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Axsome (AXSM) Q2 Loss Narrower Than Expected, Revenues Miss

·4 min read

Axsome Therapeutics, Inc. AXSM incurred a loss of $1.06 per share for second-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of $1.19. AXSM 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.

In May 2022, Axsome completed the acquisition of U.S. rights to Sunosi, a commercialized drug targeting narcolepsy, from Jazz Pharmaceuticals JAZZ. 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. The drug has shown strong sales growth since its launch, which is expected to continue over the next few years. JAZZ is entitled to receive high single-digit royalty on U.S. net sales of Sunosi.

Shares of Axsome have rallied 18.4% this year against the industry’s decline of 17.3%.

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Zacks Investment Research

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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.

Pipeline Update

Axsome’s key pipeline candidates, including AXS-05, AXS-07, AXS-12 and AXS-14, target multiple central nervous system indications.

AXS-05, one of Axsome’s lead candidates, is developed for treating major depressive disorder (MDD), smoking cessation and agitation associated with Alzheimer's disease (AD).

Axsome’s new drug application (NDA) seeking approval for AXS-05 to treat MDD is under priority review with the FDA. In June 2022, AXSM received the proposed labeling from the FDA for AXS-05. Based on this interaction, AXSM expects the FDA to give its decision for AXS-05 NDA later in third-quarter 2022.

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 recently submitted for a Type A meeting with the FDA to discuss its planned resubmission of the NDA. The meeting is likely to take place later in the third quarter of 2022.

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 also plans to initiate a phase II/III study to evaluate the efficacy and safety of solriamfetol in adults with attention deficit hyperactivity disorder in the fourth quarter of 2022.

Axsome Therapeutics, Inc. Price, Consensus and EPS Surprise

Axsome Therapeutics, Inc. Price, Consensus and EPS Surprise
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 biotech sector include Bio-Techne Corporation TECH and Precision BioSciences, Inc. DTIL, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bio-Techne’s earnings estimates have been revised 0.2% upward for 2022 and 0.8% upward for 2023 in the past 60 days.

Earnings of Bio-Techne have surpassed estimates in three of the trailing four quarters and missed on the remaining occasion. TECH delivered an earnings surprise of 3.30%, on average.

Precision BioSciences’ loss per share estimates narrowed 5.7% for 2022 and 16.2% for 2023 in the past 60 days.

Earnings of Precision BioSciences have surpassed estimates in three of the trailing four quarters and missed on the other occasion. DTIL delivered an earnings surprise of 26.88%, on average.

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