BofA maintains BioXcel Therapeutics stock underperform rating

Published 03/03/2025, 20:06
BofA maintains BioXcel Therapeutics stock underperform rating

On Monday, BofA Securities maintained its Underperform rating on BioXcel Therapeutics (NASDAQ:BTAI) with a steady price target of $4.00. The firm’s analyst, Alec Stranahan, commented on the company’s recent developments, noting that BioXcel Therapeutics’ shares have surged over 150% following the news that the FDA has completed a site inspection for the TRANQUILITY II phase 3 trial, with voluntary action indicated. According to InvestingPro data, this recent rally contributed to a 9.64% gain over the past week, though the stock remains down nearly 96% from its 52-week high of $52.80.

Stranahan highlighted that the positive outcome of the FDA’s inspection, coupled with favorable findings from an independent audit conducted in October 2023, suggests a promising future for the company’s drug candidate BXCL501. The analyst believes that the conclusion of the FDA’s investigation has lifted a significant burden from the company’s stock. InvestingPro analysis reveals several key challenges ahead, including a significant debt burden of $105 million and rapid cash burn, with 12 additional exclusive insights available to subscribers.

Despite the recent advancements, BofA Securities has decided to maintain its Underperform rating and price target of $4.00 for BioXcel Therapeutics. Stranahan pointed out that while the FDA’s findings are encouraging, there is still a substantial amount of work required to fully realize the potential of Igalmi, BioXcel’s lead product. The analyst expressed concern about the company’s ability to expand its pipeline given the current rate at which it is spending its capital.

BioXcel Therapeutics regained compliance with the Nasdaq minimum bid price requirement last week, which was a crucial factor in the recent stock price rally. The company is now focused on navigating the challenges ahead to maximize the value of its offerings, amidst the constraints posed by its financial situation.

In other recent news, BioXcel Therapeutics, Inc. has announced several significant developments. The company reported that it has regained compliance with Nasdaq’s minimum bid price requirement, ensuring its continued listing on the Nasdaq Capital Market. This compliance was achieved by maintaining a minimum closing bid price of $1.00 per share for at least 12 consecutive trading days. Additionally, BioXcel has implemented a 1-for-16 reverse stock split, which is intended to increase the per-share trading price of its common stock.

The U.S. Food and Drug Administration (FDA) has completed its inspection of a site involved in BioXcel’s TRANQUILITY II Phase 3 trial, issuing a "Voluntary Action (WA:ACT) Indicated" status. This status acknowledges certain conditions without recommending immediate regulatory actions. The company is also progressing with its SERENITY At-Home pivotal Phase 3 trial, with 23 clinical trial sites actively enrolling patients to assess the safety of BXCL501. BioXcel aims to use the data from this trial to support a supplemental new drug application for IGALMI®.

Furthermore, BioXcel disclosed the resignation of Vincent J. O’Neill, M.D., who served as Executive Vice President and Chief of Product Development and Medical (TASE:BLWV) Officer. These recent developments reflect BioXcel’s ongoing efforts in drug development, leveraging artificial intelligence and big data analytics.

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