A month has gone by since the last earnings report for Axsome Therapeutics (AXSM). Shares have added about 18.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Axsome due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Axsome Q3 Loss Narrower Than Expected, Revenues Miss
Axsome incurred a loss of $1.03 per share (excluding intangible asset amortization) in third-quarter 2022, narrower than the Zacks Consensus Estimate and our estimate of a loss of $1.10 and $1.09, respectively. AXSM reported a loss of 93 cents per share in the year-ago period.
The company’s revenues of $16.8 million missed the Zacks Consensus Estimate of $17 million. The revenues solely comprised sales of the sleep drug, Sunosi (solriamfetol). In the year-ago quarter, Axsome did not generate any revenues due to the absence of a marketed product.
Quarter in Detail
Research and development expenses were $14.9 million in the quarter, up 13% from the year-ago period’s level, owing to higher costs associated with clinical studies and post-marketing commitments assumed for Sunosi.
Selling, general and administrative expenses were $40.9 million, up 102% year over year. The significant increase was due to higher costs related to commercial activities for Sunosi and Auvelity, which included sales force onboarding and marketing spend.
As of Sep 30, 2022, Axsome had cash and cash equivalents worth $227.5 million compared with $73.4 million on Jun 30, 2022.
2022 Guidance
Management believes that its cash balance as of September 2022 end and its $300 million term-loan facility will be enough to fund operations into 2025.
The company also expects an increase in operating expenses on account of the commercialization activities of Sunosi and Auvelity and other pipeline development.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, Axsome has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Axsome has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Axsome belongs to the Zacks Medical – Biomedical and Genetics industry. Another stock from the same industry, Geron (GERN), has gained 5.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Geron reported revenues of $0.3 million in the last reported quarter, representing a year-over-year change of +172.7%. EPS of -$0.10 for the same period compares with -$0.08 a year ago.
Geron is expected to post a loss of $0.11 per share for the current quarter, representing a year-over-year change of -10%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Geron has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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