Piper plays down significance of Tesla Autopilot case in Florida
On Monday, H.C. Wainwright reaffirmed its Buy rating and $70.00 price target for Rhythm Pharmaceuticals (NASDAQ:RYTM), representing a 34.5% upside from the current price of $52.04. The firm’s analyst highlighted the company’s recent achievement of receiving orphan drug designation from Japan’s Ministry of Health, Labour and Welfare (MHLW) for setmelanotide, aimed at treating acquired hypothalamic obesity (HO). According to InvestingPro data, analyst targets for RYTM range from $60 to $94, with 4 analysts recently revising their earnings estimates upward.
Rhythm Pharmaceuticals, with a market capitalization of $3.29 billion, is currently conducting a global Phase 3 trial for setmelanotide in patients with acquired HO, with expectations to release topline data in the upcoming quarter. Setmelanotide is a melanocortin-4 receptor (MC4R) agonist that addresses hyperphagia and obesity, conditions often associated with acquired HO. This condition is characterized by a significant and persistent increase in weight due to hypothalamic injury, which can lead to insatiable hunger, abnormal food-seeking behaviors, and/or reduced energy expenditure. The company has demonstrated impressive execution with 68% year-over-year revenue growth and maintains strong gross profit margins of nearly 90%.
The orphan drug designation in Japan is granted to treatments for diseases affecting fewer than 50,000 patients in the country and where there is a significant need for medical intervention. Rhythm estimates the prevalence of acquired hypothalamic obesity to be between 5,000 to 8,000 individuals in Japan. Comparable figures in the United States range from 5,000 to 10,000, while in the European Union, the number is estimated to be between 3,500 and 10,000 people.
The analyst’s statement provided a reminder of the unmet medical need and Rhythm’s efforts to address this through their ongoing clinical trial. The reaffirmation of the Buy rating and price target reflects the firm’s confidence in Rhythm’s potential to meet these needs and the anticipated value of the forthcoming Phase 3 trial results. InvestingPro analysis suggests the company maintains a healthy financial position with a current ratio of 3.24, indicating strong liquidity to support its clinical development programs. For deeper insights into RYTM’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Rhythm Pharmaceuticals has reclaimed the rights to its obesity drug, IMCIVREE® (setmelanotide), for mainland China, Hong Kong, and Macau, ending its previous licensing agreement with RareStone Group Ltd. This move consolidates Rhythm’s global ownership of the setmelanotide franchise, with the company repaying RareStone $6.3 million in cash. Additionally, Japan’s Ministry of Health, Labour and Welfare has granted orphan drug designation to setmelanotide for treating acquired hypothalamic obesity, highlighting its potential in addressing this rare condition. Analyst firms have shown optimism about Rhythm’s prospects, with Needham raising the stock target to $66, citing positive expectations for the upcoming Phase 3 trial results. Stifel maintains a Buy rating with a $78 target, emphasizing the potential revenue opportunity exceeding $1 billion from setmelanotide’s application in hypothalamic obesity. Citizens JMP also reiterated an Outperform rating with an $81 target, noting the drug’s effectiveness in conditions caused by MC4R pathway dysfunction. Rhythm Pharmaceuticals continues to advance its clinical development program, including investigational MC4R agonists and treatments for congenital hyperinsulinism. The company’s strategic maneuvers and analyst endorsements suggest a promising outlook for its drug pipeline and market potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.