million reduction to product revenue, net.

We expect our sales of IMCIVREE to continue to increase.

We have achieved market access or named patient sales of IMCIVREE for BBS or POMC and LEPR deficiencies, or both, in more than 25 countries outside the United States, and we continue to collaborate with authorities to achieve access in additional markets.

For the three months ended June 30, 2025, and 2024, a substantial amount of our product revenue, or 66% and 74%, respectively, was generated from sales of our product to patients in the United States.

For the three months ended September 30, 2025, and 2024, the majority of our product revenue, or 74% and 68%, respectively, was generated from sales of our product to pharmacies for patients in the United States.

Cost of sales.

Cost of sales increased by $2.6 million to $5.5 million for the three months ending June 30, 2025, from $2.9 million for the three months ending June 30, 2024, an increase of 88%, which was driven by a corresponding increase in revenue in the three months ending June 30, 2025 .

Cost of sales increased by $1.7 million to $5.5 million for the three months ended September 30, 2025, from $3.8 million for the three months ended September 30, 2024, an increase of 44%, which was driven by an increase in sales volume and net product revenue in the three months ended September 30, 2025 .

Cost of sales is composed of royalty expense due to Ipsen Pharma S.A.S., or Ipsen, on our net product revenue;

amortization of our capitalized sales-based milestone payment made to Ipsen upon our first commercial sale in the United States and European Union, the cost of product, as well as costs associated with our patient assistance programs.

Specifically, the $2.6 million increase in cost of sales in the three months ended June 30, 2025, from the same period in 2024, was due to $0.9 million of additional royalties due to our growth in sales and $1.6 million attributed to increased product costs associated with higher sales volume.

Specifically, the $1.7 million increase in cost of sales in the three months ended September 30, 2025, from the same period in 2024, was due to $0.9 million of additional royalties due to our growth in sales and $0.8 million attributed to increased product costs associated with higher sales volume.

We expect cost of sales as a percentage of revenue to continue to be in a range of 10% to 12% in the foreseeable future.

Research and development expense.

Research and development expense increased by $12.1 million to $42.3 million for the three months ending June 30, 2025, from $30.2 million for the three months ending June 30, 2024, an increase of 40%.

Research and development expense increased by $8.1 million to $46.0 million for the three months ended September 30, 2025, from $37.9 million for the three months ended September 30, 2024, an increase of 21%.

The net increase was primarily due to the following:

● an increase of $5.0 million associated with chemistry, manufacturing, and controls (CMC) costs for drug formulation to support our ongoing Phase 1 clinical trial of RM-718 and the Phase 2 bivamelagon trial acquired from LGC,

● an increase of $3.1 million associated with higher clinical trial expenses, primarily related to our Phase 3 EMANATE study and Phase 2 bivamelagon trial acquired from LGC,

● an increase of $8.0 million related to personnel costs including $4.6 million related to salaries, benefits and other compensation costs related to the hiring of additional full-time employees in order to support the growth of our research and development programs, and $3.4 million of stock-based compensation, and

● an increase of $0.5 million in professional services to support our growing research and development programs.

● an increase of $1.2 million for regulatory costs to support our research and development programs associated with Hypothalamic Obesity.

The above increases were partially offset by:

● a net decrease in clinical trial expenses of $0.7 million driven by a decrease in costs of $4.6 million due to the wind down or conclusion of various studies including our long-term extension trial, DAYBREAK phase 2, EMANATE phase 3, and RM-718 parts A and B, offset by an increase in clinical trial expenses of $3.9 million for ongoing work in our bivamelagon phase 2 and Prader Willi syndrome phase 1 clinical trials.

Selling, general and administrative expense.

Selling, general and administrative expense increased by $9.5 million to $45.9 million for the three months ended June 30, 2025, from $36.4 million for the three months ended June 30, 2024, an increase of 26%.

Selling, general and administrative expense increased by $17.0 million to $52.4 million for the three months ended September 30, 2025, from $35.4 million for the three months ended September 30, 2024, an increase of 48%.

The increase was primarily due to the following:

● an increase of $6.9 million related to personnel costs including $4.0 million of stock-based compensation, and $2.9 million with additional headcount to support our expanding business operations as well as to establish commercial operations in international regions,

● an increase of $1.4 million related to increased marketing and promotion costs to support continued revenue growth, and

● an increase of $1.1 million in professional services, including legal and consulting expenses, to support our ongoing growth.

● an increase of $14.0 million related to personnel costs including $4.4 million of stock-based compensation, and $9.6 million related to salaries, benefits and other compensation costs related to the hiring of additional full-time employees to support our expanding business operations as well as to establish commercial operations in international regions and

● an increase of $2.6 million related to increased marketing and promotion costs to support continued revenue growth and our anticipated product launch for Hypothalamic Obesity.

Other income (expense), net.

Other income (expense), net decreased by ($9.7) million to ($1.0) million for the three months ended June 30, 2025 from $8.7 million of other income for the three months ended June 30, 2024.

The decrease was primarily due to the following:

● a one-time gain of $8.9 million was recognized for the settlement of the forward contract recorded with the issuance of our Series A Convertible Preferred Stock (the “Convertible Preferred Stock”) during the three months ended June 30, 2024;

which did not recur in 2025,

● a decrease in interest income of $0.9 million earned on our short-term investments, based on higher investment balances from the proceeds of $150.0 million from the Convertible Preferred Stock issuance during the three months ending June 30, 2024, and

● recognition of $1.2 million of non-cash interest expense in the three months ended June 30, 2025, associated with accretion of the deferred royalty obligation as well as the liability payable to LGC that was paid in July 2025.

The above decreases were partially offset by:

● an increase in other income of $1.3 million driven by a gain on unrealized foreign exchange as well as a gain on the fair value of the embedded derivative.

Comparison of the six months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024, together with the changes in those items in dollars and as a percentage:

Six Months Ended

Other income (expense), net remained relatively flat at ($0.1) million for both periods the three months ended September 30, 2025 and September 30, 2024.

The slight increase in other expense was primarily due to the following:

● a decrease of $1.0 million of non-cash interest expense in the three months ended September 30, 2025, associated with accretion of LG Chem liability, which was paid in July 2025, and

● a decrease in other income of $0.8 million due to less gain recognized on the change in fair value of the embedded derivative on our deferred royalty obligation as well as other income, including less gains on foreign exchange.

Comparison of the nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024, together with the changes in those items in dollars and as a percentage:

Nine Months Ended

September 30,

(in thousands)

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Product revenue, net .

Product revenue, net increased by $31.2 million to $86.2 million for the six months ending June 30, 2025, from $55.0 million for the six months ending June 30, 2024, an increase of 57%.

Product revenue, net increased by $49.2 million to $137.5 million for the nine months ended September 30, 2025, from $88.3 million for the nine months ended September 30, 2024, an increase of 56% primarily due to an increase in sales volume.

We expect our sales of IMCIVREE to continue to increase.

For the six months ended June 30, 2025, and 2024, a substantial amount of our product revenue , or 65% and 75%, respectively, was generated from sales of our product to patients in the United States.

For the nine months ended September 30, 2025, and 2024, the majority of our product revenue , or 69% and 73%, respectively, was generated from sales of our product to pharmacies for patients in the United States.

License revenue .

See Note 12, Significant Agreements , to the unaudited condensed consolidated financial statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

Cost of sales.

Cost of sales increased by $3.4 million to $9.2 million for the six months ended June 30, 2025 from $5.8 million for the six months ended June 30, 2024, an increase of 60%, which was driven by a corresponding increase in revenue in the six months ended June 30, 2025 .

Cost of sales increased by $5.1 million to $14.7 million for the nine months ended September 30, 2025 from $9.6 million for the nine months ended September 30, 2024, an increase of 53%, which was driven by an increase in sales volume and net product revenue in the nine months ended September 30, 2025 .

Cost of sales is composed of royalty expense due to Ipsen on our net product revenue;

amortization of our capitalized sales-based milestone payment made to Ipsen, upon our first commercial sale in the United States and European Union, the cost of product, as well as costs associated with our patient assistance programs.

Specifically, the $3.4 million increase in cost of sales in the six months ended June 30, 2025, from the same period in 2024 was due to $1.6 million of additional royalties due to our growth in sales and $1.8 million attributed to increased product costs associated with higher sales volume.

Specifically, the $5.1 million increase in cost of sales in the nine months ended September 30, 2025, from the same period in 2024 was due to $2.5 million of additional royalties due to our growth in sales and $2.6 million attributed to increased product costs associated with higher sales volume.

We expect cost of sales as a percentage of revenue to continue to be in a range of 10% to 12% in the foreseeable future.

Research and development expense.

Research and development expense decreased by $79.6 million to $79.3 million for the six months ended June 30, 2025 from $158.9 million for the six months ended June 30, 2024, a decrease of 50%.

Research and development expense decreased by $71.5 million to $125.3 million for the nine months ended September 30, 2025 from $196.8 million for the nine months ended September 30, 2024, a decrease of 36%.

The net decrease was primarily due to the following:

● a decrease of $92.5 million related to acquired In-Process Research and Development (“IPR&D”) costs associated with the acquisition of LGC’s proprietary compound bivamelagon in the six months ended June 30, 2024, which did not recur in 2025;

● a net decrease of $2.2 million in our clinical trial costs due to the completion and wind down of our long-term extension trial, Phase 2 Basket trial, Phase 3 pediatrics trial, and switch trial, as well as decreased genetic sequencing costs.

● a decrease of $92.4 million related to acquired In-Process Research and Development (“IPR&D”) costs associated with the acquisition of LGC’s proprietary compound bivamelagon in the nine months ended September 30, 2024, which did not recur in 2025;

● a net decrease of $1.6 million in our clinical trial costs due to the completion and wind down of our long-term extension trial, DAYBREAK phase 2, EMANATE phase 3, and RM-718 parts A and B long-term extension trial, Pathway Studies, Phase 3 pediatrics trial, and 718 Phase parts A and B, as well as decreased genetic sequencing costs.

The above decreases were partially offset by:

● an increase of $7.5 million associated with chemistry, manufacturing, and controls (CMC) costs for drug formulation to support our ongoing Phase 1 clinical trial of RM-718 and the Phase 2 bivamelagon trial acquired from LGC,

● an increase of $14.2 million related to personnel costs, including $7.7 million related to salaries, benefits and other compensation costs related to the hiring of additional full-time employees in order to support the growth of our research and development programs, and $6.6 million of stock-based compensation, and

● an increase of $0.7 million in professional services related to research and development expenses.

● an increase of $7.6 million associated with chemistry, manufacturing, and controls (CMC) costs for drug formulation and autoinjector development to support our ongoing Phase 1 clinical trial of RM-718 and our Phase 2 bivamelagon trial, as well as $1.3 million in other pre-clinical drug research efforts.

Selling, general and administrative expense.

Selling, general and administrative expense increased by $14.2 million to $85.0 million for the six months ended June 30, 2025 from $70.8 million for the six months ended June 30, 2024, an increase of 20%.

Selling, general and administrative expense increased by $31.3 million to $137.5 million for the nine months ended September 30, 2025 from $106.2 million for the nine months ended September 30, 2024, an increase of 29%.

The increase was primarily due to the following:

● an increase of $13.0 million related to personnel costs including $7.4 million of stock-based compensation, as well as $5.5 million of additional headcount to support our expanding business operations as well as to establish commercial operations in international regions,

● an increase of $2.6 million related to increased marketing and promotion costs to support continued revenue growth, and

● an increase in patents and regulatory expense of $0.5 million to support our ongoing growth.

The above increases were partially offset by:

● a decrease in CMC and other related costs of $1.7 million.

● an increase of $26.9 million related to personnel costs including $11.9 million of stock-based compensation, and $15.0 million related to salaries, benefits and other compensation costs related to the hiring of additional full-time employees to support our expanding business operations both domestic and internationally, and

● an increase of $5.2 million related to increased marketing and promotion costs to support continued revenue growth, and our anticipated product launch for Hypothalamic Obesity.

Other income (expense), net.

Other income (expense), net decreased by ($10.9) million to ($3.4) million for the six months ended June 30, 2025 from $7.5 million of other income for the six months ended June 30, 2024.

Other income (expense), net decreased by ($10.9) million to ($3.5) million for the nine months ended September 30, 2025 from $7.4 million of other income for the nine months ended September 30, 2024.

The decrease was primarily due to the following:

● a one-time gain of $8.9 million that was recognized for the settlement of the forward contract recorded with the issuance of Convertible Preferred Stock during the three months ended June 30, 2024;

● a one-time gain of $8.9 million that was recognized for the settlement of the forward contract recorded with the issuance of Convertible Preferred Stock during the nine months ended September 30, 2024;

which did not recur in 2025, and

● the recognition of $1.9 million of non-cash interest expense in the three months ended June 30, 2025, primarily associated with an increase in the accretion of the deferred royalty obligation as well as the non-current liability payable to LGC that was paid in July 2025.

● an decrease in other income of $1.2 million primarily due an additional gain in the change in fair value of the embedded derivative on our deferred royalty obligation and other income, including less gains on foreign exchange in 2024.

● Offset by the recognition of an additional $0.7 million of non-cash interest expense in the nine months ended September 30, 2025, associated with an increase in the accretion of the deferred royalty obligation as well as the non-current liability payable to LGC that was paid in July 2025.

Liquidity and Capital Resources

As of June 30, 2025, our cash and cash equivalents and short-term investments were approximately $291.0 million.

On July 11, 2025, we closed a public offering of 2,367,647 of common stock at a public offering price of $85 per share, resulting in net proceeds of approximately $189.2 million, after deducting underwriting discounts and commissions, excluding certain offering expenses payable by us.

The following table provides information regarding our cash flows for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

As of September 30, 2025, our cash and cash equivalents and short-term investments were approximately $416.1 million.

On July 11, 2025, we closed a public offering of 2,367,647 of common stock at a public offering price of $85 per share, resulting in net proceeds of approximately $188.7 million, after deducting underwriting discounts and commissions, and other offering expenses payable by us.

The following table provides information regarding our cash flows for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

(in thousands)

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The use of cash in all periods resulted primarily from our net loss adjusted for non-cash charges and changes in components of operating assets and liabilities.

Net cash used in operating activities was $63.7 million for the six months ended June 30, 2025 and consisted primarily of a net loss of $96.1 million adjusted for non-cash items of $35.9 million, which consisted of stock-based compensation, non-cash interest expense, non-cash accretion and amortization of short-term investments, depreciation and amortization, rent expense, the change in the fair value of our embedded derivative asset, and the change in unrealized gain on foreign currency.

The change in operating assets and liabilities used net cash of approximately $3.4 million and was primarily driven by net increases in prepaids and other current assets of $10.0 million, the change in accounts receivable of $7.1 million, and the change in deferred revenue of $1.3 million.

These net uses of cash were offset by an increase in accounts payable, accrued expenses and other liabilities of $9.6 million, and net decreases in other long-term assets of $5.5 million.

Net cash used in operating activities was $69.8 million for the six months ended June 30, 2024 and consisted primarily of a net loss of $173.6 million adjusted for non-cash items of $108.1 million, which consisted of non-cash stock-based compensation, depreciation and amortization, rent expense and the change in the fair value of our embedded derivative liability, totaling $18.3 million.

Our net loss adjusted for non-cash items also includes $92.4 million of acquired IPR&D assets, which are classified as investing activities, as well as an $8.9 million gain on the settlement of a forward contract.

The change in operating assets and liabilities used net cash of approximately $4.3 million, primarily driven by net increases in accounts receivable and inventory of $6.1 million, net decreases in accounts payable and accrued expenses of $0.8 million, offset by net decreases in long-term assets of $2.2 million and net decreases in prepaid expenses of $0.3 million.

Net cash used in operating activities was $90.3 million for the nine months ended September 30, 2025 and consisted primarily of a net loss of $149.0 million adjusted for non-cash items of $59.0 million, which consisted of stock-based compensation, non-cash interest expense, non-cash accretion and amortization of short-term investments, depreciation and amortization, non-cash rent expense, the change in the fair value of our embedded derivative asset, and the foreign currency impacts.

The change in operating assets and liabilities used net cash of approximately $0.3 million and was primarily driven by net increases in accounts receivable of $13.7 million, the change in prepaids and other current assets of $3.6 million, the change in inventory of $2.5 million, and the change in deferred revenue of $1.3 million.

These net uses of cash were offset by an increase in accounts payable, accrued expenses and other liabilities of $20.6 million.

Net cash used in operating activities was $95.0 million for the nine months ended September 30, 2024 and consisted primarily of a net loss of $217.3 million adjusted for non-cash items of $121.9 million, which consisted of non-cash stock-based compensation, non-cash interest expense, non-cash accretion and amortization of short-term investments, non-cash accretion of other current liability, gain on settlement of forward contract, depreciation and amortization, non-cash rent expense and the change in the fair value of our embedded derivative liability, totaling $29.5 million.

Our net loss adjusted for non-cash items also includes $92.4 million of acquired IPR&D assets, which are classified as investing activities.

The change in operating assets and liabilities used net cash of approximately $0.3 million, primarily driven by net increases in accounts receivable and inventory of $9.7 million, offset by net decreases in accounts payable and accrued expenses of $6.7 million and net decreases in long-term assets of $3.2 million.

Net cash provided by investing activities

Net cash provided by investing activities was $78.8 million for the six months ended June 30, 2025 and relates to gross maturities of short-term investments of $139.3 million, offset by purchases of short-term investments for $60.5 million.

Net cash provided by investing activities was $21.5 million for the six months ended June 30, 2024 and relates to gross maturities of short-term investments of $127.8 million, offset by purchases of short term investments for $66.3 million and cash used for the purchase of LGC’s proprietary compound LB54640 for $40.0 million in January 2024.

Net cash used in investing activities was $167.5 million for the nine months ending September 30, 2025 and relates to purchases of short-term investments for $328.3 million, offset by gross maturities of short-term investments of $200.8 million.

Additionally, we made the final payment of $40.0 million to LGC for the Company’s asset purchase of their proprietary compound bivamelagon from January 2024.

Net cash used in investing activities was $69.3 million for the nine months ended September 30, 2024 and relates to purchases of short term investments for $201.9 million and cash used for the purchase of LGC’s proprietary compound bivamelagon (LB54640) for $40.0 million in January 2024, offset by gross maturities of short-term investments of $173.1 million.

Net cash provided by financing activities

Net cash provided by financing activities was $31.6 million for the six months ended June 30, 2025, and consisted of net proceeds of $34.0 million from our ATM equity offering, as well as proceeds of $6.5 million from the exercise of stock options and the issuance of common stock from our Employee Stock Purchase Plan.

Net cash provided by financing activities was $220.9 million for the nine months ended September 30, 2025, and consisted of net proceeds of $188.7 million from our follow-on offering in July 2025, $34.0 million from our ATM equity offering, and proceeds of $12.7 million from the exercise of stock options and the issuance of common stock from our Employee Stock Purchase Plan.

These proceeds were offset by $14.5 million of repayments of our deferred royalty obligation

Net cash provided by financing activities was $150.4 million for the six months ended June 30, 2024, and consisted of net proceeds of $147.8 million from the issuance of Series A Preferred Stock as well as proceeds of $8.4 million from the exercise of stock options and the issuance of common stock from our Employee Stock Purchase Plan.

Net cash provided by financing activities was $152.9 million for the nine months ended September 30, 2024, and consisted of net proceeds of $147.8 million from the issuance of Series A Preferred Stock as well as proceeds of $14.3 million from the exercise of stock options and the issuance of common stock from our Employee Stock Purchase Plan.

These proceeds were offset by $9.1 million of repayments of our deferred royalty obligation.

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We also expect to incur additional costs associated with operating as a public company.

We expect that our cash and cash equivalents and short-term investments as of September 30, 2025 will be sufficient to fund our planned operations for at least 24 months.

Our cash and cash equivalents are maintained at financial institutions in amounts that exceed federally-insured limits.

In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we will be able to access uninsured funds in a timely manner or at all.

We may need to obtain substantial additional funding in connection with our research and development activities and any continuing operations thereafter.

We expect we may need to obtain substantial additional funding in connection with our research and development activities and any continuing operations thereafter.

If we are unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

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Contractual obligations

As of June 30, 2025, there were no other material changes to our principal contractual obligations and commitments as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

As of September 30, 2025, there were no other material changes to our principal contractual obligations and commitments as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Quantitative and Qualitative Disclosures About Market Risk

As of June 30, 2025, there were no material changes to our quantitative and qualitative disclosures about market risks as reported in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risks” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

As of September 30, 2025, there were no material changes to our quantitative and qualitative disclosures about market risks as reported in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risks” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis