Is Xenon Stock Still a Buy After Doubling in One Session? Analyst Weighs In
The week’s first session was painted a deep red, but you’d be hard-pressed to find a Xenon Pharmaceuticals (XENE) investor concerned with Monday’s bloodbath.
XENE shares more than doubled after the biotech released highly positive results from a mid-stage clinical trial. Specifically, in the Phase 2b X-TOLE study, Xenon’s potential treatment for adult patients with focal epilepsy, XEN1101, met its primary efficacy endpoint, showing a statistically meaningful and dose-dependent reduction in the frequency rate of seizures vs. the placebo. The pronounced reductions in seizures were directly related to the statistically meaningful improvements in overall status. XEN1101 was also well-tolerated with adverse events akin to those of other antiepileptic drugs (AEDs).
Needham analyst Serge Belanger is most impressed by “the unprecedented levels of seizure frequency reduction” of the 25mg cohort (there were three dose groups overall). These reached ~35% (pbo-adjusted), above other AEDs such as ezogabine (20-25%) and Xcopri (31-34%).
It’s safe to say Belanger is excited by the trial’s outcome, saying XEN1101 has hit it “out of the park.”
“We believe the best-in-indication efficacy levels, combined with a novel MOA, QD dosing with no required titration and attractive tolerability positions XEN1101 for blockbuster sales potential (>$1B) in adult focal epilepsy,” the analyst further added.
Next up, as part of an end-of-phase 2 meeting, the company will hold talks with the FDA and will try to convince the regulatory body to accept X-TOLE as one of the two pivotal trials required for approval. In order to meet both FDA and EMA approval requirements, the company still plans to push ahead with two phase 3 trials. There are also plans to test the drug for other epilepsy conditions apart from adult focal epilepsy. Additionally, before the year’s end, a phase 2 study of XEN1101 for MDD (major depressive disorder) should also kick into action.
The analyst thinks the drug will now get plenty of attention from other bigger CNS (central nervous system) players involved in the search for epilepsy treatments and to reflect the positive results that “not only de-risk the XEN1101 program, but also establish blockbuster sales potential and provide read-thrus to other indications,” Belanger boosts his price target on XENE stock from $25 to $48. After Monday’s huge share haul, there’s still potential for a 52% uptick from current levels.
No need to add, Belanger’s rating for XENE stays a Buy. (To watch Belanger’s track record, click here)
There’s unanimous agreement on this one on Wall Street. All 7 current analyst reviews are positive, culminating in the stock’s Strong Buy consensus rating. The average target leaves ample room for growth; at $44.33, the figure represents one-year upside of ~45%. (See XENE stock analysis)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
