On Tuesday, Guggenheim maintained a Buy rating on Axsome Therapeutics (NASDAQ:AXSM) and increased the price target to $135 from $125. The firm's analyst highlighted the successful launch of Auvelity in Major Depressive Disorder (MDD), noting that third-quarter sales reached $80.4 million, a 24% increase from the previous quarter. This performance surpassed both Guggenheim's and other analysts' sales estimates of around $74 million. Axsome reported approximately 144,000 total prescriptions for the quarter, a 17% sequential increase, which was slightly higher than the 14% increase projected by IQVIA.
Additionally, the analyst pointed out the expansion of market access for Axsome's product, with 63% of commercial lives now covered, up from 60% in the second quarter. This is in addition to the complete coverage of Medicare lives and 78% of all covered lives. The attention is also turning to Axsome's Alzheimer's agitation program, with the company completing enrollment for the ADVANCE-2 and ACCORD-2 studies. Axsome expects to simultaneously report data from both studies in the fourth quarter of 2024.
The firm's positive outlook extends beyond MDD to upcoming opportunities in Axsome's pipeline. This includes treatments for Alzheimer's agitation, narcolepsy, and solriamfetol, which is being studied for additional indications such as ADHD and MDD. Axsome anticipates Phase III data for these new indications in the first quarter of 2025.
The analyst's statement concluded with a reinforcement of the Buy rating and an updated price target, reflecting confidence in Axsome's current performance and future prospects. The increase in the target price is attributed to Auvelity's strong sales trajectory and the potential for significant stock upside if the Alzheimer's agitation studies yield positive results.
In other recent news, Axsome Therapeutics has experienced a series of notable developments. Truist Securities maintained a Buy rating on Axsome, setting a price target of $150, driven by strong sales of the company's drug, Auvelity. The firm also noted Axsome's plans to expand its sales force as a positive move.
The company's drug pipeline is also progressing, with Phase 3 ADVANCE-2 and ACCORD-2 trial readouts for Alzheimer's disease agitation expected by the end of 2024. Moreover, Axsome's migraine treatment drug, AXS-07, has been accepted for review by the U.S. Food and Drug Administration. Analysts from H.C. Wainwright anticipate that the drug could generate sales of approximately $79 million in 2025.
Axsome has also amended its loan agreement with Hercules Capital (NYSE:HTGC), raising the Tranche 3 Commitment from $75 million to $80 million, providing the company with extended access to capital. Mizuho (NYSE:MFG) Securities and TD (TSX:TD) Cowen have both maintained positive ratings on Axsome shares, highlighting the company's progress in pharmaceutical trials and the commercial progression of Auvelity.
InvestingPro Insights
Axsome Therapeutics' (NASDAQ:AXSM) impressive performance highlighted by Guggenheim aligns with several key metrics from InvestingPro. The company's revenue growth of 59.73% over the last twelve months and a remarkable 86.65% quarterly growth reflect the successful launch of Auvelity mentioned in the article. This growth trajectory is further supported by Axsome's impressive gross profit margin of 90.3%, underscoring the efficiency of its operations.
InvestingPro Tips indicate that Axsome has been trading near its 52-week high and has shown a large price uptick over the last six months, which corroborates the positive sentiment expressed in the analyst's report. The company's strong return over the last year and decade also align with the optimistic outlook presented.
It's worth noting that while Axsome is not currently profitable, its liquid assets exceed short-term obligations, suggesting financial stability as it continues to invest in its pipeline. For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for Axsome Therapeutics, providing a deeper understanding of the company's financial health and market position.
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