Xenon Pharmaceuticals (XENE) saw its stock price plummet 12.59% during intraday trading on Tuesday, as investors reacted negatively to the company's first-quarter 2025 financial results. The significant drop came despite the clinical-stage biopharmaceutical company beating analyst expectations on revenue.

The earnings report, released earlier in the day, showed that Xenon posted a Q1 net loss of $0.83 per diluted share, wider than the $0.62 loss reported in the same quarter last year. While this loss was less than the $0.91 per share loss analysts had predicted, the expanding deficit appeared to concern investors. Revenue for the quarter came in at $7.5 million, significantly surpassing analyst expectations of $1.11 million to $2.2 million. However, the market seemed to focus more on the company's widening losses rather than the revenue beat.

Despite the negative market reaction, Xenon Pharmaceuticals maintains a positive long-term outlook, stating that it anticipates having sufficient cash to fund operations into 2027 based on current operating plans. However, this assurance did little to calm immediate investor concerns. In response to the earnings report, several analysts adjusted their outlook on the stock. Wells Fargo cut its target price to $47 from $50, while RBC adjusted its price target to $55 from $58, maintaining an Outperform rating with Speculative Risk. Needham maintained its Buy rating on the stock. The average analyst price target now stands at $55.53, according to FactSet, suggesting potential upside despite the day's significant drop.