Back to top

Image: Shutterstock

Axsome Shares Rise 19% in a Month: What's Driving the Rally?

Read MoreHide Full Article

Axsome Therapeutics’ (AXSM - Free Report) shares have rallied 19.4% in the past month against the industry’s decrease of 0.2%, driven by investor enthusiasm about the company’s encouraging preliminary sales numbers for the fourth quarter and full year 2024.

Axsome’s commercial portfolio includes Auvelity (AXS-05) which was launched in the United States in 2022 to treat major depressive disorder. It was the company’s first approved drug.

The company is conducting several label expansion studies on Auvelity targeting other central nervous system (CNS) disorders like Alzheimer’s disease (AD) associated agitation and smoking cessation. Approval for expanded indications can potentially boost the drug’s sales in future quarters.

Axsome acquired U.S. rights to Sunosi (solriamfetol), a commercialized drug targeting narcolepsy, from Jazz Pharmaceuticals (JAZZ - Free Report) in May 2022. It began selling Sunosi in the U.S. market in May 2022 and certain international markets in November 2022.

Jazz received approval for Sunosi as a treatment for narcolepsy in 2019.

AXSM's Q4 & 2024 Preliminary Results

Earlier this month, Axsome reported robust preliminary net product revenues for Auvelity and Sunosi for the fourth quarter and full year 2024.

Auvelity sales in the fourth quarter of 2024 are expected to be around $92.6 million, bringing the full-year number to around $291.4 million. Sunosi net product revenues are expected to be around $25.7 million and $93.8 million for the fourth quarter and full year 2024, respectively. The strong preliminary sales for Auvelity and Sunosi can be attributed as the reasons for the stock’s upside in the past month.

Zacks Investment Research
Image Source: Zacks Investment Research

Auvelity has been witnessing strong sales uptake since its launch. Also, the acquisition of Sunosi from Jazz diversified Axsome’s portfolio, helping it reach a larger patient population and driving the company’s growth prospects.

Currently, two separate phase III studies are evaluating Auvelity for treating agitation associated with AD. In December 2024, the company announced top-line data from the ACCORD-2 and ADVANCE-2 studies, which evaluated Auvelity for treating agitation associated with AD.

The ACCORD-2 study met the primary endpoint wherein treatment with AXS-05 statistically and significantly delayed the time to relapse of agitation, as assessed by the Cohen-Mansfield Agitation Inventory (CMAI) total score versus placebo in the given patient population.

However, the ADVANCE-2 study did not demonstrate statistical significance for the primary endpoint, which was the change in the CMAI total score from baseline to week five. Treatment with AXS-05 was safe and well tolerated in both controlled studies.

Based on these efficacy and safety results, Axsome plans to submit a new drug application for AXS-05 in AD agitation to the FDA in the second half of 2025.

Per some reports, despite the mixed results from the above studies, AXSM remains hopeful for potential approval for Auvelity in AD agitation. This could be an important catalyst for the stock going forward.

AXSM's Other Pipeline Candidates Hold Promise

Axsome’s portfolio of pipeline candidates includes AXS-07, AXS-12 and AXS-14, all of which are being developed for various CNS indications.

AXS-07 is being developed for the acute treatment of migraine. The FDA accepted AXSM’s resubmitted new drug application, seeking approval for AXS-07 for the acute treatment of migraine in September 2024.

A final decision from the regulatory body is expected on Jan. 31, 2025.

AXS-14 (esreboxetine) is being developed for the treatment of fibromyalgia. AXS-12 (reboxetine) is being evaluated in late-stage studies for the treatment of narcolepsy.

Successful development and potential approval for any of these candidates are likely to drive Axsome’s growth prospects and should continue the upward momentum for the stock in 2025.

AXSM's Zacks Rank & Stocks to Consider

Axsome currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Voyager Therapeutics, Inc. (VYGR - Free Report) and Castle Biosciences, Inc. (CSTL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Voyager Therapeutics’ loss per share have narrowed from $1.72 to $1.58 for 2025. In the past year, shares of VYGR have plunged 27.3%.

VYGR’s earnings beat estimates in each of the trailing four quarters, the average surprise being 120.87%.

In the past 60 days, estimates for Castle Biosciences’ loss per share have narrowed from $1.88 to $1.70 for 2025. In the past year, shares of CSTL have surged 28.4%.

CSTL’s earnings beat estimates in each of the trailing four quarters, the average surprise being 172.72%.

Published in