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Rhythm (RYTM) Up on FDA Approval of Weight Management Drug

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Shares of Rhythm Pharmaceuticals, Inc. RYTM gained 21.15% after it announced that the FDA has approved its lead product candidate, setmelanotide, for chronic weight management under the brand name, Imcivree.

The drug has been approved for chronic weight management in adult and pediatric patients 6 years of age and older with obesity due to proopiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1 (PCSK1) or leptin receptor (LEPR) deficiency confirmed by genetic testing.

The approval makes Imcivree the first-ever FDA approved therapy for these rare genetic diseases of obesity.

The FDA approval was based on results from the largest studies conducted to date in obesity due to POMC, PCSK1 or LEPR deficiency. Results from the phase III studies showed that 80% of patients with obesity due to POMC or PCSK1 deficiency achieved greater than 10% weight loss and 45.5% of patients with obesity due to LEPR deficiency achieved greater than 10% weight loss after one year of treatment with Imcivree.

The FDA also issued a Rare Pediatric Disease Priority Review Voucher (PRV) to Rhythm, which can be redeemed to receive priority review for any subsequent marketing application or sold or transferred to other companies for their programs.

The approval is a major boost as it is the company’s first new drug approval and will generate a stream of revenues for it.

Meanwhile, the company’s Marketing Authorization Application (MAA) for setmelanotide to treat people living with obesity due to POMC, PCSK1 or LEPR deficiency is currently under review by the European Medicines Agency (EMA).  The candidate was granted the PRIority MEdicines (PRIME) designation for the treatment of obesity and the control of hunger associated with deficiency diseases of the MC4 receptor pathway in the EU.

Rhythm’s stock has rallied 27.5% in the year so far compared with  the industry’s growth of 2.1%.

Additionally, Rhythm is currently evaluating setmelanotide for reduction in hunger and body weight in a phase III study in people living with Bardet-Biedl or Alström syndrome, with top-line data expected late in the fourth quarter of 2020 or early first quarter of 2021. Rhythm also continues to enroll patients in its phase II basket study designed to rapidly facilitate proof-of-concept in new indications.

Rhythm currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech space include Halozyme Therapeutics, Inc. HALO, Repligen RGEN and Vanda Pharmaceuticals VNDA. All three carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Halozyme’s earnings estimates are up 18 cents for 2020 in the past 30 days.

Repligen’s earnings estimates are up 13 cents for 2020 in the past 30 days.

Vanda’s earnings estimates are up 12 cents for 2020 in the past 60 days.

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