Jefferies cuts Xenon Pharmaceuticals stock price target on trial pause

Jefferies revised its price target for Xenon Pharmaceuticals shares to $90, down from $100, while keeping a Buy rating. The stock currently trades at $36.94, which is 17.6% lower year-to-date and near its 52-week low of $36.07. This adjustment came after Xenon voluntarily paused Phase III patient enrollment for azetukalner in both bipolar disorder and major depressive disorder due to observed neuropsychiatric adverse events.

The X-NOVA2 trial for major depressive disorder is still set to report results in the first quarter of 2027. Jefferies believes azetukalner's peak sales potential in epilepsy remains strong, projecting a market worth $1.5 billion to $2 billion or more. The stock is currently trading in oversold territory and appears undervalued according to Fair Value analysis, with price targets ranging from $46 to $97 according to Wall Street analysts.

Analysts attribute the stock's performance to broader sector pressures in the biotech industry. Jefferies anticipates a potential recovery for the stock as early as the fourth quarter of 2026 based on positive updates. Investors can find more detailed insights into XENE's valuation and growth prospects through InvestingPro's comprehensive Pro Research Report.

Xenon Pharmaceuticals is developing a novel Kv7 pill called azetukalner for use in epilepsy and depression. The company temporarily paused enrollment in phase 3 studies for these indications due to safety concerns, following discussions with the Data Safety Monitoring Board. Other firms, such as Deutsche Bank and Needham, have also adjusted their price targets for Xenon, while Stifel reiterated its Buy rating with a more moderate target price. Xenon has also filed an FDA New Drug Application for azetukalner in focal seizures.