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On Tuesday, Deutsche Bank (ETR:DBKGn) initiated coverage on Xenon Pharmaceuticals (NASDAQ:XENE) with a Buy rating and a price target of $67.00, well above the current trading price of $39.25. The new coverage is based on the company’s strong performance compared to the XBI since October 2021, following positive Phase 2b data in focal epilepsy for its drug candidate, azetukalner. According to InvestingPro data, analyst targets currently range from $43 to $65, showing broad institutional confidence in this late-stage, partially de-risked asset.
Xenon’s stock has seen an uptick since November 2023, when concerns regarding Phase 2 data in Major Depressive Disorder (MDD) for azetukalner were alleviated. Furthermore, the company has attracted attention due to the growing interest from large pharmaceutical companies in acquiring CNS small to mid-cap biotech firms. InvestingPro analysis confirms the company’s strong financial position, with a remarkable current ratio of 22.21 and an overall Financial Health Score of "FAIR." Xenon is considered well-capitalized, with approximately $800 million in cash as of the end of the third quarter of 2024.
The bank’s analysts highlighted the near-term catalyst for Xenon, which is the Phase 3 X-TOLE2 data in focal epilepsy for azetukalner, expected in the second half of 2025. They anticipate that the stock could see a gradual increase in value in mid-2025 as the market anticipates the data readout. With the next earnings report due on February 26, 2025, investors can gain deeper insights into the company’s progress through the comprehensive Pro Research Report available on InvestingPro. The analysts also suggest that Xenon’s potential as an acquisition target could provide a safeguard for the stock, minimizing downside risks.
Deutsche Bank’s coverage comes at a time when Xenon Pharmaceuticals, with its current market capitalization of $2.99 billion, continues to progress in its clinical trials and maintains a strong financial position. With the upcoming Phase 3 data, the company is poised for potential growth, as reflected in the analyst’s positive outlook and the $67 price target set for the stock. For detailed financial analysis and additional insights, investors can access the full suite of metrics and 8 exclusive ProTips through InvestingPro.
In other recent news, Xenon Pharmaceuticals has seen a series of executive changes. The departure of Chief Commercial Officer, Christopher Von Seggern, has been announced, with a separation agreement in place. Von Seggern will also continue to provide consultancy services to the company until May 2025. In other developments, TD Cowen has outlined ten anticipated biotech catalysts for 2025, with Xenon Pharmaceuticals expected to publish Phase III functional outcome score data for Azetukalner.
H.C. Wainwright has maintained a positive outlook for Xenon, primarily due to the potential of azetukalner, Xenon’s new antiseizure medication. This follows interactions with Xenon’s management and clinicians at the American Epilepsy Society Meeting. Furthermore, the firm has reiterated a Buy rating for Xenon shares, influenced by the company’s efforts to expand its drug portfolio and plans to file multiple Investigational New Drug applications in 2025.
Lastly, RBC Capital has slightly increased Xenon’s price target to $56.00, maintaining its Outperform rating. This adjustment reflects positive expectations for the company’s upcoming clinical data releases and the potential of azetukalner. The first half of 2025 is anticipated to bring investigator Major Depressive Disorder data, followed by the initial Phase III epilepsy readout in the latter half of the year.
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