Axsome Shares Flirt With Record High: How Much Upside Is Left?

Axsome Therapeutics Inc AXSM by far has been the hottest biotech of the year, clocking in gains of about 1,000% in 2019. Its market capitalization has swelled to close to $1 billion thanks to the year's gravity-defying rally.

Axsome, which develops novel therapies for treating central nervous system disorders, has a robust clinical pipeline with two Phase 3 assets. Its lead product candidate AXS-05, a combo therapy of bupropion and dextromethorphan, is evaluated for multiple indications, namely:

• Treatment resistant depression, or TRD.
• Agitation in Alzheimer's disease.
• Major depressive disorder, or MDD.
• Smoking cessation.

If AXS-05 gains approval for TRD, Axsome could be facing off with large-cap pharma company Johnson & Johnson JNJ, which snagged FDA approval for its Spravato for the indication in March.

AXS-07 is Axsome's second late-stage asset, which is an oral fixed-dose combination of meloxicam and rizatriptan being evaluated as an acute treatment option for migraine.

Good Tidings Abound

In early January, Axsome reported positive top-line data from the Phase 2 study of AXS-05 in MDD.

In March, AXS-05 was accorded Breakthrough Therapy Designation for MDD.

The company announced positive results from the midstage study of AXS-05 in smoking cessation in mid-April.

On Sept. 5, the company presented positive Phase 1 pharmacokinetic data for AXS-07 at the 19th Congress of the International Headache Society in Dublin.

The results showed that AXS-07 is rapidly absorbed after oral administration, with the MoSEIC meloxicam component also displaying an extended plasma half-life, suggesting the potential for enhanced and sustained efficacy.

More To Come?

Axsome is due to release topline results from the Phase 3 STRIDE-1 trial in TRD and Phase 3 GEMINI study in MDD in the second half of 2019.

The topline readout from the Phase 3 MOMENTUM trial is also due in the second half of 2019. Following the end-of-Phase 2 meeting the company held with the FDA, it has been determined that MOMENTUM is the only efficacy trial needed to support an NDA filing.

Topline data from the Phase 2 study of AXS-12 in narcolepsy is expected in the second half of 2019.

The Stock

Axsome shares are clearly on a bullish trend, as it has been making higher highs and higher lows in successive sessions. After hitting a record intraday high of $30.50 on Tuesday, the stock closed the session below the level.

Wednesday's rally has not given the stock enough momentum to revisit the highs above $30.

The average analyst price target for Axsome is $36.83, according to the Yahoo database, with the Street-high estimate being $50.

Axsome shares were rising 0.85% to $28.45 at the time of publication. 

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