Axsome Therapeutics' CNS Portfolio Poised for Major Growth - Analyst Predicts Strong Future

Needham initiated coverage on Axsome Therapeutics Inc AXSM, which focuses on central nervous disorders conditions, including depression, Alzheimer’s disease agitation, migraine, narcolepsy, and fibromyalgia. 

Needham writes that Axsome Therapeutics’ diversified CNS portfolio will help grow the risk-adjusted topline by 8-10x in five years.

The analyst anticipates an upside for Axsome Therapeutics on its two marketed drugs, Auvelity for major depressive disorder and Sunosi for excessive daytime sleepiness.

Related: Axsome Depression Drug’s Commercial Success, Pipeline Potential Undervalued, Analyst Says.

Physicians report a positive experience with Auvelity due to its novel mechanism of action, rapid onset, and efficacy. However, they note that payer coverage could be better. Physicians were generally positive about increasing their use of Auvelity, but Needham does not anticipate better-than-expected growth for the drug.

Needham initiated with a Buy rating and a price target of $130.

The analyst says the company’s most significant pipeline asset, AXS-05 in Alzheimer’s Disease agitation, is already de-risked based on two positive Phase 3 trial data, and the ADVANCE-2 Ph 3 readout this year will support a filing.

Needham estimates 2028 US sales of ~$550 million (+11% vs. cons), growing to ~$1 billion in 2030

Currently, Axsome receives no value for its remaining pipeline, but several of these products are in the late stages.

Needham anticipates they will contribute to topline growth soon.

Axsome has three late-stage assets: AXS-07 for migraine, AXS-14 for fibromyalgia—2Q24 filing, and AXS-12 for narcolepsy filing post-second half data safety data, which can collectively drive ~$1 billion in sales by 2030 with a 60-65% probability of success.

Price Action: AXSM stock is up 1.21% at $85.88 at the last check on Monday.

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