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Axsome Therapeutics, Inc. (AXSM - Free Report) 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.
Revenues benefited from the strong sales uptake of its two marketed products, Auvelity (AXS-05) for major depressive disorder and Sunosi (solriamfetol) for narcolepsy.
Shares of AXSM were down 12.6% on Feb 20 following the announcement of the news. The stock has rallied 29.6% in the past year against the industry’s decline of 8.6%.
Image Source: Zacks Investment Research
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.
Axsome’s first drug, Auvelity, was approved for major depressive disorder by the FDA in August 2022 and was subsequently launched in October 2022.
Auvelity recorded sales of $49 million, significantly up from the previous quarter’s level, due to the products’ timely launch. Auvelity sales represented the first full year of commercialization for the drug. Sales of the drug were in line with our model estimate.
Per the company, around 84,000 prescriptions were recorded for Auvelity in the reported quarter, reflecting a sequential increase of 23%.
Axsome acquired the U.S. rights to Sunosi, a commercialized drug targeting narcolepsy, from Jazz Pharmaceuticals (JAZZ - Free Report) 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.
In February 2023, Axsome out-licensed its ex-U.S. marketing rights of Sunosi to Pharmanovia. 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 $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.
Full-Year Results
For 2023, Axsome generated revenues of $270.6 million, significantly up year over year.
For the same period, the company incurred a loss of $5.27 per share compared with a loss of $4.60 in 2022.
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.
Pipeline Updates
Axsome is evaluating Auvelity in several label expansion studies that are underway for the treatment of other central nervous system disorders. The phase III ADVANCE-2 study is evaluating the safety and efficacy of Auvelity for treating agitation associated with Alzheimer’s disease.
Based on the recent treatment market dynamics and anticipated enrollment trends, enrollment in the study is now expected to be completed in the second half of 2024, which was earlier expected in the first half of 2024.
This might have hurt investors’ sentiments and could be the reason for the stock to decline on Tuesday despite a better-than-expected earnings performance.
AXSM also plans to start a pivotal phase II/III study of Auvelity for smoking cessation in 2024.
Axsome’s key 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. In April 2022, Axsome received a complete response letter for a new drug application (NDA) seeking approval for AXS-07 for the acute treatment of the disease.
Axsome plans to resubmit its NDA in the first half of 2024. The FDA has not requested any additional safety or efficacy data for the candidate in light of the NDA resubmission.
AXS-12 is being evaluated in the phase III SYMPHONY study for the treatment of narcolepsy, with top-line data from the same expected later in the first quarter of 2024.
Meanwhile, AXSM plans to submit an NDA to the FDA to seek approval of AXS-14 for the treatment of fibromyalgia in the second quarter of 2024. Previously, the company planned to submit this NDA for AXS-14 in the first quarter of 2024.
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 by the second half of 2024.
Axsome plans to initiate separate phase III studies evaluating Sunosi for the treatment of major depressive disorder, binge eating disorder and excessive sleepiness associated with shift work disorder. All these studies are expected to begin later in the first quarter of 2024.
Axsome Therapeutics, Inc. Price, Consensus and EPS Surprise
In the past 60 days, estimates for Exact Sciences’ 2024 loss per share have narrowed from $1.22 to $1.15. In the past year, shares of EXAS have gained 2.4%.
Exact Sciences’ earnings beat estimates in each of the trailing four quarters. EXAS delivered an average earnings surprise of 44.21%.
In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share have improved from 64 cents to 69 cents. In the past year, shares of PBYI have risen 63.6%.
Earnings of Puma Biotechnology beat estimates in three of the last four quarters while missing the same on the remaining occasion. PBYI delivered a four-quarter average earnings surprise of 76.55%.
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Axsome (AXSM) Stock Falls Despite Q4 Earnings & Revenue Beat
Axsome Therapeutics, Inc. (AXSM - Free Report) 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.
Revenues benefited from the strong sales uptake of its two marketed products, Auvelity (AXS-05) for major depressive disorder and Sunosi (solriamfetol) for narcolepsy.
Shares of AXSM were down 12.6% on Feb 20 following the announcement of the news. The stock has rallied 29.6% in the past year against the industry’s decline of 8.6%.
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.
Axsome’s first drug, Auvelity, was approved for major depressive disorder by the FDA in August 2022 and was subsequently launched in October 2022.
Auvelity recorded sales of $49 million, significantly up from the previous quarter’s level, due to the products’ timely launch. Auvelity sales represented the first full year of commercialization for the drug. Sales of the drug were in line with our model estimate.
Per the company, around 84,000 prescriptions were recorded for Auvelity in the reported quarter, reflecting a sequential increase of 23%.
Axsome acquired the U.S. rights to Sunosi, a commercialized drug targeting narcolepsy, from Jazz Pharmaceuticals (JAZZ - Free Report) 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.
In February 2023, Axsome out-licensed its ex-U.S. marketing rights of Sunosi to Pharmanovia. 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 $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.
Full-Year Results
For 2023, Axsome generated revenues of $270.6 million, significantly up year over year.
For the same period, the company incurred a loss of $5.27 per share compared with a loss of $4.60 in 2022.
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.
Pipeline Updates
Axsome is evaluating Auvelity in several label expansion studies that are underway for the treatment of other central nervous system disorders. The phase III ADVANCE-2 study is evaluating the safety and efficacy of Auvelity for treating agitation associated with Alzheimer’s disease.
Based on the recent treatment market dynamics and anticipated enrollment trends, enrollment in the study is now expected to be completed in the second half of 2024, which was earlier expected in the first half of 2024.
This might have hurt investors’ sentiments and could be the reason for the stock to decline on Tuesday despite a better-than-expected earnings performance.
AXSM also plans to start a pivotal phase II/III study of Auvelity for smoking cessation in 2024.
Axsome’s key 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. In April 2022, Axsome received a complete response letter for a new drug application (NDA) seeking approval for AXS-07 for the acute treatment of the disease.
Axsome plans to resubmit its NDA in the first half of 2024. The FDA has not requested any additional safety or efficacy data for the candidate in light of the NDA resubmission.
AXS-12 is being evaluated in the phase III SYMPHONY study for the treatment of narcolepsy, with top-line data from the same expected later in the first quarter of 2024.
Meanwhile, AXSM plans to submit an NDA to the FDA to seek approval of AXS-14 for the treatment of fibromyalgia in the second quarter of 2024. Previously, the company planned to submit this NDA for AXS-14 in the first quarter of 2024.
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 by the second half of 2024.
Axsome plans to initiate separate phase III studies evaluating Sunosi for the treatment of major depressive disorder, binge eating disorder and excessive sleepiness associated with shift work disorder. All these studies are expected to begin later in the first quarter of 2024.
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 are Exact Sciences Corp. (EXAS - Free Report) and Puma Biotechnology, Inc. (PBYI - Free Report) , each sporting 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 Exact Sciences’ 2024 loss per share have narrowed from $1.22 to $1.15. In the past year, shares of EXAS have gained 2.4%.
Exact Sciences’ earnings beat estimates in each of the trailing four quarters. EXAS delivered an average earnings surprise of 44.21%.
In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share have improved from 64 cents to 69 cents. In the past year, shares of PBYI have risen 63.6%.
Earnings of Puma Biotechnology beat estimates in three of the last four quarters while missing the same on the remaining occasion. PBYI delivered a four-quarter average earnings surprise of 76.55%.