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Axsome (AXSM) Q3 Earnings Top, Pre-Launch Activities Continue

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Axsome Therapeutics, Inc. (AXSM - Free Report) incurred a loss of 93 cents per share for third-quarter 2021, slightly narrower than the Zacks Consensus Estimate of a loss of 94 cents but wider than the year-ago loss of 61 cents.

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

Following the narrower-than-expected third-quarter loss, shares of Axsome gained 7.9% on Nov 8. However, Axsome’s stock has plunged 46.8% so far this year compared with the industry’s decline of 12.5%.

Quarter in Detail

Research and development expenses were $13.2 million for the quarter, down 10.8% from the year-ago period owing to the completion of a few clinical studies.

General and administrative expenses were $20.2 million, up 220.6% year over year. The significant increase was due to higher pre-commercialization activities related to the launch of AXS-05 and AXS-07, following the potential approvals.

As of Sep 30, 2021, Axsome had cash worth $114.6 million compared with $141.2 million as of Jun 30, 2021. Management believes that its cash balance as of June-end, along with a term-loan facility, will be enough to fund its anticipated operations at least through 2024.

Pipeline Update

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

AXS-05

AXS-05, one of Axsome’s lead candidates, is being developed for treating major depressive disorder (“MDD”), treatment-resistant depression (“TRD”), smoking cessation and agitation associated with Alzheimer's disease (“AD”). The company’s new drug application (“NDA”) seeking approval for AXS-05 for treating MDD is under priority review with the FDA.

In August, the FDA extended the review period of the AXS-05 NDA following identification of deficiencies within the NDA that preclude labeling discussions, in July. Along with the earnings release, Axsome stated that the FDA has informed that two deficiencies were related to analytical methods in the chemistry, manufacturing, and controls section of the NDA. These deficiencies need to be addressed prior to the FDA taking an action related to the NDA. However, the timeline for the FDA action remains uncertain.

The company is currently enrolling patients in the phase III ACCORD study evaluating the safety and efficacy of AXS-05 for treating agitation associated with AD. The company now expects a delay in the completion of the study and expects it to be completed in the first half of 2023 from the previous expectation of the fourth quarter of 2022.

Axsome announced receipt of positive written guidance from the FDA, following a pre-investigational new drug application meeting for AXS-05 as a potential treatment for smoking cessation. The company plans to start a pivotal phase II/III study for the same. The timing of the initiation will be informed in 2022.

Others

Another lead candidate, AXS-07, has been developed for the acute treatment of migraine. The NDA for the candidate was accepted by the FDA during the third quarter and a decision is expected by Apr 30, 2022. However, the FDA warned that it may not be able to complete a required inspection of a contract manufacturing facility prior to the decision date for the NDA.

Axsome’s AXS-12 is being developed to treat narcolepsy, a sleep disorder characterized by excessive sleepiness. A placebo-controlled, parallel-group phase III study on AXS-12 for the given indication was initiated in September 2021.

The company is also developing AXS-14 to treat fibromyalgia. An NDA is expected to be filed in 2023, following the successful completion of manufacturing and other activities related to the candidate.

Axsome Therapeutics, Inc. Price, Consensus and EPS Surprise

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 has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the same sector include Fulcrum Therapeutics (FULC - Free Report) , Gritstone bio (GRTS - Free Report) and Synlogic (SYBX - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Estimates for Fulcrum have narrowed from a loss per share of $2.68 to $2.62 for 2021 and from $2.77 to $2.70 for 2022 in the past 30 days. The company beat estimates in the last four quarter, with the average earnings surprise being 12.29%. The stock is up 73.3% so far this year.

Estimates for Gritstone improved from a loss per share of $1.02 to 98 cents for 2021 and from $1.22 to $1.15 for 2022 in the past 30 days. The company delivered an earnings surprise in each of the last four quarters, with the average beat being 44.42%. The stock has risen 183% so far this year.

Estimates for Synlogic have narrowed from a loss per share of $1.24 to $1.22 for 2021 and from $1.22 to $1.19 for 2022 in the past 30 days. The company beat estimates in the last four quarters, with the average earnings surprise being 9.26%. The stock is up 26.8% so far this year.