On Tuesday, Citi maintained a Purchase score on shares of Axsome Therapeutics (NASDAQ:), with the worth goal being elevated to $127.00 from the earlier $125.00. The adjustment got here after Axsome reported optimistic Section 3 narcolepsy knowledge, which, based on Citi, was adopted by an undeserved sell-off. The inventory skilled a 4% decline in Monday’s buying and selling.
The corporate’s shares fell because the market reacted to a excessive placebo price within the current trial, which led to a smaller placebo-adjusted discount in cataplexy when in comparison with opponents corresponding to HRMY’s Wakix or branded oxybates.
Though the Epworth Sleepiness Scale (ESS) didn’t present statistical significance, different measures such because the Medical International Impression of Severity (CGI-S) have been profitable. Citi emphasised that with main and secondary endpoints being met, AXS-12 is seen as an approvable drug.
Axsome is predicted to finish a 6-month open-label extension (OLE) in December 2024, as indicated on ClinicalTrials.gov, with plans to file a New Drug Utility (NDA) inside six months of completion. Citi believes that if AXS-12 is authorised, Axsome may make the most of its current Sunosi gross sales pressure for commercialization.
The monetary agency has elevated the chance of success (POS) for AXS-12 to 80% from the earlier 50%, as a result of current trial outcomes. This revision is predicated on the drug’s potential U.S. peak gross sales, that are estimated at roughly $310 million. The brand new worth goal displays this up to date evaluation and elevated confidence within the drug’s market prospects.
InvestingPro Insights
As Axsome Therapeutics (NASDAQ:AXSM) navigates via pivotal moments, real-time knowledge from InvestingPro can provide extra context to Citi’s optimistic outlook. With a market capitalization of $3.66 billion, Axsome’s monetary well being and progress prospects are key to understanding its potential. Notably, the corporate’s gross revenue margin stands at a formidable 90.37% for the final twelve months as of Q1 2023, underscoring environment friendly operations regardless of the dearth of profitability over the identical interval. This aligns with one of many InvestingPro Suggestions highlighting Axsome’s spectacular gross revenue margins.
Nonetheless, buyers needs to be aware of the challenges forward. Analysts have revised their earnings downwards for the upcoming interval, and they don’t anticipate the corporate might be worthwhile this 12 months, as mirrored within the unfavorable P/E ratio of -18.59. Axsome’s excessive Worth / E book a number of of 19.19 additionally means that the inventory is buying and selling at a premium relative to its e book worth. That is significantly related contemplating the inventory’s current efficiency, with a 24.84% one-year worth whole return, but buying and selling at 78.61% of its 52-week excessive. These insights, together with extra InvestingPro Suggestions, might help buyers weigh the expansion potential in opposition to the present valuation.
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