Rhythm Pharmaceuticals (RYTM) Stock Forecast & Price Target

Rhythm Pharmaceuticals Inc concluded the third quarter of 2025 with a substantial cash position of $416.1 million, marking a notable increase from $291 million at the end of the previous quarter. The company anticipates that positive results from the Phase 3 Hypothalamic Obesity trial will enhance the peak sales potential of its main product, IMCIVREE (setmelanotide), while the introduction of next-generation drug oral bivamelagon could provide sustainable cash flows at least until 2040. Additionally, with the recent failure of a competitor's drug, the competitive landscape for Prader-Willi Syndrome (PWS) has improved, leading to a favorable outlook on revenue estimates and market penetration for IMCIVREE.

Rhythm Pharmaceuticals faces several significant risks that contribute to a negative outlook on its stock, including the potential failure to obtain regulatory approval for its main asset, setmelanotide, to treat additional indications beyond existing conditions, and possible setbacks in earlier-stage candidates aimed at expanding its treatment portfolio. The company's 3Q25 revenue from IMCIVREE was $51.3 million, which, while in line with consensus expectations, suggests a slower-than-expected sales ramp and raises concerns regarding the company's growth potential in a competitive market where existing treatment options for diseases like hypothalamic obesity are considered inadequate. Additionally, rising operating expenses, with GAAP R&D and SG&A both exceeding consensus estimates, coupled with unchanged guidance for Non-GAAP operating expenses, indicate potential strain on profitability and increased long-term dilution risk for shareholders.