Rhythm Pharmaceuticals (NASDAQ:RYTM) Releases Earnings Results, Beats Expectations By $0.10 EPS

Rhythm Pharmaceuticals (NASDAQ:RYTM) released its earnings results on Tuesday. The company reported ($0.61) earnings per share for the quarter, topping analysts’ consensus estimates of ($0.71) by $0.10, Zacks reports. The firm had revenue of $92.13 million for the quarter, compared to the consensus estimate of $85.56 million. Rhythm Pharmaceuticals had a negative net margin of 85.59% and a negative return on equity of 159.87%. The company’s revenue was up 79.6% compared to the same quarter last year. During the same period in the prior year, the firm earned ($0.82) EPS.

Here are the key takeaways from Rhythm Pharmaceuticals’ conference call:

• Strong U.S. acquired hypothalamic obesity launch: Q3 global IMCIVREE revenue rose 29% sequentially to $92.1 million, with U.S. revenue of $67.5 million. Rhythm reported more than 700 acquired HO patient start forms, over 500 prescribers, and continued demand growth entering Q4.
• Encouraging market access: Approximately 60% of Medicaid-covered lives and 75% of commercial-covered lives were covered by acquired HO policies at quarter-end, while more than 80% of reimbursement approvals were obtained within 60 days of receiving a start form.
• International expansion is underway: IMCIVREE launched in Japan on October 14 at a price of approximately $2,200 per vial, with more than 1,000 potentially eligible patients identified. Rhythm expects Japan to become its second-largest market, although two-week prescription limits may constrain first-year revenue; European launches are expected to begin in 2027.
• Pipeline expansion: Rhythm plans to initiate a phase III bivamelagon study in hypothalamic obesity in early 2027 and pursue a six-month phase III Prader-Willi syndrome study focused on hyperphagia. Management also expects to develop next-generation MC4R therapies and potential combination approaches.
• Higher financing obligations: Rhythm amended its LG Chem agreement to reduce potential royalties to a 1% flat rate, but committed to $350 million in payments over four years and took an initial $250 million term loan at SOFR plus 4.6%. The company ended Q3 with about $321 million in cash and investments, excluding these transaction-related cash flows.

Rhythm Pharmaceuticals Price Performance

Shares of Rhythm Pharmaceuticals stock opened at $86.44 on Wednesday. Rhythm Pharmaceuticals has a 1 year low of $74.50 and a 1 year high of $122.20. The firm’s 50-day moving average is $96.35 and its 200 day moving average is $97.16. The stock has a market cap of $5.92 billion, a price-to-earnings ratio of -27.79 and a beta of 2.17.

Insider Buying and Selling at Rhythm Pharmaceuticals

In other news, insider Alastair Garfield sold 7,763 shares of the company’s stock in a transaction that occurred on Thursday, August 13th. The shares were sold at an average price of $117.57, for a total value of $912,695.91. Following the transaction, the insider owned 2,295 shares in the company, valued at approximately $269,823.15. This represents a 77.18% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Hunter Smith sold 62,774 shares of the stock in a transaction that occurred on Monday, August 31st. The shares were sold at an average price of $105.46, for a total transaction of $6,620,146.04. Following the sale, the chief financial officer owned 114,024 shares in the company, valued at approximately $12,024,971.04. The trade was a 35.51% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 258,450 shares of company stock worth $28,796,497 in the last 90 days. Insiders own 5.90% of the company’s stock.

Analyst Upgrades and Downgrades

A number of brokerages recently issued reports on RYTM. Citizens Jmp lifted their price target on shares of Rhythm Pharmaceuticals from $160.00 to $166.00 and gave the company a “market outperform” rating in a research report on Wednesday. Needham & Company LLC cut their price objective on shares of Rhythm Pharmaceuticals from $130.00 to $114.00 and set a “buy” rating on the stock in a report on Tuesday. Deutsche Bank Aktiengesellschaft began coverage on shares of Rhythm Pharmaceuticals in a research note on Friday, August 28th. They set a “hold” rating and a $120.00 target price for the company. Citigroup reiterated a “market outperform” rating on shares of Rhythm Pharmaceuticals in a report on Wednesday, August 5th. Finally, Canaccord Genuity Group set a $154.00 price target on Rhythm Pharmaceuticals in a research report on Wednesday, August 5th. Eighteen research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $141.94.

Key Stories Impacting Rhythm Pharmaceuticals

Here are the key news stories impacting Rhythm Pharmaceuticals this week:

• Positive Sentiment: IMCIVREE revenue was $92.1 million, up 29% from the prior quarter and 79.6% year over year. The company’s loss of $0.61 per share was narrower than consensus expectations, while revenue exceeded estimates. Rhythm Pharmaceuticals Q3 results and business update
• Positive Sentiment: Commercial progress included more than 700 patient start forms for U.S. acquired hypothalamic obesity treatment by Sept. 30, the start of Japan’s IMCIVREE launch, and plans to advance bivamelagon into pivotal development for Prader-Willi syndrome. Rhythm Pharmaceuticals Q3 results and business update
• Neutral Sentiment: Rhythm amended its LG Chem license, lowering royalties on global sales of its MC4R agonists to 1% but committing to $350 million in fixed payments over four years. The company also announced up to $750 million in financing for its obesity pipeline. The funding may support development, while the fixed payments add cash obligations. LG Chem license amendment
• Negative Sentiment: Despite the earnings and revenue beats, reports said the stock slipped after the Q3 announcement, indicating the results and outlook may not have met investor expectations. Needham lowered its price target from $130 to $114, though it maintained a Buy rating. Stock reaction to Q3 report

About Rhythm Pharmaceuticals

Rhythm Pharmaceuticals, Inc is a biopharmaceutical company focused on developing and commercializing therapies for rare genetic diseases of obesity and related metabolic disorders. The company’s work is based on the melanocortin-4 receptor (MC4R) pathway, which plays an important role in regulating hunger and energy balance.

Rhythm’s principal product is IMCIVREE (setmelanotide), a targeted therapy designed to restore impaired MC4R pathway signaling. In the United States, IMCIVREE is approved for chronic weight management in adults and children at least 6 years old with obesity caused by certain genetic deficiencies, including POMC, PCSK1, or LEPR deficiency, as well as Bardet-Biedl syndrome.