Gold prices steady, holding sharp gains in wake of soft U.S. jobs data
On Tuesday, Cantor Fitzgerald reaffirmed its Overweight rating on Xenon Pharmaceuticals (NASDAQ:XENE), with a steady price target of $55.00. Currently trading at $35.85, the stock sits well below the broader analyst consensus target range of $42-$65. According to InvestingPro data, XENE has shown strong returns over the past month despite recent market volatility. The firm’s assessment follows the results from an investigator-initiated trial (IIT) involving Xenon’s drug azetukalnar, which is under study for its effects on depression.
The IIT, a placebo-controlled study with 60 participants, aimed to measure the impact of a 10 mg twice-daily dose of azetukalnar using functional magnetic resonance imaging (fMRI) as the primary endpoint. Secondary endpoints included the Montgomery-Åsberg Depression Rating Scale (MADRS) and the Snaith-Hamilton Pleasure Scale (SHAPS), which gauge anhedonia, or the inability to feel pleasure.
Although azetukalnar did not meet the primary endpoint in the fMRI analysis, it demonstrated consistent separation from placebo in both MADRS and SHAPS scores at all measured intervals. Notably, a 4-point difference was observed in MADRS scores at the six-week mark, along with a 3-point difference in SHAPS scores. The drug’s safety profile was also highlighted, as it did not result in weight gain or sexual dysfunction, common side effects associated with many antidepressants.
The analyst commented on the complexity of interpreting the fMRI results, citing a review paper that suggests fMRI could be a useful tool in evaluating pharmacotherapy for depression. However, the paper also indicates that the evidence is not definitive. InvestingPro analysis reveals that while the company maintains a strong financial health score and holds more cash than debt, it currently faces profitability challenges with negative earnings expected this year. Despite the inconclusive fMRI results, the clinical benefits observed were in line with those from the Phase 2 randomized X-NOVA trial reported the previous year, which adds to the body of evidence supporting azetukalnar’s potential efficacy.
Cantor Fitzgerald’s stance reflects a cautious optimism about the drug’s prospects, considering the positive secondary endpoint results and the consistent clinical benefit shown in the X-NOVA trial. The firm’s maintained price target suggests confidence in the drug’s future despite the mixed outcomes in the recent IIT. With a robust current ratio of 17.85 and minimal debt-to-equity of 0.01, InvestingPro data shows XENE is well-positioned financially to continue its drug development efforts. Discover more insights and 8 additional ProTips for XENE, along with comprehensive analysis in the Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Xenon Pharmaceuticals reported its fourth-quarter 2024 earnings, slightly beating analyst expectations with an earnings per share (EPS) of -0.84 compared to the forecast of -0.85. The company also announced a revenue of $357.14 million. Despite the earnings beat, Xenon plans to increase research and development spending in 2025 and 2026, which has raised investor concerns. Additionally, Xenon Pharmaceuticals has appointed PricewaterhouseCoopers LLP as its new independent auditor, replacing KPMG LLP, with no disagreements reported between the company and the previous auditor.
Chardan Capital Markets initiated coverage on Xenon Pharmaceuticals with a Buy rating and a $55 price target, citing the strong potential of its lead drug candidate, azetukalner, in treating epilepsy and neuropsychiatric disorders. Needham also maintained a Buy rating on Xenon, adjusting its price target from $60 to $55 following updates to its financial model and the company’s clinical trial timeline. Xenon is nearing the completion of enrollment for its phase 3 XTOLE2 trial, with results anticipated in early 2026, and plans to file a New Drug Application (NDA) around mid-2026.
The company’s financial position remains robust, with approximately $750 million in cash reserves, expected to sustain planned clinical programs into 2027. Xenon is advancing multiple phase 3 programs, including those for epilepsy and bipolar depression, and plans to increase R&D expenses significantly to support these initiatives. The anticipated clinical milestones and financial stability underline the Buy ratings from analysts, who are optimistic about Xenon’s future developments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.