Citi disagrees with Axsome short report, says buy on weakness

Citi says Axsome Therapeutics shares were weak Tuesday in response to a circulating short report that claims nefarious business practices related to Auvelity revenue and prescription recognition. The firm believes the report is inaccurate. “While a bear thesis can help sharpen thinking around risks to the business,” the claims in the report are overstated, relying on distortion of standard industry practices and selected anecdotes that are not representative of the broader payor landscape, the analyst tells investors in a research note. Citi says Axsome is launching its first commercial product and the launch is accelerating, which will bring a step up in accounts receivable. It would be buyers on the share weakness and reiterates a Buy rating on Axsome with a $125 price target.