This Analyst Creates Bullish Pitch For Axsome Therapeutics On Increased Outlook For Its Depression Drug

Mizuho increased the price target on Axsome Therapeutics Inc AXSM from $84 to $95 with a Buy rating.

The analyst is increasingly bullish on the stock, with an Auvelity (depression drug) beat (based on strong Rx demand and improved GTN) offsetting a weaker Sunosi result (but impacted by a one-time item). 

Related: Axsome Therapeutics Clocks Better Than Expected Q1 Sales, Depression Drug Sees Improved Coverage.

Citing increased investor confidence in Auvelity's prospects, it has raised Auvelity's near-term estimates in the initial indication of depression. It also reminds investors of potential label expansion for Auvelity in Alzheimer's agitation, a significant opportunity for which Phase 3 data are expected next year. 

Mizuho notes Q1 GTN was in the high-50s % (better than expected, and vs. the mid-60s % in 4Q22), with AXSM expecting no meaningful change. The analyst says reimbursement continues to be positive, given no meaningful pushback from payors, and several coverage decisions are expected shortly, which could further boost Auvelity's near-term growth prospects.

Price Action: AXSM shares are down 2.63% at $78.11 on the last check Thursday.