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Expect More Downside In Axovant Sciences

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Expect More Downside In Axovant Sciences

Shares of Axovant Sciences Ltd (NASDAQ: AXON) plummeted more than 70 percent after the company's late-stage trial involving its therapy for the treatment of Alzheimer's failed to meet its primary objectives in a phase 3 study called MINDSET.

Investors thinking Axovant's stock can't see any additional downside after a 70-percent drop should consider what analysts at Chardan Capital Markets have to say. The firm's Gbola Amusa maintains a Sell rating on Axovant's stock with an unchanged $3 price target.

Axovant said it will no longer develop its intepirdine therapy after the disappointing phase 3 trial results, the analyst commented in a research report. Looking forward there are multiple events ahead including top-line results from the 269-patient HEADWAY Dlb trial of intepirdine in dementia and other studies that are "unlikely to support" the stock's price performance at current levels

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"We believe that for HEADWAY DLB to in fact be a registration study, HEADWAY DLB needs to show an intepirdine efficacy signal so strong that the probability of such a signal is extremely remote," Amusa wrote.

The analyst also highlighted a few other concerns, including:

  • "HEADWAY DLB has far less power than MINDSET, yet is still testing intepirdine for cognition and function in dementia patients."
  • "To us, MINDSET, along with late-stage trials for idalopirdine and PF-05212377, were a test (and a failure) of the acetylcholine hypothesis on 5HT6 antagonist use in dementias to improve cognition and/or function."
  • "We note a lack of convincing support that 5HT2A antagonism, on top of 5HT6 antagonism, by intepirdine should affect outcomes in DLB."

At time of publication, shares of Axovant Sciences were up roughly 3 percent at $7.96.

Related Links:

Analyst Says Axovant's Bull Case Is Effectively Over

Axovant Fails To Pull The Sword From The Stone; Alzheimer's Drug Fails

Latest Ratings for AXON

DateFirmActionFromTo
Dec 2018JefferiesUpgradesHoldBuy
Jan 2018Cowen & Co.DowngradesOutperformMarket Perform
Jan 2018Chardan CapitalUpgradesSellNeutral

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