Analysis of Axsome's Stock Movement Since Last Earnings Report

It has been approximately one month since Axsome Therapeutics (AXSM) released its latest earnings report. During this period, the stock has experienced a minor decline of about 0.1%, which is below the performance of the S&P 500 index.

The question now arises: will this downward trend persist as we approach the next earnings announcement, or could Axsome be positioned for a rebound? To assess this, we will review the most recent earnings report and examine how investors and analysts have responded in the interim.

Axsome's Q3 Earnings Overview

In its third quarter of 2024, Axsome reported an adjusted loss of $1.34 per share, which is a slight improvement compared to the Zacks Consensus Estimate of a loss of $1.38. This result also reflects a marginal increase from a loss of $1.32 per share recorded in the same quarter last year.

Total revenues for Axsome surged by 81% year over year, reaching $104.8 million in Q3, comfortably exceeding the Zacks Consensus Estimate of $99 million. This impressive growth can largely be attributed to the increased market uptake of its primary product, Auvelity.

Detailed Earnings Breakdown

The revenue breakdown for the quarter consisted of income derived from Auvelity and Sunosi product sales, as well as royalty revenues.

Specifically, net product revenues amounted to $103.7 million, showcasing significant growth from $57.1 million in the prior-year quarter. This figure surpassed the expected model estimate of $94 million. For the first time, Axsome crossed the $100 million mark in product revenues within a single quarter due to robust sales of both Auvelity and Sunosi.

Auvelity sales reached $80.4 million, reflecting an impressive 113% growth year over year driven by strong demand. The sales figure also exceeded the modeled estimate of $71.1 million.

In terms of prescriptions, Axsome noted around 144,000 prescriptions for Auvelity during the reported quarter, which indicates a sequential increase of 17% and a remarkable year-over-year growth of 108%.

Sales for Sunosi also improved, totaling $24.4 million, a 21% increase compared to the same quarter the previous year. There was a 5% sequential growth in total prescriptions for Sunosi in the United States, amounting to 47,000.

In addition, royalty revenues for the quarter were recorded at $1 million, stemming from Sunosi sales in out-licensed territories.

Axsome's research and development expenses, which include stock-based compensation, rose to $45.4 million, marking a 57.6% increase from the previous year's level. This increase was mainly due to elevated costs associated with various clinical studies, particularly the label expansion study of Sunosi, along with other pipeline candidates such as AXS-05, AXS-12, AXS-07, and AXS-14.

Moreover, selling, general, and administrative expenses also rose to $95.6 million, a 14.9% increase year-over-year, driven by higher commercial activity surrounding Sunosi and Auvelity, among other variable costs.

As of September 30, 2024, Axsome reported a cash and cash equivalents balance of $327.3 million, compared to $315.7 million as of June 30, 2024.

Company Guidance and Future Outlook

Management at Axsome has expressed confidence that the cash reserves of $327.3 million are sufficient to fund operations until the company achieves cash flow positivity.

Trends in Earnings Estimates

In the month following the earnings report, there has been an observable upward trend in analyst earnings estimates for Axsome. The current consensus estimate has increased by 17.84% due to these recent adjustments.

Axsome's VGM Scores

Axsome currently holds a Growth Score of B, which indicates promising potential for growth. However, it is slightly lagging in Momentum Score with a C rating, suggesting a more cautious outlook. Notably, on the value front, the stock carries a grade of D, positioning it in the lower 40% for this investment strategy.

Overall, Axsome holds an aggregate VGM Score of D. For investors interested in a more comprehensive strategy, this overall score will be more valuable than focusing on single aspects.

Outlook Assessment

Despite the recent stock performance, estimates for Axsome have generally trended upward, and the revisions in these estimates are encouraging. Currently, Axsome holds a Zacks Rank #3 (Hold), suggesting a potential for in-line returns over the coming months.

Industry Comparisons

Axsome operates within the Zacks Medical - Biomedical and Genetics industry. Notably, Pacira (PCRX), a competitor in the same sector, has observed a robust increase of 23.6% in its stock value over the past month. Pacira reported revenues of $167.72 million in its latest quarter, reflecting a year-over-year uptick of 2.3%. Its earnings per share for this period were $0.79, in comparison to $0.72 a year prior.

For the current quarter, Pacira is projected to report earnings of $0.82 per share, which would indicate a year-over-year decrease of 7.9%. Over the past month, the consensus estimate for Pacira has remained relatively stable with a minor adjustment of -1%.

Overall, both Axsome and Pacira now share a Zacks Rank #3 (Hold), and while Pacira enjoys a VGM Score of A, Axsome's performance continues to be assessed amidst broader market conditions.

Axsome, Earnings, Stock, Performance, Revenue