On Wednesday, RBC Capital Markets adjusted its outlook on shares of Axsome Therapeutics (NASDAQ:AXSM), increasing the price target to $132 from the previous $131, while maintaining an Outperform rating on the shares. This adjustment follows Axsome's third-quarter earnings report, which revealed $80 million in sales for its flagship product, Auvelity.
The company's recent financial performance exceeded expectations, driven by successful strategies in securing favorable reimbursement and boosting prescribing volume. Axsome's efforts in educating healthcare professionals about Auvelity's profile have also facilitated its widespread use as an early-line treatment option.
RBC Capital's analysis indicates that Axsome's growth is expected to persist into the fourth quarter of 2024 and into 2025, with minimal impact anticipated from competitors in the near term. The firm's positive outlook is further supported by Axsome's robust late-stage pipeline, which includes six phase III trials expected to report results within the next six months. Moreover, Axsome is preparing for an imminent product launch and a New Drug Application (NDA) submission.
The analyst from RBC Capital highlighted the potential for Axsome's late-stage pipeline to be undervalued by investors but emphasized the possibility of these developments adding multiple billions to the company's future revenues. With continued commercial success and upcoming catalysts likely to boost the stock, RBC Capital recommends purchasing Axsome shares.
The price target hike to $132 is based on updates to RBC Capital's financial model, reflecting the company's current achievements and prospective milestones.
In other recent news, Axsome Therapeutics Inc (NASDAQ:AXSM). has reported record-breaking revenue for the third quarter of 2024, surpassing $100 million for the first time. The revenue, amounting to $104.8 million, marks an 81% increase year-over-year.
The company's major depressive disorder treatment, Auvelity, and its excessive daytime sleepiness medication, Sunosi, significantly contributed with sales of $80.4 million and $24.4 million respectively. Despite these gains, Axsome reported a net loss of $64.6 million, but maintains a robust cash reserve of $327.3 million.
As part of recent developments, Axsome is planning to expand its sales force and enhance market access. The company has strategic plans to grow the sales force for Auvelity to approximately 300 representatives by the first quarter of 2025. Moreover, Axsome is preparing for the PDUFA date and potential launch of its migraine treatment, AXS-07, in the first half of 2025.
While the company reported a significant net loss, analysts note the increased prescriptions of Auvelity and Sunosi, as well as the company's late-stage neuroscience portfolio, which is expected to generate positive patient outcomes and shareholder returns. However, the FOCUS study for solriamfetol in ADHD has been delayed to the first quarter of 2025.
InvestingPro Insights
Axsome Therapeutics' recent performance aligns with several InvestingPro metrics and tips. The company's impressive 90.3% gross profit margin in the last twelve months as of Q2 2024 supports RBC Capital's positive outlook. This high margin reflects Axsome's ability to efficiently convert revenue into profit, which is crucial for a growing biopharmaceutical company.
InvestingPro data shows a robust revenue growth of 59.73% over the same period, with an even more impressive 86.65% quarterly growth in Q2 2024. These figures underscore the strong commercial performance mentioned in the article, particularly the success of Auvelity.
An InvestingPro Tip notes that Axsome is trading near its 52-week high, which corroborates the market's positive reception of the company's recent achievements and future potential. The stock's significant return over the last week (9.37%) and strong return over the last month (13.62%) further reflect the market's enthusiasm following the Q3 earnings report.
It's worth noting that InvestingPro offers 15 additional tips for Axsome Therapeutics, providing investors with a comprehensive analysis of the company's financial health and market position.
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