Hold Rating on Axsome Therapeutics Amidst Regulatory Strategy and Commercialization Prospects

In a report released on May 17, Jason Gerberry from Bank of America Securities maintained a Hold rating on Axsome Therapeutics (AXSM – Research Report), with a price target of $97.00.

Jason Gerberry has given his Hold rating due to a combination of factors surrounding Axsome Therapeutics’ current status and future prospects. During an investor dinner event, discussions highlighted Axsome’s development and regulatory strategy, particularly for their drug AXS-05 for Alzheimer’s disease agitation (ADA) and the Major Depressive Disorder (MDD) product launch of Auvelity. Although the company is expected to secure approval for AXS-05, the actual product launch for ADA is anticipated to be a few years away, in 2026. Moreover, management’s recent initiation of the ACCORD-2 Phase 3 trial for AXS-05 was viewed as a strategic move towards risk management, which is likely to strengthen the eventual FDA data package without introducing significant new risks.

Additionally, Gerberry considered various market and branding factors for AXS-05 in ADA, including the uncertainty surrounding the type of regulatory filing and the implications for marketing and sales strategies. The trajectory of Auvelity’s commercialization was also a focal point, with peak sales targets ranging from $1-3 billion and several variables such as reimbursement, exclusivity duration, and the response to promotional efforts influencing future guidance. While there was no definitive quantification of the impact from recent sales force expansion, the potential for additional direct-to-consumer investment in 2025 was noted, all of which inform Gerberry’s cautious stance on Axsome Therapeutics at present.

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Axsome Therapeutics (AXSM) Company Description:

Axsome Therapeutics, Inc. is a clinical stage biopharmaceutical company, which engages in developing novel therapies for the management of central nervous system disorders. Its product candidates include AXS-02 and AXS-06 which are developing for multiple indications. The company was founded by Herriot Tabuteau on January 12, 2012 and is headquartered in New York, NY.