On Friday, Truist Securities updated its outlook on Axsome Therapeutics (NASDAQ:AXSM), increasing the price target on the company's stock to $180 from the previous target of $150. The firm sustained a Buy rating on the shares, signaling confidence in the biopharmaceutical company's prospects.
According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $105 to $180, suggesting significant upside potential from the current price of $79.65. The stock appears undervalued based on InvestingPro's Fair Value analysis.
The adjustment in price target comes after Truist Securities' analyst engaged in discussions with six doctors specializing in Alzheimer's disease agitation (ADA). These specialists consistently recognized the comprehensive evidence backing the approval of Axsome's AXS-05 and favored its use over brexpiprazole, a competing treatment. The company's strong market position is reflected in its impressive 51.47% revenue growth over the last twelve months and industry-leading gross profit margins of 91.09%.
The medical professionals cited several factors for their preference: the safety profile of AXS-05, known commercially as Auvelity, which has already been established in major depressive disorder (MDD) treatments; its rapid onset of effect, with symptoms improving in 1-2 weeks compared to over 8 weeks for brexpiprazole; and the efficacy data from U.S. clinical sites, which are considered more relevant to the American patient population than brexpiprazole's data, which is heavily drawn from Eastern European sites.
The analyst at Truist Securities believes that these factors will contribute to AXS-05's adoption as a front-line treatment for ADA. The anticipated increase in the drug's usage has led the firm to revise its sales estimates for AXS-05 upwards, which in turn has justified the higher price target for Axsome Therapeutics' stock.
Axsome Therapeutics specializes in developing novel therapies for central nervous system disorders. AXS-05 is one of their leading candidates, positioned to potentially address the needs of patients with Alzheimer's disease agitation, a condition that currently has limited treatment options. The positive feedback from the ADA specialists supports the view that AXS-05 could make a significant impact in this therapeutic area.
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In other recent news, Axsome Therapeutics has made significant strides in its clinical trials, with recent results indicating a 3.6-fold lower risk of relapse for patients treated with AXS-05, a novel treatment for Alzheimer’s disease-associated agitation.
The company also reported record-breaking revenue for the third quarter, surpassing $100 million for the first time. This financial milestone was primarily driven by the sales of its major depressive disorder treatment, Auvelity, and its excessive daytime sleepiness medication, Sunosi. Analyst firm H.C. Wainwright has reaffirmed its Buy rating on Axsome shares, maintaining a price target of $180.00.
In other developments, biotech firm uniQure (NASDAQ:QURE) BV is making progress with its gene therapy product, AMT-130, for the treatment of Huntington's Disease. The U.S. Food and Drug Administration (FDA) has agreed to an accelerated approval process for AMT-130, and Raymond (NS:RYMD) James has upgraded the company's stock from Outperform to Strong Buy.
Meanwhile, TD Cowen, through its analyst Joseph Thome, outlined ten anticipated catalysts for the year 2025 that are expected to generate significant investor interest. These include clinical trial data releases and regulatory milestones for several firms, including ANAB, UTHR, QURE, ALKS, JAZZ, PRME, XENE, PTCT, RAPP, and CMRX.
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