PRAX: Recent Pullback A Good Entry Point To Own Multi-B Neuropsych Potential, Initiating At OP, Spec Risk

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PRAX: Recent Pullback A Good Entry Point To Own Multi-B Neuropsych Potential, Initiating At OP, Spec Risk

acaltamide PDUFA (1/29). As future revenues trade at a 2026 0.0A 0.0E 0.0E 5.5E

discount to other CNS peers, we think regulatory de-risking can help bridge

the gap, and we see potential for shares to double on success. AllPricedvaluesas ofin priorUSD unlesstradingotherwiseday's marketnoted.close, EST (unless otherwise noted).

Ulixacaltamide can be a multi-blockbuster, and despite risk, setup looks

favorable. On one hand, we see the approval as somewhat higher risk

than the stage of development would suggest given trial changes, modest

effect sizes, novel endpoint and study designs. Still, our regulatory expert

feedback suggests these issues can be overcome at a more permissive

agency. We think PRAX has done enough between wise endpoint selection,

the totality of the evidence supporting the mechanism, the clinical studies

showing consistent benefits on ADL, and in our view, the drug is likely

delivering a modest benefit with no serious safety liabilities. We are more

confident on the commercial picture as our KOL checks have consistently

shown a high desire to prescribe the drug, and we could see it used in as

many as 1/3 of refractory patients. However, at $4.5B, we are below the

cons. of $8B - and mgmt $10B - as we want to see how discontinuations and

durability of effect play out, though there is potential upside to our model.

Rare epilepsy approach looks more rerisked, with considerable upside.

Near-term, we see a modest opportunity and high PoS for relutrigine

in genetically driven epilepsy given the strong mechanistic rationale and

supportive early data. The year-end PDUFA can help establish a foothold