Shares in drug developer Xenon Pharmaceuticals Inc. more than doubled on Monday after the Canadian company published strong efficacy results for its epilepsy drug, making it the latest in a string of domestic biotechnology companies to surpass the US$1-billion valuation mark.
Xenon shares surged 101.9 per cent to close at US$31.50 on the Nasdaq stock market, giving the company a market capitalization of nearly $1.3-billion and underscoring a bullish trend that has given the Canadian biotech scene greater visibility among global investors.
In August, Pfizer Inc. agreed to pay US$18.50 a share to acquire Mississauga-based Trillium Therapeutics Inc. , valuing the blood-cancer drug developer at US$2.3-billion.
Vancouver-based AbCellera Biologics Inc. is valued at more than US$4.5-billion, even though the shares have slipped from their strong debut after an initial public offering in December, 2020. And Zymeworks Inc. , also of Vancouver, is valued at more than US$1.3-billion.
Xenon’s rally on Monday follows the upbeat trial results for a drug used in the treatment of adult focal epilepsy, which substantially reduced monthly seizure frequencies.
“Importantly, we saw statistically significant reductions of focal onset seizures compared to placebo across all dose groups, which suggests it is highly active in the central nervous system. With these compelling topline results, we are eager to work with the [U.S. Food and Drug Administration] to plan for an expedited development path,” Dr. Christopher Kenney, Xenon’s chief medical officer, said in a release.
The results won plaudits from analysts.
Antonia Borovina, an analyst at Bloom Burton & Co., called the trial results “stellar,” adding that they are “highly clinically meaningful” and exceeded her expectations.
Ms. Borovina raised her 12-month target price on the stock to US$50 from US$27, based on her belief that the focal epilepsy drug now has an 80-per-cent probability of meeting approval from regulators, up from a 50-per-cent probability before the trial results were released.
She also raised her forecast for peak sales for the drug, to US$1.6-billion from US$1.1-billion previously.
A number of other analysts also raised their target prices for Xenon, while maintaining bullish recommendations for the stock.
Stifel Nicolaus raised its price target to US$44 from US$31, Jefferies & Co. raised its target to US$50 from US$28. and Guggenheim raised its target to US$45 from US$30.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
David Berman