Rising Genetic Diagnosis Will Expand Rare Disease Treatment Pipelines

The consensus price target for Rhythm Pharmaceuticals was raised to $114.86 as bullish analyst sentiment strengthened on strong Phase 2 obesity trial results, robust Imcivree sales, and optimistic expectations for regulatory milestones and long-term franchise durability.

Analyst Commentary

• Bullish analysts highlight strong Phase 2 trial results for bivamelagon in hypothalamic obesity, demonstrating significant placebo-adjusted BMI reduction at multiple doses and exceeding expectations for efficacy over 14 weeks.
• Sales momentum for Imcivree remains robust, and regulatory approval for setmelanotide in hypothalamic obesity is expected next year, with several upcoming clinical data readouts serving as further catalysts.
• Analysts note that the efficacy profile for oral bivamelagon appears comparable to setmelanotide but offers the convenience of once-daily oral dosing, with further improvements in tolerability anticipated with a new formulation.
• Investor sentiment is highly positive, with minimal concerns about safety, viewing the Phase 2 data as a "key inflection point" that substantially boosts confidence in the durability of Rhythm's MC4R franchise through at least the mid-2040s.
• The total addressable market for hypothalamic obesity is seen as sizable, with peak sales for Rhythm potentially reaching $1.9 billion, significantly increasing the intrinsic value per share and driving meaningful share price appreciation.

What's in the News

• FDA accepted Rhythm's supplemental New Drug Application for setmelanotide in acquired hypothalamic obesity, granting Priority Review and assigning a PDUFA goal date.
• Positive topline results announced from Phase 2 trial of oral bivamelagon in acquired hypothalamic obesity, showing significant BMI reductions and good tolerability, with plans for Phase 3 trial design discussions with US and EU regulators.
• Multiple presentations at ENDO 2025 showcased clinical data on setmelanotide and bivamelagon, including pivotal trials in hypothalamic obesity.
• Completed a $175 million follow-on equity offering and filed for an additional $150 million offering; lock-up agreements on certain securities apply for 31 days.
• Amended certificate of incorporation to update officer exculpation provisions following changes in Delaware law as approved by stockholders.

Valuation Changes

Summary of Valuation Changes for Rhythm Pharmaceuticals

• The Consensus Analyst Price Target has risen slightly from $112.50 to $114.86.
• The Future P/E for Rhythm Pharmaceuticals has risen slightly from 44.26x to 45.18x.
• The Net Profit Margin for Rhythm Pharmaceuticals remained effectively unchanged, at 33.78%.