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Why Is Axsome (AXSM) Up 26.9% Since Last Earnings Report?

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It has been about a month since the last earnings report for Axsome Therapeutics (AXSM - Free Report) . Shares have added about 26.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Axsome due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Axsome Q2 Loss Narrower Than Expected, Revenues Miss

Axsome incurred a loss of $1.06 per share for second-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of $1.19. Axsome had reported a loss of 86 cents per share in the year-ago period.

The company’s revenues of $8.8 million missed the Zacks Consensus Estimate of $10 million. The revenues solely comprised sales of the sleep drug, Sunosi (solriamfetol). In the year-ago quarter, Axsome did not generate any revenues due to the absence of a marketed product.

Quarter in Detail

Research and development expenses were $15.8 million for the quarter, up 8.9% from the year-ago period’s level, owing to higher costs associated with clinical studies.

General and administrative expenses were $31.2 million, up 91.4% year over year. The significant increase was due to higher costs related to commercial activities for Sunosi and pre-commercialization activities related to late-stage pipeline candidates.

As of Jun 30, 2022, Axsome had cash worth $73.4 million compared with $84.7 million on Mar 31, 2022.

2022 Guidance

Management believes that its cash balance as of June 2022 end and its $300 million term-loan facility will be enough to fund operations into 2024.

The company also expects an increase in operating expenses on account of pipeline development and commercialization activities.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, Axsome has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Axsome has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Axsome is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Intercept Pharmaceuticals (ICPT - Free Report) , a stock from the same industry, has gained 0.7%. The company reported its results for the quarter ended June 2022 more than a month ago.

Intercept reported revenues of $100.4 million in the last reported quarter, representing a year-over-year change of +4%. EPS of -$0.68 for the same period compares with -$0.33 a year ago.

For the current quarter, Intercept is expected to post earnings of $1.87 per share, indicating a change of +396.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Intercept has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.


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