Epilepsy-Focused Bright Minds Biosciences A High-Risk, High-Reward Play, Analyst Initiates With Over 150% Stock Upside

Chardan Research initiated coverage on Wednesday of Bright Minds Biosciences Inc. DRUG, an epilepsy drug developer.

The company’s lead product, BMB-101, is a novel scaffold 5-HT2C Gq-protein biased agonist developed using structure-based drug design.

The drug candidate is designed for the chronic treatment of neurological disorders where tolerance and drug resistance are common issues.

Biased agonism at the 5-HT2C receptor is one of its key features and adds another layer of functional selectivity within a well-validated target.

In preclinical studies, BMB-101 has demonstrated efficacy in animal models of Dravet Syndrome and numerous models of generalized seizures.

The company’s BREAKTHROUGH Phase 2 study is an open-label trial evaluating the safety, tolerability, and efficacy of BMB-101 in adult patients with classic Absence Epilepsy and Developmental and Epileptic Encephalopathy (DEE).

“We believe BMB-101 has a decent chance of working in treating epilepsy, and it could be differentiated vs other 5-HT2C agonists,” analyst Rudy Li writes.

The Chardan analyst projects over $1 billion combined peak sales in DEE and absence epilepsy but acknowledges that, given the limited data available, this remains a high-risk, high-reward play.

Analyst Li initiated coverage with a Buy rating and a price target of $80.

Chardan says the stock was not under investors’ radar until Denmark-based H. Lundbeck A/S acquired Longboard Pharmaceuticals for $60.00 per share in cash last October for its 5-HT2C agonist bexicaserin, which has a similar binding profile to the company’s BMB-101.

While the stock has moved up significantly following the news, that analyst sees an interesting story even at the current valuation of over $200 million in market cap, as per data from Benzinga Pro.

Chardan views Bright Minds Biosciences as a high-risk, high-reward play despite the partially validated mechanism of action.

Price Action: DRUG stock is up 4.84% at $30.43 at the last check Wednesday.

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