Rhythm Pharmaceuticals stock gets bullish outlook from Citizens JMP

Investing.com - Citizens JMP has reiterated a Market Outperform rating and $135.00 price target on Rhythm Pharmaceuticals (NASDAQ:RYTM), following FDA acceptance of the company’s supplemental New Drug Application with Priority Review. The stock is trading near its 52-week high of $99.04, having delivered an impressive 117.5% return over the past year, according to InvestingPro data.

The firm highlighted the significant market opportunity for setmelanotide in hypothalamic obesity (HO), estimating 5,000-10,000 patients in the U.S. representing a potential $2-4 billion market. A similar patient population exists in Europe, though with a smaller market size due to pricing adjustments.

Citizens JMP models peak sales of approximately $1.5 billion in the U.S., $340 million in the EU, and $180 million in Japan, where Phase 3 data is expected in the first quarter of 2026. The firm noted that genetic testing is not required for HO diagnosis, and patients are already engaged with the healthcare system.

Rhythm Pharmaceuticals plans to share details on its launch strategy at an investor event scheduled for September 24. The company is also advancing other candidates, including bivamelagon and RM-718.

Near-term catalysts include setmelanotide’s Phase 2 readout in Prader-Willi syndrome expected before year-end 2025, and completion of enrollment in Part C of the Phase 1 trial of RM-718 in HO by the first quarter of 2026, with data anticipated in the first half of 2026.

In other recent news, Rhythm Pharmaceuticals reported its second-quarter 2025 earnings, revealing a wider-than-expected loss per share of -$0.75, which missed analyst forecasts of -$0.67. Despite this earnings miss, the company achieved $48.5 million in revenue, surpassing the expected $43.75 million. This revenue reflects a 29% increase quarter-over-quarter, exceeding both consensus estimates and individual forecasts from firms like H.C. Wainwright and TD Cowen. The U.S. Food and Drug Administration has also accepted Rhythm Pharmaceuticals’ supplemental New Drug Application for setmelanotide, targeting acquired hypothalamic obesity, with a decision expected by December 20, 2025.

Additionally, the European Medicines Agency has validated the company’s Type II variation submission for the same indication. Analyst firms have responded to these developments with positive adjustments to their stock price targets. H.C. Wainwright raised its target from $80 to $100, maintaining a Buy rating, while TD Cowen increased its target from $85 to $110, also keeping a Buy rating. Citizens JMP raised its price target to $135 from $130, citing continued growth in demand for Imcivree and the company’s efforts to expand its pipeline opportunities. These recent developments highlight the company’s ongoing efforts and market potential despite the earnings per share miss.

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