Praxis Precision Medicines (PRAX) has entered into a research collaboration and license agreement with Remagine Labs to develop an iontophoretic transdermal patch for ulixacaltamide, extending its essential tremor program beyond the existing oral approach.

The collaboration news lands after a strong run in Praxis Precision Medicines' share price, with a 30 day share price return of 33.07% and year to date share price return of 16.31%, while the 1 year total shareholder return is very large. Recent index removals, the extended FDA review for relutrigine and the auditor change form the backdrop, but recent price momentum suggests investors are currently focused on execution across the essential tremor and epilepsy pipeline.

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Praxis Precision Medicines now has a broader CNS pipeline story and a share price that has moved sharply in the past month, so the real tension for investors is whether the current valuation already reflects that progress.

Most Popular Narrative: 46.1% Undervalued

On the latest numbers, the most widely followed narrative for Praxis Precision Medicines points to a fair value well above the last close at $333.12, so investors are weighing how much of the CNS pipeline is already in the price.

Praxis Precision Medicines currently has no revenue. Analysts are forecasting revenue to reach $1.4 billion by June 2029.

As a pre-revenue company, Analysts expect Praxis Precision Medicines to achieve a profit margin of 31.5% in 3 years time.

Want to see what underpins this valuation gap? The narrative leans on rapid top line expansion, rising profitability and a rich future earnings multiple. Curious how those moving parts fit together?

On this narrative, the implied fair value for Praxis Precision Medicines is $617.67, using a 7.18% discount rate and long term assumptions for revenue, margins and future P/E.

Result: Fair Value of $617.67 (UNDERVALUED)

However, this hinges on Praxis Precision Medicines delivering clean data from late stage epilepsy trials and avoiding delays or setbacks in the ulixacaltamide and relutrigine review timelines.

Next Steps

If the mix of optimism and caution around Praxis Precision Medicines resonates, do not wait on others to decide the story for you. Review the full balance of risks and rewards in the 2 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.