Jazz stock toppled Thursday — while shares of rival Praxis Precision Medicines surged — after its essential tremor drug failed in midstage testing.
Jazz Pharmaceuticals said a 30 milligram dose of its drug, suvecaltamide, didn't lead to a statistically significant improvement in symptoms after 12 weeks. The company blamed an unexpectedly strong response from the placebo group for the failure.
The results initially slammed Praxis stock. But shares reversed higher in afternoon trades.
Praxis is developing a treatment for essential tremor called ulixacaltamide. It targets the same channel as Jazz's suvecaltamide. Wedbush analyst Laura Chico notes Praxis is using a different goal for its study — one that has never been tested clinically.
"The obvious question to Praxis is how the Jazz update may inform on the forthcoming (study called) Essential readout for ulixacaltamide," she said in a report. "Our take: Simply put, this remains a challenging indication to demonstrate effectiveness."
On the stock market today, Jazz stock skidded 4.7% to 107.36. Praxis stock fell as much as 12.4% to 33.01 in early trading. But Praxis stock reversed and closed up 6.4% at 40.11.
Jazz Stock: Parkinson's Data Next
In addition to the flop on its main goal, Jazz's drug didn't meet any secondary goals of the study. The company, though, emphasized in an email to Investor's Business Daily that suvecaltamide showed numeric improvements on primary and secondary goals of the study.
Jazz is also evaluating suvecaltamide as a treatment for patients with tremor due to Parkinson's disease. The company will make a decision about the future of suvecaltamide following those test results in the first quarter of 2025.
Chico kept her neutral rating on Praxis stock. She doesn't rate Jazz stock.
Ulixacaltamide accounts for the majority of her valuation of Praxis stock.
"With Praxis shares trading at an about $650 million valuation, we continue to wait for a more attractive entry point before getting constructive on shares," she said.
Notably, Praxis stock has a strong IBD Digital Relative Strength Rating of 96. The 1-99 scale measures a stock's 12-month performance. This puts Praxis shares among the leading 4% of all stocks. Jazz stock, on the other hand, has a low RS Rating of 23.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
