On April 2, President Donald Trump launched a barrage of steep tariffs, dubbing it “Liberation Day” and igniting a full-scale trade war between the U.S. and China. The markets recoiled, and stocks plummeted. While a partial rollback came a week later, the damage was done. The specter of a recession looms large, with major banks now pegging the odds north of 40%.
Amid this volatility, investors are flocking to recession-resistant plays - and biopharma is gaining favor. RBC analysts highlight that biotech stocks, particularly mid-cap names, may offer that rare blend of defense and upside. Historically, the sector has shown uncanny resilience in downturns, shedding minimal value when broader markets crater.
That brings us to New York-based Axsome Therapeutics (AXSM), a central nervous system (CNS) disorders-focused biopharma firm. With a trifecta of commercial products, surging revenues, and a pipeline laser-focused on depression and Alzheimer’s-related agitation, Axsome is holding ground and gaining momentum simultaneously.
RBC’s Leonid Timashev sees nearly 94% upside, citing fundamentals and growing demand in mental health treatments - needs that only deepen during economic stress.
Let’s take a closer look at this under-the-radar gem.
About Axsome Therapeutics Stock
Axsome Therapeutics (AXSM) is a biopharma innovator with a market capitalization of $5.1 billion, rewriting the treatment story for CNS disorders. Its FDA-approved therapies include Auvelity for depression, Sunosi for narcolepsy and sleep apnea, and Symbravo for migraines.
Beyond the market, Axsome is advancing late-stage trials for Alzheimer’s agitation, fibromyalgia, and narcolepsy. With research ties to Duke University, the company continues to push therapeutic boundaries, aiming to transform lives where unmet CNS needs still persist.
AXSM is currently sitting 26% below its February high of $139.13. Yet, the stock returned 18.7% over the past six months, cruising past the 7.1% loss of the S&P 500 Index ($SPX).
Despite the stock’s double-digit plunge, AXSM still commands a premium - trading at 12.4 times sales. That valuation hints at belief in its CNS pipeline power, and suggests the market’s not done betting on its next breakthrough.
Digging Into Axsome’s Q4 Financial Performance
The biopharma company’s Q4 earnings report, unveiled on Feb. 18, was a mixed bag. Net product revenue climbed 66% year over year to $118.8 million, narrowly beating expectations, powered by rising demand for Auvelity and Sunosi (solriamfetol). Auvelity sales led the charge with $92.6 million - an 89% jump - on 158,000 prescriptions. Sunosi followed with $26.2 million in revenue, up 16%, with its total prescriptions in the U.S. growing by 4% sequentially to 49,000.
Despite the top-line strength, Axsome incurred a loss of $1.54 per share, reminding investors that growth in biotech often comes with a price.
Axsome Therapeutics closed Q4 with R&D spending hitting $55 million, a 79% jump, fueling its bold pipeline ambitions. With $315.4 million in cash, the company is built to carry operations into profitability.
Axsome made key strides with AXS-05 completing a Phase 3 trial for Alzheimer's agitation, AXS-12 showing positive narcolepsy results, and AXS-14 nearing NDA submission for fibromyalgia in Q1 2025. These advancements highlight Axsome’s commitment to expanding its pipeline through focused R&D investments.
Axsome Therapeutics is optimistic about revenue growth, driven by upcoming product approvals and market expansion. Management plans to boost its sales force and prepare for launches, targeting increased CNS market share. Strong revenue growth and continued investment in commercial and R&D efforts are key priorities through 2025.
Analysts tracking Axsome Therapeutics anticipate fiscal 2025 loss to be $2.75 per share, narrowing by 30% year over year, signaling that Axsome’s red ink could be fading. Losses are projected to swing to a $2.49-per-share profit in fiscal 2026.
What Do Analysts Expect for Axsome Stock?
RBC’s Leonid Timashev gives a $190 price target on AXSM and stamps it with an “Outperform” rating, setting a confident tone. His bullish stance leans on Axsome’s resilient profile - a solid market cap, three FDA-approved CNS therapies, and rising revenues.
Timashev notes that recessionary headwinds shouldn’t derail Axsome - in fact, they may fuel demand, especially for Auvelity, its flagship depression treatment. As mental health issues rise in tough economic times, Timashev sees a surge ahead, forecasting $500 million in Auvelity sales by 2025.
Adding regulatory tailwinds from an Alzheimer’s agitation filing later this year and potential approval in 2026, investors could get a biopharma underdog with real momentum - one that’s drawing a line straight toward breakout territory.
Wall Street is upbeat on AXSM overall, with the stock having a “Strong Buy” consensus rating. Of the 18 analysts in coverage, 16 are highly bullish, recommending a “Strong Buy,” while two advise a “Moderate Buy.”
AXSM’s mean price target of $176.41 implies the stock has upside potential of 76% from the current price levels. The Street-high target of $216 suggests the stock could rally as much as 117%.
