10 Small Cap Stocks with High Potential

02. Praxis Precision Medicines, Inc. (NASDAQ:PRAX)

Number of Hedge Fund Holders: 28

Market Cap as of October 5: 1.15 Billion

Average Analysts’ Target Price as of October 5: $146.44

Year to date Share Price Gain: 191.47%

Praxis Precision Medicines, Inc. (NASDAQ:PRAX) is a promising clinical-stage biopharmaceutical company focused on developing innovative therapies for central nervous system (CNS) disorders, particularly those stemming from an imbalance between neuronal excitation and inhibition. With a robust pipeline featuring several programs nearing regulatory milestones, Praxis Precision Medicines, Inc. (NASDAQ:PRAX) presents a compelling investment opportunity for those looking to capitalize on small-cap stocks with significant growth potential.

At the forefront of Praxis Precision Medicines, Inc. (NASDAQ:PRAX) pipeline is ulixacaltamide, a selective small molecule inhibitor currently in Phase III clinical trials aimed at treating essential tremor. The company is on track to conduct an interim analysis for its Essential3 study in Q4 2024, with topline results expected later this year, potentially paving the way for a New Drug Application (NDA) filing in 2025. Additionally, the company is advancing PRAX-562 for pediatric patients with developmental and epileptic encephalopathies (DEE), with topline results from the Phase 2 EMBOLD study anticipated in Q3 2024.

Financially, Praxis Precision Medicines, Inc. (NASDAQ:PRAX) is in a strong position, boasting cash and investments totaling $434 million as of June 30, 2024, a significant increase from $81.3 million at the end of 2023. This substantial cash reserve, bolstered by successful public offerings, provides a runway into 2027 and positions the company to navigate through critical clinical milestones without financial strain. During the second quarter of 2024, Praxis reported a net loss of $32.7 million, slightly reduced from the $34.3 million loss in the same quarter the previous year. While losses are typical for clinical-stage companies, the reduction indicates effective cost management as the company invests in its promising pipeline.

As Praxis Precision Medicines, Inc. (NASDAQ:PRAX) continues to advance its diverse pipeline, which includes PRAX-628 targeting focal epilepsy and PRAX-222 for early-onset SCN2A developmental epilepsies, the company’s potential for growth becomes even clearer. With multiple programs expected to enter registrational phases by 2025 and a strong cash position to support ongoing research and development, Praxis Precision Medicines, Inc. (NASDAQ:PRAX) stands out as a small-cap stock with high potential for investors looking for exposure in the biopharmaceutical sector.