Why Axsome Therapeutics Stock Is Sinking Today

Core Viewpoint - A short-seller report by Culper Research has led to a significant sell-off of Axsome Therapeutics' stock, with shares declining by 6.8% following the allegations regarding the company's revenue practices related to its depression drug Auvelity [1] Group 1: Allegations and Impact - Culper Research claims that Axsome's commercialization of Auvelity involves undisclosed consignment deals with questionable mail-order pharmacies, which allegedly inflate script counts and reported revenues [1] - The report is based on interviews with former sales representatives, pharmacies, prescribing physicians, and patients, raising concerns about the legitimacy of Axsome's revenue [2] - A significant concern is that Axsome's recorded revenue may not be collectible if prescriptions are filled without prior authorizations, leading to potential financial repercussions for the company [2] Group 2: Financial Implications - Since the launch of Auvelity in October 2022, Axsome's receivables have increased from $20.4 million to $101.4 million, indicating a potential risk of uncollectible revenue [2] - If the allegations are substantiated, Axsome may need to restate its revenue and write down accounts receivable, which could lead to a substantial decline in stock value [3] Group 3: Investor Guidance - As of the report's publication, Axsome Therapeutics had not publicly addressed the allegations, leaving investors uncertain about the company's position [4] - Investors are advised to wait for the company's response before making any decisions regarding their holdings or potential purchases of Axsome shares [4]