BofA Securities Downgrades Rhythm Pharmaceuticals (RYTM) to Neutral

BofA Securities analyst Tazeen Ahmad downgraded Rhythm Pharmaceuticals (NASDAQ: RYTM) from Buy to Neutral with a price target of $42.00 (from $49.00).

The analyst comments "Following 4Q23 results that were impacted by a state adding barriers to Medicaid reimbursement and 1Q24 sales that were lighter than we and consensus modeled, we assume a less steep uptake for Imcivree, namely in BBS (see model changes). While we note management continues to execute on finding new patients, they acknowledge the launch in initial indications will be slow and steady as opposed to having an outsized trajectory. We think the stock’s current valuation accounts for this outlook and their view that these indications could be at least $300mn in sales. As RYTM navigates the patient finding process we will also look for color on steady state patient compliance and discontinuation rates for insight on long-term Imcivree opportunity. In our view, the next leg of growth for the company will come from the potentially much larger hypothalamic obesity (HO) launch (we model late-2026 with ~$1bn peak sales), and we downgrade our RYTM rating from Buy to Neutral with new $42 PO."

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 $39.35 yesterday.

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