Rhythm Pharmaceuticals is in step with other life science companies going public, raising $120 million in its own upsized IPO.
The Boston company priced its stock offering late Wednesday at $17, topping the $14 to $16 per share range it had previously set. Rhythm sold just over 7 million shares, nearly 400,000 more shares that it planned, and it could sell even more. Underwriters have the option to purchase more than 1 million shares at the IPO price. Trading on the Nasdaq exchange under the stock symbol “RYTM,” Rhythm’s shares opened Thursday at $23.21 and sold for as much as $33.80 apiece in the stock’s first day of trading.
Rhythm’s IPO follows the public stock offerings of three other Boston area companies this year. Waltham, MA-based Deciphera Pharmaceuticals (NASDAQ: DCPH) raised $127.5 million in its own upsized IPO last week. Mersana Therapeutics (NASDAQ: MRSN) of Cambridge, MA, raised $75M in its public markets debut in June; Akcea Therapeutics (NASDAQ: AKCA), also based in Cambridge, raised $125 million in July.
Rhythm’s IPO comes one month after the company’s IPO paperwork with securities regulators became public. The company is developing a pipeline of peptide drugs to treat rare genetic deficiencies that lead to metabolic disorders, such as obesity. Rhythm’s lead drug candidate is setmelanotide, an injectable peptide drug that the company says boosts the activity of melanocortin-4 receptor (MC4), a protein that plays a key role in the way the body regulates weight and appetite.
The Rhythm drug is currently being tested in a Phase 3 study in pro-opiomelanocortin (POMC) deficiency, a disease caused by a genetic defect in the POMC gene that becomes apparent as severe obesity at a young age. The company says its drug could also have applications in other similar metabolic disorders, such as leptin receptor (LepR) deficiency, and Bardet-Biedl syndrome.
Rhythm is laying the groundwork to bring setmelanotide to the market. The company says in its filings that it will use $38 million from the stock offering to prepare for a commercial launch. In the nearer term, the company plans to spend $17 million to pay for development and manufacturing of its lead drug through the completion of the Phase 3 trial, as well as for regulatory filings for the drug in other metabolic diseases. Another $14 million is earmarked for completing Phase 2 studies of the drug in three other metabolic disorders, as well as the start of a Phase 3 trial in Bardet-Biedl syndrome.