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On Wednesday, H.C. Wainwright reaffirmed a Buy rating and a price target of $23.00 for Lexeo Therapeutics (NASDAQ:LXEO) shares. Currently trading at $4.44, the stock sits well below analysts’ targets, which range from $16 to $28. According to InvestingPro data, the stock has shown strong momentum recently, posting a 46% gain over the past week despite a challenging six-month period. The firm’s analyst highlighted Lexeo’s recent progress in the development of its LX2006 drug for treating Friedreich’s ataxia cardiomyopathy (FA CM), a rare heart condition. Lexeo Therapeutics has reported a positive update on its discussions with the FDA regarding the pivotal development of LX2006. The updated trial protocol for LX2006 now includes an increased focus on frataxin protein expression and has removed the previous 40% threshold for frataxin-positive (FXN+) area, potentially simplifying the path to regulatory approval.
The analyst noted that this protocol change is significant, especially since all four patients in the Phase 1/2 trial showed increases in frataxin. The pivotal trial will now recruit patients who have elevated left ventricular mass index (LVMI), a key measure in the disease’s progression. With a market capitalization of $147 million and a healthy current ratio of 5.52, InvestingPro analysis shows Lexeo maintains strong liquidity to support its clinical development programs. Previous data showed promising results, with reductions in LVMI observed in a substantial portion of patients after 12 and 18 months of treatment.
Lexeo Therapeutics plans to use natural history data as an external control in the upcoming pivotal study, which is expected to set a clear benchmark for clinical success. The company will determine the final dose and size of the registrational trial based on the results from Cohort 3 cardiac biopsy. These decisions are anticipated to be made sometime in 2025.
Secondary endpoints for the trial will include left ventricular wall thickness and troponin levels, which are anticipated to support the primary efficacy measures. The positive outlook is based on the preliminary data, which suggests that LX2006 could be effective in treating patients with FA CM by meeting the co-primary endpoints of reducing LVMI and increasing FXN protein expression. For deeper insights into Lexeo’s financial health and growth potential, InvestingPro subscribers can access comprehensive research reports, including detailed analysis of the company’s cash position, growth metrics, and market opportunities. This is one of 1,400+ US stocks covered by InvestingPro’s detailed research reports.
In other recent news, Lexeo Therapeutics reported a fourth-quarter loss of $0.78 per share, which was $0.06 worse than the analyst estimates of a $0.72 loss. Despite this, the company announced encouraging interim data from its clinical trials, leading to a 40.2% surge in its stock. The LX2020 HEROIC-PKP2 Phase 1/2 trial showed promising results, with significant increases in PKP2 protein expression and a reduction in premature ventricular contractions in participants. Lexeo also achieved regulatory clarity on its LX2006 program for Friedreich ataxia cardiomyopathy, aligning with the FDA on using frataxin expression increases as an endpoint.
Leerink Partners adjusted their price target for Lexeo to $18 from $19, maintaining an Outperform rating, highlighting the company’s potential despite the broader negative sentiment in the gene therapy sector. The firm noted Lexeo’s trading at a negative enterprise value, suggesting market undervaluation. Leerink is particularly interested in the final design of the pivotal study for the FA-CM program, anticipating significant developments in 2025. Lexeo completed enrollment of cohort 2 in the LX2020 trial and plans to update clinical data in the second half of 2025. The company concluded 2024 with $128.5 million in cash and investments, which it expects will fund operations into 2027.
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