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Forecast: This growth share could double by 2023

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biotech company Exsome therapies (AXSM -1.76%) has had a strong – albeit somewhat volatile – stock market year. Shares of the company are up nearly 50% since early January. Axsome owes this performance to significant regulatory developments.

In fact, if all goes according to plan, the company could have even brighter days ahead. Let’s see why Axom Therapeutics stock could crush the market again next year.

There must be a clear increase in turnover

Axom Therapeutics received approval for Ovelty in August. Ovality is a treatment for major depressive disorder (MDD). Of course, this drug is not yet generating revenue, but that should change in the coming quarters as it becomes more widely available in the US. Ovality will help Axom Therapeutics, a clinical stage company at the beginning of the year, improve its financial situation.

The therapy comes at a time when problems with mental illness are becoming more common, as is the awareness surrounding them. According to the US Centers for Disease Control and Prevention (CDC), the frequency of anxiety and depression among adults in the US experienced an epidemic wave, peaking between December 2020 and January 2021.

Although it later declined, it remains above pre-pandemic levels. Meanwhile, the percentage of American adults receiving mental health treatment is projected to increase from 19.2% in 2019 to 21.6% in 2021, according to the CDC. With more people suffering from mental health problems and seeking help to manage these problems, we can expect even greater acceptance of treatments such as Ovelty.

In clinical trials, Ovality successfully reduced depressive symptoms within two weeks in some patients, with sustained improvements over 12 months. In my view, the drug could reach more than $1 billion in annual sales in the treatment of MDD, though not as early as next year.

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Axom Therapeutics’ other product is Sanosi, which treats excessive daytime sleepiness associated with narcolepsy. In the third quarter, the biotech reported $16.8 million in revenue, all coming from Sanosi. This drug was first approved in 2019. Axsome has it Jazz Pharmaceuticals In May.

Between Sunosi and Auvelity, Axsome Therapeutics’ top line will look more respectable in 2023.

lots of progress in the pipeline

As important as revenue growth next year will be for Axom Therapeutics, pipeline progression should be just as important (if not more so). The company initiated a Phase 3 clinical trial in September for Ovality as a potential treatment for the movement disorder of Alzheimer’s disease (AD). Axom expects to have data read from another late-stage clinical trial for Ovality in the treatment of AD agitation by the end of the year.

Axom Therapeutics is also planning a Phase 2/3 trial to evaluate its effectiveness in smoking cessation. While it has not announced when this research will start, it should be ready next year. About 40 million Americans smoke, 70% of whom say they want to quit. But only 3% to 5% of smokers who try to quit without help succeed within six months to a year.

Elsewhere, Axom Therapeutics is conducting a Phase 3 trial for AXS-12, a potential treatment for narcolepsy, and expects topline data from this trial in the first half of 2023. Then there’s AXS-14, an investigational drug for fibromyalgia. (a chronic condition that causes symptoms such as body aches and sleep disturbances). Axom expects to have regulatory filing for this drug next year.

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There’s also Sanosi, which should start a late-stage trial before the end of the year as a potential ADHD treatment.

Finally, Axom Therapeutics should also make progress on its potential migraine treatment, AXS-07. The U.S. Food and Drug Administration declined to approve it in May, but the biotech plans to reapply for the therapy in the third quarter of 2023 after discussions with regulators.

To recap, Axom Therapeutics should have two Phase 3 data readouts in the next 13 months, two major regulatory filings (or resubmissions in the case of AXS-07), and two programs to move forward into studies in a late stage. Must be moved on. For a biotech company valued at just $2.5 billion, these catalysts could help drive its share price much higher.

nevertheless a bargain

Of course, no one can say for sure that Axom Therapeutics’ shares will double in the coming year. Market-wide problems can hinder the progress of the drug maker. But even if Axom doesn’t quite reach this lofty goal, the biotech company has plenty of potential catalysts that could help improve its long-term outlook. That’s why the company’s stock still looks like a buy, even after a solid run over the past six months.

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