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On Monday, H.C. Wainwright maintained a Buy rating on Lexaria Bioscience (NASDAQ:LEXX) shares with a steady price target of $10.00. The firm's position comes in the wake of Lexaria Bioscience's announcement of positive results from its diabetes animal study, WEIGHT-A24-1, which concluded last week.
The study's findings indicated that Lexaria's DehydroTECH candidates showed superior body weight control compared to Rybelsus, with significant statistical results.
The study involved 12 groups of animals and revealed that by the end of the 12-week period, improvements in body weight control were statistically significant in all but one group when compared to Rybelsus.
Particularly, DehydraTECH-liraglutide and a specific DehydraTECH-CBD formulation led the pack, demonstrating an 11.53% and 10.65% greater reduction in body weight, respectively. These groups also showed notable improvements in blood sugar levels, with reductions of 11.13% and 3.35%, respectively.
Additionally, DehydraTECH-semaglutide compositions, both with and without SNAC technology, surpassed the Rybelsus control group in terms of body weight control. The final weeks of the study were pivotal, as all groups displayed enhanced weight control.
The combination drug groups, which included CBD3+semaglutide and CBD3+liraglutide, outshone both the placebo and Rybelsus control groups in terms of body weight management at the 12-week mark. However, these groups did not perform as well in blood sugar control compared to other time points in the study.
The outcomes of the WEIGHT-A24-1 study are seen as a supportive step for Lexaria Bioscience's development plan, which aims to progress these candidates into a Phase 1b human study with chronic dosing.
According to H.C. Wainwright's analysis, these results bolster the case for further development and the firm's continued endorsement of Lexaria Bioscience's stock with a $10 price target reflects optimism in the company's prospects.
InvestingPro Insights
Lexaria Bioscience's recent positive study results align with some promising financial indicators. According to InvestingPro data, the company's revenue growth stands at 34.05% for the last twelve months as of Q3 2024, suggesting an expanding market for its innovative drug delivery technology. This growth is particularly relevant given the potential of DehydraTECH candidates in the lucrative diabetes and weight management markets.
InvestingPro Tips highlight that analysts anticipate sales growth in the current year, which could be fueled by the advancement of Lexaria's diabetes and weight control candidates. Additionally, the company holds more cash than debt on its balance sheet, providing financial flexibility to support further research and development efforts.
It is worth noting that while the stock has experienced a high return over the last year, with a 59.54% price total return, it has recently faced some headwinds, having fared poorly over the last month with a -21.13% return. This volatility may present opportunities for investors who believe in the long-term potential of Lexaria's technology, especially considering the $10 price target set by H.C. Wainwright.
For investors seeking a deeper understanding of Lexaria Bioscience's financial health and growth prospects, InvestingPro offers 5 additional tips and a comprehensive set of financial metrics to inform investment decisions.
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