Shares of Rhythm Pharmaceuticals RYTM rallied 17.1% on Monday after the company announced that it has met the primary endpoint in a late-stage study of its candidate, setmelanotide, for treating acquired hypothalamic obesity. RYTM’s setmelanotide is an MC4R agonist.

Per the data readout, the phase III TRANSCEND study met its primary endpoint with a statistically significant and clinically meaningful reduction in body mass index (BMI) with setmelanotide in adult and pediatric patients compared to placebo. It was observed that all patients with acquired hypothalamic obesity who underwent setmelanotide therapy experienced an average BMI reduction of 16.5% over 52 weeks, whereas those on placebo saw a 3.3% increase.

Please note that setmelanotide is already approved as Imcivree in the United States and EU for chronic weight management in adult and pediatric patients aged two years and older with certain genetic conditions. The eligible patient population includes those with monogenic or syndromic obesity due toBardet-Biedl syndrome or pro-opiomelanocortin, including proprotein convertase subtilisin/kexin type 1, or leptin receptor deficiency.

Year to date, shares of RYTM have lost 1.8% compared with the industry’s 7.3% decline.Zacks Investment Research

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Data From RYTM’s Phase III Obesity Study

Rhythm Pharmaceuticals reported that after 52 weeks of treatment, adult patients (18 years and older) achieved a 19.2% placebo-adjusted BMI reduction, while patients younger than 18 experienced a 20.2% reduction. Additionally, 80% of patients treated with the candidate experienced a BMI reduction of at least 5% at 52 weeks.

The company also reported clinically meaningful improvements in key secondary endpoints at week 52. Setmelanotide was well-tolerated in the late-stage study, with a safety profile consistent with previous trials and no new safety concerns. Most treatment-related adverse events were mild to moderate. Full data from the study will be presented at an upcoming medical conference.

Based on the encouraging efficacy data, RYTM is planning regulatory filings for setmelanotide for the acquired hypothalamic obesity indication in the United States and the EU in the third quarter of 2025. Subject to approval, it has the potential to become the first-ever approved therapy for these patients.

Acquired hypothalamic obesity is a severe and debilitating condition caused by hypothalamic damage, often resulting from brain tumors, their treatment, or other injuries. This leads to rapid weight gain, uncontrollable hunger (hyperphagia) and decreased energy expenditure.

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Current treatment options, including lifestyle modifications and obesity medications designed for general use, have proven largely ineffective in delivering sustained, long-term weight loss. This highlights a critical unmet medical need for targeted therapies that address the unique challenges of this condition.

Rhythm Pharmaceuticals also expects the success of its phase III TRANSCEND study to benefit the development of its next-generation MC4R agonists currently in phase I/II studies for acquired hypothalamic obesity.

Rhythm Pharmaceuticals, Inc. Price and ConsensusRhythm Pharmaceuticals, Inc. Price and Consensus

Rhythm Pharmaceuticals, Inc. price-consensus-chart | Rhythm Pharmaceuticals, Inc. Quote

RYTM Zacks Rank & Stocks to Consider

Rhythm Pharmaceuticals currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the sector are Bayer BAYRY, Dynavax Technologies Corporation DVAX and ADMA Biologics ADMA, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

In the past 30 days, estimates for Bayer’s earnings per share have increased from $1.15 to $1.19 for 2025. During the same time, earnings per share have increased from $1.24 to $1.28 for 2026. Year to date, shares of Bayer have gained 11.7%.

BAYRY’s earnings matched estimates in two of the trailing three quarters while missing the same on the remaining occasion, the average negative surprise being 19.61%.

In the past 30 days, estimates for Dynavax’s earnings per share have remained constant at 33 cents for 2025. During the same time, earnings per share have remained constant at 57 cents for 2026. Year to date, shares of DVAX have lost 2.2%.

DVAX’s earnings beat estimates in three of the trailing four quarters while missing the same on the remaining occasion, the average surprise being 9.58%.

In the past 30 days, the estimate for ADMA Biologics’ 2025 earnings per share has increased from 70 cents to 71 cents. The estimate for 2026 earnings per share has remained constant at 93 cents. Year to date, shares of ADMA Biologics have gained 7.3%.

ADMA’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 32.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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