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Why Is Axsome (AXSM) Up 4.8% Since Last Earnings Report?

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A month has gone by since the last earnings report for Axsome Therapeutics (AXSM - Free Report) . Shares have added about 4.8% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Axsome due for a pullback? 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 drivers.

Axsome Q2 Loss Widens Y/Y, Revenues Beat Estimates

Axsome incurred an adjusted loss of $1.24 per share for the second quarter of 2024 compared with a loss of $1.00 reported in the year-ago period. The Zacks Consensus Estimate was pegged at a loss of $1.30 per share.

The above-adjusted loss excludes the impact of certain non-cash charges, including which the reported loss per share was $1.67 in the second quarter of 2024 compared with a loss of $1.54 per share reported in the year-ago quarter.

Axsome’s total revenues surged 87% year over year to $87.2 million in the reported quarter, which beat the Zacks Consensus Estimate of $85 million. The increase in revenues can be attributed to strong sales of Auvelity.

Quarter in Detail

Total revenues in the second quarter consisted of product revenues from Sunosi and Auvelity, and royalty revenues.

Net product revenues were $86.5 million in the quarter compared with $46 million reported in the year-ago period. The figure beat our model estimate of $80.4 million.

Auvelity recorded sales of $65 million, up 135% year over year, owing to strong underlying demand. Sales of the drug beat our model estimate of $60.8 million.

Per Axsome, around 123,000 prescriptions were recorded for Auvelity in the reported quarter, reflecting a sequential increase of 29%.

Sunosi’s net product sales were $22.1 million, up 16% from the year-ago quarter’s level. Total prescriptions for Sunosi in the United States grew 8% sequentially to 45,000.

Royalty revenues totaled $0.6 million in the quarter, reflecting royalties on Sunosi sales in out-licensed territories.

Research and development expenses (including stock-based compensation) amounted to $49.9 million, up 142% 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 like AXS-05, AXS-12, AXS-07 and AXS-14.

Selling, general and administrative expenses (including stock-based compensation) totaled $103.6 million, up 31% year over year. The increase was due to higher commercial activities for Sunosi and Auvelity and other costs.

As of Jun 30, 2024, Axsome had cash and cash equivalents worth $315.7 million compared with $331.4 million as of Mar 31, 2024.

2024 Guidance

Management believes that its cash balance of $315.7 million (as of June-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.

The consensus estimate has shifted -19.79% due to these changes.

VGM Scores

Currently, Axsome has a subpar Growth Score of D, though it is lagging a bit 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, Bristol Myers Squibb (BMY - Free Report) , has gained 6.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Bristol Myers reported revenues of $12.2 billion in the last reported quarter, representing a year-over-year change of +8.7%. EPS of $2.07 for the same period compares with $1.75 a year ago.

Bristol Myers is expected to post earnings of $1.58 per share for the current quarter, representing a year-over-year change of -21%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.

Bristol Myers has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.


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