Meet the Biotech Stock That Just Jumped 251% Higher

Investors looking for stocks that can produce eye-popping gains in a short time frame often turn toward biotechnology stocks. In this wonky industry, encouraging results from a clinical trial can turn a novel new molecule into a prized asset worth billions overnight.

Unexpectedly good results from a phase 3 trial with underserved essential tremor patients recently drove shares of Praxis Precision Medicines (NASDAQ: PRAX) through the roof. From Oct. 14, 2025, through Oct. 22, 2025, shares of the clinical-stage drugmaker soared 251%.

A new drug for millions of tremor-ridden patients who lack treatment options could be worth billions in annual sales. That said, Praxis is a pre-commercial company, which could make it too risky for many investors. Here's what you want to know about this business before taking a chance on its stock.

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There are millions of underserved essential tremor patients

Essential tremor (ET) affects an estimated 10 million Americans, making it the most common movement disorder. Just one treatment is approved to treat the condition. Formerly known as Inderal, propranolol needs to be taken three times daily to reduce tremor severity.

Propranolol is a beta-blocker typically used to manage hypertension and atrial fibrillation. This means many patients with ET can't take it. A patient survey showed that up to 77% of ET patients feel their tremors are inadequately controlled by available treatments. Up to 50% of the ET population isn't receiving any treatment for the condition.

Why ulixacaltamide results sent Praxis stock soaring

Praxis ran a pair of phase 3 studies with ulixacaltamide and ET patients. In the first study, patients received either a placebo or ulixacaltamide. After 56 days, patients receiving the experimental treatment recorded an average improvement of 4.3 points on a modified Activities of Daily Living test. Patients randomized to receive a placebo improved by just 1.7 points.

In the second study, all ET patients were treated with ulixacaltamide for eight weeks before about half were randomized to receive a placebo. Patients who stayed on treatment were significantly more likely to maintain a response. Plus, they reported a significantly improved rate of disease improvement.

While recently reported phase 3 results look terrific, investors need to realize the company modified the standard Activities of Daily Living test. Praxis says the Food and Drug Administration (FDA) is on board with the change. We have to take the company at its word on this matter, though, because the FDA does not publicly correct misrepresentations of its communications with drug developers.

As a once-daily tablet, ulixacaltamide already has a leg up on standard care for ET patients. That said, it isn't as tolerable as investors want it to be. In the first study, 35.6% of patients on ulixacaltamide discontinued compared to just 5.6% of patients in the placebo group. In the second study, 38.1% of patients discontinued treatment.

Before getting too worked up about discontinuations, it's important to realize this was a somewhat unusual home-based study. The lack of in-person appointments could be partly responsible for the elevated discontinuation rate.

Praxis' pipeline has more than just ulixacaltamide

In addition to ulixacaltamide, Praxis is developing vormatrigine for the treatment of epilepsy. In August, the company presented phase 2 trial results that showed 60% of patients treated with the once-daily tablet reduced their seizure rate by at least half over an eight-week period. Treatment with vormatrigine led to complete relief from seizures for 14% of patients. Praxis has already begun enrolling patients into a phase 3 trial with vormatrigine.

While vormatrigine is aimed at a general epilepsy population, Praxis is also developing relutrigine for patients with developmental and epileptic encephalopathy (DEE), a group of severe epilepsies that often resist available treatments. In May, we saw phase 2 results that suggest the drug increased DEE patients' average period between seizures to 67 days. Before beginning treatment with relutrigine, patients reported seizures every three days, on average.

Is it a buy now?

Praxis Precision Medicine is still a pre-commercial business that lacks product sales. Luckily, its cash cushion is probably sufficient to keep the lights on long enough to launch ulixacaltamide, if there are no setbacks. The company recently raised $525 million in a secondary offering that it will add to a cash balance that stood at $446.6 million at the end of June.

At recent prices, Praxis sports a $3.9 billion market cap. That's not unreasonable for a company with multiple late-stage drug candidates aimed at underserved populations. Clinical-stage biotech stocks are only appropriate for investors with a sky-high tolerance for risk. If this describes you, this stock could be worth a closer look.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.