Shares of Axsome Therapeutics (AXSM 0.89%) were sinking 7.5% as of 11:24 a.m. ET on Monday. And while many stocks were tumbling due to the Bank of Japan's interest rate hike, that wasn't the main cause of Axsome's decline. Instead, the biopharmaceutical company announced disappointing second-quarter results before the market opened today.
Axsome reported net product revenue in the second quarter of $87.2 million, up 87% year over year. This result topped the consensus Wall Street revenue estimate of $86.9 million. But the company posted a net loss in the quarter of $79.3 million, or $1.67 per share. Analysts surveyed by LSEG were expecting a loss of $1.33 per share.
Why was Axsome's second-quarter loss so much worse than expected?
Research and development costs more than doubled year over year to nearly $49.9 million. Its selling, general, and administrative costs jumped 31% to $103.6 million.
The company noted in its press release announcing the second-quarter results that the net loss reflected $26 million in noncash charges. Much of this amount stemmed from noncash stock-based compensation.
Is Axsome stock a buy on the dip?
Risk-averse investors will probably prefer to stay on the sidelines. However, I think Axsome's sell-off could present a great buying opportunity for aggressive investors. The company has several catalysts on the way that could send shares flying higher, including a potential U.S. regulatory approval for AXS-07 in treating migraine.
