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Axsome Adds To Strong Gains After FDA Grants Breakthrough Designation For Depression Drug

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Axsome Adds To Strong Gains After FDA Grants Breakthrough Designation For Depression Drug

Axsome Therapeutics Inc (NASDAQ: AXSM) shares, which were trading at sub-$3 levels before the start of the year, have soared to the mid-teens. The stock has gained about 400 percent year-to-date. 

After a roller coaster ride over the past two sessions, Axsome shares were advancing strongly Wednesday morning.

What Happened

Axsome said Wednesday before the market open that its AXS-05 was granted Breakthrough Therapy Designation, or BTD, by the FDA for the treatment of major depressive disorder, or MDD.

AXS-05 is an oral investigational NMDA receptor antagonist with multimodal activity. The company reported positive results in early January from a midstage study of the pipeline asset.

Incidentally, the FDA approved two depression drugs this year: Spravato from Johnson & Johnson (NYSE: JNJ)'s Janssen unit for treatment-resistant depression and SAGE Therapeutics Inc (NASDAQ: SAGE)'s postpartum depression drug.

Why It's Important

A BTD means expedited development and review timelines. It is accorded to a promising investigational medicine which has been clinically proven to produce substantial improvement on one more clinically significant endpoints over available therapies for a serious life-threatening condition.

What's Next

In its latest earnings release, Axsome outlined an itinerary for key data readouts for AXS-05, which is being evaluated for indications such as MDD, treatment-resistant depression, Alzheimer's disease-related agitation and smoking cessation.

The company said it anticipates meeting with the FDA in the second quarter of 2019 to discuss the potential regulatory path for developing AXS-05 for MDD.

Axsome shares were trading up 7.46 percent at $15.41 at the time of publication Wednesday. 

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