Axovant Sciences Ltd (AXON): What Just Happened To My Shares?


Axovant Sciences Ltd (NASDAQ:AXON) investors hit the panic button after the dementia drug maker announced that the Phase 3 MINDSET clinical trial of its investigational drug intepirdine in patients with mild to moderate Alzheimer’s disease (AD) who were receiving background donepezil therapy failed to meet its co-primary efficacy endpoints. At 24 weeks, patients treated with 35 mg of intepirdine did not experience improvement in cognition or in measures of activities of daily living as measured by the Alzheimer’s Disease Assessment Scale-Cognitive Subscale (ADAS-Cog) and by the Alzheimer’s Disease Cooperative Study-Activities of Daily Living scale (ADCS-ADL), respectively, compared to patients treated with placebo. In the study, intepirdine was generally well tolerated.

Reacting to the news, Axovant shares are crashing nearly 75% in pre-market trading Tuesday.

“While we are deeply disappointed by these trial results, we also are saddened for the millions of patients and families impacted by Alzheimer’s disease. However, we believe that the fight against Alzheimer’s and other important areas of unmet need in neurology is too important to be derailed by this setback,” said David Hung, M.D., chief executive officer of Axovant. “We are grateful to the investigators, patients and caregivers who participated in this important trial and supported us in this journey. Moreover, we remain committed to advancing our pipeline, which includes our Phase 2b HEADWAY study of intepirdine, and nelotanserin, our highly selective inverse agonist of the 5-HT2Areceptor in Phase 2 development, both of which are being evaluated in patients with dementia with Lewy bodies.”

The HEADWAY trial studying intepirdine in patients with dementia with Lewy bodies (DLB) remains on track to report topline results at the end of 2017. This study investigates two doses of intepirdine, 35 mg (the dose used in the MINDSET trial) and 70 mg, a higher dose intended to engage both 5-HT6 and 5-HT2A receptors. Intepirdine has received Fast Track designation from the U.S. Food and Drug Administration for the treatment of DLB.

On the ratings front, Axovant has been the subject of a number of recent research reports. In a report released yesterday, Oppenheimer analyst Jay Olson maintained a Buy rating on AXON, with a price target of $30, which implies an upside of 24% from current levels. On September 13, Chardan’s Gbola Amusa assigned a Sell rating to the stock.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jay Olson and Gbola Amusa have a yearly average return of 6.3% and 1.5% respectively. Olson has a success rate of 54% and is ranked #1243 out of 4660 analysts, while Amusa has a success rate of 52% and is ranked #2095.

Overall, one research analyst has rated the stock with a Sell rating, 7 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $32.29 which is 33.2% above where the stock closed yesterday.

Axovant Sciences Ltd. is a clinical-stage biopharmaceutical company, which engages in the acquisition, development, and commercialization of novel therapeutics for the treatment of neurodegenerative disorders. It offers RVT-101 product which is an orally administered therapy that improves cognition and daily functioning of dementia patients.