Analyst Jonathan Wolleben from JMP Securities reiterated a Buy rating on Rhythm Pharmaceuticals (RYTM – Research Report) and keeping the price target at $81.00.
Jonathan Wolleben has given his Buy rating due to a combination of factors related to the promising potential of Rhythm Pharmaceuticals’ drug, setmelanotide, in treating hypothalamic obesity (HO). The upcoming Phase 3 trial results are anticipated to show significant reductions in BMI, building on the impressive 26% reduction observed in Phase 2 trials. This success could unlock a substantial market opportunity valued between $2 billion and $4 billion in the U.S., while also reducing the risk associated with Rhythm’s earlier-stage MC4R agonists.
Furthermore, setmelanotide is already approved for other rare genetic obesity conditions, which supports its likelihood of success in HO, a condition characterized by MC4R pathway dysfunction. The drug’s approval for young children also suggests a favorable safety profile. With an estimated 5,000 to 10,000 HO patients in the U.S., the potential market is significant. Additionally, positive outcomes from the ongoing trials for Rhythm’s other candidates, bivamelagon and RM-718, could further enhance the company’s market position and drive stock prices to new highs.
Wolleben covers the Healthcare sector, focusing on stocks such as Structure Therapeutics, Inc. Sponsored ADR, BioCryst, and Larimar Therapeutics. According to TipRanks, Wolleben has an average return of 2.8% and a 37.89% success rate on recommended stocks.
In another report released yesterday, Stifel Nicolaus also initiated coverage with a Buy rating on the stock with a $78.00 price target.