Maintaining a Buy: Setmelanotide’s PDUFA Catalyst and Subgroup Signals Offset EMANATE Miss

Analyst Tazeen Ahmad from Bank of America Securities reiterated a Buy rating on Rhythm Pharmaceuticals and decreased the price target to $139.00 from $145.00.

Tazeen Ahmad has given his Buy rating due to a combination of factors, despite the EMANATE phase 3 trial not meeting its primary endpoint in broad rare genetic obesity. He underscores that the study was exploratory in nature and highlights robust post-hoc signals in specific genetically defined subgroups, which support continued development of next-generation MC4R-targeting assets.

Tazeen Ahmad’s rating is based on the view that the key near-term value driver is the upcoming PDUFA decision for setmelanotide in acquired hypothalamic obesity, where he assigns a high probability of approval and sees a meaningful, underserved U.S. patient pool. He also notes that GLP-1 competition may ultimately expand the addressable market through GLP-failure patients, and, incorporating updated assumptions into his DCF, he still derives a price objective of $139, implying attractive upside from current levels.

Ahmad covers the Healthcare sector, focusing on stocks such as Vertex Pharmaceuticals, Gilead Sciences, and Argenx Se. According to TipRanks, Ahmad has an average return of 0.0% and a 50.72% success rate on recommended stocks.

In another report released today, Needham also assigned a Buy rating to the stock with a $130.00 price target.