Positive Outlook for Rhythm Pharmaceuticals Despite FDA Review Delay and Financial Shortfall

H.C. Wainwright analyst Ram Selvaraju has reiterated their bullish stance on RYTM stock, giving a Buy rating on November 7.

Ram Selvaraju’s rating is based on several factors that contribute to a positive outlook for Rhythm Pharmaceuticals. Despite a delay in the FDA’s review of the setmelanotide label extension for hypothalamic obesity, Selvaraju sees no impact on the company’s financial forecasts. The delay is attributed to additional sensitivity analyses requested by the FDA, with no new data required, and is considered a ‘major amendment’ allowing more review time. However, the strong clinical data supporting setmelanotide’s efficacy, its established approval for other rare weight disorders, and consistent FDA review personnel contribute to confidence in eventual approval.
Financially, Rhythm Pharmaceuticals reported a slight shortfall in third-quarter 2025 revenue and a moderate miss on the bottom line. Despite this, Selvaraju maintains a positive outlook, projecting potential upside from faster-than-expected uptake of setmelanotide in hypothalamic obesity. The company’s robust cash position, expected to fund operations for at least two years, further supports the Buy rating. Selvaraju reiterates a 12-month price target of $110 per share, reflecting confidence in the company’s strategic direction and financial health.

Selvaraju covers the Healthcare sector, focusing on stocks such as Bioxcel Therapeutics, Emergent Biosolutions, and Vanda. According to TipRanks, Selvaraju has an average return of 23.3% and a 51.40% success rate on recommended stocks.

In another report released on November 7, Morgan Stanley also reiterated a Buy rating on the stock with a $129.00 price target.