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A short seller is challenging Praxis Precision Medicines Inc. (NASDAQ:PRAX) after the company claimed success from its Phase 3 trial of ulixacaltamide.
Culper Research report argues that the data underpinning its essential tremor program cannot withstand regulatory scrutiny.
According to the short report, Praxis engineered its October 2025 results through a series of choices designed to amplify the drug's performance.
The clinical-stage biopharmaceutical company released topline results for the Phase 3 Essential3 program of ulixacaltamide in essential tremor (ET).
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Study 1 showed a statistically significant and clinically meaningful 4.3 point mean improvement in the mADL11 score at Week 8 (p<0.0001).
The effect was sustained from Week 2 throughout the 12-week dosing period. All key secondary endpoints achieved statistical significance.
The firm alleges the readout was shaped by questionable decisions that could jeopardize the drug's approval prospects heading into a key FDA meeting late this year.
Culper Research alleges the company changed its primary endpoint at the last minute, a modification it says was never cleared by the FDA, and then used optimistic assumptions to fill in outcomes for the 36% of patients in the treatment arm who discontinued the trial.
Benzinga has reached out to Praxis for a comment and will update once we receive a response.
The report further claims Praxis presented its analysis as conservative, despite applying statistical methods in ways that contradict the very research the company cited.
Individually, the short seller argues, each problem could derail an approval. Taken together, it contends ulixacaltamide has virtually no path forward.
Those conclusions, the firm says, stem from consultations with several experts, including former Praxis directors, a biostatistician, and multiple former FDA officials with decades of experience.
As Praxis prepares for its fourth-quarter 2025 pre-NDA meeting, the short seller argues the agency will recognize the issues and that the stock faces meaningful downside risk.
The report also questions the foundation of the drug's valuation. Nearly all of Praxis' market value is now tied to ulixacaltamide, which the company acquired for just $1 million in 2018 after prior owners walked away.
The short seller views that price as an early sign that the drug lacked promise.
The short report also highlights the broader challenges for the mechanism, noting that three prior compounds with similar biology failed in early-stage essential tremor programs.
Ulixacaltamide itself did not succeed in its Phase 2 Essential1 study, yet Praxis advanced the program to Phase 3.
In March 2025, an independent data monitoring committee recommended halting the Essential3 study for futility. Praxis chose to continue.
Immediately after releasing the "positive" Phase 3 results, Praxis raised $567 million in new capital.
Sell-side analysts have embraced the drug's potential, with some calling for an 80% probability of approval and valuing ulixacaltamide near $3 billion — the majority of Praxis's roughly $4.5 billion market capitalization.
The short seller argues those expectations rest on an unstable foundation, calling ulixacaltamide "a house of cards."
PRAX Price Action: Praxis Precision Medicine shares were down 9.10% at $172.10 at the time of publication on Thursday, according to Benzinga Pro data.
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