Axsome Therapeutics, Inc. AXSM incurred an adjusted loss of $1.34 per share in the third quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of $1.38. The company had incurred a loss of $1.32 per share in the year-ago quarter.
Axsome’s total revenues surged 81% year over year to $104.8 million in the third quarter, beating the Zacks Consensus Estimate of $99 million. The increase in revenues can be attributed to strong sales of Auvelity (AXS-05).
Shares of Axsome were up 9.4% on Nov. 12 owing to the better-than-expected results and strong sales uptake of Auvelity.
AXSM stock has rallied 25% so far this year against the industry’s decline of 0.9%.
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More on AXSM’s Q3 Results
Total revenues in the third quarter consisted of product revenues from Auvelity and Sunosi (solriamfetol) and royalty revenues.
Net product revenues were $103.7 million in the quarter compared with $57.1 million reported in the year-ago period. The figure beat our model estimate of $94 million.
This marks the first time that Axsome generated product revenues of more than $100 million in a particular quarter.
Product revenues in the third quarter benefited from the strong sales uptake of its two marketed products, Auvelity for major depressive disorder and Sunosi for narcolepsy.
Auvelity, launched in 2022, recorded sales of $80.4 million, up 113% year over year, owing to strong underlying demand. Sales of the drug beat our model estimate of $71.1 million.
Per Axsome, around 144,000 prescriptions were recorded for Auvelity in the reported quarter, reflecting a sequential increase of 17% and a year-over-year increase of 108%.
Axsome acquired U.S. rights to Sunosi, a commercialized drug targeting narcolepsy, from Jazz Pharmaceuticals JAZZ in May 2022. It began selling Sunosi in the U.S. market in May 2022 and in certain international markets in November 2022.
Jazz received approval for Sunosi as a treatment for narcolepsy in 2019.
Axsome out-licensed its ex-U.S. marketing rights of Sunosi to Pharmanovia in February 2023. JAZZ is entitled to receive high single-digit royalty from AXSM on net sales of Sunosi in the United States.
Sunosi’s net product sales were $24.4 million, up 21% from the year-ago quarter’s level. Total prescriptions for Sunosi in the United States grew 5% sequentially to 47,000.
Royalty revenues totaled $1 million in the quarter, reflecting royalties on Sunosi sales in out-licensed territories.
Research and development expenses (including stock-based compensation) increased to $45.4 million, up 57.6% from the year-ago quarter’s level. The increase was due to higher costs associated with clinical studies, especially the label expansion study of Sunosi, as well as other pipeline candidates like AXS-05, AXS-12, AXS-07 and AXS-14.
Selling, general and administrative expenses (including stock-based compensation) totaled $95.6 million, up 14.9% year over year. The increase was due to higher commercial activities for Sunosi and Auvelity and other costs.
As of Sept 30, 2024, Axsome had cash and cash equivalents worth $327.3 million compared with $315.7 million as of June 30, 2024.
Guidance
Management believes that its cash balance of $327.3 million (as of September-end) is enough to fund future operations into cash flow positivity.
AXSM's Pipeline Updates
Axsome is evaluating Auvelity in several label expansion studies for other central nervous system disorders. The development program of AXS-05 in Alzheimer’s disease (AD) agitation consists of four pivotal, phase III efficacy studies, namely – ADVANCE-1 and ACCORD-1 studies (completed) and the ongoing ADVANCE-2 and ACCORD-2 studies.
Top-line data from ADVANCE-2 and ACCORD-2 is expected later in the fourth quarter of 2024.
Axsome plans to start a pivotal phase II/III study of Auvelity for smoking cessation in 2025.
Other pipeline candidates include AXS-07, AXS-12 and AXS-14, which target multiple central nervous system indications.
AXS-07 is being developed for the acute treatment of migraine. Last month, the FDA accepted AXSM’s resubmitted new drug application (NDA), seeking approval for AXS-07 for the acute treatment of migraine.
A final decision from the regulatory body is expected on Jan. 31, 2025.
The phase III EMERGE study is currently evaluating AXS-07 in adults with a prior inadequate response to an oral CGRP inhibitor for the acute treatment of migraine headaches. Top-line results from the EMERGE study are expected later in the fourth quarter of 2024.
AXS-12 is currently being evaluated in the two-period phase III ENCORE study for the treatment of narcolepsy. Top-line data is expected later in the fourth quarter of 2024.
Axsome plans to submit an NDA to the FDA to seek approval of AXS-14 for the treatment of fibromyalgia later in November.
The company is investigating Sunosi in a label expansion study — the phase III FOCUS study. The study evaluates the efficacy and safety of Sunosi for the treatment of attention deficit hyperactivity disorder. Top-line data from the study is expected in the first quarter of 2025.
Axsome is also evaluating Sunosi in separate phase III studies for the treatment of major depressive disorder and binge eating disorder. Data from both studies are expected in 2025.
A separate phase III study is evaluating Sunosi for the treatment of excessive sleepiness associated with shift work disorder. Top-line data from this study is expected in 2026.
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
AXSM's Zacks Rank & Key Picks
Axsome currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the biotech sector are ANI Pharmaceuticals, Inc. ANIP and Castle Biosciences, Inc. CSTL, each carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 earnings per share have moved up from $4.59 to $4.71. Earnings per share estimates for 2025 have improved from $4.82 to $5.65 during the same time. Year to date, shares of ANIP have increased 10.6%.
ANIP’s earnings beat estimates in each of the trailing four quarters, the average surprise being 20.27%.
In the past 60 days, estimates for Castle Biosciences’ 2024 loss per share have narrowed from 58 cents to 8 cents. Loss per share estimates for 2025 have narrowed from $2.13 to $1.88 during the same time. Year to date, shares of CSTL have surged 51.9%.
CSTL’s earnings beat estimates in each of the trailing four quarters, the average surprise being 172.72%.
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