On Monday, H.C. Wainwright kept its Buy rating and $69.00 stock price target for Rhythm Pharmaceuticals (NASDAQ:RYTM). This affirmation comes after the company showcased new data at a recent medical conference.
Rhythm Pharmaceuticals presented findings at the 62nd annual meeting of the European Society for Paediatric Endocrinology (EPSE), which took place in Liverpool, England. The data highlighted positive outcomes for pediatric patients using setmelanotide, the company's treatment for certain obesity conditions.
The research focused on four pediatric patients with either acquired hypothalamic obesity (HO) or congenital HO. These patients experienced a weight reduction of over 5% after three months of treatment with setmelanotide. Setmelanotide acts on the melanocortin-4 receptor (MC4R), which plays a role in weight regulation. The cases presented included patients under 18 years old, with two suffering from acquired HO and two from congenital HO.
The findings presented at the EPSE meeting contribute to the body of evidence supporting setmelanotide's effectiveness. The data consisted of four case reports, documenting the three-month treatment period and the subsequent outcomes for these young patients. The positive results have underpinned the analyst's decision to reiterate the Buy rating and the 12-month price target for Rhythm Pharmaceuticals' shares.
Rhythm Pharmaceuticals' role in addressing obesity through its MC4R agonist therapy is being closely monitored by industry experts and investors alike. The company's continued progress and the recent data presentation have reinforced confidence in its stock, as reflected by the maintained price target and rating by H.C. Wainwright.
The endorsement underscores the potential of setmelanotide in treating patients with HO and the company's standing in the pharmaceutical landscape.
In other recent news, Rhythm Pharmaceuticals reported a successful third quarter in 2024, with a significant 48% increase in global net revenue, reaching $33.3 million, largely driven by sales of its drug IMCIVREE for Bardet-Biedl Syndrome (BBS).
The U.S. contributed $23.3 million, making up 70% of total sales, while international revenue grew to $10 million, marking a 35% increase from the previous quarter. The company also informed about ongoing clinical trials and programs, which led to an increase in R&D expenses to $37.9 million.
Rhythm Pharmaceuticals has reduced its 2024 operating expense guidance to $245-$255 million and reported $298.4 million in cash reserves. The company anticipates having sufficient cash to fund operations into 2026. The company is also moving forward with its clinical programs, with top-line data from a Phase III trial for acquired hypothalamic obesity expected in the first half of 2025.
The company expects to complete enrollment in a Phase II trial for bivamelagon and a Phase I trial for RM-718 in early 2025. Rhythm also expects growth in European contributions to revenue in 2025 despite potential variability in growth rates. The company remains optimistic about its direction and its potential for international growth, particularly in the context of hypothalamic obesity and other indications.
InvestingPro Insights
Rhythm Pharmaceuticals' recent data presentation at the EPSE meeting aligns with several key insights from InvestingPro. The company's focus on treating rare genetic obesity disorders is reflected in its impressive gross profit margin of 88.61% for the last twelve months as of Q3 2024, indicating strong pricing power for its specialized treatments like setmelanotide. This aligns with an InvestingPro Tip highlighting the company's "impressive gross profit margins."
The positive reception of the new pediatric data may contribute to the company's strong market performance. InvestingPro data shows a remarkable 73.04% price total return over the past year, and a 63.06% return over the last six months. This performance is consistent with another InvestingPro Tip noting a "high return over the last year."
While the company's growth trajectory looks promising, investors should note that Rhythm Pharmaceuticals is not yet profitable, with an adjusted operating income of -$265.51 million for the last twelve months. This is reflected in an InvestingPro Tip stating that "analysts do not anticipate the company will be profitable this year."
For those interested in a deeper analysis, InvestingPro offers 12 additional tips for Rhythm Pharmaceuticals, providing a more comprehensive view of the company's financial health and market position.
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