By Sam Boughedda
Investing.com -- Axsome Therapeutics Inc (NASDAQ:AXSM) stock plunged over 18% Friday, closing below $30.
According to Morgan Stanley (NYSE:MS) analyst Vikram Purohit, the "outsized pressure" may relate to the company's cancellation from an upcoming broker conference.
The analyst wrote in a note that they received an update from Axsome management regarding today's pressure. The update confirmed the company is unable to attend the conference in-person due to a scheduling conflict.
Purohit pointed to Axsome management guidance of potential action by the Food and Drug Administration on the New Drug Application for depression treatment AXS-05, explaining that "given the high degree of investor focus & perceived uncertainty regarding this catalyst, some investors may see the cancellation as reason for caution regarding a potential AXS-05 update."
"However, mgt noted in their update that they will be conducting investor meetings virtually and noted that the company is not aware of additional negative developments," he wrote.
"We continue to see the expected upcoming FDA action on AXS-05 as a significant catalyst for AXSM, and anticipate +40%-60% upside upon news of an approval or entry into labeling discussions and 50%+ pressure from the announcement of a CRL and/or additional deficiencies," the analyst added.