Karuna deal favorable for Axsome Therapeutics, says H.C. Wainwright

H.C. Wainwright says Bristol Myers’ (BMY) acquisition of Karuna Therapeutics (KRTX) has favorable implications for Axsome Therapeutics (ASXM). The valuation placed on Karuna, which does not have any approved products and only one late-stage asset, KarXT, currently under review at the FDA with a potential U.S. market entry only in Q4 of 2024, has highly positive implications for Axsome, given the company’s focus on the neuroscience domain and the fact that Axsome’s pipeline is more diversified as well as more mature than Karuna’s, the analyst tells investors in a research note. The firm says recent deal activity in neurology “should simply be considered further proof of Axsome’s undervalued status and potential attractiveness to strategic acquirers.” It reiterates a Buy rating on Axsome with a $180 price target.