Axsome Therapeutics Stock Soars on Proposed FDA Labeling for Depression Drug

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Shares of

Axsome Therapeutics

were soaring Monday after the biopharmaceutical company announced some good news in an attempt to gain Food and Drug Administration approval of AXS-05, its drug for major depressive disorder.

In a filing with the Securities and Exchange Commission, Axsome (ticker: AXSM) said it had received proposed labeling from the FDA last Friday related to its new drug application for AXS-05.

Shares were 36% higher on Monday to $33.69. The stock was on pace for its third best one-day percentage gain on record and its best one-day performance since December 2019, according to Dow Jones Market Data.

In August 2021, the FDA had informed Axsome that its review of the new drug application for AXS-05 would not be completed by the Prescription Drug User Fee Act target action date of Aug. 22, 2021.

Shares have fallen 11.8% this year and have dropped 54% in the past 12 months.

In a research note, Cowen analyst Joseph Thome wrote that Monday’s disclosure is “an encouraging sign and hopefully an important step toward a potential near-term FDA approval.” He rates the stock at Outperform with a $120 price target.

Truist analyst Joon Lee, who rates the stock at Buy with a $100 price target, wrote in a research note that “we anticipate finalization of AXS-05 label and approval in coming weeks.”

Of the 13 analysts polled by FactSet, 12 rate the stock at Buy and one rates it at Hold.

Axsome said it was reviewing the proposed labeling and would reply to the FDA to secure a final labeling agreement.

Write to Angela Palumbo at [email protected]