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Praxis Precision Medicines (PRAX)
NASDAQ:PRAX
US Market

Praxis Precision Medicines (PRAX) AI Stock Analysis

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Praxis Precision Medicines

(NASDAQ:PRAX)

Rating:50Neutral
Price Target:
$38.00
▼(-8.15%Downside)
The overall score is primarily influenced by the company's poor financial performance, characterized by substantial losses and negative cash flows. Although there are short-term technical strengths, the valuation remains challenging. Promising study data provides a positive outlook, but financial concerns dominate the overall assessment.
Positive Factors
Drug Efficacy
Relutrigine has demonstrated best-in-class efficacy with a 90% seizure reduction in EMBOLD.
Financial Stability
Praxis has a strong balance sheet with substantial cash reserves that would support operations into 2028.
Negative Factors
Failed Clinical Trial
The lead asset ulixacaltamide recently failed the interim analysis of the Phase 3 essential tremor program.
Valuation Impact
The IDMC recommended stopping Study 1 for futility, impacting the valuation of PRAX.

Praxis Precision Medicines (PRAX) vs. SPDR S&P 500 ETF (SPY)

Praxis Precision Medicines Business Overview & Revenue Model

Company DescriptionPraxis Precision Medicines, Inc., a clinical-stage biopharmaceutical company, develops therapies for central nervous system disorders characterized by neuronal imbalance. Its lead product candidates include PRAX-114, an extrasynaptic-preferring GABAA receptor positive allosteric modulator that is in Phase IIa clinical trial for the treatment of major depressive disorder and perimenopausal depression; and PRAX-944, a selective small molecule inhibitor of T-type calcium channels, which is in Phase IIa clinical trial for the treatment of essential tremor. The company is also developing PRAX-562, a persistent sodium current blocker that is in Phase I clinical trial to treat severe pediatric epilepsy and adult cephalgia; PRAX-222, an antisense oligonucleotide (ASO) for patients with gain-of-function (GOF) SCN2A epilepsy; and KCNT1 program for the treatment of KCNT1 GOF epilepsy. It has a cooperation and license agreement with RogCon Inc.; a license agreement with Purdue Neuroscience Company; a research collaboration, option, and license agreement with Ionis Pharmaceuticals, Inc.; and collaboration with The Florey Institute to develop three novel ASOs. The company was incorporated in 2015 and is based in Boston, Massachusetts.
How the Company Makes MoneyPraxis Precision Medicines primarily generates revenue through the development and commercialization of its pipeline of CNS disorder therapies. The company invests in research and development to advance its drug candidates through clinical trials, seeking regulatory approval to bring these therapies to market. Revenue is expected to be generated from product sales, once these therapies are approved, as well as through potential partnerships and collaborations with other pharmaceutical companies. Praxis may also receive milestone payments and royalties from licensing agreements with partners who wish to commercialize its therapies in specific markets.

Praxis Precision Medicines Earnings Call Summary

Earnings Call Date:May 02, 2025
(Q3-2024)
|
% Change Since: 8.70%|
Next Earnings Date:Aug 19, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in Praxis's pipeline, particularly with promising results in their epilepsy programs and a solid financial position. However, there were concerns about delays in clinical trial timelines and challenges in managing placebo effects, which could impact future outcomes.
Q3-2024 Updates
Positive Updates
Positive Top-line Results for Vormatrigine
In a Phase II trial, Vormatrigine demonstrated a 46% reduction in motor seizures compared to placebo, with 33% of patients achieving seizure-free status.
Strong Financial Position
Praxis ended Q3 with $411.2 million in cash, cash equivalents, and marketable securities, providing a funding runway into 2027.
Pipeline Progress
Praxis is advancing four programs in registration, aiming for a substantial multibillion-dollar market opportunity.
Interest in Epilepsy Program
The Empower study attracted over 1,000 patients shortly after its launch, indicating strong interest in the comprehensive epilepsy program.
Negative Updates
Delayed Interim Analysis for Essential3
The timing for the interim analysis of the Essential3 study has been pushed to Q1 2025, affecting the timeline for Study 1 and Study 2 results.
Enrollment Challenges in Essential3
Concerns about placebo response and patient variability have led to adjustments in study design to better manage placebo effects.
Company Guidance
During the Praxis Precision Medicine Q3 2024 earnings call, the company provided guidance on significant upcoming milestones and key metrics. The company anticipates having four programs in registration by next year, targeting a multibillion-dollar opportunity. For their lead program, ulixacaltamide, the Phase III ESSENTIAL3 study is expected to yield results in Q1 2025, with interim analyses in the coming months. In their epilepsy pipeline, the Phase II EMBOLD trial showed promising results, with relutrigine achieving a 46% reduction in motor seizures among 15 patients, leading to the initiation of a second registrational cohort. Additionally, their Empower observational study attracted over 1,000 patients in a short time. Financially, Praxis reported Q3 operating expenses of $57.1 million, with $41.9 million allocated to R&D, and ended the quarter with $411.2 million in cash, ensuring runway into 2027.

Praxis Precision Medicines Financial Statement Overview

Summary
Praxis Precision Medicines is experiencing significant financial challenges, characterized by substantial net losses and negative cash flows. Despite a strong gross profit margin and low debt levels, the company's operational inefficiencies and declining revenue growth are major concerns. The balance sheet remains stable, but the negative return on equity and worsening free cash flow highlight the need for a strategic reevaluation to improve financial health.
Income Statement
35
Negative
Praxis Precision Medicines shows a declining financial performance. The gross profit margin is relatively high at 98.1% for TTM (Trailing-Twelve-Months), but the company is suffering from significant net losses with a net profit margin of -2617.6%. Revenue has decreased by 5% in the TTM period compared to the previous annual report. Both EBIT and EBITDA margins are deeply negative, reflecting ongoing operational challenges.
Balance Sheet
40
Negative
The balance sheet reveals a relatively stable financial position with a debt-to-equity ratio of 0.0024, indicating low leverage. However, the return on equity is significantly negative at -48.4% due to ongoing losses. The equity ratio stands at 91.8%, suggesting strong equity financing but persistent operational losses are a concern.
Cash Flow
30
Negative
Cash flow analysis highlights ongoing financial challenges. The free cash flow is negative and has worsened by 24.5% compared to the previous year. Operating cash flow to net income ratio is 0.77, indicating cash flow issues. The free cash flow to net income ratio is 0.77, reflecting insufficient cash flow to cover losses.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
8.12M8.55M2.45M0.000.000.00
Gross Profit
7.97M8.20M2.45M-1.17M-1.59M-746.00K
EBIT
-233.01M-200.16M-126.37M-214.99M-167.33M-61.97M
EBITDA
-232.87M-200.16M-125.94M-212.86M-165.47M-61.08M
Net Income Common Stockholders
-212.56M-182.82M-123.28M-213.07M-166.88M-61.82M
Balance SheetCash, Cash Equivalents and Short-Term Investments
327.99M392.57M81.30M100.49M275.91M296.61M
Total Assets
478.74M483.11M87.95M115.13M292.75M303.18M
Total Debt
1.07M1.37M2.50M4.50M4.31M763.00K
Net Debt
-164.50M-214.00M-78.81M-57.11M-134.39M-295.85M
Total Liabilities
39.52M37.66M18.28M39.02M41.94M15.72M
Stockholders Equity
439.21M445.45M69.67M76.11M250.81M287.46M
Cash FlowFree Cash Flow
-163.85M-131.76M-111.19M-185.49M-125.60M-52.62M
Operating Cash Flow
-163.91M-131.76M-111.14M-185.04M-124.55M-52.62M
Investing Cash Flow
-208.34M-248.49M38.95M96.89M-140.52M4.00K
Financing Cash Flow
385.83M514.32M91.87M10.46M107.59M304.42M

Praxis Precision Medicines Technical Analysis

Technical Analysis Sentiment
Positive
Last Price41.37
Price Trends
50DMA
36.30
Positive
100DMA
49.56
Negative
200DMA
58.65
Negative
Market Momentum
MACD
0.98
Negative
RSI
64.37
Neutral
STOCH
82.58
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRAX, the sentiment is Positive. The current price of 41.37 is above the 20-day moving average (MA) of 38.44, above the 50-day MA of 36.30, and below the 200-day MA of 58.65, indicating a neutral trend. The MACD of 0.98 indicates Negative momentum. The RSI at 64.37 is Neutral, neither overbought nor oversold. The STOCH value of 82.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRAX.

Praxis Precision Medicines Peers Comparison

Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
60
Neutral
$744.72M222.83%29.88%35.11%
54
Neutral
$774.97M166.3911.62%
54
Neutral
$5.28B3.29-45.38%2.80%16.77%-0.08%
52
Neutral
$650.50M-33.48%-25.88%-29.16%
51
Neutral
$796.56M-57.92%-13.37%2.57%
50
Neutral
$839.20M-63.56%270.02%32.69%
45
Neutral
$833.64M-119.66%-551.08%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRAX
Praxis Precision Medicines
42.26
1.72
4.24%
GYRE
Gyre Therapeutics
7.97
-3.12
-28.13%
XNCR
Xencor
9.12
-12.62
-58.05%
NTLA
Intellia Therapeutics
7.58
-15.15
-66.65%
XERS
Xeris Pharmaceuticals
4.46
2.13
91.42%
NUVB
Nuvation Bio
2.48
-0.29
-10.47%

Praxis Precision Medicines Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy
Praxis Precision Medicines Shares Promising EMBOLD Study Data
Positive
May 2, 2025

On May 2, 2025, Praxis Precision Medicines updated its corporate presentation and provided significant updates on its developmental programs at an investor event. Notably, the company shared promising data from the EMBOLD study, showing sustained seizure reduction in patients with SCN2A and SCN8A DEEs treated with relutrigine. Additionally, Praxis announced the trial design for the EMERALD study, a Phase 3 clinical trial evaluating relutrigine in a broader DEE patient population. The company also plans to nominate a development candidate for its PRAX-100 program targeting SCN2A loss-of-function mutations by mid-2025. These updates reflect Praxis’s ongoing efforts to advance its pipeline and strengthen its position in the CNS disorder treatment market.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.