AstraZeneca Made a Reported $10 Billion Offer for Rhythm, and the Stock Jumped 28%

AstraZeneca offered about $10 billion to buy Rhythm Pharmaceuticals, according to Reuters and The Wall Street Journal, in a reported push into rare obesity treatments.

AstraZeneca has put a price on Rhythm Pharmaceuticals: about $10 billion, according to a Reuters report on Wednesday citing three people familiar with the matter. Its newest approach is a non-binding proposal worth as much as $134 a share when milestone payments are included, the people said.

The Wall Street Journal reported earlier on Wednesday that AstraZeneca had offered $124 a share for the company last month. AstraZeneca had expressed interest in Rhythm previously and renewed its pursuit in recent months, the Journal reported.

Neither company has confirmed the reports. An AstraZeneca spokesperson declined to comment, and representatives for Rhythm did not respond to a request for comment, according to Reuters. No agreement has been announced, and neither side has filed a disclosure about an approach.

The market priced a chance, not a deal

Shares of Rhythm closed up 28% at $110.68 on Wednesday, giving the company a market capitalization of about $7.64 billion, according to Reuters. The stock had been trading at around $95 a share on Wednesday afternoon before the Journal reported the offer.

The close sits below both reported prices - about 11% under the $124 offer and about 17% under the $134 top end, by calculation. That gap is the market's discount for an approach that is reported, non-binding and unconfirmed, and that may not become a transaction.

The drug behind the bid

Rhythm develops therapies for rare neuroendocrine disorders - hormone-system conditions that include rare forms of severe obesity. Its selling product is Imcivree, a treatment for obesity caused by certain genetic conditions and, since March, by damage to the part of the brain that controls hunger.

In March, the U.S. Food and Drug Administration expanded Imcivree's use for that brain-injury form of obesity, called acquired hypothalamic obesity. Reuters noted it was the first treatment approved in the country for the condition.

The timing sits one day after Rhythm's own results. For the third quarter, reported on Tuesday, Imcivree brought in net product revenue of $92.1 million, up 29% from the prior quarter and up from $51.3 million a year earlier.

The company said it had received more than 700 patient start forms for the new use from more than 500 prescribers by September 30. Rhythm still lost money: its net loss was $42.4 million for the quarter, narrower than the $54.3 million loss a year earlier.

"Historically, the company could be viewed as addressing ultra-rare genetic obesity. The March 2026 approval in acquired hypothalamic obesity materially changes that proposition," Jefferies analyst Michael Leuchten said, according to Reuters.

Why Alexion is the route in

The acquisition would be pursued through AstraZeneca's rare-disease business Alexion, two of the people told Reuters. AstraZeneca bought Alexion for $39 billion in 2021, and the unit has become the centerpiece of its push into high-growth specialty medicines.

AstraZeneca, with a market value of $292 billion, is far larger than its target. Reuters reported that Chief Executive Pascal Soriot is seeking to shift investors' focus back to growth after clinical trial setbacks and reports of a possible deal with Bristol Myers Squibb weighed on the shares.

Leuchten said AstraZeneca's approach in looking for rare disease assets that fit its "existing footprint is entirely sensible in our view," according to Reuters.

The wider prize is obesity care. Reuters described the obesity drug market as one of the industry's most coveted sectors, with sales that could exceed $100 billion a year over the next decade on demand for the Novo Nordisk and Eli Lilly treatments. Rhythm's therapies target rare forms of obesity rather than that broad market, so a deal would give AstraZeneca a commercial foothold in the field alongside its rare-disease portfolio.

What remains unknown

Whether Rhythm's board has engaged with the approach, rejected it, or is negotiating is not reported. Nor is it known whether the $124-a-share offer from last month was superseded by the non-binding proposal of as much as $134 a share, what the milestone payments would depend on, or how much of either price would be cash.

No other bidder has been reported, and there is no disclosed timetable. Until one of the companies speaks, the offer's status rests entirely on the two reports and the share price's reaction to them.

What to watch next

Watch for any statement or securities filing from Rhythm or AstraZeneca. A company response would turn a reported approach into a disclosed process - or end it.

Watch where Rhythm's shares settle against the reported prices. A narrowing gap would signal rising confidence in a transaction; a slide back toward where the stock traded before the reports would signal the opposite.

Watch the Imcivree launch itself. The value case rests on the new brain-injury use converting start forms into paid therapy, after third-quarter revenue reached $92.1 million and nine-month revenue reached $223.5 million.