Shares of Axsome Therapeutics (NASDAQ:AXSM) 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.
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.
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).
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.