Market Overview

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

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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