Challenging Horizon For BioXcel: Analysts Dive Into Igalmi's Potential And Reshaped Commercialization Strategy

Mizuho analyst Graig Suvannavejh downgraded BioXcel Therapeutics, Inc. BTAI to Neutral from Buy, lowering the price target to $4 from $40.

The company recently reported Q2 results with a net loss of $(53.5) million, significantly wider than the net loss of $(37.7) million for the same period in 2022.

Following the results, the analyst is pushing out the timing of the potential launch of Igalmi in AD agitation from the prior 2025 estimate to 2029. The lag is due to a new assumption that the FDA will require a second Phase 3 study to support the drug used in the at-home/assisted living facility.

The analyst downgraded the stock owing to the removal of AD agitation-related revenue from the nursing home setting after the suspension of the TRANQUILITY III study.

Suvannavejh moderated the uptake curve (and hence peak revenue) for Igalmi in the schizophrenia and bipolar disease setting, where the drug is currently approved to reflect changes in the commercialization model.

The analyst also underscores the removal of revenue related to the opportunity in major depressive disorder (MDD) for BTAI.

Considering risks associated with the lead asset Igalmi, the analyst now models peak risk-unadjusted sales within the 2037 forecast period of ~$500 million vs. the prior estimate of $1.1 billion.

Suvannavejh lowered FY23 EPS estimates to a $(5.80) loss, wider than the prior $(5.24) loss estimate. 

Truist Securities analyst Robyn Karnauskas reiterated a Buy rating on BioXcel Therapeutics, lowering the price target to $31 from $71.

The analyst lowered FY23 revenue estimates from $6 million to $4 million. For FY24, the analyst reduced revenue forecasts from $63 million to $10 million.

Given the potential chronic indication of a portion of the AD market, Karnauskas modifies the peak potential (dementia market with episodic treatments exceeding 50 million+ TAM versus 100 million prior) offset by cost structuring. 

Price Action: BTAI shares are trading lower by 7.9% to $3.9850 on the last check Tuesday.