On Tuesday, Piper Sandler expressed a positive outlook on shares of Praxis Precision Medicines Inc. (NASDAQ:PRAX), maintaining its Overweight rating and $270.00 price target for the company's stock. The firm's confidence is bolstered by the potential of PRAX's ulixacaltamide for the treatment of essential tremor (ET), as discussed during a recent fireside chat with the company's management.
Management conveyed an optimistic stance on the ulixacaltamide ET opportunity, explaining their decision to shift the interim analysis of the Essential3 Study 1 to the first quarter of 2025, rather than the fourth quarter of 2024. This strategic move aims to preserve the integrity of Study 2 and allows for additional time for analysis, considering the original timeline was set for December.
Importantly, the statistical protocol remains unchanged, and PRAX's continued pre-screening activities, along with plans to reassess ulixacaltamide's application in Parkinson's disease pending a positive Essential3 outcome, underscore the management's faith in the program.
The discussion also covered expectations surrounding PRAX's various studies, including RADIANT, POWER1, and POWER2, as well as the development pathway for another of its drugs, relutrigine. Piper Sandler's endorsement stems from their belief that PRAX represents one of the most promising investment ideas of 2025, with the ET treatment offering a sizeable opportunity alongside the company's comprehensive epilepsy program.
In other recent news, Praxis Precision Medicines has been the focus of several analyst reports. Guggenheim maintained a Buy rating on the company, keeping its $170 target price. This follows the company's update on its ulixacaltamide Essential3 Study 1, which has been rescheduled to the first quarter of 2025. Despite the shift, Praxis management maintains that their New Drug Application filing for 2025 is still on track.
Praxis has also updated its executive severance terms, enhancing benefits under certain circumstances to retain top leadership. Piper Sandler has reiterated its Overweight rating and $270 stock price target for Praxis, emphasizing the potential of the company's key assets.
Oppenheimer maintained its Outperform rating and a price target of $143, following the news of Lundbeck's acquisition of Longboard Pharmaceuticals, which is seen as a positive reflection on the DEE therapeutic area. Truist Securities also maintained its Buy rating and a $150 price target on Praxis, bolstered by positive developments in Praxis's major programs.
These recent developments underline the company's ongoing progress in its pursuit of innovative treatments. The company's drug candidate, Relutrigine, demonstrated a significant 46% reduction in motor seizures in a Phase 2 study, with over 30% of patients achieving freedom from seizures.
Furthermore, Praxis's Phase 3 clinical trial for another drug candidate, Ulixa, is expected to yield key data soon. Praxis is also planning further clinical trials, with interim Essential3 Part1 analysis expected in the fourth quarter of 2024, and the anticipated release of the relutrigine EMBOLD data in the third quarter of 2024.
InvestingPro Insights
Recent InvestingPro data provides additional context to Piper Sandler's optimistic outlook on Praxis Precision Medicines Inc. (NASDAQ:PRAX). The company's stock has shown remarkable performance, with a 477.08% price total return over the past year and a 280.75% return year-to-date. This strong momentum is reflected in the stock trading near its 52-week high, with the current price at 97.72% of that peak.
However, investors should note that PRAX's financial metrics present a mixed picture. The company's revenue for the last twelve months as of Q3 2024 was only 1.6M USD, with a negative revenue growth of -16.93%. Additionally, PRAX is not currently profitable, with a negative gross profit margin and operating income.
InvestingPro Tips highlight that PRAX holds more cash than debt on its balance sheet, which could provide financial flexibility as the company advances its drug development programs. However, analysts anticipate a sales decline in the current year, and the stock's RSI suggests it may be in overbought territory.
For investors considering PRAX, it's worth noting that InvestingPro offers 17 additional tips that could provide further insights into the company's prospects. These tips, along with real-time financial data, can help investors make more informed decisions about Praxis Precision Medicines' potential in the competitive biotech landscape.
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