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On Wednesday, Chardan Capital Markets began coverage of Praxis Precision Medicines Inc. (NASDAQ: PRAX), issuing a Buy rating and setting a price target of $80.00. The firm’s optimism is anchored in the promise of the company’s epilepsy treatments, despite a recent setback in another program. Currently trading at $35.17, the stock has seen significant volatility, with analyst targets ranging from $28 to $270. InvestingPro analysis indicates the stock is currently undervalued based on its Fair Value model.
Praxis’s lead compound, ulixacaltamide, did not meet expectations in an interim analysis of the Phase 3 essential tremor program, with final data anticipated in the third quarter of 2025. Consequently, the company’s focus has pivoted to its epilepsy portfolio, where multiple products are advancing into late-stage trials.
Epilepsy, a central nervous system disorder, is a key area of interest for Chardan, which views Praxis as a well-rounded contender in the market. The company’s strategy involves a range of products targeting voltage-gated sodium channels, a scientifically validated approach.
Financial stability is another factor supporting Chardan’s positive outlook. Praxis reported approximately $470 million in cash reserves as of the first quarter of 2025, which is expected to fund its operations through 2028, covering all planned programs. InvestingPro data confirms the company’s strong liquidity position, with a current ratio of 8.44 and more cash than debt on its balance sheet. The platform’s Financial Health Score rates the company as ’FAIR’, with particularly strong scores in cash flow management.
Looking ahead, Praxis’s key epilepsy treatments are set for several pivotal study results, with data releases scheduled for the second half of 2025 and the first half of 2026. Chardan anticipates these data points could be favorable, based on the mechanism of action and preliminary results from early-stage studies. The next earnings report is expected on August 19, 2025, which could provide further insights into the company’s development progress and financial position.
In other recent news, Praxis Precision Medicines has reported significant progress in its clinical programs for developmental and epileptic encephalopathies (DEEs). The EMBOLD study showed a mean seizure reduction of approximately 90% after 11 months of treatment with relutrigine, and the company is advancing the EMBRAVE3 trial for its ASO therapy, elsunersen. Despite these promising developments, the Independent (LON:IOG) Data Monitoring Committee recommended halting the Essential3 study for ulixacaltamide due to futility, prompting analysts at TD Cowen and Truist Securities to lower their price targets for Praxis while maintaining a Buy rating. TD Cowen adjusted its target to $61, and Truist Securities revised its target to $85, reflecting changes in their valuation models and the removal of Essential Tremor from consideration.
Praxis has also awarded stock options and restricted stock units to new employees as part of an inducement plan, aiming to incentivize and retain talent within the organization. The company reported a strong financial position with $469.5 million in cash and equivalents, expected to fund operations into 2028. Research and development expenses increased in 2024, primarily due to the Cerebrum™ platform, leading to a net loss of $58.7 million for the fourth quarter. Despite the challenges, Praxis remains focused on its epilepsy pipeline, with several studies expected to deliver key data in 2025.
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