Rhythm Pharma Hits Record High on Prader-Willi Syndrome Drug Data
Stock surges after a study showed its drug setmelanotide reduced hunger and BMI, paving the way for a pivotal Phase 3 trial for the rare genetic disease.
Shares of Rhythm Pharmaceuticals Inc. (RYTM) surged more than 14% on Wednesday to a new 52-week high after the company announced positive preliminary data from a Phase 2 trial of its drug, setmelanotide, in patients with Prader-Willi syndrome (PWS).
The Boston-based biopharmaceutical firm saw its stock climb to $120.04 in midday trading, capping a remarkable run for the company, which focuses on rare genetic forms of obesity. The rally was sparked by a press release issued before the market opened, detailing encouraging results for its flagship drug.
The exploratory study showed that setmelanotide demonstrated a “positive efficacy signal” in treating PWS, a complex and rare genetic disorder characterized by an insatiable, uncontrollable hunger known as hyperphagia. According to the company, a majority of patients experienced reductions in both Body Mass Index (BMI) and the severe hunger that marks the condition. The results showed that six of eight patients treated with the drug achieved a reduction in BMI from their baseline at the three-month mark. Furthermore, six of seven evaluable patients showed a meaningful reduction in their hyperphagia scores.
“We are encouraged by these preliminary results, which give us confidence to advance setmelanotide into a registrational Phase 3 trial for PWS,” said David Meeker, M.D., Chairman, CEO, and President of Rhythm Pharmaceuticals, in a statement. “We look forward to additional data in the first half of 2026 and remain committed to exploring the potential of MC4R agonism for this patient population, for whom there are very few treatment options available.”
The plan to advance to a pivotal Phase 3 trial is a critical step, signaling a clear regulatory path forward. A successful Phase 3 outcome would allow Rhythm to seek FDA approval to expand the use of setmelanotide, which is currently marketed as Imcivree.
Imcivree is already approved for chronic weight management in adult and pediatric patients with obesity due to three other rare genetic conditions. A label expansion into Prader-Willi syndrome would significantly broaden the drug's commercial potential, as PWS is one of the more common rare genetic causes of life-threatening obesity. The indication is highly sought after in the biopharmaceutical industry, as there are currently no approved treatments for the hyperphagia associated with the syndrome.
The market's enthusiastic response, as reported by sources like MarketWatch, lifts Rhythm's market capitalization to approximately $6.7 billion. Wall Street analysts maintain a bullish outlook on the company, with 14 analysts rating the stock as a 'Buy' or 'Strong Buy' and zero 'Hold' or 'Sell' ratings. The average analyst price target sits at $127, suggesting further potential upside even after Wednesday's sharp rally.
Investors will be watching for the company to initiate its Phase 3 trial and provide further updates on its pipeline. In addition to the current daily formulation of setmelanotide, Rhythm is also developing a next-generation weekly MC4R agonist, RM-718, and expects to begin screening PWS patients for a study with that compound this month.