Rhythm Pharmaceuticals (RYTM) FY2025 10-K Risk Factors: 10 New, 11 Dropped

What the changes say

Rhythm Pharmaceuticals highlights risks around financing its pipeline, commercializing setmelanotide, and navigating international regulatory and pricing pressures.

What changed since the prior 10-K

New

NewRisks Related to Our Financial Position and Need for Capital
Since our inception, we have raised funds through the issuance of common and preferred equity, the sale of assets and a Revenue Interest Agreement, or RIFA. As of December 31, 2025, our cash and cash equivalents and short-term investments were approximately $388.9 million
As of December 31, 2025, cash and short-term investments were $388.9 million, funding the commercialization of setmelanotide and development of RM-718, bivamelagon, and the CHI program.
NewRisks Related to Our Financial Position and Need for Capital
relinquish rights to setmelanotide or technologies or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects
Failing to secure timely funding could force Rhythm to curtail or delay research programs for setmelanotide.
NewRisks Related to the Development of Setmelanotide, Bivamelagon, RM-718 and our CHI Program
trials, at a minimum, will be required for regulatory approvals and the commercial marketing of setmelanotide for additional indications as well as RM-718 and bivamelagon
Clinical trials for setmelanotide in additional indications, RM-718, and bivamelagon face potential delays from regulatory holds or data generation hurdles.
NewRisks Related to the Development of Setmelanotide, Bivamelagon, RM-718 and our CHI Program
We have also been granted orphan designation for setmelanotide for the treatment of: (i) Alström syndrome in both the United States and the EU; (ii) Prader-Willi syndrome in the United States and the EU; and (iii) acquired hypothalamic obesity in the EU and Japan
Orphan drug exclusivity for setmelanotide in Alström syndrome, Prader-Willi syndrome, and acquired hypothalamic obesity may not prevent competition from other approved drugs.
NewRisks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates
Additionally, we have evaluated, and will continue to evaluate, potential relationships with additional suppliers to increase overall capacity as well as further reduce risks associated with reliance on a limited number of suppliers for manufacturing
Rhythm relies entirely on contract manufacturers to produce setmelanotide drug substances and finished products in compliance with GMPs.
NewRisks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters
Congress and among policymakers, and it is possible that Congress could enact additional laws that negatively affect the pharmaceutical industry
State-level prescription drug affordability boards and price caps may constrain pricing and reimbursement for IMCIVREE.
NewRisks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters
imprisonment. These laws may further limit or restrict the advertising and promotion of our products to the general public and may also impose limitations on our promotional activities with health care professionals
Interactions with healthcare professionals and third-party payors expose Rhythm to federal and state fraud and abuse laws.
NewRisks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters
claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs
HIPAA imposes civil and criminal liability for failing to safeguard health information.
NewRisks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters
The results of the United Kingdom’s departure from the EU, and the resulting impact of differing regulations, may have a negative effect on our business
The UK's implementation of the Windsor Framework creates regulatory uncertainty for medicinal products separate from EU law.
NewRisks Related to Our Common Stock
concluded that these control deficiencies constitute a material weakness and that our internal control over financial reporting was not effective as of December 31, 2023
Past control deficiencies constituted a material weakness in internal control over financial reporting as of December 31, 2023.

Dropped

DroppedRisks Related to Our Financial Position and Need for Capital
costs, following the achievement of a specified amount of cumulative net sales of IMCIVREE between July 1, 2022 and September 30, 2023
DroppedRisks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates
authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and provide reimbursement
DroppedRisks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates
In light of our election to terminate the exclusive license agreement with RareStone Group Ltd., or RareStone, the development of setmelanotide in certain indications and commercialization of IMCIVREE in certain markets could be delayed or terminated and our business could be adversely affected
Covered tiered royalties on annual net revenues under the Revenue Interest Financing Agreement.
DroppedRisks Related to Our Intellectual Property Rights
and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability
DroppedRisks Related to Regulatory Approval and Marketing of Setmelanotide and Other Legal and Compliance Matters
substantially revised before adoption, which is not anticipated before early 2026. The revisions, may, however, have a significant impact on the pharmaceutical industry and our business in the long term
DroppedRisks Related to Regulatory Approval and Marketing of Setmelanotide and Other Legal and Compliance Matters
Since its enactment, certain provisions of the ACA have been subject to judicial, executive, and legislative challenges and may be subject to additional challenges in the future
DroppedRisks Related to Regulatory Approval and Marketing of Setmelanotide and Other Legal and Compliance Matters
decide not to directly promote or market our products, inappropriate activity by our international distribution partners could have implications for us
DroppedRisks Related to Regulatory Approval and Marketing of Setmelanotide and Other Legal and Compliance Matters
Following a national referendum and enactment of legislation by the government of the UK, the UK formally withdrew from the EU on January 31, 2020
DroppedRisks Related to Regulatory Approval and Marketing of Setmelanotide and Other Legal and Compliance Matters
our ability to generate revenue and achieve or sustain profitability. If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in Great Britain for our product candidates, which could significantly and materially harm our business
DroppedRisks Related to Employee Matters and Managing Growth
in legal claims or proceedings and liability under state, federal and international privacy laws, disruption of our operations, and damage to our reputation, which could adversely affect our business
DroppedRisks Related to Our Common Stock
person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner

Reworded

98% rewrittenRisks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters
Future regulatory legislation or regulation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates
Updated to reflect that a provisional agreement on EU pharmaceutical legislation revisions was reached on December 11, 2025.
97% rewrittenRisks Related to the Development of Setmelanotide, Bivamelagon, RM-718 and our CHI Program
Failures or delays in the commencement or completion of our planned clinical trials could result in increased costs to us and could delay, prevent or limit our ability to generate revenue, achieve profitability and continue our business
Shortened the description of regulatory submissions required following clinical trials for setmelanotide, RM-718, and bivamelagon.
95% rewrittenRisks Related to Our Intellectual Property Rights
If we are unable to adequately protect our proprietary technology or maintain issued patents directed to setmelanotide, RM-718, and bivamelagon, others could compete against us sooner, which could have a material adverse impact on our business, results of operations, financial condition and prospects
Added specific warnings that competitors may erode competitive advantages and that CHI program intellectual property may lack anticipated commercial potential.
83% rewrittenRisks Related to Our Financial Position and Need for Capital
Our Revenue Interest Financing Agreement with Healthcare Royalty Partners could restrict our ability to commercialize IMCIVREE, limit cash flow available for our operations and expose us to risks that could adversely affect our business, financial condition and results of operations
Restated historical payment milestones received from HealthCare Royalty Management under the RIFA through September 12, 2023.
78% rewrittenRisks Related to Our Financial Position and Need for Capital
We expect we may need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations
No substantive textual changes made to the core funding risk description.
Was: We will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations
76% rewrittenRisks Related to the Development of Setmelanotide, Bivamelagon, RM-718 and our CHI Program
We believe that the patient populations in the EU are similar to those in the United States. However, we do not have comparable epidemiological data from the EU and these estimates are therefore based solely on applying relative population percentages to the Company-derived estimates described above
Added specific addressable patient population estimates of 10,000 in the U.S., 5,000 to 8,000 in Japan, and 10,000 in the E.U. for hypothalamic obesity.
70% rewrittenRisks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters
Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us and any future collaborators to commercialize setmelanotide and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations
Removed reference to the new presidential administration regarding healthcare reform interest.
69% rewrittenRisks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters
The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses
No substantive textual changes made to the off-label promotion enforcement risk.
61% rewrittenRisks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates
We rely completely on third-party suppliers to manufacture our clinical and commercial drug supplies of setmelanotide, RM-718, and bivamelagon, and we intend to rely on third parties to produce preclinical, clinical and commercial supplies of any future product candidate
61% rewrittenRisks Related to Our Common Stock
Provisions in our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change in control of our Company or changes in our management and, therefore, depress the market price of our common stock
58% rewrittenRisks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates
If we are unable to establish, maintain or expand our sales, marketing and distribution capabilities or enter into agreements with third parties to market, sell, and distribute IMCIVREE, we may not be able to generate revenue
53% rewrittenRisks Related to the Development of Setmelanotide, Bivamelagon, RM-718 and our CHI Program
We may not be able to obtain or maintain orphan drug designations for setmelanotide, RM-718 or bivamelagon or to obtain or maintain orphan exclusivity. Even with exclusivity, competitors may obtain approval for different drugs that treat the same indications as setmelanotide, RM-718 and bivamelagon
51% rewrittenRisks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates
Our industry is intensely competitive. If we are not able to compete effectively against current and future competitors, we may not be able to generate revenue from the sale of IMCIVREE, our business will not grow and our financial condition and operations will suffer
49% rewrittenRisks Related to the Development of Setmelanotide, Bivamelagon, RM-718 and our CHI Program
The clinical response rate used in this calculation is based on the clinical data currently available to us from our trials and may change as more data become available
44% rewrittenRisks Related to Our Common Stock
The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results
37% rewrittenRisks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters
Actual or perceived failure to comply with data protection, privacy and security laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results
34% rewrittenRisks Related to Our Common Stock
Substantial future sales or perceived potential sales of our common stock in the public market could cause the price of our common stock to decline significantly
29% rewrittenRisks Related to Employee Matters and Managing Growth
Our future success depends on our ability to retain our key employees and consultants, and to attract, retain and motivate qualified personnel
29% rewrittenRisks Related to Employee Matters and Managing Growth
We will need to develop and expand our Company, and we may encounter difficulties in managing this development and expansion, which could disrupt our operations

All 67 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Financial Position and Need for Capital

01We expect we may need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations78% rewritten
02Since our inception, we have raised funds through the issuance of common and preferred equity, the sale of assets and a Revenue Interest Agreement, or RIFA. As of December 31, 2025, our cash and cash equivalents and short-term investments were approximately $388.9 millionNew
03relinquish rights to setmelanotide or technologies or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospectsNew
04Our Revenue Interest Financing Agreement with Healthcare Royalty Partners could restrict our ability to commercialize IMCIVREE, limit cash flow available for our operations and expose us to risks that could adversely affect our business, financial condition and results of operations83% rewritten

Risks Related to the Development of Setmelanotide, Bivamelagon, RM-718 and our CHI Program

05Interim, “topline” and preliminary data from our preclinical and clinical trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data
06From time to time, we may also disclose real-world data from early access programs in particular patient cohorts, which are not controlled trials and may not be predictive of future results
07The exclusive license agreement with LGC is important to our business. If we or LGC fail to adequately perform under the agreement, the development of bivamelagon could be delayed, or if we or LGC terminate the agreement, we would lose our rights to develop and commercialize bivamelagon
08The number of patients with each of the MC4R pathway variants we are targeting is small and has not been established with precision. If the actual number of patients is smaller than we estimate, our revenue and ability to achieve profitability may be materially adversely affected
09The clinical response rate used in this calculation is based on the clinical data currently available to us from our trials and may change as more data become available49% rewritten
10We believe that the patient populations in the EU are similar to those in the United States. However, we do not have comparable epidemiological data from the EU and these estimates are therefore based solely on applying relative population percentages to the Company-derived estimates described above76% rewritten
11If we experience delays or difficulties in the enrollment and/or retention of patients in clinical trials, our regulatory submissions or receipt of additional marketing approvals could be delayed or prevented
12Failures or delays in the commencement or completion of our planned clinical trials could result in increased costs to us and could delay, prevent or limit our ability to generate revenue, achieve profitability and continue our business97% rewritten
13trials, at a minimum, will be required for regulatory approvals and the commercial marketing of setmelanotide for additional indications as well as RM-718 and bivamelagonNew
14If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted
15Setmelanotide, RM-718 or bivamelagon may cause undesirable side effects that could delay or prevent additional regulatory approvals, limit the commercial profile of approved labeling, or result in significant negative consequences following marketing approval
16We may not be able to obtain or maintain orphan drug designations for setmelanotide, RM-718 or bivamelagon or to obtain or maintain orphan exclusivity. Even with exclusivity, competitors may obtain approval for different drugs that treat the same indications as setmelanotide, RM-718 and bivamelagon53% rewritten
17We have also been granted orphan designation for setmelanotide for the treatment of: (i) Alström syndrome in both the United States and the EU; (ii) Prader-Willi syndrome in the United States and the EU; and (iii) acquired hypothalamic obesity in the EU and JapanNew
18Product developers that benefit from PRIME designation may be eligible for accelerated assessment (in 150 days instead of 210 days), which may be granted for medicinal products of major interest from a public health perspective or that target an unmet medical need, but this is not guaranteed

Risks Related to the Commercialization of IMCIVREE and, if Approved, our Products Candidates

19If we are unable to establish, maintain or expand our sales, marketing and distribution capabilities or enter into agreements with third parties to market, sell, and distribute IMCIVREE, we may not be able to generate revenue58% rewritten
20We may never receive regulatory approval to market setmelanotide outside of the United States, Canada, the European Union and the United Kingdom
21We may not achieve or maintain market acceptance for IMCIVREE, which would limit the revenue that we generate from the sale of IMCIVREE
22Our industry is intensely competitive. If we are not able to compete effectively against current and future competitors, we may not be able to generate revenue from the sale of IMCIVREE, our business will not grow and our financial condition and operations will suffer51% rewritten
23We face potential product liability exposure, and, if claims are brought against us, we may incur substantial liability
24We rely completely on third-party suppliers to manufacture our clinical and commercial drug supplies of setmelanotide, RM-718, and bivamelagon, and we intend to rely on third parties to produce preclinical, clinical and commercial supplies of any future product candidate61% rewritten
25Additionally, we have evaluated, and will continue to evaluate, potential relationships with additional suppliers to increase overall capacity as well as further reduce risks associated with reliance on a limited number of suppliers for manufacturingNew

Risks Related to Our Intellectual Property Rights

26If we are unable to adequately protect our proprietary technology or maintain issued patents directed to setmelanotide, RM-718, and bivamelagon, others could compete against us sooner, which could have a material adverse impact on our business, results of operations, financial condition and prospects95% rewritten
27We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming and unsuccessful
28We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing IMCIVREE or our other product candidates
29We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
30Issued patents covering setmelanotide or our other product candidates could be found invalid or unenforceable if challenged in court
31We do not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection
32We are dependent on licensed intellectual property. If we were to lose our rights to licensed intellectual property, we may not be able to continue developing or commercializing setmelanotide or bivamelagon
33Any termination could result in our loss of the right to use the licensed intellectual property, which could materially adversely affect our ability to develop and commercialize setmelanotide or bivamelagon, as well as harm our competitive business position and our business prospects
34If we do not obtain additional protection under the Hatch-Waxman Amendments and similar foreign legislation by extending the patent terms and obtaining product exclusivity for setmelanotide and our other product candidates, our business may be materially harmed
35Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products
36We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers

Risks Related to Regulatory Approval and Marketing of IMCIVREE and Other Legal and Compliance Matters

37Future regulatory legislation or regulation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates98% rewritten
38Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us and any future collaborators to commercialize setmelanotide and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations70% rewritten
39Congress and among policymakers, and it is possible that Congress could enact additional laws that negatively affect the pharmaceutical industryNew
40The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses69% rewritten
41imprisonment. These laws may further limit or restrict the advertising and promotion of our products to the general public and may also impose limitations on our promotional activities with health care professionalsNew
42claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programsNew
43Our employees may engage in misconduct or other improper activities, whether knowingly or unknowingly, including violating applicable regulatory standards and requirements or engaging in insider trading, which could significantly harm our business
44Actual or perceived failure to comply with data protection, privacy and security laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results37% rewritten
45Our future growth depends, in part, on our ability to continue to penetrate foreign markets, where we will be subject to additional regulatory burdens and other risks and uncertainties
46Laws and regulations governing any international operations we may have in the future may preclude us from developing, manufacturing and selling setmelanotide or our other product candidates outside of the United States and require us to develop and implement costly compliance programs
47The results of the United Kingdom’s departure from the EU, and the resulting impact of differing regulations, may have a negative effect on our businessNew

Risks Related to Employee Matters and Managing Growth

48Our future success depends on our ability to retain our key employees and consultants, and to attract, retain and motivate qualified personnel29% rewritten
49We will need to develop and expand our Company, and we may encounter difficulties in managing this development and expansion, which could disrupt our operations29% rewritten

Risks Related to Our Common Stock

50Our directors and executive officers and their affiliated entities own a significant percentage of our stock and, if they choose to act together, will be able to exert significant influence over matters subject to stockholder approval
51Market volatility may affect our stock price and the value of your investment
52Our quarterly operating results may fluctuate significantly
53Our ability to use certain net operating loss carryovers and other tax attributes may be limited
54Substantial future sales or perceived potential sales of our common stock in the public market could cause the price of our common stock to decline significantly34% rewritten
55We may be at an increased risk of securities litigation, including class action litigation
56We do not intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
57Our common stock is subordinated to our Convertible Preferred Stock
58Provisions in our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change in control of our Company or changes in our management and, therefore, depress the market price of our common stock61% rewritten
59We have in the past and may in the future acquire businesses or products, form strategic alliances or create joint ventures in the future, and we may not realize their benefits
60An active market for our common stock may not be maintained
61If securities or industry analysts do not continue to publish research or reports or publish unfavorable research or reports about our business, our stock price and trading volume could decline
62Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights
63Unfavorable global political or economic conditions could adversely affect our business, financial condition or results of operations
64Business interruptions could adversely affect our operations
65concluded that these control deficiencies constitute a material weakness and that our internal control over financial reporting was not effective as of December 31, 2023New
66The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results44% rewritten
67Short sellers of our stock may be manipulative and may drive down the market price of our common stock

Other Rhythm Pharmaceuticals 10-Ks

FY2024 10-K risk factors
68 risks
Rhythm Pharmaceuticals faces significant commercial, financial, and regulatory risks driven by its reliance on the success and market acceptance of IMCIVREE for rare genetic obesity. The company depends heavily on third-party manufacturers, licensed intellectual property from Ipsen and LGC, and the need for additional capital to fund clinical development.
Filed Feb 28, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.