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Tuesday, Praxis Precision Medicines Inc . (NASDAQ:PRAX) shares received a boost as Truist Securities increased its price target for the company to $175 from $150, while maintaining a Buy rating. The stock, which has surged 88.5% over the past year according to InvestingPro data, currently trades at $74.1. The adjustment follows a management dinner where the analyst, Joon Lee, gained confidence in the potential success of the company's ESSENTIAL3 Study.
Lee's optimism is based on the upcoming interim results of Study 1 of the ESSENTIAL3, expected in the first quarter of 2025, and the subsequent topline results of Study 2. The analyst anticipates that the Study 2 topline results could be released in conjunction with the Study 1 interim results or shortly after. InvestingPro data shows analyst targets ranging from $57 to $305, reflecting the market's varied expectations for this clinical-stage biotech company.
The increased price target reflects a heightened probability of success (POS) for Praxis's ulixacaltamide in Essential Tremor (ET), which Lee raised from 50% to 70%. This adjustment signifies greater confidence in the drug's market potential and its likelihood to pass the clinical trial phase.
In his comments, Lee stated, "We're incrementally positive on the forthcoming ESSENTIAL3 Study 1 interim in 1Q25 followed by Study 2 topline, either at the time of Study 1 interim topline or shortly thereafter." He also noted the specific changes in the POS, which directly influenced the revised price target, "We're raising our POS of ulixacaltamide in ET from 50% to 70%, raising our PT to $175 from $150."
Investors will be closely monitoring Praxis as it approaches the key dates for its ESSENTIAL3 Study results. With a market capitalization of $1.43 billion and an overall Financial Health score of FAIR according to InvestingPro, the company's progress in developing ulixacaltamide for ET treatment is a significant driver of its stock valuation and market expectations. InvestingPro subscribers have access to 12 additional investment tips and comprehensive financial metrics to better evaluate PRAX's potential.
In other recent news, Praxis Precision Medicines has been a focal point for several investment firms. Piper Sandler, a leading investment bank, identified Praxis Precision Medicines as one of the companies with the most direct catalysts within the next 12 months and expects it to present at least three significant data catalysts. The firm also maintained its Overweight rating on Praxis shares, with a consistent price target of $270.00. Similarly, Jefferies raised its price target for Praxis significantly to $305.00, maintaining a Buy rating and highlighting the company's diverse neurological pipeline.
Furthermore, Guggenheim reaffirmed its Buy rating and $170.00 price target for Praxis, following the company's third-quarter update. The firm emphasized the potential of Praxis's ulixacaltamide for the treatment of essential tremor (ET), which is currently being tested in the Essential3 Study 1. The interim analysis for this study has been rescheduled to the first quarter of 2025, but the company maintains that their New Drug Application filing for 2025 is still on track.
These recent developments underline Praxis's ongoing progress in its pursuit of innovative treatments for neurological conditions. The company's drug candidate, Relutrigine, demonstrated a significant 46% reduction in motor seizures in a Phase 2 study, with over 30% of patients achieving freedom from seizures. Praxis is also planning further clinical trials, with interim Essential3 Part1 analysis expected in the first quarter of 2025, and the anticipated release of the relutrigine EMBOLD data in the first half of 2026.
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