On Thursday, Baird increased the price target for Longboard Pharmaceuticals Inc (NASDAQ: LBPH) shares from $36 to $60 while maintaining an Outperform rating. The adjustment follows the recent announcement that Longboard's drug bexicaserin received Breakthrough Therapy designation from the FDA for the treatment of seizures associated with Developmental and Epileptic Encephalopathies (DEEs) in patients aged two years and older.
The firm's decision to raise the price target is based on the expectation that bexicaserin has the potential to generate significant sales, possibly exceeding $1 billion annually. The Breakthrough Therapy designation is considered a significant regulatory development, potentially accelerating the drug's development timeline and review process.
Bexicaserin's new status with the FDA could position it to become a major player in the treatment of DEEs. Longboard has indicated plans to initiate a phase 3 program by the end of 2024, aiming to support a broad label for the drug's use in DEE treatment.
The Baird analyst sees this development as a pivotal moment for Longboard Pharmaceuticals, with the potential to substantially impact the company's sales and market position. The phase 3 trial will be a critical step in determining the drug's efficacy and safety for a wider patient population.
The raised price target reflects the firm's confidence in Longboard Pharmaceuticals' growth prospects following the FDA's recognition of bexicaserin's potential in treating DEEs. The company's stock may respond to this positive outlook as it progresses through the upcoming clinical trial phase.
In other recent news, Longboard Pharmaceuticals has been demonstrating significant progress in the biopharmaceutical field. The company's novel therapeutic candidate, bexicaserin, has shown promising results in treating various developmental and epileptic encephalopathies (DEE), including Dravet and Lennox-Gastaut syndromes. Initial results from the PACIFIC OLE study indicate a reduction in seizure frequency, leading to an open-label extension trial with data expected later in 2024.
Citi has maintained a Buy rating on Longboard, seeing bexicaserin as a leading candidate in the DEE treatment landscape. Analysts from H.C. Wainwright & Co and Cantor Fitzgerald also hold a bullish stance, with both firms setting a price target of $60. Additionally, Baird initiated coverage with an Outperform rating and a price target of $36.
These recent developments highlight Longboard's potential to address significant unmet needs in epilepsy treatment. The company is set to discuss the design of the Phase 3 program in an end-of-Phase-2 meeting with the FDA, and anticipates Phase 1 data for another therapeutic candidate, LP659, in the second quarter of 2024.
InvestingPro Insights
Following Baird's upbeat assessment of Longboard Pharmaceuticals Inc (NASDAQ: LBPH), the InvestingPro platform offers additional insights that underline the company's financial health and stock performance. With a robust market capitalization of $1.44 billion, Longboard stands out for holding more cash than debt on its balance sheet, highlighting a strong financial position. This is particularly relevant for investors considering the significant costs associated with advancing clinical trials and bringing a drug like bexicaserin to market.
Investors should note that Longboard's stock has delivered a significant return over the last week, with a 15.98% price total return, and an impressive 404.91% return over the last year, signaling strong investor confidence. Moreover, the stock is trading near its 52-week high, at 99.69% of the peak price, which aligns with the positive momentum following the FDA's Breakthrough Therapy designation for bexicaserin.
For those seeking comprehensive analysis, InvestingPro provides 13 additional InvestingPro Tips to help assess Longboard's potential, including insights into profitability, liquidity, and stock valuation. Interested investors can take advantage of these insights and get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription using the coupon code PRONEWS24.
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