Definium Therapeutics' (DFTX) phase 3 data for DT120 in generalized anxiety disorder looked better than the stock's muted reaction suggests, with the results increasing confidence in future studies and the drug's regulatory path, RBC Capital Markets said in a note Wednesday.

The investment firm said baseline characteristics were largely balanced, while safety data showed typical transient hallucinogenic effects and no new or concerning adverse events.

RBC expects the ongoing Panorama and Ascend trials in GAD and major depressive disorder to deliver positive results, noting that the 50-microgram arm did not separate from placebo in the prior GAD trial and was included mainly to reduce expectation bias and meet regulatory guidance.

The firm said it estimates peak sales of about $1.3 billion in MDD and $1.2 billion in GAD, with psychedelic treatment centers expected to ramp quickly to meet launch demand, while patients may require three to four annual DT120 doses versus more than 50 Spravato administrations.

RBC Capital Markets maintained its outperform, speculative risk rating on the stock and raised its price target to $66 from $57.

Definium Therapeutics shares were up 3% in Thursday trading.

Price: 44.08, Change: +1.29, Percent Change: +3.01