On Wednesday, Rhythm Pharmaceuticals (NASDAQ:RYTM), Inc., a Delaware-based biopharmaceutical company, announced the filing of a prospectus supplement with the U.S. Securities and Exchange Commission (SEC). This filing allows certain shareholders to resell up to 3,124,995 shares of the company’s common stock.
The resale is part of the company’s obligations under registration rights granted to these stockholders following the issuance and sale of 150,000 shares of Series A Convertible Preferred Stock in April 2024. The preferred stock sale, which took place on April 15, 2024, raised an aggregate purchase price of $150 million.
The shares of common stock mentioned in the prospectus supplement are related to the conversion of the previously sold Series A Convertible Preferred Stock. The prospectus supplement is part of the company’s existing registration statement on Form S-3ASR (File No. 333-270233), initially filed on March 2, 2023.
Latham & Watkins LLP, legal advisors to Rhythm Pharmaceuticals, provided an opinion on the validity of the shares that are subject to resale. This opinion is included as Exhibit 5.1 in the filing and is incorporated by reference into the registration statement.
Rhythm Pharmaceuticals, trading under the ticker NASDAQ:RYTM, focuses on developing and commercializing therapies for rare genetic disorders of obesity. The company operates from its headquarters at 222 Berkeley Street, 12th Floor, Boston, MA.
This announcement is strictly informational, based on the company's SEC filing, and does not constitute an offer to sell or a solicitation of an offer to buy any securities. It is intended to provide current and potential investors with the latest corporate developments regarding the availability of these shares for resale in the market.
For further details, investors and shareholders may refer to the full SEC filing by Rhythm Pharmaceuticals.
In other recent news, Rhythm Pharmaceuticals has seen significant developments in its operations. The biopharmaceutical company has reported a robust first quarter in 2024, with a consistent demand for IMCIVREE and an increase in prescriptions and reimbursement approvals. In addition, the company raised $150 million through convertible preferred shares, extending its financial runway into 2026.
Rhythm Pharmaceuticals also announced the return of Alastair Garfield, Ph.D., as its Chief Scientific Officer. Garfield's expertise in appetite and body weight regulation is expected to be instrumental as the company furthers its development of melanocortin-4 receptor (MC4R) pathway therapies.
On the clinical front, the company reported beneficial changes in sleep and energy levels in participants of a Phase 2 trial for hypothalamic obesity during treatment with setmelanotide. Moreover, the European Medicines Agency's Committee for Medicinal Products for Human Use has endorsed the company's obesity drug, IMCIVREE, for use in children aged 2 to 6 years with certain rare genetic disorders.
However, BofA Securities recently downgraded Rhythm Pharmaceuticals from 'Buy' to 'Neutral' due to slower-than-anticipated sales of Imcivree, particularly for Bardet-Biedl Syndrome. Despite this, the company remains optimistic about its business growth and expansion. These are the recent developments in Rhythm Pharmaceuticals.
InvestingPro Insights
As Rhythm Pharmaceuticals, Inc. navigates the biopharmaceutical market, recent data from InvestingPro provides a snapshot of the company's financial health and stock performance. With a market capitalization of $2.71 billion, the company's impressive gross profit margins stand at 88.37%, reflecting a strong ability to control costs relative to revenue.
Despite facing challenges such as a net income drop expected this year and a current non-profitable status, Rhythm Pharmaceuticals has demonstrated significant stock growth, with a 176.38% return over the last year and a 10.12% return in just the past week.
InvestingPro Tips highlight the company's liquid assets, which comfortably cover short-term obligations, indicating a healthy liquidity position. Moreover, analysts have revised their earnings upwards for the upcoming period, suggesting potential optimism in the company's future performance.
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