Shares of Axsome Therapeutics (NASDAQ:AXSM) are up more than 30% today on news that the biopharmaceutical company has received approval from the U.S. Food and Drug Administration (FDA) for a unique, first-of-its-kind depression treatment.
Specifically, the FDA has approved Axsome Therapeutics’ new drug Auvelity, extended-release tablets that are used to treat major depressive disorders (MDD) in adults. Approval of the depression medication is a major success for New York City-based Axsome Therapeutics and adds further momentum to AXSM stock, which has been trending higher over the last year.
Prior to today, AXSM stock was up 12% this year and trading at $42.43 per share. Over the past 12 months, the stock has gained 172%.
What Happened With AXSM Stock
The FDA reviewed and evaluated Auvelity under its Priority Review process. Clinical trials of the medication involved 1,100 patients who suffer from major depression and have tried other medications to manage their illness. The trial also involved a certain number of patients who were given a placebo medication.
Commenting on the FDA approval, Herriot Tabuteau, Chief Executive Officer at Axsome Therapeutics, said in a news release: “We are extremely proud to deliver this Breakthrough Therapy-designated new treatment to the millions of patients living with depression at a time when it is most needed.”
New depression treatments are rarely approved in the U.S. Johnson & Johnson’s (NYSE:JNJ) nasal spray Spravato was approved in 2019, making it the first antidepressant approved by the FDA in more than 30 years.
Why It Matters
Axsome Therapeutics’ Auvelity treatment is now the only oral N-methyl D-aspartate (NMDA) receptor antagonist approved for the treatment of major depressive disorder. The company says it now plans to have Auvelity commercially available throughout the U.S. by the end of this year.
Depression is a significant issue in America. According to advocacy group Mental Health America, major depression is one of the most common mental illnesses in the U.S., affecting more than 21 million adults. Among youth ages 12 to 17, major depression impacts about 15% of the population, or 3.7 million people.
Major depressive disorder is characterized as a debilitating chronic illness that leaves people struggling with low energy, the inability to feel pleasure, feelings of guilt and worthlessness and other emotional and physical symptoms. If left untreated, MDD can have serious consequences.
What’s Next for AXSM Stock
AXSM stock is getting a huge boost on today’s news. However, Axsome Therapeutics’ share price has been gaining ground over the past year and has more than doubled in the past 12 months. Today’s news is adding fuel to the stock’s current rally, which looks set to continue.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.