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Axsome's (AXSM) Q3 Earnings In Line, Pipeline Progresses

Axsome Therapeutics, Inc. AXSM reported third-quarter 2020 loss per share of 58 cents, in line with the Zacks Consensus Estimate but wider than the year-ago quarter’s loss of 56 cents.

Axsome currently does not have any approved product in its portfolio. As a result, the company is yet to generate any revenues from the same.

Quarter in Detail

Research and development (R&D) expenses were $14.8 million in the quarter, down 6.3% from the year-ago period owing to completion of several studies on the pipeline candidates.

General and administrative (G&A) expenses were $6.3 million, significantly up year over year due to increased stock compensation expenses and commercial costs.

As of Sep 30 2020, Axsome had cash worth $202.4 million compared with $190.7 million as of Jun 30, 2020. Management believes that its cash balance as of September-end along with $225 million worth term-loan facility will be enough to fund its anticipated operations for at least through 2024.

Pipeline Updates

Axsome’s pipeline candidates including AXS-05, AXS-07, AXS-09, AXS-12 and AXS-14 are currently being developed for multiple central nervous system (CNS) indications.

AXS-05, one of Axsome’s lead candidates, is being developed for treating major depressive disorder (MDD), treatment-resistant depression (TRD) and agitation associated with Alzheimer's disease (AD).

Along with the third-quarter earnings release, Axsome announced that the new drug application (NDA) for AXS-05 to treat MDD is now expected to be filed in January 2021, which was earlier planned for the fourth quarter of 2020. The expanded timeline was due to a logistical delay resulting from the COVID-19 pandemic.

Further, the company also stretched the timeline for NDA filing of another lead candidate AXS-07 for the acute treatment of migraine. The company now plans to file the NDA for AXS-07 in the first quarter of 2021, which was earlier planned for the final quarter of 2020. The NDA for AXS-07 was deferred to include supplemental manufacturing information on the same.

This delay in the NDA filings for AXS-05 and AXS-07 might have hurt investors’ sentiments as shares of Axsome fell 7% following the earnings announcement on Thursday. In fact, the stock has plunged 32.7% so far this year compared with the industry’s decrease of 1.1%.

Meanwhile, AXS-05 is being evaluated in the pivotal phase II/III ADVANCE-1 study for treating agitation associated with AD. Notably, by the end of this year, Axsome plans to begin one additional phase III study, which will support the NDA filing for AXS-05 for AD agitation.

AXS-05 is also being investigated in the phase III STRIDE-1 study to address patients with TRD. Notably, the three phase II efficacy sub-studies, which are evaluating the efficacy and safety of AXS-05 in three clinically pertinent MDD patient populations are completed. Results from all these studies are expected to be reported in the December quarter of 2020.

Axsome is evaluating AXS-07 in the phase III MOMENTUM study as an acute treatment of migraine and in the phase III INTERCEPT study as an early treatment of migraine. The company also completed the phase III long-term safety study (MOVEMENT), which was evaluating AXS-07 for migraine. Efficacy results from this study are expected in the fourth quarter of 2020.

This apart, Axsome’s AXS-12 is being developed to treat narcolepsy, a sleep disorder characterized by excessive sleepiness. In September 2020, the company expedited its development plan for AXS-12 following a Breakthrough Therapy meeting with the FDA authorities.

A placebo-controlled, parallel-group phase III study AXS-12 for the given indication is expected to begin in the first quarter of 2021.

Axsome Therapeutics, Inc. Price, Consensus and EPS Surprise

Axsome Therapeutics, Inc. price-consensus-eps-surprise-chart
| Axsome Therapeutics, Inc. Quote

Zacks Rank & Stocks to Consider

Axsome currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Fulcrum Therapeutics, Inc. FULC, Halozyme Therapeutics, Inc. HALO and Eton Pharmaceuticals, Inc. ETON, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fulcrum Therapeutics’ loss per share estimates have narrowed 1.1% for 2020 and 0.9% for 2021 over the past 60 days.

Halozyme’s earnings estimates have been revised 19.7% and 13.7% upward for 2020 and 2021 each over the past 60 days. The stock has rallied 85.7% year to date.

Eton Pharmaceuticals’ loss per share estimates have narrowed 0.9% for 2020 and 2.2% for 2021 over the past 60 days.

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