Praxis Precision Medicines, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on February 28, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2024, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (the "SEC") on February 28, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2024 and in the "Risk Factors" section of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

For our vormatrigine program (formerly known as PRAX-628) within the Cerebrum™ platform, we announced positive results from our Photo-Paroxysmal Response, or PPR, study in the first quarter of 2024, and have initiated or plan to initiate four studies, called the ENERGY program, to generate patient eligibility, efficacy, safety and pharmacokinetics (PK) data for the program. We initiated the EMPOWER study, an observational study of vormatrigine in patients with epilepsy, in the third quarter of 2024, and initiated or plan to initiate three efficacy studies. The first efficacy study, RADIANT, is an open label eight-week study in patients with focal onset seizures or generalized epilepsy that is currently enrolling, with topline results expected by mid-year 2025. We have also initiated the POWER1 study, a double-blind, placebo-controlled, 12-week study in focal onset seizures, with topline results expected in the second half of 2025, and plan to begin enrollment in the POWER2 study, a third efficacy study, in the second half of 2025. Within our relutrigine program (formerly known as PRAX-562), we announced positive topline results from the first cohort of our EMBOLD study in the third quarter of 2024 and have initiated enrollment of the second cohort, with topline results expected no later than the first half of 2026. We also plan to initiate the EMERALD study in a broader developmental and epileptic encephalopathies, or DEE, patient population in mid-2025. For our ulixacaltamide program, we shared the results of a pre-planned statistic interim analysis of Study 1 of our Phase 3 Essential 3 clinical program for essential tremor in February 2025. Based on the predefined decision framework for Study 1, the Independent Data Monitoring Committee, or IDMC, recommended that the study be stopped for futility, due to the results being unlikely to meet the primary efficacy endpoint under the parameters set by the statistical model. The committee also indicated that some underlying assumptions of the statistical model might have influenced this outcome and encouraged us to explore alternative analysis methods. Given the advanced state of enrollment for both Study 1 and Study 2 in the Essential3 program, and in the context of the advice received by the IDMC, we have decided to continue both studies to completion, with topline results expected in the third quarter of 2025. The decision about whether the data supports the submission of an NDA will be made after analyzing the final results for Study 1 and Study 2.

Current wording

For our vormatrigine program (formerly known as PRAX-628) within the Cerebrum™ platform, we announced positive results from our Photo-Paroxysmal Response, or PPR, study in the first quarter of 2024, and initiated the ENERGY program to generate patient eligibility, efficacy, safety and pharmacokinetics (PK) data. The ENERGY program includes five studies: EMPOWER, RADIANT, POWER1, POWER2 and POWER3. We initiated the EMPOWER study, an observational study of vormatrigine in patients with epilepsy, in the third quarter of 2024. In August 2025, we announced positive topline results from our first efficacy study, RADIANT, an open label study in patients with focal onset seizures or generalized epilepsy. We are currently enrolling the POWER1 study, a double-blind, placebo-controlled, 12-week study in focal onset seizures, and expect to finalize the study in the fourth quarter of 2025. POWER2, our third efficacy study, is planned to begin in the third quarter of 2025, with enrollment expected to be completed in the second half of 2026. We intend to initiate POWER3, a clinical trial which will assess vormatrigine as a single-agent treatment for focal onset seizures, in the first half of 2026.

Previous wording

For our most advanced product candidate under the Solidus™ platform, elsunersen (formerly known as PRAX-222), we shared results from Part 1 of the EMBRAVE study in the fourth quarter of 2023. We are currently enrolling the second cohort of the EMBRAVE study in Brazil, with topline results expected in the first half of 2026, and plan to initiate EMBRAVE3, a Phase 3 registrational study, in mid-2025. We also have three earlier stage novel ASOs with preclinical proof of mechanism. PRAX-080 is focused on PCDH19 mosaic expression, PRAX-090 is targeting SYNGAP1 loss-of-function, or LoF, mutations which is a leading cause of severe intellectual disability and epilepsy in DEEs, and PRAX-100 is targeting SCN2A LoF mutations, the predominant generic link to de novo autism spectrum disorders, or ASD. We anticipate nominating a development candidate for PRAX-100 by mid- 2025, and development candidates for PRAX-080 and PRAX-090 by the end of 2025.

Current wording

We also have three earlier stage novel ASOs with preclinical proof of mechanism. PRAX-080 is focused on PCDH19 mosaic expression, PRAX-090 is targeting SYNGAP1 loss-of-function, or LoF, mutations which is a leading cause of severe intellectual disability and epilepsy in DEEs, and PRAX-100 is targeting SCN2A LoF mutations, the predominant generic link to de novo autism spectrum disorders, or ASD. We anticipate nominating a development candidate for PRAX-100 by mid- 2025, and development candidates for PRAX-080 and PRAX-090 by the end of 2025.

Previous wording

We are a development stage company and we have not generated any revenue from product sales, and do not expect to do so for several years, if at all. All of our product candidates are still in preclinical and clinical development. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. We have incurred recurring operating losses since inception, including a net loss of $69.3 million for the three months ended March 31, 2025. As of March 31, 2025, we had an accumulated deficit of $906.0 million. We expect to incur significant expenses and operating losses for the foreseeable future as we expand our research and development activities. In addition, our losses from operations may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will be maintained or increased in connection with our ongoing activities, as we:

Current wording

We are a development stage company and we have not generated any revenue from product sales, and do not expect to do so for several years, if at all. All of our product candidates are still in preclinical and clinical development. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. We have incurred recurring operating losses since inception, including a net loss of $140.4 million for the six months ended June 30, 2025. As of June 30, 2025, we had an accumulated deficit of $977.2 million. We expect to incur significant expenses and operating losses for the foreseeable future as we expand our research and development activities. In addition, our losses from operations may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will be maintained or increased in connection with our ongoing activities, as we:

Previous wording

•advance vormatrigine (formerly PRAX-628) into efficacy clinical trials for focal onset seizures;

Current wording

•advance vormatrigine (formerly PRAX-628) in the ENERGY program;

Previous wording

•advance relutrigine (formally PRAX-562) in the EMBOLD clinical trial;

Current wording

•advance relutrigine (formally PRAX-562) in the EMBOLD and EMERALD clinical trials;

Previous wording

As of March 31, 2025, we had cash, cash equivalents and marketable securities of $472.0 million. We expect that our cash, cash equivalents, and marketable securities as of March 31, 2025 will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our research efforts and clinical trials into 2028. The analysis included consideration of our current financial needs and ongoing research and development plans. We have based this estimate on assumptions that may provide to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.”

Current wording

As of June 30, 2025, we had cash, cash equivalents and marketable securities of $446.6 million. We expect that our cash, cash equivalents, and marketable securities as of June 30, 2025 will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our research efforts and clinical trials into 2028. The analysis included consideration of our current financial needs and ongoing research and development plans. We have based this estimate on assumptions that may provide to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.”

Previous wording

We have not generated any revenue from the sale of products since inception and do not expect to generate any revenue from the sale of products for several years, if at all. As discussed in Note 7 to our condensed consolidated financial statements, we entered into an Option and License Agreement, or the Collaboration Agreement, with UCB Biopharma SRL, or UCB, in December 2022. During the three months ended March 31, 2024, we recognized $0.4 million of collaboration revenue. In December 2024, UCB exercised its option to in-license global development and commercialization rights under the terms of the Collaboration Agreement. Accordingly, we did not recognize any collaboration revenue from the Collaboration Agreement during the three months ended March 31, 2025. We have no further research service obligations under the terms of the Collaboration Agreement.

Current wording

We have not generated any revenue from the sale of products since inception and do not expect to generate any revenue from the sale of products for several years, if at all. As discussed in Note 7 to our condensed consolidated financial statements, we entered into an Option and License Agreement, or the Collaboration Agreement, with UCB Biopharma SRL, or UCB, in December 2022. During the three and six months ended June 30, 2024, we recognized $0.4 million and $0.8 million of collaboration revenue, respectively. In December 2024, UCB exercised its option to in-license global development and commercialization rights under the terms of the Collaboration Agreement. Accordingly, we did not recognize any collaboration revenue from the Collaboration Agreement during the three and six months ended June 30, 2025. We have no further research service obligations under the terms of the Collaboration Agreement.

Previous wording

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will be maintained or increase in the foreseeable future as we advance our product candidates through the development phase, and as we continue to discover and develop additional product candidates, build manufacturing capabilities and expand into additional therapeutic areas.

Current wording

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will be maintained or increase in the foreseeable future as we advance our product candidates through the development phase, and as we continue to discover and develop additional product candidates and expand into additional therapeutic areas.

Previous wording

Since our inception, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in each year or for our earned research and development tax credits due to our uncertainty of realizing a benefit from those items. Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences. Our income tax provision may be significantly affected by changes to our estimates. There was no income tax provision recognized for the three months ended March 31, 2025 and 2024.

Current wording

Since our inception, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in each year or for our earned research and development tax credits due to our uncertainty of realizing a benefit from those items. Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences. Our income tax provision may be significantly affected by changes to our estimates. There was no income tax provision recognized for the three and six months ended June 30, 2025 and 2024.

Previous wording

The $33.8 million increase in research and development expenses was primarily attributable to the following:

Current wording

The $35.7 million increase in research and development expenses was primarily attributable to the following:

Previous wording

•$29.9 million increase in expense related to our Cerebrum™ platform, driven primarily by:

Current wording

•$32.0 million increase in expense related to our Cerebrum™ platform, driven primarily by:

Previous wording

◦a $13.0 million increase in spend for our vormatrigine program, primarily driven by spend related to the ENERGY program;

Current wording

◦a $15.9 million increase in spend for our vormatrigine program, primarily driven by spend related to Radiant and POWER1, as well as phase 1 study spend;

Previous wording

◦a $4.3 million increase in spend for our relutragine program, primarily related to EMBOLD clinical trial costs and current quarter manufacturing spend.

Current wording

◦a $9.1 million increase in spend for our relutrigine program, primarily related to spend for our EMBOLD study, startup expense for our EMERALD study, phase 1 study spend and current quarter manufacturing spend;

Previous wording

The $1.4 million decrease in general and administrative expenses was primarily attributable to the following:

Current wording

The $2.5 million increase in general and administrative expenses was primarily attributable to the following:

Previous wording

◦a $12.3 million increase in spend for our ulixacaltamide program, primarily due to increased Essential3 activity compared to prior year; and

Current wording

◦a $18.7 million increase in spend for our ulixacaltamide program, primarily due to increased Essential3 activity compared to prior year;

Previous wording

•$1.9 million increase in indirect expenses driven primarily by software and consulting spend to support operations.

Current wording

•$2.1 million increase in indirect expenses driven primarily by software and consulting spend to support operations; and

Previous wording

•$2.8 million decrease in personnel-related costs mainly due to decreased stock-based compensation expense; and

Current wording

•$2.0 million decrease in personnel-related costs mainly due to decreased stock-based compensation expense.

Previous wording

To date, we have financed our operations primarily with proceeds from the issuance of redeemable convertible preferred stock and from the sale of common stock through an initial public offering, common stock and pre-funded warrants through follow-on public offerings and common stock from at-the-market offerings under our shelf registration statement. From inception through March 31, 2025, we have raised $1.2 billion in aggregate cash proceeds from such transactions, net of issuance costs. As of March 31, 2025, we had cash, cash equivalents, and marketable securities of $472.0 million.

Current wording

To date, we have financed our operations primarily with proceeds from the issuance of redeemable convertible preferred stock and from the sale of common stock through an initial public offering, common stock and pre-funded warrants through follow-on public offerings and common stock from at-the-market offerings under our shelf registration statement. From inception through June 30, 2025, we have raised $1.2 billion in aggregate cash proceeds from such transactions, net of issuance costs. As of June 30, 2025, we had cash, cash equivalents and marketable securities of $446.6 million.

Previous wording

In December 2023, we entered into an Open Market Sale Agreement, or the 2023 Sales Agreement, with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of common stock from time to time in at-the-market offerings. The 2023 Sales Agreement was terminated in January 2024. During the three months ended March 31, 2024, we issued and sold an aggregate of 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $5.3 million, after deducting commissions and offering expenses payable by us.

Current wording

In December 2023, we entered into an Open Market Sale Agreement, or the 2023 Sales Agreement, with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of common stock from time to time in at-the-market offerings. The 2023 Sales Agreement was terminated in January 2024. During the six months ended June 30, 2024, we issued and sold an aggregate of 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $5.3 million, after deducting commissions and offering expenses payable by us.

Previous wording

In January 2024, we completed a public offering of: (i) an aggregate of 3,802,025 shares of our common stock at a public offering price of $35.50 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of common stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $35.4999 per share of common stock underlying the warrants. The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by us. As of March 31, 2025, 325,988 warrants associated with this offering were exercised on a cashless basis with no cash proceeds received by us.

Current wording

In January 2024, we completed a public offering of: (i) an aggregate of 3,802,025 shares of our common stock at a public offering price of $35.50 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of common stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $35.4999 per share of common stock underlying the warrants. The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by us. As of June 30, 2025, 352,500 warrants associated with this offering were exercised on a cashless basis with no cash proceeds received by us.

Previous wording

In March 2024, we entered into an Open Market Sale Agreement, or the 2024 Sales Agreement, with Jefferies, to provide for the offering, issuance, and sale of up to an aggregate amount of $150.0 million of common stock in at-the-market offerings. During the three months ended March 31, 2024, we issued and sold an aggregate of 17,662 shares under the 2024 Sales Agreement for aggregate net proceeds of $0.9 million, after deducting commissions and offering expenses payable by us.

Current wording

In March 2024, we entered into an Open Market Sale Agreement, or the 2024 Sales Agreement, with Jefferies, to provide for the offering, issuance, and sale of up to an aggregate amount of $150.0 million of common stock in at-the-market offerings. During the six months ended June 30, 2024, we issued and sold an aggregate of 17,662 shares under the 2024 Sales Agreement for aggregate net proceeds of $0.9 million, after deducting commissions and offering expenses payable by us.

Previous wording

In December 2024, we entered into an amendment to the 2024 Sales Agreement with Jefferies to provide for the offering, issuance and sale of up to an aggregate of $250.0 million of common stock from time to time in at-the-market offerings. During the three months ended March 31, 2025, we issued and sold an aggregate of 694,212 shares under the amended 2024 Sales Agreement for aggregate net proceeds of $54.9 million, after deducting commissions and offering expenses payable by us.

Current wording

In December 2024, we entered into an amendment to the 2024 Sales Agreement with Jefferies to provide for the offering, issuance and sale of up to an aggregate of $250.0 million of common stock from time to time in at-the-market offerings. During the six months ended June 30, 2025, we issued and sold an aggregate of 1,351,689 shares under the amended 2024 Sales Agreement for aggregate net proceeds of $83.3 million, after deducting commissions and offering expenses payable by us.

Previous wording

During the three months ended March 31, 2025, net cash used in operating activities of $53.0 million was primarily due to our $69.3 million net loss, partially offset by $8.4 million in changes in operating assets and liabilities primarily related to an increase in accounts payable and $7.9 million of non-cash charges primarily related to stock-based compensation.

Current wording

During the six months ended June 30, 2025, net cash used in operating activities of $107.7 million was primarily due to our $140.4 million net loss, partially offset by $17.8 million in changes in operating assets and liabilities primarily related to an increase in accounts payable and $14.9 million of non-cash charges primarily related to stock-based compensation.

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities of $20.9 million was primarily due to our $39.6 million net loss, partially offset by $1.5 million in changes in operating assets and liabilities primarily related to a decrease in accounts payable and $17.2 million of non-cash charges primarily related to stock-based compensation.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities of $48.1 million was primarily due to our $72.2 million net loss, partially offset by $2.2 million in changes in operating assets and liabilities primarily related to increases in accounts payable and accrued expenses, and $21.9 million of non-cash charges primarily related to stock-based compensation.

Previous wording

During the three months ended March 31, 2025, net cash used in investing activities of $51.1 million was primarily related to purchases of marketable securities offset by maturities of marketable securities.

Current wording

During the six months ended June 30, 2025, net cash used in investing activities of $33.2 million was primarily related to purchases of marketable securities offset by maturities of marketable securities.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities of $91.2 million was related to maturities of marketable securities.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities of $287.1 million was primarily related to maturities of marketable securities.

Previous wording

During the three months ended March 31, 2025, net cash provided by financing activities of $54.3 million consisted primarily of net proceeds from our at-the-market offerings.

Current wording

During the six months ended June 30, 2025, net cash provided by financing activities of $82.9 million consisted primarily of net proceeds from our at-the-market offerings.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities of $182.8 million consisted of net proceeds from our January 2024 public offering, our at-the-market offerings and our collaboration and license agreement with Tenacia Biotechnology (Shanghai) Co., Ltd.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities of $399.1 million consisted primarily of net proceeds from our January 2024 and April 2024 follow-on public offerings, our at-the-market offerings and our collaboration and license agreement with Tenacia Biotechnology (Shanghai) Co., Ltd.