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Investing.com - Morgan Stanley (NYSE:MS) has assumed coverage of Axsome Therapeutics (NASDAQ:AXSM), a $5.1 billion market cap biotech company with impressive 91.5% gross margins, with an Overweight rating and a price target of $190.00. According to InvestingPro data, the stock is currently trading near its Fair Value.
The investment bank’s coverage focuses on Axsome’s upcoming second half 2025 supplemental New Drug Application (sNDA) filing for AXS-05 in Alzheimer’s disease agitation (ADA) and the ongoing commercial launch of Auvelity for major depressive disorder (MDD).
Morgan Stanley views an on-time sNDA submission for AXS-05 in ADA as the base case scenario and projects $900 million in sales by 2030, or $720 million when risk-adjusted with an 80% probability of success.
The firm expressed encouragement regarding Auvelity’s continued launch progress in the MDD market and is monitoring outcomes from the company’s expanded sales force and additional commercial initiatives.
While noting that Axsome maintains a robust late-stage clinical development pipeline, Morgan Stanley indicates it requires more details before assigning value to these additional programs in its analysis.
In other recent news, Axsome Therapeutics received a Refusal to File (RTF) letter from the U.S. Food and Drug Administration (FDA) regarding its New Drug Application (NDA) for AXS-14, a treatment for fibromyalgia. The FDA found the application incomplete, citing inadequacies in one of the two placebo-controlled trials, which had an 8-week primary endpoint and a flexible-dose approach. Despite this, both trials met their primary endpoints, and the FDA did not question the positive outcomes of the studies. Axsome plans to conduct an additional trial with a fixed-dose paradigm and a 12-week primary endpoint, expected to start in the fourth quarter of 2025. Piper Sandler maintained an Overweight rating with a $148 price target, viewing the setback as not significantly impacting Axsome’s shares. H.C. Wainwright reiterated a Buy rating with a $180 price target, considering the FDA’s feedback as constructive for U.S. registration. Oppenheimer slightly lowered its price target to $183 but maintained an Outperform rating, acknowledging the market’s limited valuation of AXS-14. Axsome remains committed to advancing AXS-14, with CEO Herriot Tabuteau highlighting the drug’s potential benefits for the significant number of U.S. fibromyalgia patients.
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