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On Friday, Truist Securities adjusted the price target for Praxis Precision Medicines Inc . (NASDAQ:PRAX) to $85 from the previous target of $175, while continuing to endorse the stock with a Buy rating. The stock, currently trading at $39.05 with a market cap of $756 million, has declined nearly 13% over the past week according to InvestingPro data. The revision followed the company’s announcement that the Independent (LON:IOG) Data Monitoring Committee (IDMC) recommended halting the Phase 3 Essential3 Study 1 due to futility concerns. Despite this, Praxis intends to complete both Study 1 and Study 2, with top-line results expected in the third quarter of 2025.
The determination regarding the suitability of a New Drug Application (NDA) for Praxis will be made once data is available in the third quarter of 2025. While Truist Securities has adjusted their sum-of-the-parts (SOTP) valuation of Praxis, InvestingPro data shows analyst targets ranging from $57 to $305, with 8 analysts recently revising their earnings expectations downward. Want to access more detailed analyst insights and Fair Value calculations? Upgrade to InvestingPro for comprehensive financial analysis. The analyst noted the removal of ET from their valuation model as a contributing factor to the price target decrease.
The company remains focused on progressing with its other drug candidates, including FOS (vormatrigine) and DEE (relutrigine), which are anticipated to deliver data throughout the year 2025. The analyst from Truist Securities expressed continued confidence in these products, maintaining the Buy rating despite the setback with the Essential3 Study 1.
Praxis Precision Medicines is working towards completing the ongoing clinical trials and is preparing for the potential submission of an NDA based on the collective findings from their studies. The company’s commitment to advancing their remaining drug candidates underscores their dedication to addressing unmet medical needs in the field of precision medicine. Financial data from InvestingPro indicates the company maintains a strong liquidity position with a current ratio of 10.96 and more cash than debt on its balance sheet.
The revised price target reflects the latest developments and the anticipated milestones for Praxis Precision Medicines as they navigate the clinical trial process and strive to bring new treatments to market. The company’s stock price will likely continue to be influenced by the outcomes of their clinical trials and the subsequent regulatory decisions, with the next earnings announcement scheduled for March 12, 2025. Investors seeking deeper insights into PRAX’s financial health metrics and additional ProTips can explore the comprehensive analysis available on InvestingPro.
In other recent news, Praxis Precision Medicines has faced a significant challenge as the Independent Data Monitoring Committee recommended halting the Essential3 study for futility, indicating that the primary efficacy endpoint was unlikely to be met. Despite this, Praxis plans to continue the study to completion, with final results anticipated in the third quarter of 2025. Financially, Praxis reported a net loss of $58.7 million for the fourth quarter of 2024 and a total net loss of $182.8 million for the year. The company maintains a strong financial position with $469.5 million in cash and equivalents, expected to fund operations into 2028.
Analysts have provided varied outlooks on Praxis. Deutsche Bank (ETR:DBKGn) initiated coverage with a Buy rating and a price target of $111, highlighting the potential risks and rewards associated with the company’s upcoming clinical trial results. Jefferies maintained a Buy rating with a higher price target of $305, emphasizing the significance of upcoming milestones in 2025 that could impact the company’s trajectory. Truist Securities also increased its price target to $175, citing optimism about the potential success of the ESSENTIAL3 Study and raising the probability of success for ulixacaltamide in Essential Tremor from 50% to 70%.
Praxis is also advancing other development programs, with upcoming results expected from studies in focal onset seizures and generalized epilepsy. The company continues to focus on its Cerebrum™ and Solidus™ platforms, aiming to nominate development candidates for early-stage therapeutic initiatives in 2025. Investors will be watching closely as the company approaches key dates for its ESSENTIAL3 Study results, which are pivotal for its stock valuation and market expectations.
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