Why Axovant Is Getting Absolutely Crushed

By Chris Lange Updated Jan 12, 7:48AM EST · Published Sep 26, 8:50AM EDT

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Why Axovant Is Getting Absolutely Crushed — © Thinkstock

Axovant Sciences Ltd. (NASDAQ: AXON) shares cratered early on Tuesday after the firm provided an update from its late-stage Alzheimer’s trial. Specifically, the firm gave an update from its Phase 3 Mindset clinical trial of its investigational drug intepirdine in patients with mild to moderate Alzheimer’s disease who were receiving background donepezil therapy.

Although Axovant has made an incredible run so far in 2017, it seems that after this failed trial that the stock is giving most of it back. Excluding Tuesday’s move, the stock was up 95% year to date, and over the past 52-weeks the stock was up 59%.

Ultimately, the trial did not meet its co-primary endpoints. Patients did not experience improvement in cognition or in measures of activities of daily living as measured by the Alzheimer’s Disease Assessment Scale-Cognitive Subscale and by the Alzheimer’s Disease Cooperative Study-Activities of Daily Living scale.

Separately, the Headway trial studying intepirdine in patients with dementia with Lewy bodies (DLB) remains on track to report topline results at the end of 2017. Intepirdine has received Fast Track designation from the U.S. Food and Drug Administration for the treatment of DLB.

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David Hung, M.D., CEO of Axovant, commented:

While we are deeply disappointed by these trial results, we also are saddened for the millions of patients and families impacted by Alzheimer’s disease. However, we believe that the fight against Alzheimer’s and other important areas of unmet need in neurology is too important to be derailed by this setback. We are grateful to the investigators, patients and caregivers who participated in this important trial and supported us in this journey. Moreover, we remain committed to advancing our pipeline, which includes our Phase 2b HEADWAY study of intepirdine, and nelotanserin, our highly selective inverse agonist of the 5-HT2A receptor in Phase 2 development, both of which are being evaluated in patients with dementia with Lewy bodies.

Shares of Axovant closed Monday down 3% to $24.25, with a consensus analyst price target of $29.25 and a 52-week range of $11.01 to $27.98. Following the release, the stock was down about 73.5% to $6.43 in early trading indications Tuesday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.