Sam Boughedda

Investing.com — Axsome Therapeutics Inc Stock plunged more than 18% on Friday and closed below $30

Based on Morgan Stanley Analyst Vikram Purohit (NYSE:), believes that the “outsized” pressure could be related to cancellation of a broker conference.

In a note, the analyst stated that Axsome Management had provided an update on today’s situation. According to the update, the company was unable to make it to the conference due to scheduling conflicts.

Purohit pointed to Axsome management guidance of potential action by the Food and Drug Administration on the New Drug Application for depression treatment AXS-05, explaining that “given the high degree of investor focus & perceived uncertainty regarding this catalyst, some investors may see the cancellation as reason for caution regarding a potential AXS-05 update.”

He wrote that “Mgt” had noted in the update that they would be holding investor meetings via virtual means and that they were not aware of any other negative developments.

The analyst stated that they continue to view the FDA’s expected action on AXS-05, as a catalyst for AXSM. They anticipate +40%-60% upside upon the news of approval or entry in labeling discussions. Additionally, there will be 50%+ pressure following the announcement of CRLs and/or other deficiencies.