Rhythm secures $750M loan, revises LG Chem drug deal
What's the deal? Rhythm Pharmaceuticals (Nasdaq: RYTM) has secured a five-year term loan of up to $750 million and amended its global license agreement with LG ChemDealroom has a profile for this one. Try Dealroom → for bivamelagon, an investigational oral obesity drug. The facility is led by KKR's HealthCare RoyaltyDealroom has a profile for this one. Try Dealroom → in partnership with Blackstone.
The terms: Rhythm will pay LG Chem $350 million in four fixed installments through September 2029. In return, it replaces the original low-to-mid-single-digit royalties across its MC4R portfolio with a flat 1% rate from January 2029, or sooner if bivamelagon launches first.
On the loan: Of the $750 million, $500 million is committed, with an initial $250 million draw expected at closing on November 6, 2026. Borrowings carry interest of SOFR plus 4.60%, with no equity component and no scheduled principal repayments before maturity.
What's the endgame? Bivamelagon is an oral MC4R agonist targeting acquired hypothalamic obesity, a rare condition. After positive Phase 2 results, the drug is on track to enter pivotal Phase 3 testing by the end of 2026.
Why now? The financing funds the LG Chem payments plus global commercialization and pipeline investment as Rhythm expands its rare-obesity franchise. "This amendment is a strategic move to accelerate global development and commercialization," said chief executive officer David Meeker (translated from Korean).
What could go wrong? The deal adds debt and trades substantial scheduled cash payments for lower future royalties while the drug's pivotal efficacy and commercial prospects remain unproven.
The signal: At $750 million, the facility ranks in the top 10% of all post-IPO debt rounds in health by size. It reflects a growing appetite among lenders to back rare-disease biotechs — a focused bet on a niche obesity franchise rather than the broader obesity-drug market.
Read more: streetinsider.com
Image credit: Generated with Gemini
