Axsome Therapeutics (AXSM, Financial) shares experienced a decline of 6.39% today, trading at a price of $109.18. This movement followed the company's announcement of phase 3 trial results for solriamfetol, marketed as Sunosi, in the treatment of major depressive disorder (MDD).
The six-week phase 3 trial evaluated solriamfetol's effectiveness in MDD patients both with and without severe excess daytime sleepiness (EDS). The trial comprised 51 patients with severe EDS and 295 without. The primary objective was to demonstrate significant improvement across the entire patient group using solriamfetol, utilizing the Epworth Sleepiness Scale (ESS) and the Montgomery-Asberg Depression Rating Scale (MADRS) as assessment tools.
The trial results indicated that there was no statistical improvement in the overall patient population when comparing solriamfetol to a placebo. However, among MDD patients with severe EDS, solriamfetol showed clinically meaningful and numerically greater improvements on various efficacy measures, including the MADRS total score, according to the company's announcements.
Looking forward, Axsome Therapeutics plans to conduct another phase 3 trial for MDD patients with EDS in 2025, encouraged by the positive outcomes observed in this subgroup.
From a financial perspective, Axsome Therapeutics (AXSM, Financial) is currently evaluated at a GF Value of $150.60 GF Value, suggesting that the stock might be modestly undervalued. The company's market capitalization stands at approximately $5.32 billion. Despite the recent stock price drop, Axsome's Altman Z-score of 3.6 reflects strong financial strength, indicating that the company is unlikely to face bankruptcy in the near term.
However, investors should note the presence of one medium-level and one severe warning sign, particularly regarding the Sloan ratio, which indicates poor quality of earnings. Additionally, there was insider selling activity over the past three months, with 15,000 shares sold. On a positive note, Axsome's Beneish M-Score indicates that the company is unlikely to be a manipulator.
In conclusion, while Axsome Therapeutics (AXSM, Financial) faces challenges in the short term related to its clinical trials and current stock decline, its financial metrics suggest stability. Potential investors should consider both the clinical potential of its pipeline products and current financial evaluations before making investment decisions.
