Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Praxis Precision Medicines, Inc. (NASDAQ:PRAX), a biotechnology company with a market capitalization of approximately $988 million, announced Friday it has terminated its 2024 Open Market Sale Agreement with Jefferies LLC and entered into a new at-the-market (ATM) equity offering program with TD Securities (USA) LLC, also known as TD Cowen. The information is based on a press release statement filed with the U.S. Securities and Exchange Commission. According to InvestingPro data, the company maintains a strong balance sheet with more cash than debt, though it’s currently experiencing rapid cash burn.
According to the filing, Praxis delivered written notice to Jefferies on September 2 to end the 2024 Sales Agreement, effective immediately. The company will not incur any termination penalties as a result. Under the previous agreement, Praxis had the ability to sell up to $250 million in common stock. In total, the company sold 1,368,176 shares for aggregate gross proceeds of approximately $86.2 million through the 2024 ATM program. This capital raising activity comes as InvestingPro analysis shows the company maintaining a healthy current ratio of 6.31, indicating strong short-term liquidity despite significant operating losses.
On Friday, Praxis entered into a new Sales Agreement with TD Cowen to offer and sell shares of common stock with an aggregate offering price of up to $250 million. The sales may be made from time to time through an at-the-market equity offering program, with TD Cowen acting as sales agent.
Under the terms of the new agreement, Praxis will determine the parameters for each sale, including the number of shares, time period, daily sale limitations, and minimum price. TD Cowen may sell the shares through The Nasdaq Global Select Market or other trading venues, as defined in Rule 415 under the Securities Act of 1933. Praxis will pay TD Cowen a commission of up to 3.0% of gross proceeds from any sales conducted under the agreement and has provided customary indemnification rights. Either party may terminate the agreement with ten trading days’ written notice.
The new ATM program will be conducted pursuant to the company’s effective shelf registration statement or additional registration statements as needed. A prospectus supplement was filed Friday in connection with the new offering.
Latham & Watkins LLP issued a legal opinion to Praxis on Friday regarding the validity of shares to be issued under the new agreement.
Praxis Precision Medicines’ common stock is listed on the Nasdaq Global Select Market under the symbol PRAX.
In other recent news, Praxis Precision Medicines has reported significant developments in its RADIANT trial, focusing on the drug vormatrigine for treating focal onset seizures (FOS). The trial demonstrated a 56.3% median seizure reduction and a 67% responder rate, with some patients achieving complete seizure freedom. Following these results, several analyst firms have adjusted their ratings and price targets for the company. Piper Sandler reiterated an Overweight rating with a $270 price target, citing the consistent pharmacokinetic profile of vormatrigine. Truist Securities maintained a Buy rating and an $85 price target, highlighting the positive seizure reduction data. H.C. Wainwright increased its price target from $105 to $115, maintaining a Buy rating due to the drug’s efficacy in highly refractory cases. TD Cowen also held a Buy rating with a $61 price target, expressing optimism about the trial results. In contrast, Wedbush raised its price target to $33 but maintained an Underperform rating, noting challenges in data interpretation due to the study’s ongoing nature and lack of a placebo arm.
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