Axcella Health Reports Smaller-Than-Feared Quarterly Loss

Axcella Health (AXLA), a clinical-stage biotechnology company, posted a smaller-than-expected loss in the second quarter. The company is working on a new approach to treat complex diseases using endogenous metabolic modulator (EMM) compositions.

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Axcella incurred a loss of $0.42 per share in Q2, compared to the $0.43 loss per share estimated by analysts. The company reported a loss of $0.48 per share in the prior-year quarter.

Research and development expenses increased 19.8% year-over-year to $10.3 million, while general and administrative expenses increased 6.5% to $4.9 million. (See Axcella Health stock charts on TipRanks)

Axcella Health CEO Bill Hinshaw said, “Our progress continued in the second quarter as we initiated the EMMPOWER Phase 2 clinical trial of AXA1665 in overt hepatic encephalopathy (OHE) as well as the EMMPACT Phase 2b clinical trial of AXA1125 in nonalcoholic steatohepatitis (NASH).”

Hinshaw added, “As we enter the second half of 2021, maximizing clinical trial enrollment and expanding Axcella’s pipeline are our primary areas of focus.”

Following the Q2 results, Wedbush analyst Liana Moussatos maintained a Buy rating and a price target of $11 (205.6% upside potential).

On the pipeline update, Moussatos said, “For AXA1665, Axcella plans to announce a decision from a data monitoring committee on an interim safety analysis when 50% of study participants have received 3-month of treatment. Topline results from this study are anticipated in Q1:23.”

Furthermore, “For AXA1225, the Company plans to present top line data in H2:23 with an interim analysis anticipated in mid-2022 that may include non-invasive biomarkers such as MRI-PDFF and Fibroscan commonly correlated with histologic activity,” the analyst added.

In line with Moussatos’ stance, Wall Street analysts are bullish about the stock. The Strong Buy consensus rating boasts 5 unanimous Buy ratings. The average Axcella Health price target stands at $11.80, implying upside potential of 227.8% over the next 12 months.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Axcella Health, with 10.2% of portfolios tracked by TipRanks increasing their exposure to AXLA stock over the past 30 days.