Stanley Druckenmiller’s Duquesne Family Office recently filed its 13F for the second quarter. The firm opened new stakes in more than 40 stocks. Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) and Definium Therapeutics, Inc. (NASDAQ:DFTX) are the notable ones in the healthcare space.
Duquesne bought 203,618 shares of Rhythm Pharmaceuticals, Inc. worth $22.6 million. The fund also loaded up on 356,600 shares of Definium Therapeutics, Inc. worth $16.8 million. In this article, we will dig deeper into RYTM.
Analyzing RYTM
Rhythm Pharmaceuticals, Inc. makes a treatment for obesity caused by damage to the hypothalamus, the part of the brain that controls hunger. This damage usually comes from a brain tumor, surgery, or radiation. Competition is low because its treatment is currently the only drug approved for this condition.
The company estimates that about 10,000 people in the U.S. have acquired hypothalamic obesity, along with a similar number in Europe and 5,000 to 8,000 in Japan. About 500 new U.S. cases appear each year.
Growth Catalysts
Bulls also point to a potential catalyst from Rhythm Pharmaceuticals’ efforts to expand its MC4R drug franchise into additional rare diseases, including Prader-Willi syndrome, or PWS. MC4R is part of a pathway in the brain that helps regulate hunger, energy use and body weight. Rhythm’s drugs are designed to activate this pathway, potentially helping patients whose conditions cause severe hunger and obesity. PWS represents a potentially sizable opportunity. Rhythm estimates that about 12,500 to 16,000 people in the US have the disorder
Rhythm’s second-quarter revenue rose about 47% year over year, while the number of patients receiving reimbursed therapy increased more than 20% sequentially. US revenue jumped 38% from the previous quarter.
However, the company remains unprofitable, with research and development expenses and selling, general and administrative expenses rising. Rhythm ended the quarter with $330.9 million in cash, cash equivalents and short-term investments, which management expects will fund planned operations for at least 24 months.
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