Is Axsome Therapeutics a Buy?
Success stories such as Axsome Therapeutics (NASDAQ: AXSM) are rare in the world of investing, but the company is proof that such opportunities do exist, and that individual investors can take advantage of them.
In late 2018, Axsome Therapeutics sported a market cap of less than $100 million and was generally an afterthought among analysts. That changed over the course of 2019, when the tiny company's lead drug candidate delivered promising results in a depression disorder, while the rival candidate being developed by a more closely watched competitor flopped in a late-stage trial. By the end of 2019, Axsome Therapeutics was valued at close to $4 billion.
The pharmaceutical stock's performance has been relatively volatile in 2020. Of course, the coronavirus pandemic has injected significant uncertainty into the industry and the global economy broadly. But investors have also been weighing a disappointing clinical result in a separate depression study against promising results from Axsome's other pipeline drugs. Given all the moving parts and the stock's relatively pricey valuation, investors might wonder if too much anticipation of success has been priced into the shares. Is Axsome Therapeutics a buy or is it overvalued?
Source Fool.com
