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RBC Capital raised its price target on Xenon Pharmaceuticals (NASDAQ:XENE) to $57.00 from $55.00 on Friday, while maintaining an Outperform rating on the stock. Currently trading at $33, the company has attracted significant analyst attention, with targets ranging from $42 to $65. The adjustment follows the firm’s analysis of historical Phase II to Phase III translatability for epilepsy drugs.
The investment bank’s analysis revealed high correlation between Phase II and Phase III efficacy results for focal onset seizure medications, specifically in seizure reductions and responder rates. This finding suggests Xenon’s lead drug candidate azetukalner will likely show similar promising results in its Phase III data expected early next year. According to InvestingPro data, the company maintains a strong financial health score and holds more cash than debt on its balance sheet, providing runway for its clinical programs.
RBC Capital projects azetukalner could reach $1.2 billion in future sales, citing its novel Kv7 mechanism of action, rapid onset, and potential mood benefits as competitive advantages in a market dominated by polypharmacy. The firm noted that having two tested dose options should help with patient management despite therapeutic window considerations. With a current market capitalization of $2.56 billion, investors can access detailed valuation metrics and 8 additional key insights through InvestingPro’s comprehensive research reports.
The price target increase also reflects RBC’s higher probability of success for the drug candidate. The firm believes current share prices undervalue azetukalner’s market opportunity.
RBC Capital sees a favorable setup for Xenon Pharmaceuticals stock heading into the Phase III data readout, which is scheduled for early 2026.
In other recent news, Xenon Pharmaceuticals reported its first-quarter earnings, revealing adjusted earnings per share of -$0.83, surpassing analyst expectations of -$0.91. The company also announced revenue of $7.5 million, significantly exceeding the consensus estimate of $1.25 million. However, attention was drawn to a delay in the topline data for its Phase 3 X-TOLE2 study of azetukalner, now anticipated in early 2026, which represents a shift from previous projections. Evercore ISI initiated coverage on Xenon with an Outperform rating and a price target of $55, citing confidence in azetukalner’s potential despite the delay. Similarly, RBC Capital Markets adjusted its price target to $55 while maintaining an Outperform rating, pointing to promising data and potential revenue opportunities. Stifel also revised its price target to $60, keeping a Buy rating, and noted the delay in trial results but maintained belief in the drug’s potential. Xenon has made progress across its pipeline, planning Phase 3 studies for major depressive disorder and bipolar depression, alongside a Phase 1 study for XEN1120. The company ended the quarter with $691.1 million in cash and marketable securities, expected to support operations into 2027.
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