Axsome (AXSM) Q2 2026: 96 Cents Of Selling Cost Per Dollar Sold

Axsome Therapeutics (AXSM) Q2 2026 — Q2 2026 (quarter ended June 30, 2026): a GAAP loss of $(0.99) per share against a $(0.89) bar - an 11% MISS - on total revenue of $218.4M, up 45.5% but below the $221.1M estimate. A double miss. The 8-K was EDGAR-accepted at 7:05 a.m. Eastern on Aug 10, so Aug 10 IS the reaction: $212.74 to $220.89, UP 3.83% on 1.4M shares against a ~700k average. It has since given the move back, closing $214.66 on Aug 12. Axsome missed on earnings and missed on revenue, and the stock closed UP 3.8% on double the normal volume. The market was not reading the income statement. One expense line moved: SG&A went from $130.3M to $208.1M, up 59.8%, while revenue grew only $68.3M - so the cost line grew $9.6M MORE than the revenue line in a quarter where revenue rose 46%. Axsome now spends 96 cents of selling cost for every dollar of product it sells. THE CALL: AVOID (3/5, THE DRUGS WORK - THE MARGIN INFLECTION HAS NOT STARTED) — base-case value ~$180.0 vs ~$214.66 today. KEY METRICS: - CALL: AVOID, 3/5. Fair value $180 vs the $214.66 close of Aug 12 - about 16% BELOW the tape, and far under the Street's $274.59 average. Owner-earnings DCF does not apply: Axsome has NEVER produced positive free cash flow. Method is path-to-profitability plus a reverse-DCF, probability-weighted: 35% the margin inflection lands on the Street's timetable ($267), 45% it slips ~2 years ($159), 20% the Alzheimer's launch disappoints ($75). Weighted: $180. - THE ANGLE - THE COST LINE IS THE WHOLE QUARTER: revenue grew $68.3M year on year; SG&A grew $77.9M, to $208.1M against $216.4M of net product revenue - 96.2 cents of selling cost per dollar sold. R&D actually FELL 6.7% to $46.2M. Every other line was flat. Sequentially SG&A ran $185.0M to $208.1M, up 12.5%. FY2025 SG&A was $570.6M in total; this ONE quarter is 36.5% of it, and annualises to $832M. - THE FLOAT - WHY CASH LOOKS FINE: cash fell just $3.1M ($322.9M to $319.9M) across a half-year with a $115.9M net loss. Operating activities used $53.7M. The gap was filled by $51.9M of employee option exercises and ESPP, $19.8M from the ATM, and a $54.4M rise in accrued rebates ($150.2M to $204.6M) - now 95% of one quarter's net product sales. DSO stretched ~105 to ~116 days. - THE PRINT: total revenue $218.4M +45.5% ($216.4M of it product). Auvelity $180.3M +51%; Sunosi $35.8M +20%; Symbravo $2.3M. Gross margin 93.7%. Operating loss $(49.6)M, margin -22.7%. Net loss $(51.3)M, $(0.99)/sh; SBC $27.1M was 52.8% of it. Cash $319.9M vs $190M of Blackstone debt ($70M current). Guidance in full: 'sufficient to fund operations into cash flow positivity' - no date. What to watch: UP: Q3 SG&A printing FLAT against this quarter's $208.1M; the +126% new-to-brand Alzheimer's signal converting into revenue; quarterly revenue crossing $242M, which is cash breakeven at a frozen cost base. DOWN: SG&A above $225M in November; the $204.6M gross-to-net accrual outgrowing revenue again; the remaining $90M Blackstone term loan being drawn. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.