On Monday, H.C. Wainwright adjusted the price target for BioXcel Therapeutics (NASDAQ:BTAI), a clinical-stage biopharmaceutical company, reducing it to $10.00 from the previous $11.00. Despite the lower price target, the firm maintains a Buy rating on the stock.
The adjustment comes in the wake of the company's announcement last week regarding the upcoming TRANQUILITY In-Care Phase 3 trial for its drug BXCL501, aimed at treating agitation related to Alzheimer's dementia.
The TRANQUILITY In-Care trial is set to evaluate the efficacy and safety of BXCL501, an investigational, orally dissolving film formulation of dexmedetomidine. Designed as a double-blind, placebo-controlled study, it will involve around 150 patients aged 55 and above across various stages of Alzheimer's disease severity. The trial will take place in skilled nursing facilities, memory care units, or assisted living facilities.
Patients participating in the trial will be those with episodic agitation who will self-administer either a 60µg dose of BXCL501 or a placebo when experiencing agitation episodes over a 12-week period. The primary endpoint for the study is the change from baseline in the Positive and Negative Syndrome Scale-Excitatory Component (PEC) total score two hours after the first dose is administered.
The TRANQUILITY In-Care trial builds on previous TRANQUILITY trials and studies that supported the FDA approval of IGALMI (dexmedetomidine) sublingual film. The study will also include additional PEC and complementary efficacy measures, such as the global impression of change in agitation.
The decision by H.C. Wainwright to revise the price target follows BioXcel Therapeutics' recent equity raise.
InvestingPro Insights
As BioXcel Therapeutics (NASDAQ:BTAI) gears up for its TRANQUILITY In-Care Phase 3 trial, investors are keeping a keen eye on the company's financial health and market performance. According to InvestingPro data, BioXcel Therapeutics boasts a significant revenue growth of 268% over the last twelve months as of Q4 2023, with a quarterly revenue growth of 57.98% in Q4 2023. This demonstrates a robust upward trajectory in sales, aligning with analysts' expectations of sales growth in the current year. However, with a market capitalization of $88.67 million and a negative P/E ratio of -0.47, the company's financials reflect the challenges typical of clinical-stage biopharmaceutical companies, including a rapid cash burn and weak gross profit margins of 8.7%.
Investors should note that while BioXcel's liquid assets exceed its short-term obligations, suggesting a degree of financial stability, the company's valuation implies a poor free cash flow yield, and analysts do not anticipate profitability this year. Moreover, the stock price has seen a significant decline over the last year, now trading at only 8.9% of its 52-week high, which may present a potential entry point for long-term investors who believe in the company's drug development prospects. BioXcel does not pay a dividend, focusing its resources on research and development instead.
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