A few months after emerging from stealth, Praxis is handed a clinical hold for lead depression drug
Less than a month after Praxis Precision Medicines hit Wall Street with an upsized IPO, the FDA has slapped a clinical hold on its lead candidate for major depressive disorder (MDD), sending shares spiraling.
Without providing much information, the FDA said in an email that it reviewed Praxis’ IND for its Phase II/III trial, and is placing a full clinical hold on the study. More details should come in the next 30 days, according to the email. Praxis says it has reached out to the agency, which said it isn’t done finalizing comments.
“The FDA has not provided any reason for the clinical hold,” Praxis said in a statement. According to an S-1/A filed on Oct 15, the study would have satisfied one of two registrational trials required by the FDA to support clinical efficacy. The biotech’s stock $PRAX plunged more than 26% after the news broke on Tuesday.
Cowen analysts aren’t worried, though. In a note to investors on Tuesday, analysts Ritu Baral and Lyla Youssef said they believe the hold “should be resolved in short order given the continued clean preclinical and clinical safety profile.” The candidate, PRAX-114, is currently in an ongoing Phase IIa trial in Australia. Part A enrolled 33 MDD patients, and early data suggest “rapid, marked improvements in depression scores” after two weeks of treatment, according to the analysts. After one week, patients showed LS mean Hamilton Depression Rating Scale improvements of 15 to 19 points across three dose groups.
The candidate, GABA positive allosteric modulator, is also in Phase II trials for perimenopausal depression. The field is a tough one, with scientists struggling for years to develop better anti-depressants. Last December, Sage Therapeutics’ MDD drug flopped in a large trial, costing the company $6 billion in market cap and forcing it to cut half of employees.
If PRAX-114 gets approved, Cowen predicts its US sales potential will be in the $3 billion range.
Praxis emerged from stealth mode this spring, with $100 million and two drugs in Phase II. It initially set out to identify mutations that cause epilepsy in patients who didn’t inherit the disease, and is now applying those discoveries to other CNS diseases, like depression, movement disorders and pain syndromes. In July, Praxis bagged another $110 million in a Series C1 led by Eventide Asset Management.
Eventide holds 9.4% of Praxis’ stock, according to the S-1/A. Blackstone, Novo Holdings and Vida Ventures, which also kicked in on the round, have 23.1%, 6/6% and 7.3% respectively.
Back in August, Praxis filed for a $100 million IPO. It ended up bringing in $190 million, from $10 million shares priced at $19 apiece — a buck higher than the $17 to $18 range. Between $70 to $80 million was tagged for PRAX-114.