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Axsome Therapeutics Stock Rises 36% In A Month But Will The Rally Continue?

[Updated: 9/17/2021] AXSM Stock Rise

A couple of months back we discussed that Axsome Therapeutics (NASDAQ: AXSM) stock is likely to rebound after it fell nearly 20% in a month following the U.S. FDA’s decision to pull the breakthrough therapy designation of AXS-12, the company’s drug used for the treatment of narcolepsy. But the company faced another setback in early August when the U.S. FDA identified deficiencies related to AXS-05 – Axsome’s drug for major depressive disorder. AXS-05 is a promising drug with its peak sales pegged to be north of $1 billion, and with the regulator’s findings, investors were concerned over a possible delay for the AXS-05 launch. This sent the stock crashing over 45% in a single trading session on August 9.

However, over the last month or so, AXSM stock has seen a gradual rise of 36% to levels of $29 currently. The stock has seen 6% growth in the last five trading days. The recent uptick can be attributed to multiple positive developments for Axsome. Firstly, the company has now begun the phase three trials for AXS-12, and the U.S. FDA has also accepted its new drug application for AXS-07 – a drug used for migraine treatment. Also, the regulator missed its August 22 action date for AXS-05, and the company has stated that it was not asked for any additional information on the drug. Investors are now hoping that the deficiencies identified may not be serious.

But will AXSM stock continue its upward trajectory over the coming weeks, or is a fall in the stock imminent?

According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using six years of historical data, returns for AXSM stock average around 12.5% in the next one-month (twenty-one trading days) period after experiencing a 6.4% rise over the previous week (five trading days), implying that the stock will likely continue to rise in the near term.

More importantly, if the FDA’s decision around AXS-05 is positive, it will likely result in a large rally in AXSM stock. After all, it was the development around AXS-05 that resulted in AXSM stock plummeting nearly 50% from its July levels and despite the recent rise, it is still way below those levels. But how would the returns fare if you are interested in holding AXSM stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Axsome Therapeutics stock chances of a rise. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

If AXSM stock moved by 5% over five trading days, then over the next twenty-one trading days AXSM stock moves an average of 11%, with a good 52% probability of a positive return over this period, based on the stock’s historical performance.

Some Fun Scenarios, FAQs & Making Sense of Axsome Therapeutics Stock Movements:

Question 1: Is the expected return for Axsome Therapeutics stock higher after a drop?

Answer: Consider two situations,

Case 1: Axsome Therapeutics stock drops by -5% or more in a week

Case 2: Axsome Therapeutics stock rises by 5% or more in a week

Is the expected return for Axsome Therapeutics stock higher over the subsequent month after Case 1 or Case 2?

AXSM stock fares better after Case 2, with an expected return of 9.2% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an expected return of 11.1% for Case 2.

In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days under Case 1, and an expected return of just 0.5% for Case 2 as detailed in our dashboard that details the expected return for the S&P 500 after a rise or drop.

Try the Trefis machine learning engine above to see for yourself how Axsome Therapeutics stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Axsome Therapeutics stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For AXSM stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Axsome Therapeutics after a larger loss over the last week, month, or quarter.

Question 3: What about the expected return after a rise if you wait for a while?

Answer: The expected return after a rise is understandably lower than after a drop as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although AXSM stock appears to be an exception to this general observation.

It’s pretty powerful to test the trend for yourself for Axsome Therapeutics stock by changing the inputs in the charts above.

 

[Updated: 7/22/2021] AXSM Stock Decline

The stock price of Axsome Therapeutics (NASDAQ: AXSM), a biopharmaceutical company focused on developing novel therapies for central nervous system conditions, has seen a 19% drop over the last twenty-one trading days, while it is down 30% over the last year. Last month, we discussed that AXSM stock is more likely to see lower levels, going by the stock’s historical performance. That said, the recent decline in AXSM stock can be attributed to the U.S. FDA pulling the breakthrough therapy designation of AXS-12, the company’s drug used for the treatment of narcolepsy.

However, the selling based on this development appears to be unwarranted. The breakthrough designation for AXS-12 being revoked was for cataplexy as a condition in narcolepsy. The company does not expect any change to its timeline for clinical trials in the light of this development.

However, now that AXSM stock has seen a fall of 19% in twenty-one trading days, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of a rise in AXSM stock over the next monthOut of 186 instances in the last six years that AXSM stock saw a twenty-one day fall of 19% or more, 128 of them resulted in AXSM stock rising over the subsequent one month period (twenty-one trading days). This historical pattern reflects 128 out of 186, or about 69% chance of a rise in AXSM stock over the coming month. See our analysis on Axsome Stock Chances of A Rise for more details.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  1. After moving 0.5% or more over a five-day period, the stock rose in the next five days on 47% of the occasions.
  2. After moving -10.0% or more over a ten-day period, the stock rose in the next ten days on 47% of the occasions
  3. After moving -19.0% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 69% of the occasions.

Predict average return on Axsome Therapeutics (AXSM) Stock Return: AI Predicts AXSM Average and Excess Return After a Fall or Rise

Axsome Therapeutics (AXSM) Stock Return (Recent) Comparison With Peers And S&P500

  • Five-Day Return: FLXN highest at 13%; SPY lowest at -0.4%
  • Ten-Day Return: FLXN highest at 2.1%; AXSM lowest at -10%
  • Twenty-One Days Return: SPY highest at 3.3%; ENDP lowest at -25%

 

[Updated: 6/18/2021] AXSM Stock Rise

The stock price of Axsome Therapeutics (NASDAQ: AXSM), a biopharmaceutical company focused on developing novel therapies for central nervous system conditions, has seen a 13% rise over the last twenty-one trading sessions. In a recent development, the company announced that it plans to submit a new drug application for one of its pipeline candidates – AXS-14 – a treatment for fibromyalgia, in Q4 2022. The peak sales for AXS-14 are estimated to be in the range of $500 million to $1.0 billion.

Now that AXSM stock has seen a rise of 13% in twenty-one trading days, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a higher chance of a rise in AXSM stock over the next month. Out of 341 instances in the last six years that Axsome stock saw a twenty-one day rise of 13% or more, 176 of them resulted in AXSM stock falling over the subsequent one month period (twenty-one trading days). This historical pattern reflects 176 out of 341, or about 52% chance of a rise in AXSM stock over the coming month. See our analysis on Axsome Therapeutics Stock Chances of Rise for more details.

Twenty-One Days: AXSM 13%, vs. S&P500 2.5%; Outperformed market

(24% likelihood event; 52% probability of rise over next 21 days)

  • Axsome Therapeutics stock rose 13% the last twenty-one trading days (one month), compared to the broader market (S&P500) rise of 2.5%
  • A change of 13% or more over twenty-one trading days is a 24% likelihood event, which has occurred 341 times out of 1444 in the last 6 years
  • Of these 341 instances, the stock has seen a positive movement over the next twenty-one trading days on 176 occasions
  • This points to a 52% probability for the stock rising over the next twenty-one trading days

Five Days: AXSM -2.9%, vs. S&P500 -0.2%; Underperformed market

(34% likelihood event; 53% probability of rise over next 5 days)

  • Axsome Therapeutics stock declined 2.9% over a five-day trading period ending 6/17/2021, compared to a broader market (S&P500) decline of 0.2%
  • A change of -2.9% or more over five trading days (one week) is a 34% likelihood event, which has occurred 486 times out of 1444 in the last 6 years
  • Of these 486 instances, the stock has seen a positive movement over the next five trading days on 257 occasions
  • This points to a 53% probability for the stock rising over the next five trading days

While AXSM stock may continue to rise, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Johnson & Johnson vs Quest Diagnostics.

Trefis  Market Beating Portfolios Trefis  Price Estimates

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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