Ram Selvaraju, an analyst from H.C. Wainwright, reiterated the Buy rating on Rhythm Pharmaceuticals (RYTM – Research Report). The associated price target remains the same with $70.00.
Ram Selvaraju has given his Buy rating due to a combination of factors surrounding Rhythm Pharmaceuticals. The company has recently received orphan drug designation in Japan for setmelanotide, a treatment targeting acquired hypothalamic obesity. This designation is significant as it highlights the unmet medical need for this condition, which affects a relatively small patient population in Japan. The ongoing global Phase 3 trial for setmelanotide in acquired hypothalamic obesity patients is expected to provide topline data soon, which could further strengthen the company’s position in this niche market.
Additionally, Rhythm Pharmaceuticals has reacquired the rights to setmelanotide in China, which could potentially enhance their market presence in Asia. Although this reacquisition will result in a short-term reduction in licensing revenue, the long-term strategic benefits could be substantial. The valuation of Rhythm Pharmaceuticals is based on a discounted cash flow model, which incorporates a 10% discount rate and a 60% probability of regulatory approval for their programs. These factors collectively support the Buy rating with a 12-month price target of $70 per share.
In another report released on March 21, Morgan Stanley also reiterated a Buy rating on the stock with a $72.00 price target.