A look at obesity drugmaker Rhythm; Druckenmiller picked up shares in 2Q

According to its second-quarter 13F quarterly filings, billionaire Stanley Druckenmiller’s Duquesne Family Office bought shares of mid-cap biotech Rhythm Pharmaceuticals. The company develops treatments for rare forms of obesity that cannot be treated with blockbusters from Novo Nordisk and Eli Lilly and faces little competition, writes the Motley Fool analyst Prosper Junior Bakiny.

Druckenmiller’s Duquesne Family Office acquired 203,618 shares of Rhythm Pharmaceuticals in the second quarter, with the stake valued at $22.6 million at the end of the period, according to the fund’s filing with the U.S. SEC. At the close on Friday, Rhythm was trading at $110 per share, putting the current value of Druckenmiller’s stake at around $22.4 million.

See the article below for a recap of Druckenmiller's other investments in the quarter.

Rhythm develops treatments for rare forms of obesity caused by genetic disorders or damage to brain regions that control hunger, writes Bakiny of the Motley Fool. That sets them apart from Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, which are intended for patients with common forms of obesity.

Rhythm currently has only one approved product on the market, Imcivree. The U.S. FDA first approved it in 2020 for chronic weight management in patients with deficiencies of certain proteins involved in appetite regulation. Two years later, the regulator expanded the drug’s indication to include patients with Bardet-Biedl syndrome, a genetic disorder that can cause weight gain. In March 2026, the FDA approved the drug for patients with acquired hypothalamic obesity, a rare disease characterized by accelerated and sustained weight gain caused by hypothalamic injury or dysfunction.

Bakiny highlights the latest FDA decision. The company estimated the potential market for its drug across the first two indications at around 7,500 patients in the U.S. and Europe. Acquired hypothalamic obesity, meanwhile, affects around 28,000 patients in the U.S., Europe, and Japan, according to Rhythm. The new indication has therefore more than quadrupled the biotech’s addressable market, Bakiny points out. It should thus boost Rhythm’s revenue growth. In the second quarter, revenue rose 47% year over year to $71.3 million.

Imcivree’s next potential label expansion could be even more important, according to Bakiny. Rhythm has reported positive mid-stage clinical trial results in patients with Prader-Willi syndrome, a rare genetic condition that leads to constant hunger and obesity. Around 400,000 people worldwide live with the condition. Imcivree will not be eligible for approval for this indication for several years, but if it eventually wins approval, it could significantly improve the company’s financial results, Bakiny notes.

Rhythm’s potential market is not as large as those targeted by Eli Lilly and Novo Nordisk. On the one hand, that means the company faces less competition, which could allow it to generate consistent revenue and earnings, Bakiny writes. On the other hand, investing in the company carries significant risks. Beyond potential clinical and regulatory setbacks, increased competition in Rhythm’s relatively small target market could significantly hurt its prospects. Against this backdrop, Bakiny advises investors to open a small position in the stock and potentially add to it as the company makes further progress.

Overall, Wall Street is fairly upbeat on Rhythm stock: it has 16 “buy” ratings versus just one “hold,” according to MarketWatch data. There are no “sell” ratings. The average target price is $141.50 per share, implying around 29% upside from the last close.

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