BMO Raises BioXcel Price Target on Study Expansion

Researchers at BMO Capital Markets have given BioXcel Therapeutics (NASDAQ:BTAI) a nod of approval after the firm announced it was studying the efficacy of its in-trial drug on a new condition.

Earlier this month, the Connecticut-based biopharmaceutical company confirmed its BXCL501 agent, an oral film treatment, had started a Phase 1b/2 study for its effects on patients with acute agitation associated with dementia.

This follows the drug’s first trial to research its effectiveness in patients with schizophrenia and bipolar disorder after being granted a fast track designation from the US Food and Drug Administration (FDA) back in 2018.

In a note sent out to clients on Thursday (January 16), Do Kim, biotechnology analyst at BMO Capital Markets, told investors they were raising the price target from US$21 to US$26 after a meeting with the company’s management team.

The share price of the company opened at US$17.64 on Friday (January 17) after rising 6.1 percent during Thursday’s extended trading session.

Kim said the expansion of the BXCL501 study to now include conditions that cause varying levels of agitation is a crucial move for BioXcel.

“We believe the BXCL501 opportunity remains underappreciated, with potential positive data not only providing a positive catalyst for shares but also de-risks ongoing development of expansion programs,” Kim added.

Agitation is a symptom connected to several psychiatric conditions and can result in bursts of anger and disruptive behaviors. According to BioXcel, about 18 million people in the US are estimated to be at risk of agitation, racking up US$40 billion a year in treatment expenses.

In a press release, Robert Risinger, vice president of clinical development at BioXcel, said there currently aren’t any approved treatments for agitation in patients with dementia, which has left an avenue open for the development of this drug.

The original study for the drug’s effect on patients with bipolar disorder and schizophrenia has moved into the final stage of testing, with two critical Phase 3 trials announced in December.

Topline data for the trials is expected to be published by mid-2020, which Kim said could prove to be pivotal for the company, leading to a New Drug Application filing in the second half of 2020 and the commercial launch of the oral film treatment by 2021.

With positive results on the horizon, the company has already made plans to optimize the use of BXCL501.

In BioXcel’s Q3 2019 report, the firm said it was looking into a partnership that would pair the oral film treatment with wearable tech, like a smartwatch, to enhance the treatment process, especially for geriatric patients with dementia.

BioXcel raised US$19 million in proceeds during its most recent quarter to fund its ongoing trials.

As part of this continuous research growth, the company has faced an uptick in its financial losses.

Net losses saw a significant jump year-over-year to US$9 million from US$4.9 million in Q3 2018. Research expenses were up as well, to US$7.1 million from US$3.8 million in Q3 2018, due to clinical trial costs and expanded research and development activities.

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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.