Axsome Therapeutics (AXSM) stock more than doubled since the drug maker announced positive results for its phase 2 trial, ASCEND on Monday. The medication, called AXS-05, which treats major depressive disorder (MDD), met its primary endpoint. After six weeks of treatment, 47% of patients given the drug had achieved remission.
In response, H.C. Wainwright’s Ram Selvaraju reiterates a Buy rating for the stock while upping his price target to $15 from a previous $10, which implies over 80% upside from current levels. (To watch Selvaraju’s track record, click here)
“We view these data as highly encouraging, particularly given the relatively small size of the trial; AXS-05’s clear separation from bupropion underscores the differentiated profile of Axsome’s candidate. Accordingly, we reiterate our Buy rating, while raising the probability of approval for AXS-05 in treatment-resistant depression (TRD) to 30% from the prior 15%, which results in a corresponding increase in the value of this candidate to over $400M vs. the prior $200M,” the analyst explains.
The company has more than one study going on – including STRIDE-1, which aims to use AXS-05 to treat those whose bodies have failed to respond to two or more antidepressant therapies (TRD). In late April of 2018, Axsome released positive results for Phase 3 of that trial as well, calling AXS-05 safe and well-tolerated. With no adverse events, like psychomimetic side effects, weight gain or sexual dysfunction, the drug is in a favorable light. This, paired with the fact that there are few effective medications for depression, Axsome is able to carve out a niche sector in the market.
Are all the other analysts on Wall Street bulls when it comes to AXSM? TipRanks analytics says yes indeed. Out of four analysts who review the stock, all four consider it a Buy. The consensus price target of $20.25 shows a potential upside of 128%. (See AXSM’s price targets and analyst ratings on TipRanks)