Stifel maintains optimism Rhythm, setmelanotide despite SURMOUNT-2 data

Stifel analyst Dae Gon Ha said the firm is maintaining optimism on Rhythm Parmaceuticals (RYTM) shares despite read-through from Eli Lilly’s (LLY) Phase 3 SURMOUNT-2 data for tirzepatide that showed a consistent weight loss benefit at 72 weeks compared to placebo. The analyst, who made no change to the firm’s Buy rating on Rhythm shares, tells investors in a research note that the negative knee-jerk reaction may be due to potential competition worry from tirzepatide, but says that as of now, evaluations were in polygenic obesity and not hypothalamic obesity, tirzepatide is used as an adjunct to reduced calorie diet and exercise, and GI safety signals continue to be fairly high.