Axcella Health Tanks 4% On Wider-Than-Feared Quarterly Loss

Axcella Health dipped 3.8% to close at $5.57 on March 17 after the clinical-stage biotechnology company posted a larger-than-expected loss in the fourth quarter.

Axcella Health (AXLA) incurred a loss of $0.40 per share in 4Q, compared to the $0.36 loss per share estimated by analysts. The company reported a loss of $0.68 per share in the prior-year quarter.

The company’s research and development expenses decreased 1.9% year-over-year to $10.6 million, while general and administrative expenses declined 15.2% to $3.9 million. (See Axcella Health stock analysis on TipRanks)

Axcella Health CEO Bill Hinshaw said, “We were pleased to advance our preparations in the fourth quarter with a successful Type B pre-IND meeting with the U.S. Food and Drug Administration (FDA) regarding our non-alcoholic steatohepatitis (NASH) candidate, AXA1125, and began 2021 with our first investigational new drug (IND) clearance for AXA1665, our candidate for the reduction in risk of recurrent overt hepatic encephalopathy (OHE).”

Following the 4Q results, B.Riley Financial analyst Mayank Mamtani maintained a Buy rating and a price target of $14 (151.4% upside potential).

Mamtani said, “AXA1665 IND clearance marks an important milestone, validating AXLA’s capital efficient, accelerated drug development model to rapidly advance molecules to late-stage programs.”

Axcella Health shares have exploded 147.6% over the past year, while the stock still scores a Strong Buy consensus rating based on 4 unanimous Buys. That’s alongside an average analyst price target of $14.75, which implies 164.8% upside potential to current levels.

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