UPDATE: BofA Securities Downgrades Praxis Precision Medicines Inc. (PRAX) to Neutral

BofA Securities analyst Tazeen Ahmad downgraded Praxis Precision Medicines Inc. (NASDAQ: PRAX) from Buy to Neutral with a price target of $4.00 (from $26.00) after management reported that ph 2/3 ARIA study (PRAX-114 in major depressive disorder) did not achieve statistical significance on the primary endpoint of change in HAMD-17 vs. baseline at day 15.

The analyst stated "We caught up with mgmt and they believe that negative results were not related to how the study was conducted but ‘114’s extrasynaptic selectivity did not create strong enough effect size. The company saw 10% somnolence in the study which was in-line with expectations. We are disappointed at the data and a bit surprised given compelling efficacy data observed in POC studies with favorable safety and tolerability profile. PRAX’s next big update is in essential tremor (ET) with ph 2 Essential1 readout expected in 4Q. We update our DCF-based model for ARIA results and strategic alignment, including removing MDD value from the model (see below for detailed changes). Given the negative ARIA readout, we downgrade PRAX to Neutral with our new PO of $4 (prev $26) as we think positive ET readout in 4Q may help the company recover from the ARIA miss, given large unmet need in ET."

For an analyst ratings summary and ratings history on Praxis Precision Medicines Inc. click here. For more ratings news on Praxis Precision Medicines Inc. click here.

Shares of Praxis Precision Medicines Inc. closed at $1.88 yesterday.

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