FDA accepts Rhythm Pharmaceuticals’ setmelanotide application for review

BOSTON - The U.S. Food and Drug Administration has accepted Rhythm Pharmaceuticals’ (NASDAQ:RYTM) supplemental New Drug Application for setmelanotide to treat acquired hypothalamic obesity with priority review, setting a decision date of December 20, 2025. The company’s stock, which has delivered a remarkable 113% return over the past year according to InvestingPro, is currently trading near its 52-week high of $99.04.

The European Medicines Agency has also validated the company’s Type II variation submission for the same indication, with the review process having begun on August 16, according to a company press release.

Setmelanotide, a melanocortin-4 receptor agonist, is already approved under the brand name IMCIVREE for certain genetic obesity conditions including Bardet-Biedl syndrome and POMC, PCSK1 or LEPR deficiencies.

The applications are supported by data from the Phase 3 TRANSCEND trial involving 120 patients with acquired hypothalamic obesity. The study met its primary endpoint with a statistically significant 19.8% placebo-adjusted reduction in body mass index over 52 weeks. The company, now valued at $6.54 billion, maintains impressive gross profit margins of 89.25%, though InvestingPro data shows it is not yet profitable, with a net loss of $188.44 million in the last twelve months.

Adult participants achieved a 19.2% placebo-adjusted BMI reduction, while pediatric patients saw a 20.2% reduction compared to placebo.

Acquired hypothalamic obesity occurs following physical injury or structural abnormality of the hypothalamus, most commonly after treatment of brain tumors. The condition affects an estimated 5,000 to 10,000 people in the U.S. and 3,500 to 10,000 in the European Union.

The company plans to host an investor event on Wednesday, September 24 in Boston to review its U.S. launch plans for the potential new indication. Analyst price targets range from $95 to $135, reflecting varied opinions on the company’s prospects. For deeper insights into RYTM’s valuation and 12+ additional ProTips, visit InvestingPro, where you can access comprehensive Pro Research Reports available for 1,400+ US stocks.

Common side effects reported in the trial included nausea, vomiting, diarrhea, injection site reactions, skin hyperpigmentation and headache.

In other recent news, Rhythm Pharmaceuticals reported its second-quarter 2025 earnings, revealing a wider-than-expected loss per share. The company’s earnings per share came in at -$0.75, missing the analyst forecast of -$0.67. Despite this, Rhythm Pharmaceuticals’ revenue for the quarter reached $48.5 million, surpassing the expected $43.75 million. This revenue growth represents a 29% increase quarter-over-quarter, exceeding forecasts from firms like H.C. Wainwright and TD Cowen. Following these results, H.C. Wainwright raised its price target for the company from $80 to $100, maintaining a Buy rating. TD Cowen also increased its price target to $110 from $85, citing the strong revenue performance. Meanwhile, Citizens JMP adjusted its price target to $135 from $130, maintaining a Market Outperform rating due to the continued demand for Imcivree and potential pipeline expansions. Rhythm Pharmaceuticals is on track to submit regulatory applications for setmelanotide for hypothalamic obesity in both the U.S. and EU this quarter.

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