Analyst Ram Selvaraju from H.C. Wainwright reiterated a Buy rating on Rhythm Pharmaceuticals (RYTM – Research Report) and increased the price target to $80.00 from $70.00.
Ram Selvaraju’s rating is based on the successful results from the Phase 3 TRANSCEND trial for Rhythm Pharmaceuticals’ drug, setmelanotide, which demonstrated a significant reduction in body mass index (BMI) for patients with acquired hypothalamic obesity. The trial met its primary endpoint, showing a statistically significant difference in BMI reduction compared to placebo, with 80% of patients on setmelanotide achieving a BMI reduction of 5% or greater. These results highlight the drug’s potential effectiveness and safety, as no new safety signals were observed, and it was generally well-tolerated.
Furthermore, Selvaraju sees a substantial market opportunity for setmelanotide, with an estimated 5,000 to 10,000 potential patients in the U.S. alone. This potential market, combined with the positive trial outcomes, has led to an increased probability of approval for the drug, now at 85%. Consequently, Selvaraju has raised the 12-month price target for Rhythm Pharmaceuticals to $80, reflecting the drug’s potential to be a significant value driver for the company in the near and medium term.
According to TipRanks, Selvaraju is an analyst with an average return of -4.0% and a 30.77% success rate. Selvaraju covers the Healthcare sector, focusing on stocks such as Vanda, Axsome Therapeutics, and Emergent Biosolutions.
In another report released yesterday, Bank of America Securities also upgraded the stock to a Buy with a $63.00 price target.