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The decision on the drug came a bit less than a year after the FDA’s self-imposed deadline on making a call had passed.
Dreamstime
The Food and Drug Administration issued a long-awaited approval of a depression drug from
Axsome Therapeutics
that can take effect within a week, using a different mechanism than traditional treatments.
Shares of Axsome (ticker: AXSM) were up 34% in morning trading following the Friday news. Formerly known as AXS-05, the drug will be marketed under the name Auvelity, and will go on sale in the fourth quarter of this year.
Investors have been watching the drug’s approval process with some concern. The FDA’s self-imposed deadline for a decision on the drug’s approval passed just under a year ago, leaving investors with more questions than answers as the months dragged on.
On an investor call on Friday morning, an Axsome executive attributed the delay to the impact of the pandemic.
“We and our consultants were optimistic for approval, and thus today’s news brings welcome relief,” Cowen analyst Joseph Thome said in a research note. Thome wrote that he expects U.S. sales of the drug to hit $2 billion a year in 2030.
In his note, Thome wrote that investors had been concerned that the FDA putting a “burdensome” warning on the drug’s label, or imposing on the drug what’s known as Risk Evaluation and Mitigation Strategy, a program used for some high-risk medicines.
That didn’t happen. The safety warnings appended to the drug’s label by the FDA, which note an increased risk of suicidal thoughts and behavior in young adult patients taking antidepressants, are similar to those on other antidepressants, analysts said.
Auvelity is the first of a class of drugs, known as NMDA receptor antagonists, to be available in pill form as a depression treatment. It is the only pill approved as a rapid-acting treatment for major depressive disorder. It will be the company’s first marketed product.
Analysts expect Axsome to hit $209.1 million in sales in 2023, a figure that will rise to $1.5 billion by 2027, according to FactSet.
In a note out early Friday, William Blair analyst Myles Minter wrote that some of the run-up in shares he expected on Friday would come as a result of investors closing out short positions, or bets against the stock. He wrote that short interest made up 18% of the stock’s float as of the latest available data.
Axsome was one of a number of companies working on new, quicker-acting antidepressant drugs. Shares of
SAGE
), which has begun a rolling submission of its fast-acting antidepressant zuranalone for approval as a treatment for major depressive disorder, were down 0.7% on Friday. Shares of
Relmada Therapeutics
(RLMD), which is working on a similar drug called REL-1017, were down 1.7%.
Source: https://www.barrons.com/articles/axsome-axsm-fda-depression-drug-approval-51660925422?siteid=yhoof2&yptr=yahoo