SVB Leerink starts Axsome Therapeutics at OP; PT $25

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SVB Leerink initiated coverage of Axsome Therapeutics (NASDAQ:AXSM) with an “outperform” rating and $25 price target. The stock closed at $14.50 on April 5.

“The specialty pharma business model (using proprietary delivery technologies to develop a new product or through combining two older drugs) can work if the value proposition of the new product is differentiated like what we are seeing with Axsome, but this strategy should also have lower clinical and regulatory risk, lower development costs, and faster development/approval timelines via 505(b)(2) strategies,” writes analyst Marc Goodman.

He said Axsome is not a one-product story. The company has a diversified portfolio of multiple products, with its lead asset, AXS-05, going for three high unmet indications: treatment resistant depression (TRD), agitation in Alzheimer's disease (AAD) and smoking cessation that have “little-to-no approved therapies and each could be significant for Axsome by itself.”

According to Mr. Goodman key upcoming catalysts in the second quarter of 2019 include Phase 3 data for AXS-05 in TRD; Phase 2 data for AXS-05 in smoking cessation; and Phase 2 data for AXS-12 in narcolepsy.

The company also expects to report Phase 3 data for AXS-07 in acute migraine in the first quarter of 2020 and Phase 2/3 data for AXS-005 in AAD in the first half of 2020, he added.

Stephen Kilmer