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Axsome (AXSM) Q3 Loss Narrower Than Expected, Revenues Miss
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Axsome Therapeutics, Inc. (AXSM - Free Report) incurred a loss of $1.03 per share (excluding intangible asset amortization) in third-quarter 2022, narrower than the Zacks Consensus Estimate and our estimate of a loss of $1.10 and $1.09, respectively. AXSM reported a loss of 93 cents per share in the year-ago period.
The company’s revenues of $16.8 million missed the Zacks Consensus Estimate of $17 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.
In May 2022, Axsome acquired the U.S. rights to Sunosi, a commercialized drug targeting narcolepsy, from Jazz Pharmaceuticals (JAZZ - Free Report) . Sunosi is currently marketed in the United States, Europe and several other countries.
In ex-U.S. markets, the transaction is expected to close in the fourth quarter of 2022. JAZZ still has rights to Sunosi in ex-U.S. markets.
Jazz received approval for Sunosi in 2019 as a treatment for narcolepsy. JAZZ is entitled to receive high single-digit royalty on U.S. net sales of Sunosi.
Shares of Axsome have rallied 42.2% this year against the industry’s decline of 20.3%.
Image Source: Zacks Investment Research
Quarter in Detail
Research and development expenses were $14.9 million in the quarter, up 13% from the year-ago period’s level, owing to higher costs associated with clinical studies and post-marketing commitments assumed for Sunosi.
Selling, general and administrative expenses were $40.9 million, up 102% year over year. The significant increase was due to higher costs related to commercial activities for Sunosi and Auvelity, which included sales force onboarding and marketing spend.
As of Sep 30, 2022, Axsome had cash and cash equivalents worth $227.5 million compared with $73.4 million on Jun 30, 2022.
2022 Guidance
Management believes that its cash balance as of September 2022 end and its $300 million term-loan facility will be enough to fund operations into 2025.
The company also expects an increase in operating expenses on account of the commercialization activities of Sunosi and Auvelity and other pipeline development.
Pipeline Update
Axsome’s key pipeline candidates, including AXS-05, AXS-07, AXS-12 and AXS-14, target multiple central nervous system indications.
In August, Axsome received FDA approval for its lead pipeline candidate AXS-05, with the trade name of Auvelity, for the treatment of adults with major depressive disorder (MDD), making it the first approved drug in its portfolio. Auvelity was commercially launched on Oct 20, 2022, and is presently available by prescription in the United States.
AXS-05 is also being evaluated in the pivotal phase II/III ADVANCE-1 study for treating agitation associated with Alzheimer’s Disease (AD).
AXS-05 is also being investigated in the phase II MERIT study to address patients with treatment-resistant depression (TRD) and a candidate for smoking cessation.
In September, the company initiated an ADVANCE-2 phase III evaluating AXS-05 for treating Alzheimer’s disease (AD) agitation.
Another lead candidate, AXS-07, is developed for the acute treatment of migraine. Axsome received a complete response letter from the FDA for the NDA, seeking approval for AXS-07 for the migraine indication in May. The company held a Type A meeting with the FDA to discuss Axsome’s approach to its planned resubmission of the NDA. Following the meeting, Axsome intends to resubmit its NDA in the third quarter of 2023. The FDA has not requested any additional safety or efficacy data for the candidate in light of the NDA resubmission.
AXS-12 is being developed to treat narcolepsy, a sleep disorder characterized by excessive sleepiness. AXSM is currently enrolling patients in the phase III SYMPHONY study for the given indication. Top-line data from this study is expected in the first half of 2023.
AXS-14 is Axsome’s candidate for the treatment of 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
Puma Biotechnology’s loss estimates for 2022 have remained steady at 6 cents over the past 30 days. Shares of PBYI have returned 29.5% year to date. Earnings of Puma beat earnings estimates in three of the trailing four quarters and missed the same in the remaining occasion. PBYI delivered an earnings surprise of 201.37%, on average.
Kodiak Sciences’ loss estimates for 2022 have remained steady at $7.12 over the past 30 days. Shares of Kodiak have declined 91.8% year to date. Earnings of KOD beat earnings estimates only once in the last four quarters. KOD delivered a negative earnings surprise of 20.20%, on average.
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Axsome (AXSM) Q3 Loss Narrower Than Expected, Revenues Miss
Axsome Therapeutics, Inc. (AXSM - Free Report) incurred a loss of $1.03 per share (excluding intangible asset amortization) in third-quarter 2022, narrower than the Zacks Consensus Estimate and our estimate of a loss of $1.10 and $1.09, respectively. AXSM reported a loss of 93 cents per share in the year-ago period.
The company’s revenues of $16.8 million missed the Zacks Consensus Estimate of $17 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.
In May 2022, Axsome acquired the U.S. rights to Sunosi, a commercialized drug targeting narcolepsy, from Jazz Pharmaceuticals (JAZZ - Free Report) . Sunosi is currently marketed in the United States, Europe and several other countries.
In ex-U.S. markets, the transaction is expected to close in the fourth quarter of 2022. JAZZ still has rights to Sunosi in ex-U.S. markets.
Jazz received approval for Sunosi in 2019 as a treatment for narcolepsy. JAZZ is entitled to receive high single-digit royalty on U.S. net sales of Sunosi.
Shares of Axsome have rallied 42.2% this year against the industry’s decline of 20.3%.
Image Source: Zacks Investment Research
Quarter in Detail
Research and development expenses were $14.9 million in the quarter, up 13% from the year-ago period’s level, owing to higher costs associated with clinical studies and post-marketing commitments assumed for Sunosi.
Selling, general and administrative expenses were $40.9 million, up 102% year over year. The significant increase was due to higher costs related to commercial activities for Sunosi and Auvelity, which included sales force onboarding and marketing spend.
As of Sep 30, 2022, Axsome had cash and cash equivalents worth $227.5 million compared with $73.4 million on Jun 30, 2022.
2022 Guidance
Management believes that its cash balance as of September 2022 end and its $300 million term-loan facility will be enough to fund operations into 2025.
The company also expects an increase in operating expenses on account of the commercialization activities of Sunosi and Auvelity and other pipeline development.
Pipeline Update
Axsome’s key pipeline candidates, including AXS-05, AXS-07, AXS-12 and AXS-14, target multiple central nervous system indications.
In August, Axsome received FDA approval for its lead pipeline candidate AXS-05, with the trade name of Auvelity, for the treatment of adults with major depressive disorder (MDD), making it the first approved drug in its portfolio. Auvelity was commercially launched on Oct 20, 2022, and is presently available by prescription in the United States.
AXS-05 is also being evaluated in the pivotal phase II/III ADVANCE-1 study for treating agitation associated with Alzheimer’s Disease (AD).
AXS-05 is also being investigated in the phase II MERIT study to address patients with treatment-resistant depression (TRD) and a candidate for smoking cessation.
In September, the company initiated an ADVANCE-2 phase III evaluating AXS-05 for treating Alzheimer’s disease (AD) agitation.
Another lead candidate, AXS-07, is developed for the acute treatment of migraine. Axsome received a complete response letter from the FDA for the NDA, seeking approval for AXS-07 for the migraine indication in May. The company held a Type A meeting with the FDA to discuss Axsome’s approach to its planned resubmission of the NDA. Following the meeting, Axsome intends to resubmit its NDA in the third quarter of 2023. The FDA has not requested any additional safety or efficacy data for the candidate in light of the NDA resubmission.
AXS-12 is being developed to treat narcolepsy, a sleep disorder characterized by excessive sleepiness. AXSM is currently enrolling patients in the phase III SYMPHONY study for the given indication. Top-line data from this study is expected in the first half of 2023.
AXS-14 is Axsome’s candidate for the treatment of 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-eps-surprise-chart | Axsome Therapeutics, Inc. Quote
Zacks Rank & Stocks to Consider
Axsome currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the overall health sector are Puma Biotechnology (PBYI - Free Report) , sporting a Zacks Rank #1 (Strong Buy), Kodiak Sciences (KOD - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Puma Biotechnology’s loss estimates for 2022 have remained steady at 6 cents over the past 30 days. Shares of PBYI have returned 29.5% year to date. Earnings of Puma beat earnings estimates in three of the trailing four quarters and missed the same in the remaining occasion. PBYI delivered an earnings surprise of 201.37%, on average.
Kodiak Sciences’ loss estimates for 2022 have remained steady at $7.12 over the past 30 days. Shares of Kodiak have declined 91.8% year to date. Earnings of KOD beat earnings estimates only once in the last four quarters. KOD delivered a negative earnings surprise of 20.20%, on average.