What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 200 added, 123 removed, 464 unchanged (41% of the section changed)

14 unchanged sentences

Other long-term assets

Liabilities and stockholders’ equity

Liabilities, Convertible Preferred Stock and Stockholders’ equity

Current liabilities:

11 unchanged sentences

Commitments and contingencies (Note 15)

Series A convertible preferred stock, $ 0.001 par value:

150,000 shares authorized;

150,000 and 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.

Liquidation preference of $ 150,000 as of June 30, 2024.

Stockholders’ equity:

1 unchanged sentence

10,000,000 shares authorized;

no shares issued and outstanding at March 31, 2024 and December 31, 2023

no shares issued and outstanding at June 30, 2024 and December 31, 2023

Common stock, $ 0.001 par value:

120,000,000 shares authorized;

60,964,468 and 59,426,559 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

61,095,949 and 59,426,559 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive (loss) income

Accumulated deficit

1 unchanged sentence

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total liabilities, convertible preferred stock and stockholders’ equity

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands, except share and per share data)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Product revenue, net

6 unchanged sentences

Loss from operations

Other (expense) income:

Other income (expense):

Other income (expense), net

Gain on settlement of forward contract

Interest expense

Interest income

Total other (expense) income, net

Total other income (expense), net

Loss before income taxes

Provision for income taxes

Net loss per share, basic and diluted

Accrued dividends on convertible preferred stock

Net loss attributable to common stockholders

Net loss per share attributable to common stockholders, basic and diluted

Weighted-average common shares outstanding, basic and diluted

Other comprehensive loss:

Net loss attributable to common stockholders

Foreign currency translation adjustment

Unrealized gain (loss), net on marketable securities

Unrealized (loss) gain, net on marketable securities, net of tax

Comprehensive loss

1 unchanged sentence

Rhythm Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Convertible Preferred Stock & Stockholders’ Equity

(in thousands, except share data)

Series A Convertible

Preferred Stock

Comprehensive

10 unchanged sentences

( 1,036,108 )

Issuance of Series A Preferred Stock, net of $ 2,250 of issuance costs

Stock-based compensation expense

Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units

Accretion of preferred stock dividends

Foreign currency translation adjustment

Unrealized loss on marketable securities

Balance at June 30, 2024

( 1,068,369 )

Balance at December 31, 2022

5 unchanged sentences

Balance at March 31, 2023

Stock-based compensation expense

Issuance of common stock in connection with ESPP

Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units

Issuance of common stock upon completion of public offering, net of offering costs

Foreign currency translation adjustment

Net unrealized gains on short-term investments

Balance at June 30, 2023

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three months ended March 31,

Six months ended June 30,

Operating activities

2 unchanged sentences

Depreciation and amortization

Non-cash interest expense and amortization of debt issuance costs

Non-cash interest expense

Non-cash accretion & amortization of short-term investments

Unrealized loss on short-term investments

Non-cash accretion of non-current liability

1 unchanged sentence

Change in fair value of embedded derivative liability

Gain on settlement of forward contract

Acquired IPR&D assets classified as investing activities

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Proceeds from issuance of common stock from ESPP

Gain on settlement of forward contract

Proceeds from Series A Preferred Stock, net of issuance costs

Net cash provided by (used in) financing activities

Effect of exchange rates on cash

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental disclosure of non-cash investing activities:

Supplemental disclosure of non-cash investing and financing activities:

Non-current liability issued in exchange for the acquisition of IPR&D

Issuance of common stock in exchange for IPR&D

Accretion of preferred stock dividends

Holdback payable associated with acquisition of IPR&D assets, in accrued expenses

Transaction costs associated with acquisition of IPR&D assets, in accounts payable

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5 unchanged sentences

(the “Company” or “we”) is a global, commercial-stage biopharmaceutical company dedicated to transforming the lives of patients and their families living with rare neuroendocrine diseases.

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

While obesity affects hundreds of millions of people worldwide, we are developing therapies for a subset of individuals who have hyperphagia, a pathological hunger that leads to abnormal food-seeking behaviors, and severe obesity due to an impaired MC4R pathway, which may be caused by traumatic injury or genetic variants.

9 unchanged sentences

The Company has incurred operating losses and negative cash flows from operations since inception.

As of March 31, 2024, the Company had an accumulated deficit of $ 1,036,108 .

As of June 30, 2024, the Company had an accumulated deficit of $ 1,068,369 .

The Company has primarily funded these losses through the proceeds from the sales of common and preferred stock, asset sales, royalty financing, out-license arrangements, as well as capital contributions received from the former parent company, Rhythm Holdings LLC.

While the Company is generating product revenue, management expects operating losses to continue for the foreseeable future.

The Company has devoted substantially all of its resources to its drug development efforts, comprising of research and development, the acquisition of in process research and development assets, manufacturing, conducting clinical trials for its product candidates, protecting its intellectual property, commercialization activities and general and administrative functions relating to these operations.

The Company has devoted substantially all of its resources to its drug development efforts, comprised of research and development, the acquisition of in process research and development assets, manufacturing, conducting clinical trials for its product candidates, protecting its intellectual property, commercialization activities and general and administrative functions relating to these operations.

The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain profitable operations.

At March 31, 2024, the Company had $ 201,199 of cash and cash equivalents and short-term investments on hand.

“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” (the “Convertible Preferred Stock”), for an aggregate purchase price of $ 150,000 , or $ 1,000 per share (the “Issuance”).

At June 30, 2024, the Company had $ 319,130 of cash and cash equivalents and short-term investments on hand.

On April 1, 2024, the Company entered into an Investment Agreement (the “Investment Agreement”) with certain affiliates of Perceptive Advisors LLC (“Perceptive”) and a life sciences focused institutional investor (each, an “Investor” and

collectively, the “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” (the “Convertible Preferred Stock”), for an aggregate purchase price of $ 147,750 , net of issuance costs of $ 2,250 , or $ 1,000 per share (the “Issuance”).

The Issuance closed on April 15, 2024.

2 unchanged sentences

If the Company fails to obtain additional funding when needed, the Company would be forced to scale back, terminate its operations or seek to merge with or be acquired by another company.

Management believes that the Company's existing cash resources, together with the proceeds received from the sale of preferred stock in April 2024, will be sufficient to fund the Company’s operations through at least the next twelve months from the filing of this Quarterly Report on Form 10-Q with the SEC .

Management believes that the Company's existing cash resources will be sufficient to fund the Company’s operations through at least the next twelve months from the filing of this Quarterly Report on Form 10-Q with the SEC .

Summary of Significant Accounting Policies

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As permitted under these rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted.

The accompanying condensed consolidated balance sheet as of March 31, 2024, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024 and 2023, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2024 and 2023 and the condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 and the related footnote disclosures are unaudited.

The accompanying condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of convertible preferred stock and stockholders’ equity for the three and six months ended June 30, 2024 and 2023 and the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 and the related footnote disclosures are unaudited.

In management's opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2023 and include all adjustments, which are all normal recurring adjustments, necessary for the fair presentation of the interim financial statements.

The results for the three months ended March 31, 2024 are not necessarily indicative of the results expected for the full fiscal year, any other interim periods, or any future year or period.

The results for the six months ended June 30, 2024 are not necessarily indicative of the results expected for the full fiscal year, any other interim periods, or any future year or period.

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the unaudited condensed consolidated financial statements.

As of March 31, 2024, there have been no material changes in the Company's significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

As of June 30, 2024, there have been no material changes in the Company's significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Use of Estimates

2 unchanged sentences

This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made.

Significant estimates relied upon in preparing these financial statements include estimates related to determining our net product revenue, license revenue, accruals related to research and development expenses, assumptions used to record stock-based compensation expense, interest expense on our deferred royalty obligation, and the valuation allowance on the Company's

deferred tax assets.

Significant estimates relied upon in preparing these financial statements include estimates related to determining our net product revenue, accruals related to research and development expenses, assumptions used to record stock-based compensation

expense, interest expense on our deferred royalty obligation, and the valuation allowance on the Company's deferred tax assets.

Estimates are periodically reviewed in light of changes in circumstances, facts and experience.

7 unchanged sentences

Certain prior year amounts have been reclassified to conform to the current period presentation.

These reclassifications had no effect on the reported results of operations or cash flows.

In the condensed consolidated statements of cash flows, the Company reclassified $ 2,341 to non-cash accretion and amortization of short-term investments from prepaid expenses and other current assets for the three months ended March 31, 2023.

The reason for the reclassification was to conform with the current year’s presentation.

These reclassifications had no effect on the reported cash flows.

Specifically, in the condensed consolidated statements of cash flows, the Company reclassified $ 4,299 to non-cash accretion & amortization of short-term investments from prepaid expenses and other current assets for the six months ended June 30, 2023.

Segment Information

11 unchanged sentences

The Company does not require collateral to secure amounts due from its customers.

For the three months ended March 31, 2024 and 2023, approximately 74 % and 83 %, respectively, of all of the Company’s revenue was generated from a single customer in the United States.

As of March 31, 2024 and December 31, 2023, approximately 72 % and 67 %, respectively, of the Company’s accounts receivable was outstanding from a single customer in the United States.

For the three months ended June 30, 2024 and 2023, approximately 74 % and 84 % of all of the Company’s revenue was generated from a single customer in the United States.

For the six months ended June 30, 2024 and 2023, approximately 75 % and 83 % of all of the Company’s revenue was generated from a single customer in the United States.

As of June 30, 2024 and December 31, 2023, approximately 66 % and 67 %, respectively, of the Company’s accounts receivable was outstanding from a single customer in the United States.

The Company relies on third-party manufacturers and suppliers for the manufacture and supply of its product.

2 unchanged sentences

The Company relies on separate third parties to perform genetic testing in the United States and Europe, respectively.

The inability of the vendor to fulfill testing services for the Company could materially impact future operating results and adversely impact our ability to further develop setmelanotide.

The inability of the vendors to fulfill testing services for the Company could materially impact future operating results and adversely impact our ability to further develop setmelanotide.

A change in the relationship with the genetic testing service providers, or an adverse change in their business, could materially impact future operating results.

5 unchanged sentences

The Company analyzes amounts that are past due for collectability, and periodically evaluates the creditworthiness of its customers.

As of March 31, 2024 and December 31, 2023, the Company determined an allowance for doubtful accounts was not required based upon our review of contractual payments and our customers’ circumstances.

As of June 30, 2024 and December 31, 2023, the Company determined an allowance for doubtful accounts was not required based upon our review of contractual payments and our customers’ circumstances.

Revenue Recognition

2 unchanged sentences

Product Revenue, net

In the United States (the “U.S.”), which accounts for the largest portion of our total revenues, the Company sells its product to a limited number of specialty pharmacies.

In the United States (the “U.S.”), which accounts for the largest portion of our total revenues, the Company sells its product to one specialty pharmacy.

The product is distributed through third-party logistics, or 3PL, distribution agent that does not take title to the product.

3 unchanged sentences

Internationally, we make sales primarily to specialty distributors and retail pharmacy chains, as well as hospitals, many of which are government-owned or supported.

The Company offers returns of product sold to the customer on a limited basis.

The Company offers returns of product sold to the customer on a limited basis, however, no material returns have been recognized to date.

Revenue from product sales is recognized when the customer obtains control of our product, which occurs at a point in time, upon transfer of title to the customer because at that point in time we have no ongoing obligations to the customer.

34 unchanged sentences

The estimate is recorded as a reduction of revenue in the same period the related revenue is recognized.

Provisions for cash discounts are recorded as reductions of accounts receivable, and fees, rebates, and other incentives are recorded as a component of accrued expenses.

Provisions for trade discounts, chargebacks and allowances are recorded as reductions to accounts receivable, and returns, government rebates, and other incentives are recorded as a component of accrued expenses.

License Agreements

In January 2024, we entered into a license agreement and share issuance agreement with LG Chem, Ltd.

Under the terms of the license agreement, we obtained worldwide rights to develop 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.

Under the terms of the license agreement, we obtained worldwide rights to develop LGC’s proprietary compound LB54640 and assumed 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.

On July 23, 2024, the Company announced that the first patients have been dosed and participants in the SIGNAL trial will receive one of three doses of LB54640 or placebo by oral administration once daily for 14 weeks (patients may continue on open-label therapy 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.

We paid LGC $ 40.0 million in cash and issued shares of our common stock with an aggregate fair value of $ 18.7 million.

The shares were issued at a per share price equal to the ten-day volume weighted-average closing price for our

common stock, calculated as of the trading day immediately prior to January 4, 2024.

We also agreed to make a $ 40.0 million payment in cash 18 months after the effective date of the license agreement.

The shares were issued at a per share price equal to the ten-day volume weighted-average closing price for our common stock, calculated as of the trading day immediately prior to January 4, 2024.

We also agreed to make an additional $ 40.0 million payment in cash 18 months after the effective date of the license agreement.

This payment has been recorded at its present value and reflected in other long-term liabilities on our unaudited condensed consolidated balance sheet.

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.

In addition, under the terms of the license agreement, we agreed to pay LGC up to $ 205 million in cash upon achieving various regulatory and sales milestones based on net sales of LB54640.

Subject to the completion of Phase 2 development of LB54640, the Company also 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.

Royalties may further increase to a low double digit percent royalty, though such royalty would only be applicable on net sales of LB54640 in a region if LB54640 is covered by a composition of matter or method of use patent controlled by LGC in such region and the Company’s MC4R portfolio is not covered by any composition of matter or method of use patents controlled by the Company in such region.

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The Company determined that the RareStone License contains two performance obligations, the delivery of the license and the supply of clinical and commercial product.

The Company further determined the supply of commercial product to RareStone contains a significant future discount and estimates the discount to be $ 1,286 , which is recorded as a component of deferred revenue on the consolidated balance sheet at December 31, 2023.

Based on a relative fair-value allocation between the license and the manufacture of clinical and commercial product, the Company recognized $ 6,754 of license revenue in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2022.

The discount related to commercial manufacturing supply

will be deferred and recognized over the commercial supply period or upon termination of the agreement.

No license revenue was recognized during the years ended December 31, 2023 or 2021.

No license revenue was recognized during three and six months ended June 30, 2024 and 2023, respectively.

On October 28, 2022, we delivered written notice, or the October Notice, to RareStone that we have terminated the RareStone License for cause.

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If such assets are considered to be impaired, the Company measures the impairment to be recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset, less the cost to sell.

No events or changes in circumstances existed to require an impairment assessment during the three months ended March 31, 2024 and 2023, respectively.

No events or changes in circumstances existed to require an impairment assessment during the three and six months ended June 30, 2024 and 2023, respectively.

Acquired IPR&D and Milestone Expenses

11 unchanged sentences

Changes resulting from foreign currency translation are included in accumulated other comprehensive income (loss) on the Company’s consolidated statement of stockholders’ equity.

Net foreign currency exchange transaction gains (losses), which are included in other (expense) income, net on our consolidated statements of operations, were immaterial for the three months ended March 31, 2024 and 2023.

Fair Value Measurements

6 unchanged sentences

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s cash equivalents and marketable securities and derivative liability at March 31, 2024 and December 31, 2023 were carried at fair value, determined according to the fair value hierarchy.

The Company’s cash equivalents and marketable securities and derivative liability at June 30, 2024 and December 31, 2023 were carried at fair value, determined according to the fair value hierarchy.

See Note 6 for further discussion.

The carrying amounts reflected in the condensed consolidated balance sheets for accounts payable and accrued expenses and other current liabilities approximate their fair values due to their short-term maturities at March 31, 2024 and December 31, 2023, respectively.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration of potential dilutive securities.

Basic net loss per share is computed by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period, without consideration of potential dilutive securities.

Diluted net loss per common share is computed by adjusting the weighted average shares outstanding for the potential dilutive effects of common stock equivalents outstanding during the period calculated in accordance with the treasury stock method.

3 unchanged sentences

Three Months Ended

Six Months Ended

Stock options

1 unchanged sentence

Performance stock units

Common stock reserved for the conversion of Series A convertible preferred stock

Potential common shares

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Improvements to Reportable Segment Disclosures.

The standard requires disclosure of incremental segment information on an annual and interim basis and allows for multiple measures of a segment’s profit or loss provided that one of those measures is consistent with GAAP.

but rather requires public entities to provide in interim periods all disclosures about a reporting segment’s profit or loss and assets that are currently required annually.

consistent with GAAP.

The amendments in this update do not change how a public company identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments, but rather requires public entities to provide in interim periods all disclosures about a reporting segment’s profit or loss and assets that are currently required annually.

ASU 2023-07 becomes effective for the annual period starting on January 1, 2024, and for interim periods starting on January 1, 2025.

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On January 4, 2024, the Company entered into a license agreement and share issuance agreement with LG Chem, Ltd.

Under the terms of the license agreement, the Company obtained worldwide rights to 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.

Under the terms of the license agreement, the Company obtained worldwide rights to LGC’s proprietary compound LB54640 and assumed sponsorship of two ongoing LGC Phase 2 studies designed to evaluate safety, tolerability, pharmacokinetics and weight loss efficacy of LB54640.

The total purchase consideration of $ 92.4 million was composed of $ 40.0 million of cash paid at closing and issued shares of the Company’s common stock with an aggregate value of $ 20.0 million.

1 unchanged sentence

As of January 4, 2024, the fair value of common stock issued was $ 18.7 million.

The total purchase consideration also includes a $ 40.0 million license fee payable in 18 months , whose present value at closing was $ 33.7 million, and $ 0.8 million of transaction costs which are recorded as selling, general and administrative expenses.

The total purchase consideration also includes an additional $ 40.0 million license fee payable in 18 months , whose present value at closing was $ 33.7 million, and $ 0.8 million of transaction costs which are recorded as selling, general and administrative expenses.

In addition, under the terms of the license agreement, we agreed to pay LGC up to $ 205 million in cash upon achieving various regulatory and sales milestones based on net sales of LB54640.

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The assets acquired were In-Process Research and Development (“IPR&D”) assets.

However, since the IPR&D assets were determined to have no alternative future use, the Company recognized the $ 92.4 million of purchase consideration as research and development expense in the three months ended March 31, 2024.

The Company determined that the additional contingent consideration did not meet the definition of a derivative as of the acquisition date.

Therefore, the Company did not record a contingent consideration liability on the acquisition date.

The Company will recognize any future contingent consideration payments related to the LG Chem transaction in the period in which the achievement of the underlying milestones becomes probable.

The Company will recognize any future contingent consideration payments related to the LGC transaction in the period in which the achievement of the underlying milestones becomes probable.

Xinvento B.V.

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The total purchase consideration of $ 5,667 was composed of $ 4,520 of cash paid at closing, a $ 500 holdback, paid in the three months ended March 31, 2024, and $ 647 of acquisition-related costs.

The Company determined that substantially all of the value as of acquisition date related to Xinvento’s In-Process Research and Development.

The Company determined that substantially all of the value as of acquisition date related to Xinvento’s IPR&D.

As a result, the Company determined this transaction should be accounted for as an asset acquisition.

The assets acquired were In-Process Research and Development (IPR&D) assets.

The assets acquired were IPR&D assets.

However, since the IPR&D assets were determined to have no alternative future use, the Company recognized the $ 5,667 of purchase consideration as research and development expense in the year ended December 31, 2023.

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The Company will recognize any future contingent consideration payments related to the Xinvento transaction in the period in which the achievement of the underlying milestones becomes probable.

Xinvento's results of operations are included in the condensed consolidated financial statements from the date of acquisition.

For the three months ended March 31, 2024, the net loss associated with the operations of Xinvento was de minimis in the Company’s condensed consolidated statements of operations.

Inventory consists of the following:

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Fair Value of Financial Assets and Liabilities

As of March 31, 2024 and December 31, 2023, the carrying amount of cash and cash equivalents and short-term investments was $ 201,199 and $ 275,846 respectively, which approximates fair value.

Cash and cash equivalents and

short-term investments includes investments in U.S.

As of June 30, 2024 and December 31, 2023, the carrying amount of cash and cash equivalents and short-term investments was $ 319,130 and $ 275,846 respectively, which approximates fair value.

Cash and cash equivalents and short-term investments includes investments in U.S.

treasury securities and money market funds that invest in U.S.

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Fair Value Measurements as of

March 31, 2024 using:

June 30, 2024 using:

Cash equivalents:

Commercial Paper

Money market funds

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Derivative liability

The estimated fair value of the derivative liability related to our Royalty Interest Financing Agreement (RIFA) with HealthCare Royalty Partners was determined using Level 3 inputs.

The estimated fair value of the derivative liability relates to our Royalty Interest Financing Agreement (RIFA) with HealthCare Royalty Partners was determined using Level 3 inputs.

The fair value measurement of the derivative liability is sensitive to changes in the unobservable inputs used to value the financial instrument.

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and (6) the probability of a change in control occurring during the term of the instrument.

Three months ended

The forward contract associated with our Series A Convertible Preferred Stock, as discussed further in Note 10, “Series A Preferred Stock”, is measured at fair value.

In order to value the forward contract, a binomial lattice model was used to determine the fair value of the Series A Preferred Stock.

The fair value of the forward contract was measured as the difference between the consideration payable of $ 150,000 and the fair value of the Series A Preferred Stock.

The fair value of the forward contract was determined to be $ 0 at initial issuance and the change in the fair value from initial issuance to settlement of $ 8,900 was recognized as other income in the condensed consolidated statements of operation for the three and six months ended June 30, 2024.

The assumptions used in the binomial lattice model include:

(1) the Company’s common stock price on the issuance and settlement dates;

(2) the Conversion Price as of $ 48.00 as per the

(3) a 20-year term to maturity;

(4) an estimate of the Company’s credit risk-adjusted discount rate;

and (5) volatility.

Six months ended

Beginning aggregate estimated fair value of Level 3 liabilities

Initial recording of embedded derivative

Change in fair value of embedded derivative

Fair value of forward contract - Series A Convertible Preferred Stock

Settlement of forward contract

Ending aggregate estimated fair value of Level 3 liabilities

1 unchanged sentence

The following tables summarize the Company's marketable securities:

March 31, 2024

June 30, 2024

Corporate debt securities and commercial paper (due within 1 year)

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Right of Use Asset and Lease Liability

The Company has a material operating lease for its head office facility and other immaterial operating leases for certain equipment.

The Company’s office lease has a remaining lease term of 1.3 years.

The Company measured the lease liability associated with the office lease using a discount rate of 10 % at inception.

The Company estimated the incremental borrowing rate for the leased asset based on a range of comparable interest rates the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment.

As of March 31, 2024, the Company has not entered into any lease arrangements classified as a finance lease.

The Company’s corporate headquarters is located in Boston, Massachusetts.

This facility houses the Company’s research, clinical, regulatory, commercial and administrative personnel.

The Company’s lease agreement commenced May 2019 and has a term of six years with a five-year renewal option to extend the lease.

The Company has not included the five-year renewal option to extend the lease in its measurement of the right-of-use asset or lease liability.

The following table presents the maturities of the Company’s operating lease liability related to office space as of March 31, 2024, all of which is under a non-cancellable operating lease:

The Company has a material operating lease for its head office facility located in Boston, Massachusetts and other immaterial operating leases for certain equipment.

On May 2, 2024, the Company entered into an agreement to amend the current operating lease agreement for its head office facility.

Under the amendment, the current lease was extended for five years through July 31, 2030, with $ 5,694 committed to future lease payments.

The Company acquired Right of Use Assets of $ 3.1 million under the amended operating lease.

The Company measured the lease liability associated with the office lease modification using an incremental borrowing rate (“IBR”) of 13 %.

The Company estimated the IBR for the leased asset based on a range of comparable interest rates the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment.

As of June 30, 2024, the Company has not entered into any lease arrangements classified as a finance lease.

Rent expense, or operating lease costs, was $ 272 , $ 606 , $ 291 and $ 587 , for the three and six month periods ended June 30, 2024 and 2023.

Supplemental cash flow information related to the Company’s lease for the six months ended June 30, 2024 and 2023, includes cash payments of $ 421 and $ 413 , respectively, used in the measurement of its operating lease liability.

As of June 30, 2024, the Company’s operating lease liability has a weighted average remaining lease term of approximately five years .

The following table presents the maturities of the Company’s operating lease liability related to office space as of June 30, 2024, all of which is under a non-cancellable operating lease:

Operating Lease

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Intangible Assets

As of March 31, 2024

As of June 30, 2024

As of December 31, 2023

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Capitalized Milestones

As of March 31, 2024, the Company’s finite-lived net intangible assets, which totaled $ 6,815 resulted from the capitalization of certain milestone payments made to Ipsen Pharma, S.A.S., or Ipsen, in accordance with the terms of the Company’s license agreement with Ipsen, in connection with the Company’s first commercial sale of IMCIVREE in the U.S.

As of June 30, 2024, the Company’s finite-lived net intangible assets, which totaled $ 6,601 resulted from the capitalization of certain milestone payments made to Ipsen Pharma, S.A.S., or Ipsen, in accordance with the terms of the Company’s license agreement with Ipsen, in connection with the Company’s first commercial sale of IMCIVREE in the U.S.

in March 2021 and in France in March 2022.

As of March 31, 2024, amortization expense for the next five years and beyond is summarized as follows:

Amortization expense totaled $ 214 and $ 214 for the three months ended March 31, 2024 and 2023, respectively.

As of June 30, 2024, amortization expense for the next five years and beyond is summarized as follows:

Amortization expense totaled $ 214 , $ 427 , $ 214 , and $ 428 for the three and six months ended June 30, 2024 and 2023, respectively.

Amortization expense is included in cost of sales in the condensed consolidated statements of operations and comprehensive loss.

The Company recorded an income tax provision of approximately $ 300 for the three months ended March 31, 2024.

The Company recorded an income tax provision of approximately $ 479 and $ 779 for the three and six months ended June 30, 2024.

The income tax provision is a result of taxable income from the Company’s foreign jurisdictions.

The Company did not record an income tax provision for the three months ended March 31, 2023, as it generated sufficient tax losses during the period.

The Company expects to maintain a full valuation allowance against its net deferred tax assets for the year.

As of March 31, 2024, an aggregate of 15,285,096 shares of common stock was reserved for future issuance under the Company’s stock plans, including outstanding stock options, restricted stock units, and performance stock units that have been issued totaling 8,804,692 and 1,294,531 shares available for future grants under the Company’s 2017 Equity Employee Stock Purchase Plan.

The Company did not record an income tax provision for the three or six months ended June 30, 2023, as it generated sufficient tax losses during the period.

The Company expects to maintain a full valuation allowance against its net deferred tax assets for the year ended December 31, 2024.

Series A Convertible Preferred Stock

On April 1, 2024, the Company entered into an Investment Agreement (the “Investment Agreement”) with certain affiliates of Perceptive Advisors LLC (“Perceptive”) and certain other investors (each, an “Investor” and collectively, the “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” (the “Convertible Preferred Stock”), for an aggregate purchase price of $ 147,750 , net of $ 2,250 of issuance costs, or $ 1,000 per share (the “Issuance”).

The Issuance closed on April 15, 2024.

The Company determined the obligation to issue 150,000 shares of Convertible Preferred Stock to Perceptive and Investors in the future at a set price represented a forward contract which was required to be accounted for at fair value.

The fair value of the forward contract was measured as the difference between the fair value of the Series A Preferred Stock, as determined using a binomial lattice valuation model, and the consideration payable to the Company.

The assumptions used in the binomial lattice model include:

(1) the Company’s common stock price on the issuance and settlement dates;

(2) the Conversion Price as of $ 48.00 as per the Agreement;

(3) a 20-year term to maturity;

(4) an estimate of the Company’s credit risk-adjusted discount rate;

and (5) volatility.

The fair value of the forward contract upon issuance was determined to be $ 0 .

Upon closing, the value of the forward contract was determined to be $ 8,900 and the fair value of the Convertible Preferred Stock was determined to be $ 141,100 .

The Convertible Preferred Stock was recorded at its fair value on the Issuance and the change in fair value of the forward contract was recorded as other income in its consolidated statement of operations for the three months ended June 30, 2024.

Issuance costs of $ 2,250 were incurred and recorded as a reduction in the carrying value of the Convertible Preferred Stock in the three months ended June 30, 2024.

The Company classifies its Series A Convertible Preferred Stock outside of stockholders’ equity as the redemption of such shares is outside the Company’s control.

The Company did not adjust the carrying values of the Series A Convertible Preferred Stock to redemption value as the shares are not probable of becoming redeemable as of June 30, 2024.

The Convertible Preferred Stock has the following rights and privileges:

The Series A Preferred Stock will rank senior to the Company’s common stock with respect to the distribution of assets upon the Company’s liquidation, dissolution or winding up.

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (“Liquidation”), each holder of Convertible Preferred Stock shall be entitled to receive payment for the greater of (i) 1.75 multiplied by the sum of the Liquidation Preference (i.e., Initial Liquidation Preference of $ 1,000 per share plus Paid-in-Kind (“PIK”) Dividends) plus unpaid Regular Dividends (to the extent such accumulated and unpaid Regular Dividends are not included in such Liquidation Preference) or (ii) the amount such holder would have received if the Series A Preferred Stock were fully converted to common stock.

If the assets available for distribution are not sufficient to pay the holders of the Convertible Preferred Stock pursuant to the preceding sentence, the assets will be distributed ratably to the holders of the Convertible Preferred Stock.

Holders of the Convertible Preferred Stock have the right to vote with the holders of common stock on each matter submitted for a vote on an as-converted basis, subject to the terms of the Convertible Preferred Stock as specified in the Amended and Restated Certificate of Designations.

The holders of the Convertible Preferred Stock shall also have certain protective voting rights.

Specifically, as long as the Series A Preferred Stock are outstanding, each of the following events require at least a two thirds affirmative vote of the Series A Preferred Stock holders:

(a) any amendment or modification of the Certificate of Incorporation to authorize or create, or to increase the authorized number of shares of, any class or series of Dividend Parity Stock, Liquidation Parity Stock, Dividend Senior Stock or Liquidation Senior Stock, (b) any amendment, modification, repeal or waiver of any provision of the Certificate of Incorporation or the Amended and Restated Certificate of Designations that adversely affects the rights, preferences, privileges or powers of the Convertible Preferred Stock, (c) increase or decrease the number of authorized shares of Convertible Preferred Stock or issue additional shares of Convertible Preferred Stock, (d) the Company’s consolidation or combination with, or merger with or into, another Person, or any binding or statutory share exchange or involving the Convertible Preferred Stock, in each case unless:

(i) the Convertible Preferred Stock either (x) remains outstanding after such consolidation, combination, merger, share exchange or reclassification;

or (y) is converted or reclassified into, or is exchanged for, or represents solely the right to receive, preference securities of the continuing, resulting or surviving Person of such consolidation, combination, merger, share exchange or reclassification, or the parent thereof;

(ii) the Convertible Preferred Stock that remains outstanding or such preference securities, as applicable, have rights, preferences and voting powers that, taken as a whole, are not materially less favorable to the Holders or the holders thereof, as applicable, than the rights, preferences and voting powers, taken as a whole, of the Convertible Preferred Stock immediately before the consummation of such consolidation, combination, merger, share exchange or reclassification;

and (iii) the issuer of the Convertible Preferred Stock that remains outstanding or such preference securities, as applicable, is a corporation duly organized and existing under the laws of the United States of America, any State thereof or the District of Columbia that, if not the Company, will succeed to the Company under the Amended and Restated Certificate of Designations and the Convertible Preferred Stock.

The Company has the right to redeem all Convertible Preferred Stock after the Redemption Trigger Date, which is the fifth anniversary of the Initial Issue Date of April 15, 2024.

The amount payable on the redemption date is equal to the Liquidation Preference (i.e., Initial Liquidation Preference of $ 1,000 per share plus PIK Dividends) plus any unpaid Regular Dividends (to the extent such accumulated and unpaid Regular Dividends are not included in such Liquidation Preference).

If a change of control occurs, each holder shall have the right to require the Company to repurchase all, or any whole number of shares that is less than all, of the holder’s Series A Preferred Stock at an amount equal to 1.75 multiplied by the sum of the Liquidation Preference (i.e., Initial Liquidation Preference of $ 1,000 per share plus PIK Dividends) plus any unpaid Regular Dividends (to the extent such accumulated and unpaid Regular Dividends are not included in such Liquidation Preference).

As of June 30, 2024, the Company did not adjust the carrying value of the Series A Preferred Stock to its redemption value, since a change of control was determined to not be probable.

After the second anniversary, dividends on the Convertible Preferred Stock accrue quarterly, at a 6 % annual rate, and if not paid out in cash before the quarter end, will become PIK Dividends and added to the liquidation preference, or original issue price plus PIK Dividends.

Since dividends do not commence until the second anniversary of the Issuance, the Convertible Preferred Stock is considered increasing rate preferred stock.

Accordingly, the Company accretes the dividends, using the effective interest method, from Issuance to the first contractual call date, April 15, 2029.

The Company accrued dividends of $ 1,302 for the three months ended June 30, 2024, as a reduction to Additional Paid-In Capital and an increase to the carrying value of Convertible Preferred Stock.

The carrying value of Convertible Preferred Stock as of June 30, 2024 is $ 140,152 .

Holders of Convertible Preferred Stock have the option to convert any number of whole shares at any time.

The conversion is based on the sum of the Liquidation Preference plus unpaid Dividends divided by the $ 48.00 Conversion Price.

Given the Initial Liquidation Preference of $ 1,000 , each share of Convertible Preferred Stock would be convertible into 20.8333 shares of common stock, prior to any adjustments such as PIK Dividends, unpaid Dividends, stock splits, or voluntary conversion rate increases.

Upon conversion, cash will be paid in lieu of any fractional share of common stock.

However, based on certain restrictions on the conversion of the Convertible Preferred Stock specified in the Amended and Restated Certificate of Designations, a holder of Convertible Preferred Stock is not entitled to effect a conversion of any portion of its shares of Convertible Preferred Stock, or to vote in its capacity as a holder of shares of Convertible Preferred Stock with respect to matters submitted to holders of the common stock if, after giving effect to such conversion, that holder would beneficially own in excess of 4.99 %, in the case of one holder, or 9.99 %, in the case of the other holder, of the number of shares of common stock outstanding immediately after giving effect to such exercise.

On May 7, 2024, the Company filed an Amended and Restated Certificate of Designations in respect of the Convertible Preferred Stock containing certain technical amendments to the terms of the Convertible Preferred Stock.

The amendments contained in the Amended and Restated Certificate of Designations (x) limited the voting rights of the Convertible Preferred Stock to 24.9438 shares of the Company’s common stock per $ 1,000 liquidation preference of Convertible Preferred Stock and (y) eliminated a 1 % step up in the interest rate that otherwise would have applied in the unlikely event that the Company was required to obtain and failed to obtain stockholder approval for certain conversion shares underlying the Convertible Preferred Stock.

On July 10, 2024, the Company filed with the Securities Exchange Commission (the “SEC”) a prospectus supplement to the prospectus included in the Company’s registration statement on Form S-3ASR filed with the SEC on March 2, 2023, covering the resale from time to time by the Investors of up to an aggregate of 3,124,995 shares of common stock, to satisfy registration rights that the Company granted to such stockholders in connection with the Issuance.

As of June 30, 2024, an aggregate of 15,747,881 shares of common stock were reserved for issuance under the Company’s stock plans, which number includes stock options, restricted stock units, and performance stock units that have been granted covering 9,081,232 shares of common stock, 150,000 shares of Convertible Preferred Stock potentially convertible into 3,125,000 shares of common stock, and 1,888,797 shares of common stock that remain available for future grants under the Company’s 2017 Equity Incentive Plan (the “2017 Plan”), 2017 Employee Stock Purchase Plan and 2022 Employment Inducement Plan (the “Inducement Plan”).

On November 2, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”), pursuant to which the Company may issue and sell shares of its common stock, having an aggregate offering price of up to $ 100.0 million, from time to time through an “at the market” equity offering program under which Cowen acts as sales agent (the “ATM Program”).

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On February 29, 2024, the Company and Cowen entered into Amendment No.

1 to Sales Agreement (the “Amendment”) to increase the aggregate offering price of the shares of Common Stock that may be issued and sold pursuant to the Sales Agreement to $ 200,000,000 (excluding the aggregate offering price of shares of Common Stock

issued and sold pursuant to the Sales Agreement prior to February 29, 2024).

1 to Sales Agreement (the “Amendment”) to increase the aggregate offering price of the shares of common stock that may be issued and sold pursuant to the Sales Agreement to $ 200,000,000 (excluding the aggregate offering price of shares of common stock issued and sold pursuant to the Sales Agreement prior to February 29, 2024).

In connection with the Amendment, on February 29, 2024, the Company filed with the SEC a prospectus supplement, dated February 29, 2024, which, combined with the Base Prospectus (together, the “New Prospectus”), amended the Prior Prospectus in its entirety.

The issuances and sales under the Sales Agreement, as amended by the Amendment, will be made pursuant to the Registration Statement and the New Prospectus.

On February 9, 2022, the Company’s board of directors adopted the Rhythm Pharmaceuticals, Inc.

2022 Employment Inducement Plan or the Inducement Plan, without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules or Rule 5635(c)(4).

On January 4, 2024, the Company issued 432,143 shares of common stock as partial consideration for its acquisition of the worldwide rights to LGC’s proprietary compound LB54640.

On February 9, 2022, the Company’s board of directors adopted the Inducement Plan, without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules or Rule 5635(c)(4).

In accordance with Rule 5635(c)(4), awards under the Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s board of directors, or an employee who is being rehired following a bona fide period of non-employment by the Company or a subsidiary, as a material inducement to the employee’s entering into employment with the Company or its subsidiary.

An aggregate of 1,000,000 shares of the Company’s common stock have been reserved for issuance under the Inducement Plan.

The Company will continue to grant awards under the 2017 Plan pursuant to the terms thereof.

The exercise price of stock options granted under the Inducement Plan will not be less than the fair market value of a share of the Company’s common stock on the grant date.

The Company continues to grant awards under the 2017 Plan pursuant to the terms thereof.

The exercise price of stock options granted under the Inducement Plan is not less than the fair market value of a share of the Company’s common stock on the grant date.

Other terms of awards, including vesting requirements, are determined by the Company’s board of directors and are subject to the provisions of the Inducement Plan.

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Stock options granted under the Inducement Plan expire no more than 10 years from the date of grant.

As of the three months ended March 31, 2024, 553,889 stock option awards have been issued under the Inducement Plan.

As of March 31, 2024, 281,196 restricted stock unit awards have been granted under the Inducement Plan.

As of March 31, 2024, 164,915 shares of common stock are available for future grant under the Inducement Plan.

On January 4, 2024, the Company issued 432,143 shares of common stock as partial consideration for its acquisition of the worldwide rights to LGC’s proprietary compound LB54640.

As of June 30, 2024, 574,353 stock option awards and 344,154 restricted stock unit awards have been granted under the Inducement Plan.

As of June 30, 2024, 81,493 shares of common stock are available for future grant under the Inducement Plan.

Related-Party Transactions

Expenses paid directly to related parties for the three months ended March 31, 2024 and 2023, were $ 135 and $ 322 , respectively.

Outstanding payments due to related parties as of March 31, 2024 and December 31, 2023 were $ 5 and $ 1 , respectively.

See also Note 13, “Subsequent Events” for disclosure regarding transactions after March 31, 2024.

Expenses paid directly to related parties for the three and six months ended June 30, 2024 and 2023, were immaterial.

Outstanding payments due to related parties as of June 30, 2024 and December 31, 2023 were immaterial.

Long-Term Obligations

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If the Investors have not received cumulative minimum payments equal to 60 % of the amount funded by the Investors to date by March 31, 2027, or 120 % of the amount funded by the Investors to date by March 31, 2029, we must make a cash payment immediately following each applicable date to the Investors sufficient to gross the Investors up to such minimum amounts after giving full consideration of the cumulative amounts paid by us to the Investors through each date, referred to as the Under Performance Payment.

As the repayment of the funded amount is contingent upon worldwide net product sales and upfront payments, milestones, and royalties, the repayment term may be shortened or extended depending on actual

worldwide net product sales and upfront payments, milestones, and royalties.

We made repayments of $ 2,783 in the three months ended March 31, 2024.

As of March 31, 2024 we have made cumulative payments of $ 10,313 .

We made repayments of $ 5,758 in the six months ended June 30, 2024.

As of June 30, 2024 we have made cumulative payments of $ 13,288 .

The Investors’ rights to receive the Revenue Interests will terminate on the date on which the Investors have received payments equal to a certain percentage of the funded portion of the Investment Amount including the aggregate of all payments made to the Investors as of such date, each percentage tier referred to as the Hard Cap, unless the RIFA is earlier terminated.

The total Revenue Interests payable by us to the Investors is capped between 185 % and 250 % of the Investment Amount paid, dependent on the aggregate royalty paid between 2028 and 2032.

If a change of control of occurs, the Investors may accelerate payments due under the RIFA up to the Hard Cap plus any other obligations payable under the RIFA.

If a change of control of occurs,

the Investors may accelerate payments due under the RIFA up to the Hard Cap plus any other obligations payable under the RIFA.

The repayment period commenced on July 8, 2022 for the Initial Investment Amount, and expires on the earlier of (i) the date at which the Investors received cash payments totaling an aggregate of a Hard Cap ranging from 185 % to 250 % of the Initial Investment Amount or (ii) the legal maturity date of July 8, 2034.

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We determined the fair value of the derivative using an option pricing Monte Carlo simulation model taking into account the probability of change of control occurring and potential repayment amounts and timing of such payments that would result under various scenarios, as further described in Note 2, “Summary of Significant Accounting Policies” to our condensed consolidated financial statements.

The aggregate fair value of the embedded derivative liability was $ 660 and $ 1,150 as of March 31, 2024 and December 31, 2023, respectively.

The aggregate fair value of the embedded derivative liability was $ 360 and $ 1,150 as of June 30, 2024 and December 31, 2023, respectively.

We will remeasure the embedded derivative to fair value each reporting period until the time the features lapse and/or termination of the deferred royalty obligation.

For the three months ended March 31, 2024 and 2023, we recognized other income of $ 490 and $ 50 , respectively, due to the remeasurement of the embedded derivative liability.

The carrying value of the deferred royalty obligation as of March 31, 2024 was $ 107,368 based on $ 100,000 of proceeds, net of the fair value of the bifurcated embedded derivative liability upon execution of the RIFA, and debt issuance costs incurred.

The carrying value of the deferred royalty obligation approximated fair value as of March 31, 2024 and December 31, 2023.

The effective interest rate as of March 31, 2024 was 15.15 %.

For the three and six months ended June 30, 2024 and 2023, we recognized other income of $ 490 and $ 50 , respectively, due to the remeasurement of the embedded derivative liability.

The carrying value of the deferred royalty obligation as of June 30, 2024 was $ 108,372 based on $ 100,000 of proceeds, net of the fair value of the bifurcated embedded derivative liability upon execution of the RIFA, and debt issuance costs incurred.

The carrying value of the deferred royalty obligation approximated fair value as of June 30, 2024 and December 31, 2023.

The effective interest rate as of June 30, 2024 was 14.93 %.

In connection with the deferred royalty obligation, we incurred debt issuance costs totaling $ 3,287 .

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Subsequent Events

The Issuance closed on April 15, 2024.

Prior to the closing of the Issuance, certain of the investors and certain of their affiliated entities held over 5 % of the Company’s common stock, par value $ 0.001 per share (the “Common Stock”).

On May 2, 2024, the Company entered into an agreement to amend the current material operating lease agreement for its head office facility located at 222 Berkeley Street in Boston, Massachusetts.

Under the amendment, the current lease has been extended for five years through July 31, 2030, with $ 5,694 committed to future lease payments.

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure.

Subsequent events have been evaluated as required.

No events or transactions occurred subsequent to the balance sheet date that require disclosure.

Commitments and Contingencies

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Additionally, the Company is party to various contracts with CROs and CMOs that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement.

Based on the Company’s current development plans as of March 31, 2024, the Company does not expect to make milestone payments due to third parties during the next 12 months from the filing of this Annual Report on Form 10-K, in connection with our license agreements.

Based on the Company’s current development plans as of June 30, 2024, the Company does not expect to make milestone payments due to third parties during the next 12 months from the filing of this Annual Report on Form 10-K, in connection with our license agreements.

These milestones are generally recognized in the period in which the achievement of the underlying milestones becomes probable.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements