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Investing.com - Leerink Partners raised its price target on Rhythm Pharmaceuticals (NASDAQ:RYTM) to $102.00 from $88.00 on Wednesday, maintaining an Outperform rating following positive Phase 2 trial results. The company, currently valued at $5.6 billion, has seen its stock surge to $88.98, trading near its 52-week high with impressive revenue growth of 49% over the last twelve months.
The price target increase comes after Rhythm disclosed Phase 2 data for bivamelagon in acquired hypothalamic obesity (aHO), which Leerink described as "close to a best-case scenario." The stock jumped more than 30% on the news.
Leerink noted that investor feedback has been "highly positive" regarding the drug’s efficacy, with minimal safety concerns. The firm views this data as "a highly important milestone" for Rhythm’s MC4R franchise and lifecycle management strategy.
The analyst firm has updated its model to reflect increased probability of success for bivamelagon and RM-718, a weekly injectable MC4R agonist, across all indications.
Leerink identified several upcoming catalysts for Rhythm, including RM-718 Phase 1 data and Imcivree proof-of-concept results in Prader-Willi syndrome later this year, followed by Imcivree TRANSCEND data and the aHO launch next year.
In other recent news, Rhythm Pharmaceuticals announced a proposed public offering of $150 million in common stock, with a potential additional $22.5 million available for underwriters. The offering is subject to market conditions and other customary closing conditions, with no assurance on its completion. Meanwhile, the company reported positive results from its Phase 2 trial of bivamelagon, an investigational treatment for hypothalamic obesity, showing significant reductions in body mass index (BMI) across various dosage cohorts. Stifel raised its price target for Rhythm Pharmaceuticals to $123, citing positive clinical data for bivamelagon and its potential to extend the company’s MC4R franchise beyond 2040. Similarly, BofA Securities increased its price target to $95 following favorable Phase 2 trial results for bivamelagon, noting its comparable efficacy to existing treatments with a more convenient dosing schedule. Stifel reiterated its Buy rating, emphasizing the drug’s efficacy and potential for extended intellectual property protection. Rhythm Pharmaceuticals intends to seek regulatory guidance for advancing to Phase 3 trials, with plans to refine the drug’s formulation to improve tolerability.
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