Please ensure Javascript is enabled for purposes of website accessibility

Why Axsome Therapeutics Stock Is Rising Today

By Keith Speights – Nov 8, 2021 at 12:37PM

Key Points

  • Axsome gave its third-quarter update Monday morning.
  • The company's loss wasn't as wide as analysts expected.
  • Axsome also said it thinks issues with its regulatory filing for AXS-05 are addressable.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company provided its third-quarter update.

What happened

Shares of Axsome Therapeutics (AXSM -0.64%) were rising 6.8% as of 12:05 p.m. EST on Monday. The gain came after the company provided its third-quarter update earlier in the morning.

So what

Axsome posted a net loss of $34.9 million, or $0.93 per share, in the third quarter. That was a little better than the average analysts' estimate of a net loss of $0.95 per share. The company didn't generate any revenue in the quarter.

A scientist looking through a microscope.

Image source: Getty Images.

While this bottom-line result was better than expected, the biotech stock probably enjoyed an even bigger boost from Axsome's encouraging pipeline update. In particular, the company stated that it thinks the deficiencies identified by the U.S. Food and Drug Administration (FDA) in the regulatory filing for AXS-05 in treating major depressive disorder (MDD) are addressable. 

The FDA was originally scheduled to make an approval decision on AXS-05 in treating MDD by Aug. 22. However, it informed Axsome on Aug. 20 that its review would not be completed by that date. The FDA recently told Axsome that there were two deficiencies related to analytical methods in the Chemistry, Manufacturing, and Controls section of the New Drug Application for AXS-05.

Now what

Axsome could have another key catalyst on the way. The FDA set a Prescription Drug User Fee Act (PDUFA) date of April 30, 2022, for its review of AXS-07 in treating migraine. However, the agency told Axsome that date could slip if it can't complete an inspection of a contract manufacturing facility due to COVID-19-related travel restrictions.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Axsome Therapeutics. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.