RHYTHM PHARMACEUTICALS, INC. 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the “safe harbor” created by those sections. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including without limitation statements regarding: the promise or potential of any of our products or product candidates; the marketing, commercialization, and sales of IMCIVREE (setmelanotide), including marketing approval in Japan and the timing thereof; 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 financial performance, including our expectations regarding our existing cash, operating losses, expenses and sources of future financing; the sufficiency of our cash, cash equivalents and short-term investments to fund our operations; our ability to hire and retain necessary personnel; patient enrollments and the timing thereof; the timing of announcements regarding results of clinical trials; 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; our marketing, commercial sales, revenue generation, and cost of revenue; expectations surrounding our manufacturing arrangements; the impact of the current or future economic conditions on our business and operations and our future financial results; and other statements identified by words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “likely,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms are forward-looking statements. These forward-looking statements are neither promises nor guarantees of future performance, and are subject to a variety of known and unknown risks, uncertainties, and other important factors, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in such forward-looking statements. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this report, including but not limited to those set forth in Part II, Item 1A under the heading “Risk Factors” of this Quarterly Report on Form 10-Q. Except as may be required by law, we have no plans to update our forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Overview We are a global, commercial-stage biopharmaceutical company dedicated to transforming the lives of patients living with rare neuroendocrine diseases. 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-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. IMCIVREE is approved by the U.S. Food and Drug Administration (FDA) to reduce excess body weight and maintain weight reduction long term in adult and pediatric patients aged 4 years and older with acquired HO and in adult and pediatric patients aged 2 years and older with syndromic or monogenic obesity due to BBS or pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1), or leptin receptor (LEPR) deficiency as determined by genetic testing demonstrating variants in POMC, PCSK1, or LEPR genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance (VUS). The European Commission (EC) has authorized IMCIVREE for the treatment of obesity and the control of hunger in adults and children 4 years of age and above with acquired hypothalamic obesity (aHO) due to hypothalamic injury or impairment, and 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 United Kingdom’s Medicines & Healthcare Products Regulatory Agency (MHRA) has 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 26 Table of Contents 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. IMCIVREE’s label expansion to treat patients living with acquired HO was approved by the U.S. FDA on March 19, 2026, and a similar expansion of its marketing authorization was approved by the European Commission on April 30, 2026, making it the first approved therapy in the United States and the first approved therapy in Europe for patients with this rare disease. These approvals were supported by the positive pivotal Phase 3 TRANSCEND trial of setmelanotide in 142 patients with acquired HO. The global study met its primary endpoint, with a statistically significant -18.4% placebo-adjusted reduction in body mass index (BMI). For the primary endpoint of mean BMI change from baseline, study participants on setmelanotide therapy (n=94) achieved a -15.8% reduction compared with a +2.6% increase among patients on placebo (n=48) at 52 weeks (p<0.0001). Setmelanotide was generally well tolerated in the Phase 3 trial. The most common adverse events (affecting >20% of participants) were skin hyperpigmentation, nausea, vomiting and headache. In addition, on May 5, 2026, we announced that our Japanese New Drug Application (JNDA) for setmelanotide to treat acquired HO was accepted, validated and is now under review by Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) . We anticipate PMDA's decision on the application in the second half of 2026 and, if positive, expect commercial launch by the end of 2026. Acquired hypothalamic obesity is a rare form of obesity that occurs following damage to the hypothalamic region of the brain. This disease most frequently follows the growth or surgical removal of craniopharyngioma, astrocytoma or other rare brain tumors. Additional causes of injury may include traumatic brain injury, stroke, or inflammation. Patients experience accelerated weight gain, a reduction in energy expenditure, and hyperphagia (a chronic pathological condition characterized by insatiable hunger, impaired satiety, and persistent abnormal food-seeking behaviors) leading to accelerated onset of severe obesity. 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. Our MC4R pathway program is designed to expand the total number of patients who we believe would benefit from setmelanotide therapy or advance one of our other drug candidates, including RM-718, which is designed to be a more selective MC4R agonist with weekly administration, and bivamelagon, an investigational oral small molecule MC4R agonist in Phase 2 clinical trials. As mentioned above, our Phase 3 trial of setmelanotide in patients with acquired HO met the primary and key secondary endpoints, and we have initiated an additional, independent substudy in patients with congenital hypothalamic obesity as part of that trial. We are advancing our next-generation MC4R agonists in clinical trials. In July 2025, we announced bivamelagon achieved statistically significant and clinically meaningful BMI reductions at 14 weeks of treatment in a Phase 2 trial in patients with acquired HO. We also 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. We also are advancing MC4R agonists with the intention to improve the treatment landscape for patients living with Prader‑Willi syndrome (PWS), a rare, complex genetic neurodevelopmental disorder characterized by hyperphagia, severe obesity risk, and significant metabolic, cognitive, and behavioral complications. PWS affects approximately one in 10,000 to 30,000 individuals worldwide, and approximately 20,000 patients in the United States. Based on the central role of MC4R pathway dysfunction in PWS, we believe that targeting this biology represents a compelling therapeutic approach. On December 11, 2025, we announced positive interim results from our exploratory Phase 2 trial of setmelanotide in patients with PWS. Setmelanotide demonstrated BMI and hyperphagia reductions at month 3 and month 6, as well as safety and tolerability results consistent with setmelanotide’s well-established clinical profile. In addition to this ongoing trial of setmelanotide, we have begun enrolling patients in a Phase 2 trial evaluating RM-718 in PWS. We continue to leverage what we believe is the largest known DNA database focused on obesity - with approximately 120,000 sequencing samples as of December 31, 2025 - 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 did not achieve the primary endpoint in each of its four independent substudies evaluating setmelanotide in genetically caused MC4R pathway diseases, but we did see positive signals in two genetic indications. We continue to analyze the EMANATE results and evaluate potential clinical development paths to develop one of our product candidates in patients with SRC1 (NCOA1) deficiency and POMC insufficiency, including with our next-generation MC4R agonists bivamelagon or RM-718. In addition, we plan to continue to evaluate the potential for MC4R agonism in the genes and gene families previously identified through the exploratory Phase 2 DAYBREAK trial, including the SEMA3 family, PHIP, TBX3 or PLXNA family. Our sequencing-based epidemiology estimates show that each of these genetically-defined 27 Table of Contents MC4R pathway deficiencies are considered rare diseases, according to established definitions based on patient populations. Our epidemiology estimates are approximately 4,600 to 7,500 for U.S. patients in setmelanotide's initial FDA-approved indications, including obesity due to biallelic POMC, PCSK1 or LEPR deficiencies, and BBS. Our epidemiology estimates for the two more prevalent indications studied in our Phase 3 EMANATE trial (SRC1 deficiency and POMC/PCSK1 insufficiency) suggest that approximately 26,000 U.S. patients with one of these genetically driven obesities have the potential to respond well to setmelanotide. Similarly, our epidemiology estimates for patients with genetic indications who demonstrated an initial response following stage 1 of our Phase 2 DAYBREAK trial is approximately 65,300. We believe that all these patients face similar challenges as other patients with rare diseases, namely lack of awareness, resources, tests, tools and, especially, therapeutic options. Additional recent clinical, regulatory, corporate and commercial updates include: • On May 5, 2026, we announced that more than 150 patient start forms had been received for IMCIVREE in acquired hypothalamic obesity (HO) in the United States, within the first six weeks following approval by the U.S. Food and Drug Administration on March 19, 2026; • On May 5, 2026 we announced revenue from global sales of IMCIVREE was $60.1 million for the first quarter of 2026, an increase of 5% on a sequential basis from the fourth quarter of 2025, primarily driven by sales of IMCIVREE for the treatment of patients with Bardet-Biedl syndrome (BBS) and an increase in the number of patients on reimbursed therapy globally. In the first quarter of 2026, revenue of $36.9 million, or 61% of product revenue, was generated in the United States, a decrease of 5% on a sequential basis primarily driven by specialty pharmacy inventory and some patients receiving drug under the Company’s bridging program as they transitioned insurance plans during the quarter. Revenue of $23.2 million, or 39% of product revenue, was generated outside the United States, a sequential increase of $4.9 million or 27%; • On May 5, 2026, we announced positive data from the Japanese cohort of our Phase 3 TRANSCEND study and that our New Drug Application for setmelanotide to treat acquired HO has been accepted, validated and is now under review by Japan’s Pharmaceuticals and Medical Devices Agency (PMDA). We anticipate PMDA's decision on the application in the second half of 2026 and, if positive, commercial launch by the end of 2026; • On May 4, 2026, we announced new data presented at the Pediatric Endocrine Society Annual Meeting demonstrating sustained reductions in BMI and BMI Z‑score through 2.5 years of setmelanotide treatment and observed weight category improvements in pediatric patients (n=10) with acquired hypothalamic obesity and a second presentation demonstrating weight category improvement in the pediatric subpopulation of participants after 1 year of setmelanotide treatment; • On April 3, 2026, we announced the appointment of Kim Popovits to our Board of Directors and the resignation of Ed Mathers. • On March 26, 2026, the EMA's CHMP adopted a positive opinion recommending to expand the current marketing authorization for IMCIVREE ® (setmelanotide) to include the treatment of obesity and the control of hunger in adults and children 4 years of age and above with acquired HO due to hypothalamic injury or impairment; • On March 19, 2026, the FDA approved a label expansion for IMCIVREE to reduce excess body weight and maintain reduction long term in adults and pediatric patients aged 4 years and older with acquired HO; • On March 16, 2026, we announced topline results from the Phase 3 EMANATE trial. None of the trial’s four sub-studies met the primary endpoint, which was the difference in mean percent change in BMI from baseline to Week 52 versus placebo, analyzed in the modified intent-to-treat (ITT) population using prespecified multiple imputation to account for missing values and discontinuations. Topline results include: ◦ POMC / PCSK1 Hets (N=78): –4.3% placebo-adjusted reduction in BMI (p=0.15); ◦ LEPR Hets (N=23): –3.6% placebo-adjusted reduction in BMI (p=0.94); ◦ SRC1 (NCOA1) (N=73): –4.0% placebo-adjusted reduction in BMI (p=0.12); and ◦ SH2B1 (N=121): –1.7% placebo-adjusted reduction in BMI (p=0.43). 28 Table of Contents • According to post hoc analyses based on last observation carried forward (LOCF) for missing values, setmelanotide achieved statistically significant and clinically meaningful BMI reductions at Week 52 in the modified intent-to-treat patient populations in the POMC/PCSK1 Hets and SRC1 substudies: ◦ –5.5% least-squares mean difference in BMI in POMC/PCSK1 Hets patients (n=78; p=0.0010); and ◦ –6.2% least-squares mean difference in BMI in SRC1 (NCOA1) patients (n=73; p<0.0001). • According to post hoc analyses of genetically confirmed patients who reached Week 52 of treatment, setmelanotide achieved statistically significant and clinically meaningful BMI reductions in patients who completed the 52-week trial in the POMC/PCSK1 Hets and SRC1 substudies: ◦ –9.7% placebo-adjusted reduction in BMI in POMC/PCSK1 Hets patients (n=41; p=0.0002); and ◦ –8.0% placebo-adjusted reduction in BMI in SRC1 (NCOA1) patients (n=29; p=0.0158). • On February 26, 2026, we announced completion of an end-of-Phase-2 meeting with FDA regarding bivamelagon in acquired HO and disclosed encouraging open-label extension data from our Phase 2 trial that showed bivamelagon achieved persistent BMI reductions at six and nine months of therapy. We currently anticipate the following, near-term milestones: • Announce six-month results from the ongoing exploratory Phase 2 trial of setmelanotide in PWS in the second quarter of 2026; • European Commission decision on the Type II Variation for IMCIVREE in acquired hypothalamic obesity in the second quarter of 2026; • Announce results from the Phase 1/2, Part C trial evaluating the weekly, MC4R agonist RM-718 in patients with acquired HO mid-year 2026; • Complete enrollment in the substudy evaluating setmelanotide in congenital HO in the second half of 2026; • Complete enrollment in the Phase 1/2, Part D trial evaluating RM-718 in PWS in the second half of 2026; and • Initiate a pivotal Phase 3 trial evaluating bivamelagon in acquired HO by year-end 2026. Following IMCIVREE's initial approval in the United States and marketing authorizations in the EU, Great Britain and Canada, 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. We may enter into arrangements with other parties for certain markets outside the United States. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. 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. Since our inception, we have raised funds through the issuance of common and preferred equity, the sale of assets and a Revenue Interest Financing Agreement, or RIFA. We expect 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. We may enter into collaborations with other parties for certain markets outside the United States. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. 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. 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 29 Table of Contents of building a similar infrastructure in several European markets and the United Kingdom. We may enter into collaborations with other parties for certain markets outside the United States. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. 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 March 31, 2026, we had an accumulated deficit of $1.4 billion. Our net loss was $55.6 million and $49.5 million for the three months ended March 31, 2026 and March 31, 2025. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our expenses may increase in connection with our ongoing activities, as we: • continue to conduct clinical trials for setmelanotide and our other product candidates ; • engage contract manufacturing organizations, or CMOs, for the manufacture of clinical and commercial-grade setmelanotide; • seek regulatory approval for setmelanotide for future indications, and for our other product candidates ; • expand our clinical and financial operations and build a marketing and commercialization infrastructure ; • engage in the sales and marketing efforts necessary to support the continued commercial efforts of IMCIVREE globally; • take into account the levels, timing and collection of revenue earned from sales of IMCIVREE and other products approved in the future, if any; and • continue to operate as a public company. As of March 31, 2026, our existing cash and cash equivalents and short-term investments were approximately $340.6 million. We expect that our cash and cash equivalents and short-term investments as of March 31, 2026, will be sufficient to fund our planned operations for at least 24 months. Financial Operations Overview Product revenue, net Revenues from product sales are recorded at the net sales price, or the transaction price, which includes estimates of variable consideration for which reserves are established and which result from discounts, rebates, and co-pay assistance that are offered within contracts between us and our customers, health care providers and other indirect customers relating to the sale of IMCIVREE. To date, we have generated approximately $482.6 million in product revenue. Our lead product candidate, IMCIVREE, was approved by the FDA in November 2020 for chronic weight management in adult and pediatric patients six years of age and older with obesity due to POMC, PCSK1 or LEPR deficiency confirmed by genetic testing. IMCIVREE became commercially available in the United States in the first quarter of 2021. We recorded our first sales of IMCIVREE in the United States in March 2021 and we made our first sales in the EU in March 2022 under the paid early access program. IMCIVREE was approved by the FDA and the EC in adult and pediatric patients six years of age and older with obesity due to BBS in June and September 2022, respectively. In March 2026, IMCIVREE was approved by the FDA to reduce excess body weight and maintain reduction long term in adult and pediatric patients aged 4 years and older with acquired hypothalamic obesity (aHO). Following these initial approvals, sales of IMCIVREE have grown, and we expect will continue to grow. License revenue In the three months ended March 31, 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, 30 Table of Contents 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 All of our inventory of IMCIVREE produced prior to FDA approval is available for commercial or clinical use. Most of the manufacturing costs have been recorded as research and development expenses in prior periods. We expect cost of sales to increase in 2026 as we continue to sell inventory that is produced after we began capitalizing manufacturing costs for IMCIVREE commercial inventory. Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery and genetic sequencing efforts, and the clinical development of setmelanotide, which include: • expenses incurred under agreements with third parties, including CROs that conduct research and development and preclinical activities on our behalf, and the cost of consultants and CMOs that manufacture drug products for use in our preclinical studies and clinical trials; • employee-related expenses including salaries, benefits and stock-based compensation expense; • the cost of lab supplies and acquiring, developing and manufacturing preclinical and clinical study materials; • the cost of genetic sequencing of potential patients in clinical studies; and • facilities, depreciation, and other expenses, which include rent and maintenance of facilities, insurance and other operating costs. We expense research and development costs to operations as incurred. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The capitalized amounts are expensed as the related goods are delivered or the services are performed. The following table summarizes our current research and development expenses: Three Months Ended March 31, Research and development summary 2026 2025 Research and development expense 41,725 36,973 We are unable to predict the duration and costs of the current or future clinical trials of our product candidates. The duration, costs, and timing of clinical trials and development of setmelanotide, RM-718, bivamelagon, and a potential therapeutic product candidate for congenital hyperinsulinism (CHI) will depend on a variety of factors, including: • the scope, rate of progress, and expense of our ongoing, as well as any additional, clinical trials and other research and development activities; • the rate of enrollment in clinical trials; • the safety and efficacy demonstrated by setmelanotide and other product candidates in future clinical trials; • changes in regulatory requirements; • changes in clinical trial design; and • the timing and receipt of any regulatory approvals. A change in the outcome of any of these variables with respect to the development of our product candidates would significantly change the costs and timing associated with its development and potential commercialization. 31 Table of Contents Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to increase significantly for the foreseeable future as our setmelanotide and other development programs progress. However, we do not believe that it is possible at this time to accurately project total program-specific expenses to commercialization and there can be no guarantee that we can meet the funding needs associated with these expenses. Selling, general and administrative expenses Selling expenses consist of professional fees related to preparation for the continued commercialization of setmelanotide, as well as salaries and related benefits for commercial employees, including stock-based compensation. As we further implement and execute our commercialization plans to market setmelanotide in new territories and as we explore new collaborations to develop and commercialize setmelanotide, we anticipate that these expenses will materially increase. General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, relating to our full-time employees not involved in R&D or commercial activities. Other significant costs include rent, information technology, legal fees relating to patent and corporate matters and fees for accounting and consulting services. The following table summarizes our current selling, general and administrative expenses: Three Months Ended March 31, Selling, general and administrative summary 2026 2025 Selling, general and administrative expense 63,591 39,087 We anticipate that our selling, general and administrative expenses will increase in the future to support our continued and expanding commercialization efforts for IMCIVREE in the United States and the European Union as well as increased costs of operating as a global, commercial-stage biopharmaceutical public company. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, compliance with local rules and regulations in the United States and foreign jurisdictions, exchange listing and Securities and Exchange Commission, or SEC, expenses, insurance and investor relations costs, among other expenses. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States, or GAAP. 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. Actual results may differ from these estimates under different assumptions or conditions. There were no significant changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. 32 Table of Contents Results of Operations Comparison of the three months ended March 31, 2026 and 2025 The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025, together with the changes in those items in dollars and as a percentage: Three Months Ended March 31, Change 2026 2025 $ % (in thousands) Statement of Operations Data: Product revenue, net $ 60,112 $ 37,718 $ 22,394 59 % License revenue, net — (5,014) 5,014 (100 %) Total revenues 60,112 32,704 27,408 84 % Costs and expenses: Cost of sales 7,157 3,648 3,509 96 % Research and development 41,725 36,973 4,752 13 % Selling, general, and administrative 63,591 39,087 24,504 63 % Total costs and expenses 112,473 79,708 32,765 41 % Loss from operations (52,361) (47,004) (5,357) 11 % Other income (expense), net (2,733) (2,414) (319) 13 % Loss before income taxes (55,094) (49,418) (5,676) 11 % Provision for income taxes 545 80 465 581 % Net loss $ (55,639) $ (49,498) $ (6,141) 12 % Product revenue, net . Product revenue, net increased by $22.4 million to $60.1 million for the three months ended March 31, 2026 from $37.7 million for the three months ended March 31, 2025, an increase of 59%, primarily due to higher volume of product sold both domestically and internationally. We expect our sales of IMCIVREE to continue to increase. We have achieved market access for 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 March 31, 2026, and 2025, a substantial amount of our product revenue, or 61% and 65%, respectively, was generated from sales of our product to patients in the United States. License revenue . For the three months ended March 31, 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. Cost of sales. Cost of sales increased by $3.5 million to $7.2 million for the three months ended March 31, 2026, from $3.6 million for the three months ended March 31, 2025, an increase of 96%, which was driven by an increase in net product revenue in the three months ended March 31, 2026 . 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 EU, the cost of product, as well as costs associated with our patient assistance programs. Specifically, the $3.5 million increase in cost of sales in the three months ended March 31, 2026, from the same period in 2025, was due to $1.1 million of additional royalties due to our growth in net product revenue and $2.4 million attributed to increased product costs associated with higher net product revenue. 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. 33 Table of Contents Research and development expense. Research and development expense increased by $4.8 million to $41.7 million for the three months ended March 31, 2026, from $37.0 million for the three months ended March 31, 2025, an increase of 13%. The net increase was primarily due to the following: • an increase of $7.0 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 $2.5 million of stock-based compensation; and • an increase in patents, licenses and other regulatory costs of $0.6 million. The above increases were partially offset by: • a net decrease in clinical trial expenses of $1.7 million driven primarily by a decrease in costs due to the wind down or conclusion of various studies including our long-term extension trial, DAYBREAK Phase 2, EMANATE Phase 3, and Phase 3 HO Setmelanotide trial, and • a net decrease of $1.4 million due to the timing of chemistry, manufacturing, and controls (CMC) costs for drug formulation and autoinjector development to support our ongoing clinical trials. Selling, general and administrative expense. Selling, general and administrative expense increased by $24.5 million to $63.6 million for the three months ended March 31, 2026, from $39.1 million for the three months ended March 31, 2025, an increase of 63%. The increase was primarily due to the following: • an increase of $20.1 million related to personnel costs including $7.8 million of stock-based compensation, and $12.3 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 $3.6 million related to increased marketing and promotion costs to support continued product revenue growth and our product launch for acquired Hypothalamic Obesity. Other income (expense), net. Other expense, net increased by $(0.3) million to $(2.7) million for the three months ended March 31, 2026 from $(2.4) million for the three months ended March 31, 2025. The increases were primarily due to the following: • an increase of $0.8 million in unrealized loss on foreign currency • an increase in other expense of $0.3 million recognized on the change in fair value of the embedded derivative on our deferred royalty obligation • an increase of $0.2 million in interest expense related to our deferred royalty obligation. These increases were partially offset by: • a decrease of $1.1 million of non-cash interest expense in the three months ended March 31, 2026, associated with accretion of LG Chem liability, which was paid in July 2025. Liquidity and Capital Resources As of March 31, 2026, our cash and cash equivalents and short-term investments were approximately $340.6 million. 34 Table of Contents Cash flows The following table provides information regarding our cash flows for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, 2026 2025 (in thousands) Net cash (used in) provided by: Operating activities (44,185) (40,351) Investing activities 57,052 24,812 Financing activities (5,400) 32,499 Effect of exchange rates on cash 448 (2) Net increase (decrease) in cash, cash equivalents and restricted cash $ 7,915 $ 16,958 Net cash used in operating activities 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 $44.2 million for the three months ended March 31, 2026 and consisted primarily of a net loss of $55.6 million adjusted for non-cash items of $28.5 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. Additionally, the change in operating assets and liabilities used net cash of approximately $17.0 million and was primarily driven by net increases in accounts receivable of $8.1 million, primarily due to the increase in product revenue, the change in prepaid expenses and other current assets of $0.5 million, the change in inventory of $3.1 million, the change in deferred revenue of $0.1 million, and the decrease in accounts payable, accrued expenses and other liabilities of $5.6 million. These net uses of cash were offset by a decrease in other long-term assets of $0.4 million. Net cash used in operating activities was $40.4 million for the three months ended March 31, 2025 and consisted primarily of a net loss of $49.5 million adjusted for non-cash items of $17.1 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 and the change in the fair value of our embedded derivative asset. The change in operating assets and liabilities used net cash of approximately $7.9 million and was primarily driven by net decreases in accounts payable and accrued expenses of $3.6 million, the change in deferred revenue of $1.3 million, and net increases in prepaids and other current assets of $3.2 million. These net uses of cash were offset by net increases in other long-term assets of $0.1 million and net increases in accounts receivable and inventory of $0.1 million. Net cash provided by investing activities Net cash provided by investing activities was $57.1 million for the three months ending March 31, 2026 and relates to purchases of short-term investments for $42.2 million, offset by gross maturities of short-term investments of $99.3 million. Net cash provided by investing activities was $24.8 million for the three months ended March 31, 2025 and relates to gross maturities of short-term investments of $58.3 million, offset by purchases of short-term investments for $33.5 million. Net cash provided by financing activities Net cash used in financing activities was $5.4 million for the three months ended March 31, 2026, and consisted of proceeds of $7.3 million from the exercise of stock options and the issuance of common stock from our Employee Stock Purchase Plan. These proceeds were offset by $4.3 million of repayments of our deferred royalty obligation and $8.5 million for the net settlement of equity awards. 35 Table of Contents Net cash provided by financing activities was $32.5 million for the three months ended March 31, 2025, and consisted of net proceeds of $34.0 million from our ATM equity offering, as well as proceeds of $3.1 million from the exercise of stock options and the issuance of common stock from our Employee Stock Purchase Plan. These proceeds were offset by $4.6 million of repayments of our deferred royalty obligation. Funding requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the clinical development of and seek marketing approval for setmelanotide for future indications, continue the clinical development of our other product candidates and build out our global organization. In addition, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators. 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 March 31, 2026 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 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. Our future capital requirements will depend on many factors, including: • the cost to continue to commercialize setmelanotide, by growing our internal sales force or entering into collaborations with third parties and providing support services for patients; • the scope, progress, results and costs of clinical trials for our setmelanotide program as well as for RM-718 and bivamelagon, and in connection with a therapeutic product candidate for CHI ; • the costs, timing and outcome of regulatory review of our setmelanotide program as well as for RM-718 and bivamelagon, and in connection with a therapeutic product candidate for CHI ; • the obligations owed to Ipsen, Camurus AB, and LGC pursuant to our license agreements; • the extent to which we acquire or in-license other product candidates and technologies; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • our ability to establish and maintain additional collaborations on favorable terms, if at all; and • the costs of operating as a public company. Although IMCIVREE has been approved by the FDA in certain indications, and became commercially available in the first quarter of 2021, IMCIVREE may not achieve commercial success. In addition, developing our setmelanotide program is a time-consuming, expensive and uncertain process that may take years to complete, and we may never generate the necessary data or results required to obtain future marketing approvals and achieve product sales. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. 36 Table of Contents Further, the global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines and fluctuations in consumer confidence and economic growth, increases in unemployment rates, the imposition of tariffs and other trade barriers, uncertainty about economic stability, and rising political uncertainty. Any of these factors could impact our liquidity and future funding requirements, including but not limited to our ability to raise additional capital when needed on acceptable terms, if at all. The duration of this economic slowdown is uncertain and the impact on our business is difficult to predict. See “Risk Factors— Unfavorable global political or economic conditions could adversely affect our business, financial condition or results of operations.” Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, involves agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our setmelanotide program on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our setmelanotide program that we would otherwise prefer to develop and market ourselves. ATM Program On November 2, 2021, we entered into a Sales Agreement (the "Prior Sales Agreement") with TD Securities (USA) LLC (“TD Cowen”), pursuant to which we may issue and sell shares of our 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 TD Cowen acts as sales agent (the “ATM Program”). Between August 10, 2023 and August 21, 2023, we sold approximately two million shares of our common stock in the ATM Program for net proceeds of approximately $48.9 million. On February 29, 2024, the Company and TD 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 Prior Sales Agreement to $200.0 million (excluding the aggregate offering price of shares of common stock issued and sold pursuant to the Prior Sales Agreement prior to February 29, 2024). In connection with the Amendment, on February 29, 2024, we filed with the SEC a prospectus supplement, dated February 29, 2024, related to the issuances and sales under the Prior Sales Agreement, as amended by the Amendment. From December 10, 2024 to December 31, 2024, the Company sold 744,595 shares of common stock in the ATM Program for net proceeds of $41.2 million as of December 31, 2024. The Company sold an additional 587,510 shares of common stock in the ATM Program from January 1, 2025 through January 21, 2025 for net proceeds of approximately $32.1 million in the quarter ending March 31, 2025. On February 26, 2026, the Company and TD Cowen entered into a new Sales Agreement (the “Sales Agreement”) pursuant to which the Company may issue and sell shares of its common stock, having an aggregate offering price of up to $200.0 million, through its ATM Program. The Sales Agreement supersedes the Prior Sales Agreement between TD Cowen and the Company, dated November 2, 2021, as amended on February 29, 2024, and the Prior Sales Agreement terminated upon the effectiveness of the Sales Agreement. In connection with the Sales Agreement, on February 26, 2026, the Company filed with the SEC a registration statement on Form S-3ASR containing a base prospectus and a prospectus supplement, each dated February 26, 2026, pursuant to which issuances and sales under the Sales Agreement will be made. Contractual obligations As of March 31, 2026, 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, 2025. 37 Table of Contents Item 3. Quantitative and Qualitative Disclosures About Market Risk As of March 31, 2026, 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, 2025.