In a market stuffed with hundreds of micro-cap companies, AXSM stock could be called a break-out success. Because in only four months, Axsome Therapeutics (NASDAQ:AXSM) went from being a $3 penny stock to a lot more.
Let’s check out one of the hottest small-capped companies at present and see what happened.
Back in January, AXSM shares were selling for anywhere around the $3 USD mark. In fact, the year prior saw these shares climb to highs just over $4… but no further. A stagnating stock, Axsome Therapeutics looked like a typical small-cap biopharmaceutical company trying to catch its break in a tough market.
But then on the weekend of January 5th, 2019, all that changed. AXSM stock surged on the report of positive results from a phase 2 clinical study on its experimental drug AXS-05. This drug—developed to treat major depressive disorder (MDD)—beat established drug Bupropion in improving the symptoms of depression.
This fact was a cherry on top for investors. The news sent AXSM stock soaring 468%.
News surrounding AXS-05 has only continued the bullish sentiment. Earlier this month, shares climbed again when another phase 2 study showed that the drug “met the prespecified primary endpoint of significantly curbing the habit of daily smoking.”
Another cherry, because it beat Bupropion in this area too.
The Volatility in Bio-Pharma
But looking at the same period in 2018, we see a completely different story for Axsome. The clinical stage biopharmaceutical company had suffered a failure that pummeled shares. AXSM stock fell by 37% after a treatment trial for complex regional pain syndrome (CRPS) was halted.
The trial, named CREATE-1, was stopped following a recommendation by the independent data monitoring committee (IDMC) due to ‘futility’.
This is one of the reasons investors love or loath investing in micro-capped companies. Especially in the biopharmaceutical sector, trial successes or failures can make or break a stock respectively.
AXSM stock is now on a high selling for nearly $15 a share. It’s a prime example of how one success can snowball for a company; the surge has sustained itself and appears to be continuing.
According to RNSDaily:
“Experts from research firms are bullish about the near-term performance of Axsome Therapeutics, Inc. with most of them predicting a $28.25 price target on a short-term (12 months) basis.”
With analysts setting an average price target that shows a further 82.49% ahead, its no surprise that all eyes are on AXSM stock. Further, if it hits this target, Axsome’s market cap will surge to $888.18 million.
A micro-capped company with heaps of potential still ahead, is AXSM on your radar now?
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