Rhythm Pharmaceuticals and LG Chem Enter into Amendment to Bivamelagon Exclusive License Agreement

What happened

Rhythm Pharmaceuticals amended its exclusive license agreement with LG Chem for bivamelagon. The royalty changed from low-to-mid single digits to 1% on global net sales of Rhythm MC4R agonists, including setmelanotide, bivamelagon and RM-718. Rhythm will pay LG Chem additional fixed payments totaling $350 million over four years.

Confirmed

Global impact / market context

The lower 1% royalty reduces the share of future product sales owed to LG Chem, which can keep more revenue per sale for Rhythm. In exchange, Rhythm takes on $350 million of fixed payments, so it must fund those costs regardless of sales, increasing financial pressure before revenue grows.

Analyst inference

Rhythm is supporting the amended LG Chem deal with a five-year term loan of up to $750 million led by KKR's HealthCare Royalty with Blackstone. That borrowed money is also meant for global commercialization and pipeline investment, so it raises future interest and repayment obligations.

Analyst inference

What to watch

1. Rhythm secured a five-year term-loan facility providing access to up to $750 million, led by KKR's HealthCare Royalty in partnership with Blackstone, to fund the amended LG Chem agreement, global commercialization and pipeline investment. Confirmed
2. Track whether Rhythm pays the $350 million in additional fixed payments to LG Chem on the stated four-year schedule and how those payments affect cash available for commercialization and pipeline work. Proposed
3. Watch global net sales of Rhythm MC4R agonists, since the 1% royalty applies to those sales; stronger sales raise royalty costs but also show whether the lowered rate supports more revenue kept per sale. Analyst inference

Evidence

• globenewswire.com