Overview
Bloom Burton & Co. has launched coverage of Eupraxia Pharmaceuticals (NASDAQ:EPRX) with an initial Buy rating and a price target of $14.00. The brokerage’s valuation reflects the average of two methodologies: a discounted 5x multiple applied to forecast peak sales and a discounted cash flow analysis using a 12% discount rate. Both methods were adjusted by a 40% probability of success, a factor Bloom Burton applied to the valuation math.
Clinical program and timing
Bloom Burton highlighted EP-104GI as Eupraxia’s lead clinical candidate. EP-104GI is a long-acting formulation of fluticasone propionate intended for the treatment of eosinophilic esophagitis. The program employs the company’s DiffuSphere technology platform, which the firm describes as the only non-rigid depot technology capable of stably releasing drug deep in target tissue over periods of 12 months or longer.
Bloom Burton anticipates that Eupraxia will report top-line results from the phase 2b study of EP-104GI later in the year. The timing of that readout is a central input to the firm’s valuation and outlook.
Market potential and peer benchmark
In its modeling, Bloom Burton projects global peak sales for EP-104GI of $1.1 billion by 2035, with approximately $801 million of that total generated in the U.S. These forecasts assume a 30% peak market share among eosinophilic esophagitis patients who fail first-line therapies and who undergo annual endoscopic evaluation.
For context on pricing in the category, the judgment note references an approved therapy for eosinophilic esophagitis that received approval in May 2022 and carries an approximate gross list price near $110,000 per patient per year, with an estimated net price around $65,000.
Epidemiology and market growth
The report cites rapidly rising reported prevalence for eosinophilic esophagitis, noting a five-fold increase in reported prevalence between 2009 and 2022. That trend is part of the backdrop for Bloom Burton’s market-size and penetration assumptions.
Recent equity performance and financing
Over the past year, the biotech’s stock price has risen approximately 133%, though the firm’s analysis notes that significant volatility remains a factor for investors. Separately, Eupraxia recently completed a public offering that raised about $63.2 million in gross proceeds by issuing 7,607,145 common shares at $7.00 per share, together with pre-funded warrants exercisable for up to 1,428,571 common shares at $6.99999 per warrant. The offering included full exercise of the underwriters’ option to purchase additional shares.
Bloom Burton’s initiation follows an earlier financing announcement from the company that had priced a separate public offering expected to generate $55 million in gross proceeds, consisting of 6,428,574 common shares sold at the same per-share price and associated pre-funded warrants.
Other analyst activity
In another recent development, Raymond James resumed coverage of Eupraxia Pharmaceuticals with a Strong Buy rating and established a price target of $18.00.
Conclusion
Bloom Burton’s coverage ties its $14.00 target to explicit valuation mechanics and a 40% clinical success probability, while the company awaits a potentially material phase 2b readout later this year. Investors should note the combination of clinical uncertainty and recent financing activity as they assess the stock.