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On Thursday, Canaccord Genuity maintained a Buy rating on Rhythm Pharmaceuticals (NASDAQ:RYTM), while slightly increasing the price target from $80.00 to $81.00. Currently trading at $53.32 with a market capitalization of $3.28 billion, the stock sits within the broader analyst target range of $60-84. This adjustment comes after the company’s fourth-quarter report and subsequent developments that have bolstered confidence in its financial stability and growth prospects.
The company’s fourth-quarter performance was seen as incremental, following a preannouncement earlier this year. InvestingPro data reveals impressive gross profit margins of 89.73% and strong revenue growth of 68.06% over the last twelve months. Canaccord Genuity analyst Whitney Ijem highlighted the company’s successful $75 million capital raise through an at-the-market (ATM) offering, which is expected to extend Rhythm Pharmaceuticals’ financial runway into 2027. The company’s product, Imcivree, has expanded its availability to over 15 countries, and a new strategic partnership with Trispera Pharma Solutions in Turkey was announced, furthering the reach of the drug.
The updates that generated enthusiasm were primarily related to Rhythm Pharmaceuticals’ pipeline. According to InvestingPro analysis, the company maintains a healthy financial position with a current ratio of 3.24, indicating strong liquidity to support its development programs. The company is anticipating top-line Phase 3 data for acquired Hypothalamic Obesity (HO) in the second quarter, with expectations set for positive results that could significantly boost the stock’s value. Additionally, the company has completed enrollment for its Phase 2 study of bivamelagon, an oral MC4R agonist, with top-line data expected later in the year.
These developments signal a robust pipeline with potential milestones that could impact the company’s stock performance. Despite a recent 7.66% decline over the past week, the maintained Buy rating by Canaccord Genuity reflects a positive outlook on Rhythm Pharmaceuticals’ current position and future prospects within the pharmaceutical industry. For deeper insights into RYTM’s valuation and 8 additional ProTips, explore the comprehensive research available on InvestingPro.
In other recent news, Rhythm Pharmaceuticals reported its fourth-quarter 2024 financial results, showcasing a narrower-than-expected loss per share and surpassing revenue forecasts. The company achieved an EPS of -$0.72, beating the anticipated -$0.74, while revenue reached $41.8 million, exceeding the expected $36.04 million. This strong performance reflects significant year-over-year sales growth, particularly for their product IMCIVRI, which saw global sales increase from $24.2 million in Q4 2023 to $41.8 million in Q4 2024. Full-year sales for 2024 amounted to $130.1 million, up from $77.4 million in 2023. Additionally, Citizens JMP analyst Jonathan Wolleben raised the price target for Rhythm Pharmaceuticals to $81.00 from $75.00, maintaining a Market Outperform rating. This adjustment is driven by positive commercial dynamics for Imcivree™ and growth projections in its approved indications. The analyst noted the anticipation for Phase 3 data on setmelanotide for hypothalamic obesity, which could expand the drug’s market significantly. The company is also preparing for significant milestones in 2025, including the Phase III hypothalamic obesity trial readout and further product pipeline developments.
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