OVERVIEW

Rhythm is a biopharmaceutical company developing peptide therapeutics for the treatment of gastrointestinal (GI) diseases and obesity, including obesity caused by genetic deficiencies in the MC4 pathway. Our lead product candidate, relamorelin, is a potent, best-in-class, Phase 2 ghrelin agonist for the treatment of diabetic gastroparesis, a GI complication of diabetes, and other GI functional disorders. We are also developing a second product candidate, RM-493, which is a potent, first-in-class, Phase 2-ready melanocortin-4 (MC4) receptor agonist for the treatment of obesity and obesity caused by genetic deficiencies in the MC4 pathway. We believe our product candidates, which are both administered by subcutaneous injection, and for which we have exclusive worldwide rights, have the potential to treat these diseases for which there are currently limited therapeutic options. We believe that ghrelin and MC4 are compelling targets because of their critical role in regulating GI function and metabolism, and that peptide therapeutics are well suited for activating these targets.

Obesity and diabetes are epidemic in the U.S. Genetic defects in the MC4 gene are the most common genetic cause of obesity. A 2005 epidemiological study performed in Europe reported a prevalence of 1%-2% of genetic defects in the MC4 gene in the obese population with a body mass index, or BMI, of greater than 30 kg/m2, and studies performed in both Europe and the United States, in 2000 and 2003, respectively, reported a prevalence of up to 4% of these genetic defects in more severely obese populations with a BMI of greater than 35 kg/m2. These prevalence rates suggest that there are approximately one million people in the United States with obesity caused by a mutation of the MC4 gene. These patients have a higher risk than the general population for early onset obesity and severe obesity and their complications such as diabetes. There are currently no approved drugs in the United States that have been studied in obesity due to MC4 deficiency.

Prader Willi syndrome (PWS), another form of genetic MC4 deficiency, is an orphan disease with a prevalence ranging from approximately one in 8,000 to one in 25,000 patients in the United States. A hallmark of the disease is severe hyperphagia—an overriding physiological drive to eat—leading to severe obesity and other complications. For PWS patients, obesity is the greatest threat to their health, and these patients are likely to die prematurely as a result of choking, stomach rupture, or from complications caused by morbid obesity. Currently, there is no approved treatment for the obesity and hyperphagia associated with PWS. Based on recent scientific studies, we believe that deficiencies in the MC4 pathway are a cause of the obesity and associated symptoms of PWS, such as hyperphagia, and that an MC4 agonist can directly impact these symptoms.

We have completed a Phase 1b proof-of-concept clinical trial with RM-493 in obese patients, including one cohort of patients with mutations in one of the MC4 receptor genes. This clinical trial demonstrated promising weight loss in these patients with a four-week treatment. We expect to initiate two Phase 2a clinical trials in patients with genetic deficiencies in the MC4 pathway by the end of 2014—one for the treatment of obesity in patients with a single mutation of the MC4 receptor gene, and one in patients with PWS.

Diabetic gastroparesis affects a large number of type 1 and type 2 diabetics. Diabetic gastroparesis is a disorder in which there is a substantial delay in stomach emptying along with characteristic symptoms of vomiting, nausea, abdominal pain, early satiety, and bloating. Moderate to severe diabetic gastroparesis results in significant debility and hospitalizations and can interfere with nutrition and the absorption of medications. An estimated 2.3 million type 1 and type 2 diabetic patients in the United States have moderate or severe gastroparesis symptoms. Available therapies to treat this disorder are limited and exhibit significant side effects. No new therapies have been approved in the United States for the treatment of gastroparesis in more than 30 years.

We have completed a Phase 2 clinical trial of relamorelin for the treatment of diabetic gastroparesis. Based on consultation with regulatory authorities, we expect to initiate a Phase 2b clinical trial for the treatment of diabetic gastroparesis by early 2015. The FDA has granted Fast Track designation to relamorelin for the treatment of diabetic gastroparesis. We have also completed a Phase 2a benchmark clinical trial in patients with chronic constipation, and we are conducting a Phase 2a clinical trial for refractory chronic constipation in Parkinson’s disease patients.