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Praxis Precision Medicines, Inc. (PRAX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 tracked the plan operationally but missed Street EPS and revenue: non‑GAAP revenue was $0.0M vs S&P Global consensus $0.18M* and diluted EPS was $(3.29) vs $(3.21)* as operating investment stepped up for late‑stage programs . Values retrieved from S&P Global.
  • Operating intensity rose as R&D accelerated across Cerebrum programs; R&D was $60.8M (+125% y/y), driving a net loss of $(69.3)M (vs $(39.6)M y/y) .
  • Balance sheet remains a differentiator: cash and marketable securities totaled $472.0M with runway into 2028, up from “into 2027” last fall .
  • 2025 catalysts remain dense: vormatrigine RADIANT topline mid‑2025; POWER1 2H25; EMERALD registrational start mid‑2025; EMBRAVE3 (elsunersen) start mid‑2025. Essential tremor interim was negative (IDMC futility), but studies continue to completion with topline in Q3 2025 .
  • Narrative that can move the stock: durability of DEE efficacy signals (EMBOLD OLE ~90% reduction at 11 months) vs ET overhang; regulatory design allowances (EMBRAVE3 24‑weeks, birth‑to‑adolescent cohorts) and rapid enrollment logistics .

What Went Well and What Went Wrong

  • What Went Well

    • DEE portfolio momentum: EMBOLD OLE showed ~90% mean seizure reduction at 11 months; EMERALD (broad DEE) and EMBRAVE3 (SCN2A GoF) moving to initiation mid‑year 2025 .
    • Financing and runway: “Cash and investments of $472 million as of March 31, 2025, maintains runway into 2028” .
    • CEO tone on 2025 catalysts: “We expect a transformative year… topline results for vormatrigine… POWER1… initiate EMERALD… initiate EMBRAVE3… runway into 2028” .

  • What Went Wrong

    • Essential tremor: IDMC recommended stopping Study 1 at interim for futility; company will complete both ET studies, pushing a binary into Q3 2025 and raising execution risk on the ET path .
    • Operating leverage: R&D more than doubled y/y to $60.8M, swinging net loss to $(69.3)M despite $5.4M other income; G&A fell but wasn’t enough to offset R&D step‑up .
    • Revenue cadence: $0.0M collaboration revenue vs $0.4M y/y and small Street expectations, limiting any margin read‑through this quarter .

Financial Results

Income statement snapshot (USD Millions, except per‑share)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Collaboration Revenue$0.431 $0.302 $7.463 $0.000
R&D Expense$26.984 $41.881 $56.288 $60.806
G&A Expense$15.333 $15.256 $15.131 $13.922
Total Operating Expenses$42.317 $57.137 $71.419 $74.728
Other Income (net)$2.333 $4.925 $5.277 $5.432
Net Loss$(39.553) $(51.910) $(58.679) $(69.296)
Diluted EPS$(2.84) $(2.75) $(2.94) $(3.29)
Wtd Avg Shares (M)13.90 18.88 19.98 21.06

Margins (context)

  • Net Income Margin %: Not meaningful due to de minimis/zero revenue in Q1 2025 and most comparison periods .

Balance sheet and liquidity (USD Millions)

MetricQ3 2024Q4 2024Q1 2025
Cash & Equivalents$168.645 $215.372 $165.567
Marketable Securities$242.528 $254.156 $306.456
Total Assets$416.256 $483.110 $478.736
Accounts Payable$15.010 $12.528 $22.909
Accrued Expenses$15.457 $23.763 $15.547

Capitalization and runway

MetricQ3 2024Q4 2024Q1 2025
Shares Outstanding (end of period, M)17.8 19.4 20.3
Runway GuidanceInto 2027 Into 2028 Into 2028

Consensus vs Actual – Q1 2025

MetricConsensusActual
Revenue ($M)$0.183*$0.000
Diluted EPS ($)$(3.21)*$(3.29)
# of EstimatesRev: 10*; EPS: 11*—

Values retrieved from S&P Global.

KPIs and disclosures

  • Stock‑based compensation in net loss: $8.8M in Q1 2025 .
  • Cash and investments: $472.0M (cash + marketable securities) as of March 31, 2025 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayMulti‑yearInto 2027 (Q3’24) Into 2028 (Q4’24 and reiterated Q1’25) Raised/Extended
EMERALD (Relutrigine, broad DEEs)StartPlan to initiate 1H 2025 Initiation mid‑2025; phenotypic selection; 16‑week, ~160 pts Maintained/specified
EMBOLD Cohort 2 (SCN2A/SCN8A)Topline1H 2026 No later than 1H 2026 Maintained
EMBRAVE3 (Elsunersen, SCN2A GoF)Start/DesignRegistrational protocol harmonization; start 1H 2025 Start mid‑2025; 24‑week DB/sham; initial ages 2–18; cohorts to birth Maintained with more detail
Essential3 (Ulixacaltamide, ET)Interims/ToplineInterim Q1 2025; NDA 2025 anticipated IDMC recommended stop for futility; continue both studies to completion; topline Q3 2025; NDA decision after full data Lowered/De‑risking in ET

Earnings Call Themes & Trends

TopicQ3 2024 (Prev‑2)Q4 2024 (Prev‑1)Q1 2025 (Current)Trend
Relutrigine efficacy in DEEsEMBOLD Cohort 1 topline: 46% placebo‑adjusted motor seizure reduction; ~75% reduction OLE; >30% seizure‑free Strategy reiterated; cohort 2 planned for registration OLE update ~90% mean reduction at 11 months; expanding to broad DEEs (EMERALD) Improving
EMERALD (broad DEE) strategyPlan to initiate 1H 2025 Plans reiterated Initiate mid‑2025; phenotypically defined; ~160 pts; 16 weeks On track
Elsunersen (SCN2A GoF) regulatory pathPart A ongoing; registrational design being harmonized Global registrational design progress EMBRAVE3: 24‑week DB/sham; cohorts to birth; start mid‑2025 Clarified/accelerative design
Essential Tremor (ulixacaltamide)Interim in Q1 2025; optimism NDA anticipated 2025 IDMC futility at interim; proceeding to completion; topline Q3 2025 Deteriorated
Enrollment engines (EMPOWER/interest)EMPOWER >1,000 patients enrolled EMPOWER >3,000 consented EMPOWER >3,000; ongoing; rapid cohort identification Improving
Cash runwayInto 2027 Into 2028 at YE’24 Into 2028 re‑affirmed Q1’25 Improved

Management Commentary

  • “We expect a transformative year at Praxis… topline results for vormatrigine from the RADIANT study in epilepsy by mid‑2025, and from the POWER1 study in the second half of 2025… initiate the registrational EMERALD study… initiate the Phase 3 EMBRAVE3 trial… runway into 2028” — Marcio Souza, CEO .
  • “Cash and investments of $472 million… maintains runway into 2028” — Company statement .
  • On EMERALD’s phenotypic, broad‑DEE approach: “These patients will be phenotypically defined… downstream of the etiology… a natural consequence of [the drug’s] set‑up” — Steven Petrou .
  • On relutrigine’s mechanism/differentiation: “We couldn’t find a maximum tolerated dose… block activity at the high level, spare it at the low level… next evolution beyond state‑dependent blockers” — Steven Petrou .
  • CFO on runway and funding scope: “$472 million at the end of Q1… runway is into 2028 and it funds all of the trials through the readouts that we talked about today” — Tim Kelly .

Q&A Highlights

  • Placebo/carryover design: management acknowledged ~5‑day half‑life and possible carryover; argued design still biases against detecting a drug effect and was ethically necessary in severe DEEs .
  • Broad DEE inclusion vs basket: EMERALD will be phenotypically defined (not genotype baskets); regulators accepted no fixed subtype proportions; subgroup analyses planned .
  • Dosing/exposure logic: escalation ceiling at 1.5 mg agreed with FDA; exposure‑response supports higher exposures in some etiologies; no titration required; once‑daily dosing .
  • Combination thesis: elsunersen (root cause) plus relutrigine (residual hyperexcitability) seen as complementary in SCN2A GoF DEE .
  • Enrollment readiness: all patients for EMBRAVE3 Cohort 1 effectively identified pre‑activation, suggesting rapid start .

Estimates Context

  • Q1 2025 results vs S&P Global consensus: revenue $0.000M vs $0.183M*; diluted EPS $(3.29) vs $(3.21); # of estimates: revenue 10, EPS 11*. Values retrieved from S&P Global. Actuals from company filings .
  • Implications: modest EPS miss reflects deliberate R&D scale‑up into multiple late‑stage studies; revenue variability stems from collaboration timing (UCB revenue recognized in Q4 2024, none in Q1 2025) . Values retrieved from S&P Global.

Guidance Changes

(See table above.) Key changes this quarter:

  • Runway extended to 2028 (from 2027 in Q3’24) on cash build and ATM usage .
  • ET program risk flagged at interim; topline now Q3 2025 with NDA decisions post full data readout .

Key Takeaways for Investors

  • Cash runway into 2028 underwrites multiple late‑stage readouts without near‑term financing, a rarity among small‑mid cap CNS developers .
  • DEE engine remains the core equity story; EMBOLD OLE durability (~90% reduction at 11 months) and EMERALD/EMBRAVE3 starts should be stock catalysts through mid‑2025 .
  • Near‑term overhang: Essential tremor interim futility; management will complete both Phase 3 studies, making Q3 2025 a binary event for that indication .
  • Vormatrigine in common epilepsies provides an additional 2025 catalyst stack (RADIANT mid‑2025, POWER1 2H25), broadening optionality beyond rare DEEs .
  • Regulatory dialogue appears constructive (EMBRAVE3 24‑week registrational, neonatal cohorts), potentially accelerating SCN2A GoF path and label breadth over time .
  • Expense trajectory is intentionally front‑loaded; expect elevated R&D while pivotal programs execute; any financing need is mitigated by current runway guidance .
  • Net‑net: focus positioning around DEE catalysts and vormatrigine readouts; treat ET as a free or discounted option into Q3 2025 while monitoring enrollment pace and regulatory milestones.

Additional Supporting Data (prior two quarters)

  • Q4 2024 (for context): collaboration revenue $7.46M; R&D $56.29M; net loss $(58.68)M; runway into 2028 at YE .
  • Q3 2024 (for context): collaboration revenue $0.30M; R&D $41.88M; net loss $(51.91)M; runway into 2027 .