Axsome Shares Up 20% in a Month: How Should You Play the Stock?

Axsome Therapeutics AXSM delivered a strong performance over the past month, with its shares rallying 20.2% compared with the industry’s rise of 2.5%. The stock has also outperformed the sector and the S&P 500 index, as shown in the chart below.

The company’s lead drug, Auvelity (AXS-05), has witnessed strong sales uptake since its approval and launch. The drug currently contributes the majority of Axsome’s revenues. Earlier this month, the company reported better-than-expected second-quarter 2025 results.

Let us delve deeper and take a closer look at what’s happening with Axsome and how we should approach things.

AXSM’s Auvelity Witnessing Robust Sales

Auvelity, approved for treating major depressive disorder (MDD), was the first approved product in Axsome’s commercial portfolio.

Auvelity recorded sales worth $215.9 million in the first half of 2025, reflecting an increase of 82.3% on a year-over-year basis, driven by an increase in unit sales volume. The momentum is likely to continue in the second half of 2025. Our model estimates Auvelity sales to witness a CAGR of around 42.7% for the next three years.

Axsome is also developing Auvelity in several label expansion studies for other central nervous system (CNS) disorders like Alzheimer’s disease (AD), agitation and smoking cessation.

Axsome plans to submit a supplemental new drug application (sNDA) for Auvelity to the FDA for treating AD agitation later in the third quarter of 2025. Axsome also plans to start a pivotal phase II/III study of Auvelity for treating smoking cessation later in the fourth quarter of 2025.

A potential approval for Auvelity for additional indications is likely to boost sales further and drive AXSM stock in the future quarters.

AXSM's Other Drugs and Pipeline Candidates Maintain Momentum

Besides Auvelity, another key revenue driver for Axsome has been its narcolepsy drug, Sunosi (solriamfetol). Axsome acquired U.S. rights to Sunosi from Jazz Pharmaceuticals JAZZ in May 2022.

In the first half of 2025, Sunosi generated sales of $53 million, reflecting a 25.6% increase year over year. The acquisition of Sunosi from Jazz diversified the company’s commercial portfolio.

Sunosi is also being evaluated in separate phase III studies for treating attention deficit hyperactivity disorder, MDD, binge eating disorder and excessive sleepiness associated with shift work disorder.

Meanwhile, the FDA approved Axsome’s newest product, Symbravo (meloxicam and rizatriptan), for the acute treatment of migraine with or without aura in adults in January 2025. The drug, which was launched in the United States in June, has further solidified Axsome’s commercial footprint in the target market.

Axsome’s other CNS pipeline candidates are also progressing well. AXS-12 is currently being developed in multiple studies for the treatment of narcolepsy. A new drug application (NDA) for AXS-12 for treating cataplexy in patients with narcolepsy is expected to be submitted in the fourth quarter of 2025.

Competition in AXSM’s Target Market & Pipeline Setbacks

Though Axsome is riding on the success of Auvelity and other commercial activities, competition looms large in the target market as some companies are also developing treatments to address various CNS disorders. Acadia Pharmaceuticals ACAD is one such company that currently markets its lead drug, Nuplazid (pimavanserin), for a CNS disorder.

ACAD’s Nuplazid was the first and only drug approved by the FDA for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis. Acadia is also developing other pipeline candidates targeting various other CNS disorders.

Sunosi is also likely to face competition from Jazz’s sleep disorder drugs, which hold a strong market share.

Meanwhile, Axsome recently received a Refusal to File letter from the FDA related to its NDA for its pipeline candidate, AXS-14 (esreboxetine), for the management of fibromyalgia. Such setbacks do not bode well for the company, as these are likely to delay the potential approval for AXS-14, which could have given Axsome a new marketed product.

AXSM’s Valuation & Estimates

From a valuation standpoint, Axsome is trading at a premium to the industry. Going by the price-to-sales (P/S) ratio, the company’s shares currently trade at 12.16, higher than 2.12 for the industry. The stock is trading below its five-year mean of 14.93.

The Zacks Consensus Estimate for 2025 loss per share has widened from $3.26 to $3.41 over the past 30 days. During the same time frame, earnings per share estimates for 2026 have decreased from $1.36 to 92 cents.

Conclusion

Axsome’s recent rally has been positive, given the robust sales performance of Auvelity. The steady performance of Auvelity and Sunosi, along with the recent drug approval and encouraging pipeline progress, should help the stock gain further.

However, competition in the target remains a concern. Any failure in ongoing studies and pipeline/regulatory setbacks will hurt growth prospects.

We advise a wait-and-watch stance for prospective investors as of now. Those who already own the stock can stay invested. The successful development and potential approval of Auvelity for additional indications, along with successful data readouts from its planned pipeline studies, will be an important catalyst for the stock.

Axsome Therapeutics, Inc. Price

Axsome Therapeutics, Inc. price | Axsome Therapeutics, Inc. Quote

AXSM's Zacks Rank

Axsome currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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