On Tuesday, Cantor Fitzgerald analyst increased the price target for Axsome Therapeutics (NASDAQ:AXSM) to $124 from the previous $121, while maintaining an Overweight rating on the stock. According to InvestingPro data, analyst targets for AXSM range from $105 to $180, with 7 analysts recently revising their earnings expectations upward.
The company's current market capitalization stands at $4.11 billion. This adjustment follows Axsome's announcement of topline results from the Phase 3 ACCORD-2 and ADVANCE-2 trials of AXS-05, which is approved as AUVELITY for Major Depressive Disorder (MDD), in Alzheimer's Disease agitation (ADA).
The analyst acknowledged that the results from the trials could be seen as mixed, noting that the ADVANCE-2 trial did not reach statistical significance, which resulted in the stock trading down by 8% compared to a 1% decline in the XBI index.
Despite recent market volatility, InvestingPro analysis shows impressive revenue growth of 51.47% over the last twelve months, with a robust gross profit margin of 91.09%. For deeper insights into Axsome's financial health and growth prospects, InvestingPro offers comprehensive analysis with additional ProTips and metrics.
Despite this, the analyst expressed a positive outlook, citing the clear data from the ACCORD-2 trial, combined with previously released ADVANCE-1 data and long-term open-label extension observations, as supportive of a broadened approval and significant market expansion.
Duncan highlighted the safety profile of AXS-05, particularly when compared to the only FDA-approved therapeutic for ADA, brexpiprazole, which carries a black box warning for increased risk of mortality in elderly patients. He pointed out that AXS-05 does not have an association with sedation, cognitive decline, or death, suggesting a differentiated safety and tolerability profile.
The analyst also noted the reduced risk of relapse observed with AXS-05, which could lead to improved long-term treatment outcomes and quality of life for patients and caregivers. With these factors in mind, Duncan envisions AXS-05 becoming a first-line treatment option for ADA, with a low likelihood of receiving a black box warning similar to brexpiprazole.
Looking ahead, Axsome Therapeutics is expected to prepare a New Drug Application (NDA) filing to be submitted in the second half of 2025, with management anticipating approximately a six-month review period. InvestingPro data reveals the company maintains a healthy financial position with a current ratio of 2.44, indicating strong liquidity to support its development pipeline. Access the complete Pro Research Report, available for over 1,400 US stocks, to explore detailed analysis of Axsome's financial health, valuation metrics, and growth potential. Cantor Fitzgeraldemphasized the strong support for the NDA from three positive well-controlled studies across two different trial designs.
In light of these developments, the analyst has increased the probability of success for AXS-05 in ADA to 75% from 70% and anticipates a potential launch in the second half of 2026, a year earlier than previously expected. The revised price target reflects these updated projections and the potential for AXS-05 in the treatment of ADA.
In other recent news, Axsome Therapeutics has seen significant developments in its clinical trials and financial performance. The biopharmaceutical company has successfully completed its Phase 3 clinical trials for AXS-05, a novel treatment for Alzheimer’s disease-associated agitation. The results indicated a 3.6-fold lower risk of relapse for patients treated with AXS-05, which has significantly bolstered the treatment's profile.
Moreover, Axsome has reported record-breaking revenue for the third quarter, surpassing $100 million for the first time. This financial milestone was primarily driven by the sales of its major depressive disorder treatment, Auvelity, and its excessive daytime sleepiness medication, Sunosi.
Several analyst firms have revised their ratings and price targets for Axsome. H.C. Wainwright has reaffirmed its Buy rating on Axsome shares, maintaining a price target of $180.00, while Mizuho (NYSE:MFG) has revised Axsome's stock target to $122 and Baird analysts have reiterated their Outperform rating, maintaining a $116.00 price target. Leerink Partners have also sustained their Outperform rating and $110.00 price target for Axsome.
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