Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



What's Got Axovant Sciences Jumping 10% Today?

What happened

Yesterday, shares in Axovant Sciences (NYSE: AXON  )  shot higher after management announced it has hired former Medivation CEO David Hung to be the company's next CEO. Today, shares climbed another 10% after the company announced it's shoring up its balance sheet with a $100 million stock offering. 

So what

It's common for companies to tap equity investors for funding following a big move up in share prices, but it's less common for news of an offering to cause share prices to increase.

Business people jump for joy on a beach on a summer day.


In this case, though, that's exactly what's happening. The addition of a proven leader like Hung is a coup for this Alzheimer's disease drug developer, and that seems to be outweighing worry that this stock offering will dilute current shareholders. 

In Hung, Axovant lands someone who successfully launched and commercialized a multibillion-dollar drug at Medivation, and then convinced Pfizer to fork over $14 billion to acquire Medivation last year.

Whether or not Hung can do that again at Axovant Sciences depends heavily on how late-stage trials pan out for the company's lead drug candidate, intepirdine. Results from a phase 3 study evaluating the use of intepirdine alongside Aricept are expected later this year.

Now what

Intepirdine is a 5-HT6-receptor antagonist that boosts the production of acetylcholine, a neurotransmitter important for cognition and brain function. Meanwhile, Aricept is a FDA approved drug that helps prevent the body from breaking acetycholine down. By dosing the two drugs together, Axovant Sciences hopes to boost acetycholine enough to reduce patient symptoms.

While this is an intriguing idea, intepirdine isn't the first 5-HT6 drug to be studied in trials, and unfortunately, those trials haven't been successes. For instance, Pfizer discontinued research on its 5-HT6 drug last year after a futility analysis showed its phase 2 trial wouldn't meet its endpoint.

Pfizer's disappointment added to a long string of disappointments in the field of Alzheimer's disease research, but it doesn't necessarily mean Axovant Sciences drug will fail. In fact, intepirdine's study was designed differently than Pfizer's study, and that difference could allow it to deliver a win.

Regardless, the dismal track record associated with Alzheimer's disease drugs makes Axovant Sciences a very risky stock to buy.

10 stocks we like better than Axovant Sciences
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now...and Axovant Sciences wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 3, 2017.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 4012783, ~/Articles/ArticleHandler.aspx, 4/29/2017 1:26:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
Change down DOW 20940.5 -40.8 -0.2%
Change down S&P 500 2384.2 -4.6 -0.2%
Change down NASD 6047.6 -1.3 0.0%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

4/28/2017 4:00 PM
AXON $24.24 Down -0.11 -0.45%
Axovant Sciences CAPS Rating: *
PFE $33.92 Up +0.06 +0.18%
Pfizer CAPS Rating: ****

Article registration testing

Revisit this page

Clear article's cache and revisit this page

Or, visit the current page, forcing Test ID to article:interrupt:106919 and

Tookie Value = 43153431213731988365011350597300