In a June 30 research note, H.C. Wainwright & Co. analyst Ram Selvaraju reported that the U.S. Food and Drug Administration (FDA) designated Axsome Therapeutics Inc.'s (AXSM:NASDAQ) AXS-05, an NMDA receptor antagonist, a breakthrough therapy for Alzheimer's disease agitation.
AXS-05 received the same status previously in another indication, major depressive disorder. The designation, in part, means a drug will get priority review, in 6 versus 10 months.
Selvaraju explained that breakthrough designation is "granted to expedite development and review timelines for a promising investigational medicine when preliminary clinical evidence indicates that it may show substantial improvement on one or more clinically significant endpoints over available therapies for a serious or life-threatening condition."
The analyst indicated that positive data from Axsome's recent pivotal Phase 2/3 ADVANCE-1 study support the breakthrough designation of AXS-05 for Alzheimer's disease agitation. In the trial, patients treated with AXS-05 experienced "rapid, substantial, and statistically significant improvement in agitation." Adverse events, from most to least common, were somnolence, dizziness and diarrhea.
Selvaraju highlighted that H2/20 should be a catalyst-rich period for U.S.-based Axsome, with completion of its regulatory filings for AXS-05 in major depressive disorder and for AXS-07 in migraine, with potential FDA approvals to follow by year-end 2021.
Also next year, clinical data are expected in the way of pivotal AXS-05 results in treatment-resistant depression and possibly Alzheimer's disease-associated agitation along with Phase 3 AXS-12 findings in narcolepsy.
Selvaraju concluded that Axsome is "still undervalued" and "by 2022 Axsome could have four drugs on the market in the U.S., spanning a total of at least six indications. . .We feel that added clarity from regulators in the wake of multiple FDA meetings that Axsome is likely to have in the course of the coming months should provide significant risk mitigation and substantially increase investor confidence in the company's clinical development and regulatory approach."
H.C. Wainwright has a Buy rating and a $210 per share target price on Axsome; the current stock price is $85.02 per share.[NLINSERT]
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Disclosures from H.C. Wainwright & Co., Axsome Therapeutics Inc., Company Update, June 30, 2020
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Raghuram Selvaraju, Ph.D., certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Axsome Therapeutics, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of May 31, 2020 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Axsome Therapeutics, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from Axsome Therapeutics, Inc. for non-investment banking services in the previous 12 months.
The firm or its affiliates did receive compensation from Axsome Therapeutics, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Axsome Therapeutics, Inc. during the past 12 months.
The Firm does not make a market in Axsome Therapeutics, Inc. as of the date of this research report.