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Investing.com - Oppenheimer has increased its price target on Rhythm Pharmaceuticals (NASDAQ:RYTM) to $110.00 from $76.00 while maintaining an Outperform rating on the stock. The company, now valued at $5.66 billion, has seen its shares surge 35% in the past week, trading near its 52-week high of $89.05.
The price target revision follows positive Phase 2 SIGNAL results for bivamelagon, which demonstrated the drug candidate’s potential as a daily oral alternative to setmelanotide for acquired hypothalamic obesity (HO). According to InvestingPro data, the company maintains impressive gross profit margins of 89.62% and has achieved nearly 49% revenue growth over the last twelve months.
Oppenheimer noted that applications for US and EU expansion of Imcivree’s label are on track to be submitted this quarter, potentially broadening the company’s market reach.
The investment firm highlighted that bivamelagon addresses a key intellectual property concern for Rhythm Pharmaceuticals, as setmelanotide’s key patents will begin to expire in 2032, while bivamelagon’s patent protection should extend beyond 2040.
Rhythm Pharmaceuticals focuses on developing treatments for rare genetic disorders of obesity, with Imcivree (setmelanotide) already approved for certain conditions and bivamelagon representing a potential future growth driver. InvestingPro has identified 15 additional investment tips for RYTM, available to subscribers along with comprehensive financial analysis and Fair Value calculations.
In other recent news, Rhythm Pharmaceuticals announced the pricing of an upsized public offering of 2,058,824 shares at $85.00 per share, aiming to raise approximately $175 million in gross proceeds. The offering, managed by Morgan Stanley (NYSE:MS), BofA Securities, Stifel, and Wells Fargo (NYSE:WFC) Securities, is expected to close soon, with an option for underwriters to purchase additional shares. Meanwhile, analyst firms have reacted positively to Rhythm’s recent clinical data. Leerink Partners raised its price target to $102.00, maintaining an Outperform rating, following positive Phase 2 trial results for bivamelagon in acquired hypothalamic obesity. Similarly, Stifel increased its price target to $123.00, citing the derisking of bivamelagon in terms of efficacy and safety, while BofA Securities raised its target to $95.00 based on promising Phase 2 results for the oral obesity treatment. These developments reflect growing confidence in Rhythm’s drug pipeline, particularly for its MC4R franchise. The company has not specified the use of proceeds from the stock offering.
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