After the slump on weak quarterly results, investors turned positive on Axsome Therapeutics (AXSM) stock, which climbed to the 34-month high of $11.33 on Monday. Traders were positive on the company’s patient enrollment in Migraine final trial as well as its commitment to developing therapies for serious central nervous system disorders.
Majority of the analysts recommended a “strong buy” rating while expecting the stock to reach $24.75 per share in the next 52 weeks. They tend to value the company much more than the present scenario due to its venture in developing therapies for resistant depression and in agitation associated with Alzheimer’s disease as well as for smoking cessation.
Other therapy portfolio includes knee osteoarthritis associated with bone marrow lesions, chronic low back pain associated with Modic changes, acute treatment of migraine, treatment of osteoarthritis and rheumatoid arthritis and for the reduction of the risk of nonsteroidal anti-inflammatory drug-associated gastric ulcers. Traders and investors have believed the stock to be a good investment and the current levels called for a buy.
In the recent fourth-quarter, the company reported a wider loss due to higher costs and expenses. An increase in costs for central nervous system studies as well as study startup and manufacturing costs dragged research and development expenses higher by 60%. General and administrative expenses increased by 15% on higher intellectual property costs and legal expenses, external fees associated with operating as a public company as well as a rise in personnel costs.
In 2018, the company secured its balance sheet through the registered direct offering in October and with received gross proceeds of $8.9 million. To further strengthen cash position in January of 2019, Axsome has raised $25.8 million in gross proceeds through the sale of shares under its ATM facility with Leerink.
At December 31, 2018, the company had $14 million of cash. Including proceeds from the recently completed at-the-market equity financings and new growth capital term loan, Axsome’s pro forma cash balance was $52.6 million, which compares to $34 million of cash at December 31, 2017.
Also read: Axsome almost doubles on positive outcome from Alzheimer’s disease trial
Axsome anticipates that its current cash, including proceeds from the January 2019 equity financings and March 2019 term loan, will be sufficient to fund its anticipated operations into at least the fourth quarter of 2021.
The global CNS disorders drug market has been widening as more contenders are undergoing trials. The contenders include AstraZeneca (AZN), GlaxoSmithKline (GSK), Watson Pharmaceuticals, Teva Pharmaceutical Industries (TEVA), Allergan (AGN), Forest Laboratories, Johnson & Johnson (JNJ), Pfizer (PFE), Shire Pharmaceuticals Group, Merck & Co. (MRK), Biogen Idec (BIIB), Bayer Ag, Eli Lilly & Co. (LLY), Novartis Ag (NVS), Takeda Pharmaceutical Company (TAK), Astellas Pharma, Sanofi–Aventis, and Abbott Laboratories (ABT).
Shares of Axsome opened higher on Monday and is trading in the green territory. The stock has risen over 312% in the past year and over 303% in the past three months.