Key Takeaways
- Axsome Therapeutics shares fell 10% today after third-quarter revenue rose 52% to $259.7 million, ahead of consensus.
- Product sales landed right on consensus, and selling costs rose 35%, but the operating loss shrank to $11.1 million.
- The selloff looks overdone ahead of an FDA decision on narcolepsy drug AXS-12, which would compete with Jazz Pharmaceuticals and Alkermes.
Axsome Therapeutics (AXSM) stock fell 10% today, even though third-quarter revenue rose 52% to $259.7 million, ahead of the $249.93 million consensus. CEO Herriot Tabuteau said the growth had Axsome “surpassing a one-billion-dollar annual run rate.”
Its next big test is narcolepsy drug AXS-12, with an FDA decision date of May 1, 2027, in a market where Jazz Pharmaceuticals (JAZZ) and Alkermes (ALKS) already sell oxybates.
Auvelity’s growth picked up
Auvelity sales rose 53% to $207.6 million. Its Alzheimer’s agitation approval came in April, and since then new prescriptions among patients 65 and older have more than tripled from a year ago.
Going in, analysts expected revenue of $950 million this year and $1.51 billion in 2027:
Nothing in these prescription trends points to cuts.
A thinner beat, and a bigger bill
Royalties and milestones added $9.7 million of that revenue, so product sales of $250 million landed right on consensus.
Selling, general and administrative expenses rose 35% to $203.1 million, nearly matching Auvelity’s sales.
My read: investors wanted a cleaner beat for that kind of spending.
Still, the operating loss shrank to $11.1 million from $46.1 million a year earlier, after the margin improved over the eight quarters to June:
The third-quarter loss is about 4% of revenue, and Axsome says its $313.9 million of cash is enough to get it to positive cash flow.
TIKR tracks 22 analysts on Axsome Therapeutics. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Axsome Therapeutics, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Axsome Therapeutics’ Analyst Ratings
Jazz and Alkermes have a stake in May
Jazz has the most riding on AXS-12. Sleep drugs brought in $501.7 million of its $1.21 billion of second-quarter revenue, and Xywav added about 525 net patients. Axsome sees AXS-12’s peak sales at $500 million to $1 billion, roughly a quarter to half of Xywav’s current pace. Do Jazz’s patient additions hold up once AXS-12 launches?
Alkermes bought its way into narcolepsy. Its oxybate Lumryz, from the Avadel deal, brought in $96.6 million in the second quarter, and it’s developing alixorexton for narcolepsy. It reports this week: how does management plan to compete in a more crowded market?
Cheaper than it’s been in three years
Axsome traded at 6.4x forward sales at the last close, against a 9.2x three-year average, and today’s drop takes it lower still:
The way I see it, investors are punishing spending that’s already showing up in prescriptions and a shrinking loss, and at this multiple I’d lean toward buying the drop.
Of course, a miss in its binge-eating trial early next year would leave Axsome leaning on Auvelity alone.
So what is Axsome stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Axsome could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
