AXSM - Axsome: Unpacking Auvelity's First-Year Market Dynamics And Economic Challenges

2024-02-21 16:20:58 ET

Summary

• Auvelity shows growth with $130.1 million annual sales, impressive in a crowded depression treatment market.
• Axsome's Q4 reveals surging revenues but widened losses due to high R&D and SG&A expenses.
• The cash position is strong, however, net loss suggests potential future financing needs despite the company's confidence.
• My investment stance: "Hold" on AXSM, citing revenue growth and market position balanced by operational and financial risks.

Auvelity's Steady Rise Amidst Axsome's Financial Fog

Axsome Therapeutics ( AXSM ) revealed Q4 earnings on Tuesday. The company's depression drug, Auvelity (dextromethorphan-bupropion), continues steady growth in a competitive market. For the fourth quarter and the full year, Auvelity achieved $49.0 million and $130.1 million, respectively. This is definitely an accomplishment given the treatment landscape for depression, which is jam-packed with established and frontline alternatives like SSRIs (e.g., Prozac) and SNRIs (e.g., Cymbalta). I went into greater detail in previous writings about how Auvelity fits in....

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