JPMorgan Starts Rhythm Pharmaceuticals (RYTM) at Overweight

JPMorgan analyst Priyanka Grover initiates coverage on Rhythm Pharmaceuticals (NASDAQ: RYTM) with a Overweight rating and a price target of $145.00.

The analyst comments: “Our OW thesis centers on Rhythm’s opportunity to grow Imcivree (setmelanotide) from a rare genetic obesity franchise into a more durable MC4R-pathway rare disease platform, driven by the newly launched acquired hypothalamic obesity (HO) indication (WW peak sales ~ $2.1B), where there is a significant unmet need. Imcivree’s recent expansion into acquired HO is an important inflection point that we expect to be a key near-term driver for the next chapter of growth for Rhythm. Along with Rhythm’s next generation assets (see below) potentially extending the franchise beyond setmelanotide IP, we see RYTM shares as currently undervalued on these key points.

We see multiple opportunities to broaden label coverage into other indications, such as congenital HO and Prader-Willi Syndrome (PWS). Imcivree’s ongoing commercial execution helps de-risk expansion efforts across the MC4R pipeline. Importantly, the next-generation assets of bivamelagon and RM-718 could extend the franchise beyond the initial setmelanotide IP window (IP ends in 2034 for the US), while potentially improving administration and tolerability and cementing Rhythm’s franchise in these rare disease obesity indications well into the 2040s. With easier administration and potentially a better tolerability profile, the next-generation assets could drive penetration deeper into the MC4R-pathway related indications.”

For an analyst ratings summary and ratings history on Rhythm Pharmaceuticals click here. For more ratings news on Rhythm Pharmaceuticals click here.

Shares of Rhythm Pharmaceuticals closed at $102.10 yesterday.

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