TKP Masthead

Hype Cycle Alert: Play This Biotech Breakout For Big Gains

Welcome to your Hype Cycle Insider report!

Remember, these monthly bonus reports exclusively for Technology Profits Confidential PRO readers pull back the curtain on a stock that's ramping up the innovation curve so that you can act before mainstream investors are paying attention.

Driven by a spate of high-profile buyouts since spring, biotech has been hot! The S&P Biotech ETF, which tracks the biotech sector, has risen 20% since early April. 

Biotech buyouts are driven by Big Pharma greed. Commercial-stage pharmaceutical companies own perishable assets in the form of patent drugs, drugs which can suddenly be worth much less when they come off patent and generic competition hits.

So, besides internal research and development, pharmaceutical companies with enough cash often go out and buy promising junior players—biotechs--with assets either looking like they will succeed in the market, or are already doing so. 

Axsome Therapeutics (NASDAQ: AXSM) could be one of those companies. The $3.69 billion company has been trading in a range all year, but earlier this month started to break out, suggesting higher share prices are in its future.


Investors have good reason to get excited about Axsome. The company has been developing a new drug to treat major depressive disorder. The drug, called AXS-05, targets receptors of the central nervous system. 

AXS-05 is a proprietary formulation consisting of two components. One is dextromethorphan (DM), a common component of cough suppressants. The second is bupropion, an existing antidepressant. The combination drug is formulated in such a way as to inhibit the metabolism of DM, so it can stay in the brain longer, where it can modulate an array of cell receptors and neurotransmitters. Bupropion itself is used to treat depression, where it affects neurotransmitters like dopamine as well as norepinephrine. Combining the two is synergistic, with bupropion increasing the bioavailability of DM.

In Phase 3 trials AXS-05 showed a marked diminution in depressive symptoms, with 53% scoring improvements compared to only 33% on placebo. On another measure, 47% of patients reported feeling much, or very much improved when taking the drug.

Success in this Phase 3 trial sets Axsome up for a new drug application at the FDA, something it plans to do in the fourth quarter of this year. Since AXS-05 has already received Breakthrough Therapy Designation from the FDA, I believe it is highly likely Axsome will see this drug receive priority review, too. Priority means the review and decision on AXS-05’s application would only take 6 months instead of 10 months.

The FDA approved Axsome’s depression treatment last October, and the company is steadily growing sales numbers. But AXS-05 is also in Phase 3 clinical development for Alzheimer’s Disease agitation, as well as a smoking cessation aid. Add to that an additional three drugs in the pipeline. One drug is AXS-07, which the company expects to file for regulatory approval next quarter for migraines. Another, AXS-12, is expected to generate results from a Phase 3 trial in narcolepsy later this month.

But the real shocker is what Axsome believes its drugs will generate in terms of sales. Axsome expects that once approved, its stable of new drugs could pull in up to $11.5 billion, implying a huge upside from its current price. Even analysts' forecasts, which don’t include the sales potential for all of Axsome’s drugs, range up to $4.5 billion per year—still a huge opportunity at current prices. 

That makes this month’s breakout in AXSM shares a great buy opportunity.

Consider buying shares of Axsome Therapeutics (NASDAQ: AXSM)

Important Note: As a reminder, Hype Cycle Insider picks are an exclusive bonus benefit for Technology Profits Confidential PRO readers like you but they aren’t official Tech Profits Confidential recommendations. That means we won't track this stock in our model portfolio. If you choose to buy, plan your entry and exit carefully. Never invest money you can't afford to lose.

Want More Technology Profits Confidential Pro?

Do you like this content? Would you like to know more? Because we have this and much more to share with you. Get started today!

Crypto’s Countdown to Blastoff

Here’s your Investment Network update...

Read More

shutterstock 529374745

Can Silver Do What Cocoa Just Did?

With prices exploding in the cocoa space, could silver replicate the huge run-up as well? Senior geologist Byron King explains the cocoa price explosion and provides the case for investing in the silver space before price momentum takes off.

Read More

FED RECAP: What Markets and The Media Aren’t Telling You

Jim gives a recap of the March FOMC meeting and the Fed’s latest expectations on cutting rates this year. He analyzes Jay Powell’s post-meeting comments and provides insight on a key conclusion that you won’t hear anywhere else in financial media. Read Jim’s special report in full.

Read More

Small Cap Comeback: A Big Opportunity for Wall Street's Smallest Stocks

While mega-cap stocks have been some of the year’s best performers, small caps have been left in the dust. In this issue, you’ll see why small-cap stocks are finally ready to make a big comeback.

Read More

Amazon Puts Robots To Work

Amazon just took a big leap in the robotics department. Here’s everything you need to know…

Read More

Inner Circle Elite: Going Wild in the Metaverse

In order for the metaverse to be successful, it will need some amazing content that draws in users. One metaverse project has us especially excited. Check it out here…

Read More

Here’s Why You Should Own Royalty Companies

Investors have abandoned energy stocks after oil’s recent price retreat. But economic strength here in the U.S. provides a floor for crude prices while policy pivots in China could be a catalyst for an explosive oil breakout.

Read More

FED RECAP: Powell Ruins The Party

Jim gives a recap of the January FOMC meeting and the Fed’s latest policy announcement. He analyzes Jay Powell’s comments on the chance of rate cuts this year and why Powell threw a bucket of ice water on the market’s euphoria. Read Jim’s special report in full.

Read More

The AI Rabbit That Stole the Show

This little gained major popularity at CES. Here’s everything you need to know…

Read More

Rickards Uncensored Call (with Byron King 1/5/2024)

We’re setting up for an election year and truth and reality are getting more difficult to discern. During today’s call, Byron presented several Democratic narratives that are going to die this year.

Read More