This small Canadian pharma stock is undervalued, analyst says

Research Capital analyst Andre Uddin reiterated a “Speculative Buy” rating and C$12.00 target price for Eupraxia Pharmaceuticals (Eupraxia Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials TSX:EPRX) following strong early clinical data from the company’s eosinophilic esophagitis (EoE) program.

Victoria, B.C.–based Eupraxia is developing EP-104IAR for osteoarthritis pain and EP-104GI, a new fluticasone-based injectable formulation for EoE, a chronic inflammatory disease of the esophagus.

On Sept. 29, Eupraxia released initial Cohort 9 data from its Phase 1b EP-104GI study, showing a “striking” Week 4 reduction in EoEHSS Grade and Stage scores (–0.40 to –0.50) compared with –0.10 to –0.20 in lower-dose groups. Uddin said the strong early response suggests Cohort 9 could deliver even greater efficacy over time and “very likely strongly outperform Sanofi’s Dupixent” based on Phase 2 benchmarks.

Plasma fluticasone levels were briefly higher than the Flovent HFA reference early post-injection but declined rapidly by Week 4, which Uddin said poses no safety concern. No serious adverse events or gastrointestinal candidiasis were reported across cohorts, reinforcing the therapy’s safety profile.

Eupraxia is expanding Phase 2 enrollment from 60 to 120 patients, with two treatment arms (120mg and 160mg) and one placebo group, followed for 52 weeks with a crossover at Week 26. Top-line results are expected in the second half of 2026, with FDA discussions on Phase 3 design planned by year-end. Uddin anticipates a single registrational Phase 3 study with 150–300 patients, potentially including adolescents.

“The updated dataset reinforces our confidence that EP-104GI has the potential to emerge as a best-in-class therapy and ultimately the standard of care for EoE patients,” Uddin said.

Eupraxia also strengthened its balance sheet with a US$70-million public equity offering announced Sept. 22, which was upsized to US$80.5-million after full exercise of the underwriters’ overallotment option. In total, 14.6 million shares were issued at US$5.50 per share. Uddin estimates the company’s cash position at US$89.5 million (C$124.6 million) as of Sept. 30, after fees and expected Q3 outflows.

Uddin said EP-104GI continues to deliver compelling data, with Cohort 9 in particular demonstrating strong dose-response, durable efficacy and a clean safety profile, supporting its potential to become the leading therapy in the EoE field.

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