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Rhythm Pharmaceuticals Inc (RYTM)
NASDAQ:RYTM
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Rhythm Pharmaceuticals
(NASDAQ:RYTM)
49Neutral
Positive Factors
Clinical Trials
The Phase 3 study of setmelanotide in hypothalamic obesity is expected to read out positively, as prior studies have shown durable reductions despite the refractory nature of the condition.
Market Potential
The largest market opportunity for setmelanotide is hypothalamic obesity, with a conservative assumption of around 6,000 acquired patients in the US and significant peak sales potential.
Negative Factors
Financial Performance
Rhythm reported a full-year 2024 net loss of $4.34 per share.
Rhythm Pharmaceuticals (RYTM) vs. S&P 500 (SPY)
Market Cap
$3.16B
Dividend YieldN/A
Average Volume (3M)508.70K
Price to Earnings (P/E)―
Beta (1Y)2.11
Revenue Growth68.06%
EPS Growth-35.93%
CountryUS
Employees226
SectorHealthcare
Sector Strength78
IndustryBiotechnology
Share Statistics
EPS (TTM)-4.36
Shares Outstanding63,223,730
10 Day Avg. Volume632,534
30 Day Avg. Volume508,700
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)23.59
Price to Cash Flow (P/CF)-40.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$75.08Price Target Upside49.98% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Rhythm Pharmaceuticals Business Overview & Revenue Model
Company DescriptionRhythm Pharmaceuticals (RYTM) is a biopharmaceutical company focused on developing and commercializing therapies for the treatment of rare genetic disorders of obesity. The company aims to address unmet medical needs by targeting the melanocortin-4 receptor (MC4R) pathway, which plays a significant role in regulating hunger and energy expenditure. Rhythm's core product, IMCIVREE (setmelanotide), is designed to treat specific genetic obesity disorders caused by genetic variants along the MC4R pathway.
How the Company Makes MoneyRhythm Pharmaceuticals generates revenue primarily through the commercialization of its flagship product, IMCIVREE. The company earns money by selling this drug to healthcare providers, hospitals, and specialty pharmacies. The pricing of IMCIVREE reflects its status as a treatment for rare genetic disorders, which often allows for premium pricing due to the lack of alternative therapies. Rhythm also engages in strategic partnerships and collaborations that may provide additional revenue streams through research funding, milestone payments, and royalties. Furthermore, the company invests in expanding the indications for IMCIVREE, which could broaden its market and increase sales.
Rhythm Pharmaceuticals Financial Statement Overview
Summary
Rhythm Pharmaceuticals is experiencing robust revenue growth, a positive sign in the biotechnology sector. However, the company continues to face challenges with profitability and cash flow. The low debt levels are a strength, but negative equity returns and persistent net losses indicate ongoing financial difficulties.Income Statement
Rhythm Pharmaceuticals has shown significant revenue growth over the years, with an impressive increase from $3.15 million in 2021 to $130.13 million in 2024. However, profitability remains a concern as the company continues to report negative EBIT and net income, resulting in negative profit margins. The gross profit margin is relatively high at 89.71% for 2024, indicating efficient production, but the net profit margin is deeply negative due to substantial operating expenses.45
Neutral
Balance Sheet
The company's balance sheet reveals a low debt-to-equity ratio of 0.18 in 2024, indicating a conservative leverage strategy. However, the return on equity is negative due to consistent net losses, which is a major concern. The equity ratio has declined over time, reflecting increasing liabilities relative to assets, which might pose risks if the trend continues.50
Neutral
Cash Flow
Rhythm Pharmaceuticals has a negative operating cash flow of -$113.88 million in 2024, which is an improvement from previous years but still a concern. The free cash flow is also negative, suggesting that the company is not generating enough cash from its operations to cover its capital expenditures. The operating cash flow to net income ratio is positive, indicating that cash losses are smaller than accounting losses, partially due to non-cash expenses.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 130.13M | 77.43M | 23.64M | 3.15M | 0.00 | Gross Profit |
| 116.76M | 68.13M | 21.50M | 2.56M | -690.00K | EBIT |
| -265.50M | -184.36M | -179.16M | -170.06M | -136.57M | EBITDA |
| -238.09M | -168.46M | -174.51M | -68.45M | -135.88M | Net Income Common Stockholders |
| -260.60M | -184.68M | -183.08M | -68.01M | -130.73M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 320.56M | 275.85M | 333.29M | 294.86M | 172.79M | Total Assets |
| 392.27M | 332.75M | 382.48M | 329.52M | 187.07M | Total Debt |
| 3.94M | 1.26M | 1.94M | 2.55M | 3.09M | Net Debt |
| -85.20M | -58.82M | -125.73M | -56.70M | -97.77M | Total Liabilities |
| 227.72M | 162.99M | 118.22M | 45.37M | 20.55M | Stockholders Equity |
| 21.73M | 169.76M | 264.26M | 284.15M | 166.53M |
| Cash Flow | Free Cash Flow | |||
| -113.88M | -136.20M | -177.71M | -151.44M | -122.19M | Operating Cash Flow |
| -113.88M | -136.16M | -173.43M | -146.00M | -121.98M | Investing Cash Flow |
| -48.17M | -5.67M | 28.03M | -62.16M | 158.53M | Financing Cash Flow |
| 191.24M | 74.37M | 213.83M | 166.48M | 2.01M |
Rhythm Pharmaceuticals Technical Analysis
Negative
50.06
Price Trends
56.25
Negative
56.31
Negative
51.12
Negative
Market Momentum
-1.90
Positive
36.81
Neutral
17.05
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RYTM, the sentiment is Negative. The current price of 50.06 is below the 20-day moving average (MA) of 54.27, below the 50-day MA of 56.25, and below the 200-day MA of 51.12, indicating a bearish trend. The MACD of -1.90 indicates Positive momentum. The RSI at 36.81 is Neutral, neither overbought nor oversold. The STOCH value of 17.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RYTM.
Rhythm Pharmaceuticals Risk Analysis
Rhythm Pharmaceuticals disclosed 74 risk factors in its most recent earnings report. Rhythm Pharmaceuticals reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rhythm Pharmaceuticals Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $3.49B | ― | -39.22% | ― | ― | -31.37% | |
54 Neutral | $1.84B | ― | -113.76% | ― | 229.74% | 70.23% | |
52 Neutral | $125.08M | ― | -3758.21% | ― | -99.95% | -5.95% | |
49 Neutral | $3.16B | ― | -272.15% | ― | 68.06% | -35.93% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% | |
45 Neutral | $3.19B | ― | -32.02% | ― | ― | -0.12% | |
38 Underperform | $3.33B | ― | -74.17% | ― | ― | -43.10% |
* Healthcare Sector Average
Performance Comparison
RYTM
Rhythm Pharmaceuticals
51.32
10.35
25.26%
MCRB
Seres Therapeutics
0.69
-0.09
-11.54%
CRNX
Crinetics Pharmaceuticals
35.40
-5.10
-12.59%
AKRO
Akero Therapeutics
45.85
17.88
63.93%
IMVT
Immunovant
19.12
-12.70
-39.91%
ARQT
Arcutis Biotherapeutics
15.16
4.10
37.07%
Rhythm Pharmaceuticals Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -1.90% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive outlook with strong financial positioning, robust sales growth, and significant pipeline advancements. However, there are concerns about high operating expenses and potential challenges in market uptake for new indications.Highlights
Strong Financial Position
Rhythm Pharmaceuticals raised $75 million in gross proceeds, extending their cash run rate into 2027, allowing them to fund operations through multiple inflection points.
Positive Growth in IMCIVREE Sales
U.S. sales of IMCIVREE were $31.7 million in Q4 2024, accounting for 76% of the quarter's revenue, marking a significant growth compared to previous periods.
Expansion of International Access
IMCIVREE has achieved access in more than 15 countries outside the U.S., contributing to steady growth in international markets.
Pipeline Advancements
Enrollment completed for Phase II oral bivamelagon study; Phase III trial of setmelanotide in acquired HO with a second-quarter readout expected.
FDA Label Expansion for IMCIVREE
The FDA approved a label expansion for IMCIVREE to include children as young as 2 years of age, broadening its applicability and potential impact.
Lowlights
High Operating Expenses
Rhythm's operating expenses were $382.3 million for 2024, driven by increased R&D and SG&A expenses.
Potential Challenges in Market Uptake
There is uncertainty in market uptake for new indications and the impact of the FDA label expansion, which may not significantly affect revenue immediately.
Company Guidance
During the Rhythm Pharmaceuticals earnings call, the company provided several key metrics and guidance for the upcoming year. They reported entering 2025 well-capitalized with $320.6 million in cash, aided by a $75 million raise through their ATM program, extending their cash runway into 2027. The company completed enrollment in their Phase II daily oral bivamelagon study and achieved a dropout rate of below 10% in their Phase III trial of setmelanotide for acquired hypothalamic obesity (HO), with a second quarter 2025 readout expected. Revenue from global IMCIVREE sales reached $130.1 million in 2024, a significant increase from $77.4 million in 2023, with consistent growth in both the U.S. and international markets. Rhythm anticipates non-GAAP operating expenses for 2025 to be between $285 million and $315 million, with increased spending due to expansion plans and ongoing trials. The company also highlighted strategic partnerships, particularly in Turkey, to expand market reach, and emphasized the potential for growth in Japan, where the prevalence of hypothalamic obesity is higher than in the U.S. or Europe.Rhythm Pharmaceuticals Corporate Events
Business Operations and StrategyFinancial Disclosures
Rhythm Pharmaceuticals Reports Growth and Expands Pipeline
Positive
Jan 10, 2025
Rhythm Pharmaceuticals announced preliminary unaudited net revenues of $42 million for the fourth quarter and $130 million for the full year of 2024, marking significant growth driven by increased patient reimbursement and inventory growth in the U.S. The company is advancing its clinical pipeline with several ongoing and upcoming trials, including a Phase 3 trial for acquired hypothalamic obesity and a new Phase 2 trial for Prader-Willi syndrome. These developments are expected to drive further growth and provide transformative treatment opportunities for unmet medical needs, reflecting the company’s strategic focus on expanding its therapeutic impact in rare diseases.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.