Xenon Pharmaceuticals: A Strong Buy on Clinical Progress and Robust Financials

Needham analyst Serge Belanger has maintained their bullish stance on XENE stock, giving a Buy rating today.

Serge Belanger has given his Buy rating due to a combination of factors surrounding Xenon’s ongoing clinical and financial developments. The progress of Xenon’s X-TOLE2 phase 3 epilepsy trial is on a steady path, aiming for a New Drug Application (NDA) filing for their drug candidate XEN1101, also known as azetukalner. The enrollment for this critical trial is expected to be completed in late 2024 to early 2025, with an anticipated top-line readout in the second half of 2025. Belanger’s confidence in Xenon is further supported by the company’s successful end-of-phase 2 interactions with the FDA, setting the stage for a phase 3 program of XEN1101 in Major Depressive Disorder (MDD), details of which are to be disclosed with the commencement of the first trial.
Furthermore, Xenon’s financial standing contributes to Belanger’s positive outlook. With approximately $885 million in cash reserves at the end of 2023, Xenon is expected to have sufficient funding into 2027, ensuring the continuation of its research and development activities without immediate financial constraints. Despite the acknowledgment that significant catalysts or value drivers may not emerge until 2025, Belanger sustains the Buy rating and adjusts the price target to $62, indicating a belief that the current market valuation of Xenon does not fully reflect the potential of its pipeline or the progress the company is making in its clinical programs.

In another report released today, Wedbush also maintained a Buy rating on the stock with a $50.00 price target.

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Xenon (XENE) Company Description:

Xenon Pharmaceuticals, Inc. engages in discovering and developing therapeutics to improve the lives of patients with neurological disorders. It focuses on the treatment of epilepsy. Its products include XEN496, XEN1101, XEN901, and XEN007. The company was founded by Simon Neil Pimstone, Johannes J. P. Kastelein, and Michael R. Hayden on November 5, 1996 and is headquartered in Burnaby, Canada.