Axsome Therapeutics' (AXSM) Q2 results showed continued strength from Auvelity, its treatment for major depressive disorder, with the drug's new indication expected to drive revenue growth in H2, RBC Capital Markets said Monday in a report.

Auvelity generated $180 million in revenue in the quarter, topping Wall Street's $176 million estimate, "which may help to drive some incremental upside as investors lift their outlook for the drug," the report said.

Continued expansion of Auvelity's use in major depressive disorder, including potential benefits from long-term care, should support total revenue of $804 million in 2026, the report said.

Auvelity sales may reach $4.3 billion by 2035, with peak sales potentially reaching $5 billion to $6 billion, and the longer-term opportunity is still not fully reflected in Axsome's share price, the report said.

RBC lowered its price target on Axsome stock to $297 from $304 and maintained its outperform rating.

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