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On Tuesday, Deutsche Bank (ETR:DBKGn) initiated coverage on Praxis Precision Medicines Inc . (NASDAQ:PRAX) with a Buy rating, setting a price target of $111.00. The coverage comes amid a period of high volatility for the small to mid-cap biotech company, now valued at $1.63 billion, with significant stock price appreciation of 86.52% over the past 12 months. According to InvestingPro data, the stock is trading near its 52-week high of $90.33, with notably strong momentum scores.
Praxis Precision Medicines has experienced notable setbacks, including the failure of its Phase 2/3 study of PRAX-114 in Major Depressive Disorder (MDD) in June 2022, and the miss on the primary endpoint of the Phase 2b study of ulixacaltamide in Essential Tremor (ET) in March 2023. Despite these challenges, the company’s shares have more than doubled in value as investors anticipate a year filled with potential catalysts. InvestingPro subscribers can access 14 additional key insights about PRAX’s financial health and market position to better evaluate these upcoming catalysts.
Looking ahead to the first half of 2025, the biotech firm is expected to face substantial volatility around the Phase 3 ESSENTIAL3 readout for ulixacaltamide, which comprises two parts: Study 1 with a parallel design and Study 2 featuring a randomized withdrawal. According to Deutsche Bank, the forthcoming data on ulixacaltamide carries inherent risks, but a successful outcome could significantly de-risk the investment case and provide a stronger rationale for investment in Praxis Precision Medicines.
The analyst suggests that more risk-averse investors may prefer to wait until after the ET readout before investing, in order to take advantage of subsequent data for other Praxis pipeline candidates, such as vormatrigine in the second half of 2025 and relutrigine in the first half of 2026. The initiation of a Buy rating with a price target of $111 reflects a positive outlook on the company’s prospects, despite the inherent risks associated with its clinical trials.
In other recent news, Praxis Precision Medicines Inc. has been making significant strides with its pipeline of neurological disorder treatments. Jefferies has maintained a Buy rating for the company and raised its price target to $305, highlighting the potential of Praxis’s drug discovery engine and its upcoming milestones. The firm is optimistic about the interim analysis of Praxis’s Essential3 Study 1 in essential tremor (ET), and the results from the open-label RADIANT trial of vormatrigine in common epilepsies, both expected in the first half of 2025.
Simultaneously, Truist Securities has also increased its price target for Praxis to $175, maintaining a Buy rating based on the potential success of the company’s ESSENTIAL3 Study. Analyst Joon Lee at Truist has raised the probability of success for Praxis’s ulixacaltamide in Essential Tremor from 50% to 70%, indicating increased confidence in the drug’s market potential.
Piper Sandler, another investment firm, has reaffirmed its Overweight rating on Praxis shares with a price target of $270. The firm sees potential in Praxis’s pipeline, especially the upcoming Phase 3 Essential3 ET Study 1 interim results. Piper Sandler has also identified Praxis as one of the companies with the most direct catalysts within the next 12 months.
These recent developments reflect the growing optimism and confidence in Praxis’s potential to transform neurological disorder treatments.
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