A Treatment for Tremors Is Back From the Dead. This Stock Is Up 200%.

There is no approved treatment for essential tremor, which causes uncontrollable shaking that can eventually interfere with people’s ability to perform basic tasks. (Dreamstime)

Key Points

• Praxis Precision Medicines’ shares rallied over 200% after patients using its experimental essential tremor treatment, ulixacaltamide, showed improvement.
• In a Phase 3 trial, ulixacaltamide led to a 4.3-point average drop in mADL11 scores, compared to a 1.7-point drop for a placebo.
• Praxis plans to submit ulixacaltamide for FDA approval early next year.

Shares of Praxis Precision Medicines rallied more than 200% on Thursday after the biotech said patients with a condition that causes uncontrollable shaking saw improvement on the company’s experimental treatment.

Praxis, which had a market value of $1.2 billion as of Wednesday, has a pipeline of experimental drugs it is testing for neurological conditions. Its treatment for essential tremor, called ulixacaltamide, had topped no one’s list of the most promising.

In February, an independent monitoring committee had suggested that a trial of the drug be stopped because it appeared to be unlikely to succeed. Praxis hadn’t seen the data, but continued the trial anyway after making some tweaks to its statistical analysis plans.

Analysts weren’t enthusiastic about ulixacaltamide. “Expectations are low” for the ulixacaltamide studies, Jefferies analyst Andrew Tsai wrote in an Oct. 1 note.

On Thursday, the company appeared to be vindicated. Ulixacaltamide dramatically outperformed lowered expectations in two studies. The stock was trading at $174.78 on Thursday, up around 204% from its Wednesday close of $57.35.

Praxis was testing ulixacaltamide as a treatment for essential tremor, a neurological condition that causes uncontrollable shaking. There is no drug approved to treat the condition, which can eventually interfere with a patient’s ability to perform normal daily tasks.

Praxis said that two separate Phase 3 trials of ulixacaltamide had been successful. The trials tracked improvement on a scale called mADL11, which measures a patients’ ability to perform tasks like speaking, writing, and eating with a spoon. In the first trial, patients who took ulixacaltamide saw an average 4.3-point drop in their mADL11 score, while scores for patients on a placebo declined by an average of 1.7 points.

Praxis called the improvement “statistically significant and clinically meaningful.” The company didn’t provide details on how patients had improved. More data on the trials will be presented later.

“This is a very large and very robust change,” the company’s CEO, Marcio Souza, said on an investor call. “When compared with placebo…those results were highly significant.”

Now, approval of the medicine looks possible. Praxis said Thursday that it had requested a meeting to begin the drug-application process with the Food and Drug Administration, and plans to submit the drug for approval early next year.

In a second Phase 3 trial whose results were disclosed on Thursday, patients who had responded to the medicine after eight weeks were split into two groups. Half were switched to a placebo and half were kept on ulixacaltamide. Among those who stayed on ulixacaltamide, 55% continued to respond after four weeks, while 33% of those on placebo continued to respond.

In a note on Thursday, Jefferies’ Tsai increased his target price on Praxis to $300 from $65. Ulixacaltmade “could become a $2.5B+” opportunity, he wrote, saying that estimate was “still conservative.”

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com