Research Capital starts Eupraxia at speculative buy; PT $10.30 (Canadian)

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Research Capital launched coverage of Eupraxia Pharmaceuticals (TSX:EPRX) with a “speculative buy” rating and price target of $10.30 (Canadian). The stock closed at $3.69 on Jan. 6.

Eupraxia’s lead product, EP-104, a novel extended release injectable formulation of fluticasone propionate for treating osteoarthritis pain, is currently in Phase 2 development.

Analyst Andre Uddin, Ph.D., expects a clinical readout from the trial in the second quarter of 2023, which he called a “major catalyst for the stock.”

Eupraxia also is entering trials with a novel treatment for eosinophilic esophagitis, which is an orphan indication.

“To be conservative, we have assumed Eupraxia out-licenses their osteoarthritis asset,” Dr. Uddin said. However, based on the clinical data, market potential of EP-104, lack of late-stage competitors, and the historical track record of management, “we believe Eupraxia has the potential to be acquired once the Phase 3 trials have been initiated or once the drug has been commercialized.”