Rhythm Pharmaceuticals and LG Chem Enter into Amendment to Bivamelagon Exclusive License Agreement
Lower portfolio royalties come with $350 million in additional fixed payments and a new sales-based milestone obligation.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Rhythm Pharmaceuticals (Nasdaq: RYTM) amended its bivamelagon license with LG Chem, replacing portfolio royalties with a 1% rate and adding fixed payments. The rate replaces low-to-mid-single-digit royalties on global net sales of its MC4R portfolio, including setmelanotide, bivamelagon and RM-718, starting January 1, 2029, or first commercial bivamelagon sales, if earlier.
Rhythm owes $350 million in additional installments through September 2029. An additional milestone of up to $200 million is tied to $3 billion in annual portfolio net sales; existing milestones of up to $205 million remain. A five-year loan facility led by KKR’s HealthCare Royalty with Blackstone provides up to $750 million, including $500 million committed. An initial $250 million draw is expected at closing on November 6, 2026. Borrowings carry SOFR, a benchmark interest rate, plus 4.60%, with no equity component or scheduled principal repayments before maturity.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate point. Forward-looking: it has not happened yet and may not happen.Portfolio royalties fall from low-to-mid-single digits to 1% starting January 1, 2029, or first commercial bivamelagon sales, if earlier.
- Moderate pointLoan facility provides $500 million committed to support the amended license, commercialization and research programs. 7.8% of market cap
- Minor point. Forward-looking: it has not happened yet and may not happen.Additional loan funding of $250 million is available by mutual agreement.
- Minor pointLoan has no equity component, avoiding equity issuance under this financing.
- Minor point. Forward-looking: it has not happened yet and may not happen.Principal has no scheduled amortization before maturity under the five-year loan.
- Minor point. Forward-looking: it has not happened yet and may not happen.Existing revenue-financing amendments, expected effective at loan closing, remove debt-like covenants and default provisions and limit collateral.
Negative
- Moderate point. Forward-looking: it has not happened yet and may not happen.Additional fixed payments total $350 million: $70 million initially, $100 million each in September 2027 and 2028, $80 million in September 2029. 5.4% of market cap
- Minor point. Forward-looking: it has not happened yet and may not happen.New milestone obligation reaches up to $200 million upon achievement of $3 billion in annual global MC4R portfolio net sales.
- Minor pointOriginal development, regulatory and commercial milestone obligations of up to $205 million remain.
- Minor pointFive-year loan borrowings bear interest at SOFR plus 4.60%.
- Minor point. Forward-looking: it has not happened yet and may not happen.Loan prepayment carries premiums declining over the term.
News Explained
Changes to the existing revenue-interest agreement, including covenant and collateral terms, are expected to take effect only when the term loan closes.
The amended license is effective
With LG Chem’s agreement, Rhythm may meet certain of these fixed-payment obligations through additional royalties.
Separately, Rhythm and HealthCare Royalty agreed to amend their existing revenue-interest financing agreement; the changes are expected to take effect when the term loan closes.
Those changes remove debt-like covenants and default provisions, limit the collateral securing that agreement, and modify its material-adverse-effect provisions.
Key Figures
- Additional fixed payments
- $350 million
- Payable to LG Chem in four installments under the amended agreement
- Portfolio royalty
- 1%
- On global net sales, beginning January 1, 2029, or earlier upon bivamelagon’s first commercial sale; replaces the prior variable royalty structure
- Additional milestone payment
- Up to $200 million
- Contingent on the MC4R portfolio reaching $3 billion in annual global net sales
- Term-loan facility
- $750 million
- Facility amount
- Committed loan capital
- $500 million
- Committed portion of the term-loan facility
- Initial loan draw
- $250 million
- At closing, subject to customary closing conditions
- Loan interest rate
- SOFR plus 4.60%
- Interest on borrowings under the facility
- Annual sales milestone threshold
- $3 billion
- Annual global net sales of the MC4R portfolio; threshold for the additional milestone payment
Key Terms
mc4r medical
sofr financial
delayed-draw tranches financial
revenue interest financing financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
-- Amendment revised royalty structure from low-to-mid-single digits to
-- Rhythm to pay LG Chem additional fixed payments totaling
-- Rhythm secures
BOSTON, Nov. 02, 2026 (GLOBE NEWSWIRE) -- Rhythm Pharmaceuticals, Inc. (Nasdaq: RYTM) today announced an amendment to the global exclusive license agreement with LG Chem, Ltd. for bivamelagon, an investigational oral small-molecule melanocortin-4 receptor (MC4R) agonist. The Company also announced a five-year term loan facility led by KKR’s HealthCare Royalty (“HealthCare Royalty”) in partnership with funds managed by Blackstone (“Blackstone”), providing access to up to
“MC4R agonism has been shown to achieve a profound impact on patients living with hyperphagia and severe obesity associated with rare MC4R pathway diseases,” said David Meeker, M.D., Chairman, President and Chief Executive Officer of Rhythm. “With its deep scientific expertise, LG Chem succeeded where many failed in developing the first oral MC4R agonist in bivamelagon, which has been shown to achieve clinically meaningful weight loss in patients living with acquired hypothalamic obesity (HO). Our commitment to this program reflects our confidence in bivamelagon’s potential to deliver meaningful benefits for patients and create substantial long-term value for shareholders.”
“This amendment reflects the strong confidence both companies have in the value and potential of bivamelagon,” said Jeewoong Son, President of LG Chem Life Sciences Company. “By expanding global development efforts, we hope to accelerate patient access to an innovative treatment option for rare obesity diseases.”
Bivamelagon Licensing Agreement
In January 2024, Rhythm entered into a global licensing agreement with LG Chem for exclusive worldwide rights to develop and commercialize bivamelagon, then known as LB54640. Under the original agreement, Rhythm paid LG Chem a total of
Under the terms of the amended agreement, Rhythm will make additional fixed payments totaling
With LG Chem's agreement, Rhythm may satisfy certain of the foregoing fixed payment obligations through additional royalties.
In addition to potential development, regulatory and commercial milestone payments totaling up to
Term Loan Facility Highlights:
Today, Rhythm also announced that it has entered into a
The five-year term loan facility includes an initial
In connection with the term loan, Rhythm and HealthCare Royalty have agreed to amend the Company’s existing revenue interest financing agreement, with the amendment expected to become effective upon the closing of the term loan. The amendments remove the debt-like covenants and default provisions, limit the collateral securing the agreement and modify the agreement’s material adverse effect provisions.
“We value our partnership with HealthCare Royalty and welcome our new partnership with Blackstone. We believe the mutually beneficial terms of this financing agreement enhance our financial flexibility while positioning us to create meaningful long-term shareholder value,” said Hunter C. Smith, Chief Financial Officer of Rhythm.
“Rhythm has established a clear leadership position in MC4R pathway diseases, supported by a growing commercial foundation and a differentiated pipeline spanning multiple potential indications,” said Clarke B. Futch, Chairman and Chief Executive Officer of HealthCare Royalty.
M. Craig Shepherd, Senior Managing Director, Blackstone, added, “We are pleased to partner with Rhythm and HealthCare Royalty through a financing structure that supports the Company’s long-term strategy and reflects our shared confidence in the value and potential of its MC4R portfolio.”
J. Wood Capital Advisors served as financial advisor to Rhythm in connection with the financing.
About Rhythm Pharmaceuticals
Rhythm is a commercial-stage biopharmaceutical company committed to transforming the lives of patients and their families living with rare neuroendocrine diseases. Rhythm’s lead asset, IMCIVREE® (setmelanotide), an MC4R agonist designed to treat hyperphagia and severe obesity, is approved by the U.S. Food and Drug Administration (FDA) to reduce excess body weight and maintain weight reduction long term in adult and pediatric patients aged 4 years and older with acquired hypothalamic obesity, adult and pediatric patients 2 years of age and older with syndromic or monogenic obesity due to Bardet-Biedl syndrome (BBS) or genetically confirmed pro-opiomelanocortin (POMC), including proprotein convertase subtilisin/kexin type 1 (PCSK1), deficiency or leptin receptor (LEPR) deficiency. Both the European Commission (EC) and the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) have authorized setmelanotide for the treatment of obesity and control of hunger in patients 4 years of age and above with acquired hypothalamic obesity due to hypothalamic injury or impairment; and for the treatment of obesity and the control of hunger associated with genetically confirmed BBS or genetically confirmed loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 2 years of age and above. Additionally, Rhythm is advancing a broad clinical development program for setmelanotide in other rare diseases, as well as investigational MC4R agonists bivamelagon and RM-718, and a preclinical suite of small molecules for the treatment of congenital hyperinsulinism. Rhythm’s headquarters is in Boston, MA.
About LG Chem
LG Chem is a leading global chemical company with a diversified business portfolio spanning across petrochemicals, advanced materials, and life sciences. LG Chem Life Sciences, the life sciences business division of LG Chem, is dedicated to developing and delivering innovative medicines across a broad range of therapeutic areas. Guided by its mission to transform people’s lives through inspiring science and leading innovation, LG Chem Life Sciences is offering differentiated solutions to its customers. For more information, please visit www.lgchem.com.
About HealthCare Royalty, a business of KKR
HealthCare Royalty is a leading royalty acquisition company founded in 2006 that is majority owned by KKR & Co. Inc. (NYSE: KKR). Over two decades, the HealthCare Royalty team has developed a strong track record of investing in commercial-stage and near-commercial-stage biopharmaceutical assets, committing
About Blackstone
Blackstone is the world’s largest alternative asset manager. Blackstone seeks to deliver compelling returns for institutional and individual investors by strengthening the companies in which the firm invests. Blackstone’s nearly
Setmelanotide Indication
In the United States, setmelanotide is indicated to reduce excess body weight and maintain weight reduction long term in adults and pediatric patients aged 4 years and older with acquired hypothalamic obesity, in adult and pediatric patients aged 2 years and older with syndromic or monogenic obesity due to Bardet-Biedl syndrome (BBS) or Pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1), or leptin receptor (LEPR) deficiency confirmed by genetic testing demonstrating variants in POMC, PCSK1, or LEPR genes that are interpreted as pathogenic, likely pathogenic, or of uncertain significance (VUS).
In the European Union and the United Kingdom, setmelanotide is indicated for the treatment of obesity and the control of hunger associated with genetically confirmed BBS or loss-of-function biallelic POMC, including PCSK1, deficiency or biallelic LEPR deficiency in adults and children 2 years of age and above, and for the treatment of obesity and control of hunger in adults and children 4 years of age and above with acquired hypothalamic obesity due to hypothalamic injury or impairment. In the European Union and the United Kingdom, setmelanotide should be prescribed and supervised by a physician experienced in the diagnosis and management of rare forms of obesity with genetic or hypothalamic origin.
Limitations of Use
Setmelanotide is not indicated for the treatment of patients with the following conditions as setmelanotide would not be expected to be effective:
- Obesity due to suspected POMC, PCSK1, or LEPR deficiency with POMC, PCSK1, or LEPR variants classified as benign or likely benign
- Other types of obesity not related to acquired HO, BBS, or POMC, PCSK1 or LEPR deficiency, including obesity associated with other genetic syndromes and general (polygenic) obesity.
Important Safety Information
CONTRAINDICATIONS
Prior serious hypersensitivity to setmelanotide or any of the excipients in IMCIVREE. Serious hypersensitivity reactions (e.g., anaphylaxis) have been reported.
WARNINGS AND PRECAUTIONS
Disturbance in Sexual Arousal: Spontaneous penile erections and increased frequency of penile erections in males have occurred. Inform patients that these events may occur and instruct patients who have an erection lasting longer than 4 hours to seek emergency medical attention.
Depression and Suicidal Ideation: Depression and suicidal ideation have occurred. Monitor patients for new onset or worsening depression or suicidal thoughts or behaviors. Consider discontinuing IMCIVREE if patients experience suicidal thoughts or behaviors, or clinically significant or persistent depression symptoms occur.
Hypersensitivity Reactions: Serious hypersensitivity reactions (e.g., anaphylaxis) have been reported. If suspected, advise patients to promptly seek medical attention and discontinue IMCIVREE.
Skin Hyperpigmentation, Darkening of Pre-existing Nevi, and Development of New Melanocytic Nevi: Generalized or focal increases in skin pigmentation occurred in the majority of IMCIVREE-treated patients. IMCIVREE may also cause development of new melanocytic nevi or darkening of pre-existing nevi. Perform a full body skin examination prior to initiation and periodically during treatment to monitor pre-existing and new pigmented lesions.
Acute Adrenal Insufficiency with Acquired HO: Patients with acquired HO and secondary adrenal insufficiency reported serious adverse reactions related to acute adrenal insufficiency in
Sodium Imbalance in Patients with Acquired HO and Central Diabetes Insipidus: Patients with acquired HO and concomitant central diabetes insipidus (DI)/arginine vasopressin (AVP) deficiency reported hyponatremia in
ADVERSE REACTIONS
Most common adverse reactions (incidence ≥
USE IN SPECIFIC POPULATIONS
Treatment with IMCIVREE is not recommended when breastfeeding. Discontinue IMCIVREE when pregnancy is recognized unless the benefits of therapy outweigh the potential risks to the fetus.
To report SUSPECTED ADVERSE REACTIONS, contact Rhythm Pharmaceuticals at +1 (833) 789-6337 or FDA at 1-800-FDA-1088 or http://www.fda.gov/medwatch. See section 4.8 of the Summary of Product Characteristics for information on reporting suspected adverse reactions in Europe.
Please see the full Prescribing Information for additional Important Safety Information.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the safety, efficacy, potential benefits of, and clinical design or progress of any of our products or product candidates at any dosage or in any indication, including, setmelanotide, bivamelagon, and RM-718; our continued collaboration with LG Chem; the anticipated benefits of the term loan; the expected timing of the closing and initial funding of the term loan and the effectiveness of the amendment to our revenue interest financing agreement; the estimated market size and addressable population for our drug products, including setmelanotide for the treatment of acquired HO; and the timing of any of the foregoing. Statements using words such as “expect”, “anticipate”, “believe”, “may”, “will” and similar terms are also forward-looking statements. Such statements are subject to numerous risks and uncertainties, including, but not limited to, the satisfaction of the conditions to closing of the term loan, our ability to enroll patients in clinical trials, the design and outcome of clinical trials, the impact of competition, the ability to achieve or obtain necessary regulatory approvals, risks associated with data analysis and reporting, unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, risks associated with the laws and regulations governing our international operations and the costs of any related compliance programs, our ability to successfully commercialize setmelanotide, our liquidity and expenses, our ability to retain our key employees and consultants, and to attract, retain and motivate qualified personnel, and general economic conditions, and the other important factors, including those discussed under the caption “Risk Factors” in Rhythm’s Quarterly Report on Form 10-Q for the three months ended June 30, 2026, and in Rhythm’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 to be filed with the Securities and Exchange Commission (the “SEC”) and our other filings with the SEC. Except as required by law, we undertake no obligations to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release, whether as a result of new information, future developments or otherwise.
Corporate Contacts:
David Connolly
Head of Investor Relations and Corporate Communications
Rhythm Pharmaceuticals, Inc.
857-264-4280
dconnolly@rhythmtx.com
Kate Walsh
Director, Corporate Communications
Rhythm Pharmaceuticals, Inc.
(857) 264-4280
kwalsh@rhythmtx.com
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
When does Rhythm Pharmaceuticals’ new 1% royalty to LG Chem begin?
The 1% royalty begins January 1, 2029, or upon the first commercial sale of bivamelagon, if earlier. It applies to global net sales of products within Rhythm’s MC4R portfolio, replacing the original low-to-mid-single-digit royalty structure.
How much can Rhythm Pharmaceuticals borrow under its new loan facility?
Rhythm has access to up to $750 million, including $500 million committed and an additional $250 million available by mutual agreement. The five-year facility is led by KKR’s HealthCare Royalty in partnership with funds managed by Blackstone.
What is Rhythm Pharmaceuticals’ loan draw schedule?
An initial $250 million draw is expected at closing on November 6, 2026, subject to customary closing conditions. Rhythm may draw up to $250 million of additional committed capital through June 30, 2028, in two $100 million tranches and one $50 million tranche.
Can Rhythm Pharmaceuticals pay LG Chem additional royalties instead of fixed payments?
Rhythm may satisfy certain fixed payment obligations through additional royalties with LG Chem’s agreement. The first fixed installment, $70 million, is due within 15 business days following the amendment’s November 2, 2026 effective date.