Axsome jumps on the happy train

Sage Therapuetics was not the only company to enjoy a huge share price boost thanks to encouraging depression data yesterday. Axsome Therapeutics saw its stock jump 161% following news that its lead asset, AXS-05, appeared to work in the usually intractable major depressive disorder. The data were only from a phase II trial but the result was impressive, particularly as multiple companies have tried and failed in MDD, Alkermes being a notable recent casualty. And in a perfectly executed move from the small biotech playbook, Axsome also took the opportunity to raise $23.3m via an existing at-the-market facility that, given the timing of the data, looks incredibly fortuitous. The sums raised from ATMs tend to be small and are therefore relatively non-dilutive, so investors might want to brace themselves for a larger and more painful cash call – Axsome shares opened up 25% higher today and the company wants to push its other products through development. Given that the group’s market cap sits at only $250m, compared with $6.5bn for Sage, investors may be hoping that the short-term inconvenience of a secondary raise will soon be mitigated by an acquisition offer.