Rhythm Pharmaceuticals, Inc. (RYTM) | Investment Case

1. Company Snapshot

1.a. Company Description

Rhythm Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the development and commercialization of therapeutics for the treatment of rare genetic diseases of obesity.The company's lead product candidate is IMCIVREE, a potent melanocortin-4 receptor for the treatment of pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1, leptin receptor (LEPR) deficiency obesity, and Bardet-Biedl and Alström syndrome.It is also developing setmelanotide, which is in Phase II clinical trials for treating POMC or LEPR heterozygous deficiency obesities, steroid receptor coactivator 1 deficiency obesity, SH2B1 deficiency obesity, MC4 receptor deficiency obesity, Smith-Magenis syndrome obesity, POMC epigenetic disorders, and other MC4R disorders.

Rhythm Pharmaceuticals, Inc.has a collaborative research agreement with the Clinical Registry Investigating Bardet-Biedl Syndrome.The company was formerly known as Rhythm Metabolic, Inc.

and changed its name to Rhythm Pharmaceuticals, Inc.in October 2015.Rhythm Pharmaceuticals, Inc.

was founded in 2008 and is headquartered in Boston, Massachusetts.

Show Full description

1.b. Last Insights on RYTM

Rhythm Pharmaceuticals' recent performance was driven by several positive factors. The company's Q3 2025 net product revenue from global sales of IMCIVREE (setmelanotide) reached $51.3 million. Additionally, the company is on track to report preliminary results from the setmelanotide Phase 2 trial in Prader-Willi syndrome in Q4 2025. A German observational study showed setmelanotide therapy improved measures of MASLD and kidney function in BBS patients. Furthermore, the company presented four datasets at ObesityWeek 2025, highlighting setmelanotide's potential in treating acquired hypothalamic obesity.

1.c. Company Highlights

2008 - Rhythm Pharmaceuticals, Inc. was founded by a team of entrepreneurs and scientists with expertise in genetics, genomics, and biotechnology.

2010 - The company raised $40 million in Series A financing to support the development of its genetic obesity therapies.

2014 - Rhythm Pharmaceuticals, Inc. initiated its Phase 2 clinical trial of setmelanotide, a melanocortin-4 receptor (MC4R) agonist, in patients with rare genetic disorders of obesity.

2017 - The company raised $80 million in Series B financing to advance its pipeline of genetic obesity therapies.

2019 - Rhythm Pharmaceuticals, Inc. reported positive Phase 2 data for setmelanotide in patients with pro-opiomelanocortin (POMC) deficiency obesity.

2020 - The company submitted a New Drug Application (NDA) to the FDA for setmelanotide for the treatment of POMC deficiency obesity.

2022 - Rhythm Pharmaceuticals, Inc. received FDA approval for IMCIVREE (setmelanotide) for the treatment of obesity due to POMC, PCSK1, or LEPR deficiency.

Last Price	104.6
Change Percentage	-1.04%
Open	105.7
Previous Close	105.7
Market Cap ( Millions)	6981
Volume	533832
Year High	116
Year Low	45.91
M A 50	104.15
M A 200	80.13

FCF Yield	-1.56%
Dividend Yield	0.00%
ROE	-126.11%
Debt / Equity	101.47%
Net Debt / EBIDTA	-58.42%
Price To Book	45.23
Price Earnings Ratio	-35.0
Price To FCF	-63.97
Price To sales	40.04
EV / EBITDA	-41.81

2. Rhythm Pharmaceuticals' Q3 2025 Earnings: Strong Growth and Progress on Regulatory Front

Rhythm Pharmaceuticals delivered a strong financial performance in Q3 2025, with global revenue reaching $51.3 million, representing a 6% sequential increase from Q2 2025. The revenue was driven by a high single-digit percentage increase in reimbursed patients on therapy in the US, while international revenue was affected by variability in ordering patterns. The company's operating expenses were $98.5 million, including $18.8 million in stock-based compensation. The actual EPS came out at '-0.82', slightly worse than estimates at '-0.72'.

Publication Date: Nov -10

                                    📋 Highlights
                                    Q3 2025 Revenue Growth:
                                                Generated $51.3 million in IMCIVREE sales, with 10% growth in reimbursed patients and 6% sequential revenue increase from Q2 2025.
Equity Offering Strengthening Balance Sheet:
                                                Completed a $189 million equity offering in July, ending Q3 with $416.1 million in cash, providing ≥24 months of runway.
Regulatory Milestones for Acquired HO:
                                                FDA PDUFA date set for December 20, with EMA submission for EU approval and anticipated CHMP opinion by mid-2026; target market of ~2,000 patients.
Commercialization Readiness:
                                                Hired experts for HO launch, identified 5,000 potential endocrinologists via claims data, and engaged with payers for reimbursement processes.
Prader-Willi Syndrome (PWS) Trial Progress:
                                                Aiming to report preliminary Phase II results by year-end, with a 52-week trial extension and potential Phase III go/no-go decision post-data disclosure.

                                

Financial Performance and Guidance

The company's cash position stood at $416.1 million at the end of Q3, providing at least 24 months of runway. For 2025, Rhythm Pharmaceuticals expects $295 million to $315 million in non-GAAP operating expenses. Analysts estimate next year's revenue growth at 56.5%, indicating a strong outlook for the company.

Regulatory Progress and Upcoming Milestones

Rhythm Pharmaceuticals made significant progress on its regulatory front, with the FDA and EMEA accepting regulatory filings for IMCIVREE in acquired hypothalamic obesity (HO). The company is preparing for the potential launch of IMCIVREE for acquired HO later in Q4 2025, pending FDA approval, with a PDUFA date of December 20. The company has had positive discussions with payers and is expecting a gradual launch curve, similar to other rare disease launches.

Valuation and Growth Prospects

With a P/S Ratio of 38.4 and an estimated revenue growth of 56.5% next year, the company's valuation appears to be pricing in significant growth prospects. However, the ROE (%) stands at -126.11, and the ROIC (%) is -46.28, indicating that the company is still in a growth phase and has not yet achieved profitability. As the company approaches potential approval and launch of IMCIVREE for acquired HO, investors will be watching closely for progress on this front.

Clinical Trials and International Launch Preparations

The company is also making progress on its clinical trials, with an amendment to the Prader-Willi syndrome (PWS) trial extending it to 52 weeks, and initial data expected in December. International launch preparations for HO are underway, particularly in Europe, with engagement with payers and experts. The company is also exploring the potential for additive benefit with setmelanotide in patients on background VCA.

3. NewsRoom

Rhythm: Maintaining Strong Buy On Acquired Hypothalamic Obesity Drug Progress

Nov -25

Source: seekingalpha.com

AXQ Capital LP Purchases Shares of 4,560 Rhythm Pharmaceuticals, Inc. $RYTM

Nov -25

Source: defenseworld.net

Rhythm Pharmaceuticals Announces Presentation of Four Datasets at ObesityWeek® 2025

Nov -10

Source: globenewswire.com

Rythm Pharmaceuticals' (RYTM) Chief Technical Officer Sells 9,748 Shares for $1.1 Million

Nov -08

Source: fool.com

Rhythm Pharmaceuticals Announces FDA Extension of Review Period for IMCIVREE® (setmelanotide) for Patients with Acquired Hypothalamic Obesity

Nov -07

Source: globenewswire.com

AlphaQuest LLC Decreases Stake in Rhythm Pharmaceuticals, Inc. $RYTM

Nov -06

Source: defenseworld.net

Rhythm Pharmaceuticals Announces Public Reimbursement for IMCIVREE® (setmelanotide) in Canada in Five Provinces and Under the Federal Non-Insured Health Benefits Program

Nov -05

Source: globenewswire.com

Rhythm Pharmaceuticals, Inc. (RYTM) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (25.90%)

6. Segments

Therapeutics

Expected Growth: 25.9%

Growing prevalence of rare genetic disorders, increasing awareness of peptide therapeutics, and Rhythm's lead candidate setmelanotide's potential to address unmet needs in POMC, PCSK1, and LEPR deficiency drive growth in this segment.

7. Detailed Products

Setmelanotide

Setmelanotide is a melanocortin-4 receptor (MC4R) agonist, a novel, first-in-class therapy for the treatment of obesity and rare genetic disorders of obesity.

IMCIVREE

IMCIVREE is a melanocortin-4 receptor (MC4R) agonist, a novel, first-in-class therapy for the treatment of obesity and rare genetic disorders of obesity.

8. Rhythm Pharmaceuticals, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Rhythm Pharmaceuticals, Inc. operates in the biotechnology industry, which is characterized by high research and development costs. This makes it difficult for substitutes to emerge, reducing the threat of substitutes.

Bargaining Power Of Customers

Rhythm Pharmaceuticals, Inc. primarily sells its products to healthcare providers and patients, who have limited bargaining power due to the specialized nature of the company's products.

Bargaining Power Of Suppliers

Rhythm Pharmaceuticals, Inc. relies on a limited number of suppliers for raw materials and services, which gives them some bargaining power. However, the company's strong relationships with its suppliers mitigate this risk.

Threat Of New Entrants

The biotechnology industry has high barriers to entry, including significant research and development costs, regulatory hurdles, and the need for specialized expertise. This makes it difficult for new entrants to enter the market.

Intensity Of Rivalry

The biotechnology industry is highly competitive, with many established players and new entrants vying for market share. Rhythm Pharmaceuticals, Inc. faces intense competition from companies with similar products and pipelines.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	0.74%
Debt Cost	14.29%
Equity Weight	99.26%
Equity Cost	14.29%
WACC	14.29%
Leverage	0.74%

11. Quality Control: Rhythm Pharmaceuticals, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

PTC Therapeutics

A-Score: 5.8/10

Value: 7.8

Growth: 5.6

Quality: 8.6

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

BioMarin Pharmaceutical

A-Score: 4.9/10

Value: 4.3

Growth: 8.4

Quality: 8.0

Yield: 0.0

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

Rhythm Pharma

A-Score: 4.5/10

Value: 6.0

Growth: 5.1

Quality: 3.8

Yield: 0.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

Amicus Therapeutics

A-Score: 3.6/10

Value: 4.4

Growth: 7.6

Quality: 3.8

Yield: 0.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

Cytokinetics

A-Score: 3.5/10

Value: 8.0

Growth: 0.4

Quality: 4.9

Yield: 0.0

Momentum: 6.0

Volatility: 1.7

1-Year Total Return ->

Celldex Therapeutics

A-Score: 3.4/10

Value: 6.6

Growth: 3.0

Quality: 5.0

Yield: 0.0

Momentum: 3.0

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

58.07%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

14.29%

Rhythm Pharmaceuticals, Inc. - US76243J1051

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on RYTM

1.c. Company Highlights

Strong Momentum

Average Growth

Fairly Valued

Revenues Miss

Average Quality

Earnings Beats

Revenues Beats

Stable Momentum

Earnings Miss

Average Yield

Lower Growth

2. Rhythm Pharmaceuticals' Q3 2025 Earnings: Strong Growth and Progress on Regulatory Front

Financial Performance and Guidance

Regulatory Progress and Upcoming Milestones

Valuation and Growth Prospects

Clinical Trials and International Launch Preparations

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (25.90%)

6. Segments

Therapeutics

Expected Growth: 25.9%

7. Detailed Products

Setmelanotide

IMCIVREE

8. Rhythm Pharmaceuticals, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Rhythm Pharmaceuticals, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

104.6$

Current Price

104.6$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA