Rhythm Pharmaceuticals CFO Sells 42,120 Shares
Smith Hunter C, Chief Financial Officer of Rhythm Pharmaceuticals(NASDAQ:RYTM), reported mixed transactions totaling 42,120 shares on July 9, 2025, as disclosed in an SEC Form 4 filing, resulting in post-transaction holdings of 116,915 shares.
Transaction summary
| Metric | Value |
|---|---|
| Shares Traded | 42,120 |
| Transaction Value | $3.4 million (transaction value as of July 11, 2025, per Form 4) |
| Post-Transaction Shares | 116,915 |
| Post-Transaction Value | $10.4 million (market value of post-transaction holdings as of July 11, 2025) |
| YTD Performance | 71.77% (one-year total return on a calendar year basis) |
Key questions
How do the post-transaction holdings position the insider relative to ownership trends?
After the transaction, Smith Hunter C retains 116,915 shares, representing approximately 0.1838% insider ownership as of the latest available data, which is modest and consistent with ongoing reduction in net holdings over recent quarters.
What market context surrounds this transaction?
The transaction occurred with shares priced at $80.48, while the closing price on July 14, 2025, was $89.15, reflecting a price increase of 10.8% from the transaction price on July 11, 2025, to the closing price on July 15, 2025, and a 71.77% one-year total return on a calendar year basis.
Company overview
| Metric | Value |
|---|---|
| Market Capitalization | $5.69 billion |
| Revenue (TTM) | $136.86 million |
| Net Income (TTM) | ($174.02 million) |
| One-Year Price Change | 71.77% |
Company snapshot
Rhythm Pharmaceuticals is a Boston-based biopharmaceutical company focused on rare genetic diseases of obesity. It develops and commercializes IMCIVREE, a melanocortin-4 receptor agonist, for rare genetic obesity disorders, with additional pipeline candidates in Phase II clinical trials targeting related indications. The biopharma is also leveraging regulatory approvals and ongoing clinical development to expand indications and market reach. Its commercialized and developmental therapies target patients with rare genetic obesity syndromes, including POMC, PCSK1, LEPR deficiency, Bardet-Biedl syndrome, and Alström syndrome.
The company's strategy emphasizes commercializing innovative therapies for underserved patient populations, supported by a robust clinical development pipeline.
Foolish take
Shares of Rhythm Pharmaceuticals have been on a tear, especially over the last three years, with the stock returning 806%, at an annual average of 108%. It shouldn't come as a surprise, as quarterly sales numbers of IMCIVREE (a setmelanotide-based drug) -- the biopharma's only commercial drug -- also grew over 800% over this period, before pulling back a bit in the first quarter.
However, the market seems to be even more bullish about the weight-loss leader's pipeline of drugs, as evidenced by shares rocketing as much as 37% on July 9, after the company announced statistically significant body mass index (BMI) reduction in patients with acquired hypothalmic obesity, during its bivamelagon phase 2 trial.
In addition, management had previously said that it was confident of another setmelanotide-based candidate that’s already in phase 3 to progress to a potential filing with the US Food and Drug Administration (FDA) later this year.
On the financial front, thanks to its research and development costs sustaining the drug pipeline, Rhythm isn’t operationally profitable. However, the good news is that its existing commercial drug, IMCIVREE, has a gross margin of 90%. That partly explains why the market is so bullish on Rhythm’s stock.
Judging by IMCIVREE’s profitability, should the existing phase 3 and phase 2 candidates progress to commercialization, the company’s profit margins are most likely going to be substantial.
As an investor, if you have a small portion of your investment portfolio directed to more risk-tolerant positions, and you have the patience to ride out near-term volatility, then Rhythm Pharmaceuticals should be on your watchlist.
Glossary
Form 4:A required SEC filing disclosing insider trades of company securities.
Insider:An executive, director, or major shareholder with access to non-public company information.
Mixed transaction:An insider trade involving both sales and other types of transactions, such as option exercises.
Option-related activity:Transactions involving stock options, such as exercising or selling shares acquired through options.
Median trade size:The middle value of all trade sizes made by an insider, used to assess typical activity.
Percentile (e.g., 75th percentile):Indicates the value below which a given percentage of observations fall.
Insider ownership:The proportion of a company’s shares held by its insiders.
Post-transaction holdings:The number of shares an insider owns after completing a reported transaction.
Total return:The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Melanocortin-4 receptor agonist:A drug that activates the MC4 receptor, used to treat certain rare obesity disorders.
Phase II clinical trials:Studies testing a drug’s effectiveness and side effects in patients after initial safety has been established.
TTM:The 12-month period ending with the most recent quarterly report.
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Isac Simon has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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