Praxis Precision Medicines: Buy Rating Backed by Accelerated FDA Approval Path and Promising Relutrigine Data

Analyst Douglas Tsao from H.C. Wainwright reiterated a Buy rating on Praxis Precision Medicines and keeping the price target at $232.00.

Douglas Tsao has given his Buy rating due to a combination of factors that highlight the potential of Praxis Precision Medicines. A significant factor is the company’s alignment with the FDA on an accelerated approval path for relutrigine, which could expedite its market entry and enhance its value proposition. This development, coupled with the Breakthrough Therapy Designation for relutrigine, positions Praxis favorably to achieve approval and potentially earn a rare pediatric disease priority review voucher.
Furthermore, the confidence in relutrigine’s efficacy is underscored by the robust data from the EMBOLD Cohort 1 study, which demonstrated a significant reduction in seizure frequency. The design of the EMBOLD Cohort 2 trial reflects this confidence, aiming to confirm the efficacy with a stringent statistical approach. Additionally, the valuation of Praxis is supported by a discounted risk-adjusted revenue estimate, with adjustments made for the probability of success across its pipeline. Despite the risks associated with regulatory approval, commercial launch, and financial sustainability, the potential upside of Praxis’s innovative treatments justifies the Buy rating.

Based on the recent corporate insider activity of 24 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of PRAX in relation to earlier this year.