WASHINGTON (dpa-AFX) - Rhythm Pharmaceuticals, Inc. (RYTM) has amended its licensing agreement with LG Chem for bivamelagon, an investigational oral therapy for rare obesity disorders, while also securing access to up to $750 million in financing to support the program and its broader portfolio.
Bivamelagon is an oral melanocortin-4 receptor (MC4R) agonist being developed for rare obesity conditions linked to disruptions in the MC4R pathway. The drug has shown clinically meaningful weight-loss benefits in patients with acquired hypothalamic obesity, adding to the company.
Under the revised agreement, Rhythm will make $350 million in fixed payments to LG Chem over the next four years. In return, the previous royalty structures of low-to-mid single-digit royalties on global sales of MC4R products will be replaced with a 1% royalty on global net sales of Rhythm's MC4R portfolio, including setmelanotide, bivamelagon and RM-718 beginning in 2029 or upon the first commercial sales of bivamelagon, whichever comes first.
The amended deal also preserves previously agreed milestone payments of up to $205 million and adds a potential $200 million milestone payment tied to achieving $3 billion in annual global net sales across the MC4R portfolio.
To support the agreement and future growth plans, Rhythm also announced a five-year term loan facility worth up to $750 million, led by KKR's HealthCare Royalty in partnership with Blackstone. The facility includes $500 million in committed capital, comprising an initial $250 million to draw at closing and up to $250 million in additional committed funding available through June 30, 2028. Rhythm can also access another $259 million by mutual agreement.
The initial $250 million draw is expected to close on November 6, 2026, subject to customary closing conditions.
Rhythm said the financing will support the amended LG Chem agreement, commercialization efforts for its approved obesity treatment IMCIVREE (setmelanotide), and continued investment in research and development programs.
The transaction underscores Rhythm's commitment to expanding its portfolio of treatments targeting rare obesity disorders, with bivamelagon representing the company's first investigational oral MC4R agonist candidate.
The company has scheduled to report its Q3 2026 financial results today, November 3, at 8:00 AM EST.
RYTM has traded between $74.50 and $122.20 over the past year. The stock closed Monday's trading at $93.44, up 0.94%.
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