Axsome Therapeutics (AXSM) Drops 7.58% Amid FDA Setback

Axsome Therapeutics (AXSM) shares fell 0.11% today, marking the fifth consecutive day of decline, with a total drop of 7.58% over the past five days. The stock price hit its lowest level since April 2025, experiencing an intraday decline of 2.26%.

The strategy of buying AXSM shares after they reached a recent low and holding for one week yielded a 52.10% return, slightly underperforming the benchmark return of 56.81%. The strategy had a maximum drawdown of -30.98%, a Sharpe ratio of 0.43, and a volatility of 43.59%. The CAGR was 18.78%.

One of the primary factors contributing to the recent decline in Axsome Therapeutics' stock price is the receipt of a Refusal to File (RTF) letter from the FDA regarding their New Drug Application for AXS-14 (esreboxetine). This regulatory setback has raised concerns among investors about the company's ability to bring new products to market, potentially dampening investor sentiment and stock performance.

Despite the recent challenges, there have been positive developments that could influence investor perception. Morgan Stanley analyst Vikram Purohit maintained a bullish stance on AXSM stock, assigning it a Buy rating on June 11, 2025. This endorsement from a prominent analyst may help to mitigate some of the negative impact of the RTF letter and provide a more balanced view of the company's prospects.

Additionally, the average price target for AXSM suggests a forecasted 69.62% upside from the current price of $101.60. This optimistic outlook reflects positive market expectations and could serve as a catalyst for future stock price appreciation, assuming the company can navigate the current regulatory hurdles and deliver on its pipeline promises.

Ask Aime: Will Axsome Therapeutics' recent stock decline continue?