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On Monday, Oppenheimer adjusted its price target on Axsome Therapeutics (NASDAQ:AXSM) shares, reducing it to $183 from the previous $185. The firm maintained its positive Outperform rating on the stock, with the current share price at $111.12 falling within analysts’ broader target range of $146-$210. The revision follows the U.S. Food and Drug Administration’s (FDA) Refusal to File (RTF) letter concerning the New Drug Application (NDA) for AXS-14, which is being developed for fibromyalgia.
The FDA’s refusal was attributed to the NDA’s lack of completeness, particularly regarding the design of the second pivotal trial. In response to the FDA’s feedback, Axsome Therapeutics plans to initiate another trial in the fourth quarter of 2025, mirroring the design of the first trial, with hopes of potential approval around 2028. According to InvestingPro data, the company maintains impressive gross profit margins of 91.49% and has demonstrated strong revenue growth of 72.16% over the last twelve months.
Despite this setback, Oppenheimer’s outlook for Axsome remains optimistic. The firm believes that the market had not assigned significant value to AXS-14, implying that the impact of the RTF letter on the company’s shares may be limited. The focus for Axsome is expected to return to its other products, such as Auvelity and the upcoming Symbravo launch.
In light of the recent developments, Oppenheimer has updated its financial model for Axsome, factoring in a lower probability of success (POS) for AXS-14, which influenced the slight decrease in the price target. The firm’s revised expectations and the strategic shift in Axsome’s pipeline were detailed in Oppenheimer’s recent initiation report.
In other recent news, Axsome Therapeutics has faced a setback with its New Drug Application for AXS-14, intended for fibromyalgia management, as the FDA issued a Refusal to File letter. The FDA’s review highlighted that one of the two trials submitted did not meet criteria for being adequate and well-controlled. To address this, Axsome plans to conduct an additional controlled trial with a 12-week primary endpoint, expected to start in late 2025. Meanwhile, Oppenheimer analysts initiated coverage on Axsome with an Outperform rating, citing the company’s potential in the neuroscience sector and accelerating revenue growth from its approved products. They set a price target of $185, reflecting confidence in Axsome’s growth prospects and strategic positioning. Separately, Axsome has settled a patent dispute with Hetero Labs over the drug SUNOSI, allowing Hetero to market a generic version starting in 2040, pending FDA approval. This settlement follows similar agreements with other companies, aimed at protecting Axsome’s intellectual property. Analysts from H.C. Wainwright have maintained a Buy rating on Axsome stock, emphasizing the company’s strong patent protection strategy.
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