Please ensure Javascript is enabled for purposes of website accessibility

Why Axsome Therapeutics Stock Is Jumping Today

By Keith Speights – Jun 26, 2020 at 11:44AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The drugmaker received good news from the FDA for one of its pipeline candidates.

What happened

Shares of Axsome Therapeutics (AXSM 1.06%) were jumping 13.8% as of 11:15 a.m. EDT on Friday. The big gain came after the drugmaker announced that the Food and Drug Administration granted a Breakthrough Therapy designation for its AXS-05 in treating Alzheimer's disease agitation.

So what

The FDA only gives Breakthrough Therapy designation when an experimental drug shows promise for significant improvement over already-approved therapies for a serious or life-threatening condition. Since there are no FDA-approved treatments for Alzheimer's disease agitation, this threshold was relatively easy for AXS-05 to meet after Axsome reported positive results from its phase 2/3 Advance-1 study.

Businessman holding blocks spelling FDA in his palm

Image source: Getty Images.

Receiving the designation is a big deal for Axsome. It could speed up the FDA's review process for AXS-05 in the Alzheimer's disease agitation indication.

This wasn't the first Breakthrough Therapy designation for the drug, though. Axsome previously announced that AXS-05 was awarded the designation for treating major depressive disorder (MDD).

Now what

There are several potential catalysts ahead for the biotech stock. Axsome plans to file for FDA approval of AXS-05 in treating MDD in the fourth quarter of 2020. It also expects to file for FDA approval of AXS-007 in treating migraine around the same time. In addition, the company plans to begin late-stage testing of AXS-12 in treating narcolepsy in the second half of this year.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Axsome Therapeutics, Inc. Stock Quote
Axsome Therapeutics, Inc.
$44.62 (1.06%) $0.47

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.