Venture

Looking to an IPO? Rhythm raises $41M to pay for pivotal trials

In a move festooned with all the trappings of a pre-IPO deal, Boston-based Rhythm has come in with a $41 million financing from a big syndicate that includes a few notable crossover investors.

Deerfield Management, Ipsen, OrbiMed, MPM Capital, New Enterprise Associates, Pfizer Venture Investments, Third Rock Ventures, and an undisclosed public healthcare investment fund all stepped in to back the mezzanine round.

The new money will pay for pivotal Phase III trials of their peptide drug setmelanotide, a melanocortin 4 receptor (MC4R) agonist designed to hit the MC4 pathway, where single genetic defects play havoc with a patient’s weight. There are only about 50 known patients with POMC deficiency. And two of them were enrolled for their Phase II.

Both patients responded in dramatic fashion. The first lost 112.4 pounds over 42 weeks, after weighing in at 341.7 pounds. The second lost 45.2 pounds over 12 weeks, from a baseline weight of 336.9 pounds.

I asked Rhythm’s founder and President Bart Henderson if he was plotting an IPO. His emailed response:

We have a strong group of investors supporting Rhythm, and this financing enables build out to support Phase 3 development. We’re in a good place.
Indeed.

“This mezzanine financing enables a significant expansion of the setmelanotide clinical development program, for which the FDA has granted Breakthrough Therapy Designation status for POMC deficiency obesity,” Henderson said in the announcement. “In parallel, we are advancing setmelanotide into initial proof-of-concept studies for several additional rare genetic disorders of obesity that are life-threatening and for which there are no effective treatments.”


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