Investors are stoking the shares of Axsome Therapeutics (NASDAQ:AXSM) after the U.S. Food and Drug Administration granted a priority review for the biotech firm’s treatment for major depressive disorder (MDD). AXSM stock was up 11% at 8 a.m. Eastern.
The FDA has accepted for filing the company’s new drug application (NDA) for AXS-05 for the treatment of MDD. That drug (dextromethorphan-bupropion) is a novel, oral, investigational NMDA receptor antagonist with multimodal activity, according to the company.
The agency previously granted Breakthrough Therapy Designation for AXS-05 for the treatment of MDD in March 2019. The FDA also granted Breakthrough Therapy Designation for AXS-05 for a second indication of Alzheimer’s disease agitation in June 2020.
Patients diagnosed with major depressive disorder are defined as having treatment-resistant depression (TRD) if they have failed two or more antidepressant therapies. There are approximately 5.7 million estimated patients with TRD in the U.S.
AXSM Stock Rides to Highs and Lows on News
Any investor who has owned AXSM stock for a while should already be familiar with the volatility in the shares. In the 12 months through January 2020, AXSM stock exploded from a low of $2.64 to a high of $105.55. That ride was all after a series of major announcements, throughout the year, about its lead drug candidate, AXS-05.
A year ago, the company announced that AXS-05 had also met the primary and secondary endpoints in the Phase 2b/3 ADVANCE-1 trial testing in patients experiencing agitation related to Alzheimer’s disease (AD), the most common form of dementia.
Of today’s news, CEO Herriot Tabuteau, MD said “If approved, AXS-05 would be an important new treatment option for the many Americans living with depression.”
Investors are likely to also be pleased with the news. AXSM stock is down more than 35% year to date, compared with a 2.61% gain in the iShares NASDAQ Biotechnology ETF (NASDAQ:IBB) over the same period.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News, McKinsey & Co. and McDonald & Company Investments.