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On Tuesday, H.C. Wainwright reaffirmed its Buy rating and $12.00 price target for Grace Therapeutics (NASDAQ:GRCE), which currently trades at $3.45 with a market cap of $35 million. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value model. The positive outlook follows the recent pivotal safety results for GTX-104 in aneurysmal subarachnoid hemorrhage (aSAH). GTX-104, an intravenous (IV) form of nimodipine, was evaluated against the standard-of-care oral nimodipine, demonstrating favorable safety in terms of clinically significant hypotension events.
The research firm had anticipated the primary endpoint to pose relatively low risk, given previous data indicating lower hypotension rates with GTX-104. The latest results from the STRIVE-ON study not only met expectations but also provided additional data that could potentially set GTX-104 apart from other parenteral nimodipine products in terms of FDA benefit-risk assessment and commercial value. InvestingPro subscribers can access detailed financial health metrics and 8 additional key insights about Grace Therapeutics’ market position and growth potential.
One of the key findings from the STRIVE-ON study was the marked improvement in relative dose intensity (RDI) with GTX-104. This measure reflects the total dose administered and suggests that GTX-104 could offer fewer instances of hypotension, fewer dosing interruptions, and easier administration, especially beneficial for patients who have difficulty swallowing.
H.C. Wainwright’s continued endorsement of Grace Therapeutics’ stock comes despite the potential dilution effect of a concurrent financing announcement. The company revealed that it raised $15 million, with the possibility of an additional $15 million through warrants, alongside the STRIVE-ON results. InvestingPro data shows the company holds more cash than debt and maintains a strong current ratio of 6.06, though it’s currently burning through cash rapidly. The firm believes that the increased estimates and higher probability of success for GTX-104 balance out the potential dilution from the financing.
In summary, H.C. Wainwright remains optimistic about Grace Therapeutics’ prospects, maintaining a $12 price target and Buy rating on the stock. While the company isn’t currently profitable, analysts tracked by InvestingPro expect profitability this year with a projected EPS of $4.53. The endorsement is based on recent clinical data that supports GTX-104’s safety profile and potential market advantages over existing treatments for aSAH.
In other recent news, Grace Therapeutics Inc. has reported positive results from its Phase 3 STRIVE-ON safety trial for GTx-104, an intravenous nimodipine formulation. The trial demonstrated a 19% reduction in hypotension episodes and a 29% relative increase in favorable outcomes at a 90-day follow-up for patients treated with GTx-104 compared to oral nimodipine. Grace Therapeutics plans to submit a New Drug Application for GTx-104 in the first half of 2025 based on these promising results.
In financial developments, Grace Therapeutics has secured agreements for up to $30 million in financing, led by Nantahala Capital and ADAR1 Partners, LP. The arrangement includes the issuance of over 4.4 million shares of common stock or pre-funded warrants, exercisable upon the FDA’s approval of GTx-104 or by September 2028.
These are recent developments for Grace Therapeutics, which is focused on developing treatments for rare diseases. The company’s lead clinical asset, GTx-104, has been tested in over 150 healthy volunteers and has shown lower pharmacokinetic variability compared to oral nimodipine. The funding will be used to support the pre-commercial development of GTx-104 and other general corporate purposes.
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