Why Is Axsome (AXSM) Down 4% Since Last Earnings Report?
A month has gone by since the last earnings report for Axsome Therapeutics (AXSM). Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Axsome due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Axsome’s Q4 Earnings & Revenue Surpass Estimates
Axsome reported an adjusted loss of 73 cents per share for the fourth quarter of 2023, narrower than the Zacks Consensus Estimate of a loss of $1.21. The company had reported a loss of $1.28 per share in the year-ago period.
The above-adjusted loss excludes the impact of certain non-cash charges, including which the reported loss per share was $2.08 in the fourth quarter of 2023 compared with a loss of $1.41 reported in the year-ago quarter.
The company’s fourth-quarter revenues were $71.5 million, which beat the Zacks Consensus Estimate of $70 million. AXSM had recorded revenues of $24.4 million in the year-ago period.
Quarter in Detail
Total revenues consist of product revenues from Sunosi and Auvelity and royalty revenues.
Net product revenues were $70.7 million in the quarter compared with $24.4 million reported in the year-ago period. The figure missed our model estimate of $71.3 million.
Auvelity recorded sales of $49 million, significantly up from the previous quarter’s level, due to the products’ timely launch. Sales of the drug were in line with our model estimate.
Notably, around 84,000 prescriptions were recorded for Auvelity in the fourth quarter, reflecting a sequential increase of 23%.
Sunosi’s net product sales were $22.5 million, up 17% from the year-ago quarter’s level. Total prescriptions for Sunosi in the United States grew 18% year over year and 2% sequentially.
Royalty revenues totaled $0.8 million in the quarter, reflecting royalties on Sunosi sales in out-licensed territories.
Research and development expenses (including stock-based compensation) amounted to $30.8 million, up 109.5% from the year-ago quarter’s level. The significant increase was due to higher costs associated with clinical studies, especially the label expansion study of Sunosi, as well as higher costs associated with clinical studies on other pipeline candidates.
Selling, general and administrative expenses (including stock-based compensation) totaled $86.8 million, up almost 41.1% year over year. The increase was due to higher commercial activities for Sunosi and Auvelity and higher personnel costs.
As of Dec 31, 2023, Axsome had cash and cash equivalents worth $386.2 million compared with $416.6 million as of Sep 30, 2023.
2024 Guidance
Management believes that its cash balance of $386.2 million (as of December 2023-end) is enough to fund future operations into cash flow positivity.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Axsome has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Axsome has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Axsome belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Gilead Sciences (GILD), has gained 1.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Gilead reported revenues of $7.12 billion in the last reported quarter, representing a year-over-year change of -3.7%. EPS of $1.72 for the same period compares with $1.67 a year ago.
Gilead is expected to post earnings of $1.56 per share for the current quarter, representing a year-over-year change of +13.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Gilead. Also, the stock has a VGM Score of C.
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Axsome Therapeutics, Inc. (AXSM) : Free Stock Analysis Report
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