What happened
Shares of Axsome Therapeutics (AXSM -3.85%) were jumping 8.4% as of 11:41 a.m. EDT on Monday after rising as much as 16.3% earlier in the day. The nice gain came following the company's announcement that the Food and Drug Administration accepted the New Drug Application (NDA) filing for AXS-05 in treating major depressive disorder. As an added bonus, the FDA granted Priority Review to the regulatory application.
So what
Investors cheered today's news because it means that Axsome jumped a key hurdle in its path to winning FDA approval for AXS-05. The FDA's granting of Priority Review makes the finish line even closer. This designation reduces the agency's review time from 10 months to six months after acceptance of the NDA filing.
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Axsome should have a big market opportunity if AXS-05 wins FDA approval. Around 17 million adults in the U.S. are affected by major depressive disorder. At least one-third have treatment-resistant depression.
The company's chances of obtaining FDA approval for AXS-05 appear to be pretty good. Axsome previously reported results from two late-stage clinical studies that showed the drug achieved statistically significant improvements in symptoms of depression compared to placebo and active controls.
Now what
FDA approval of AXS-05 would be a major catalyst for the biotech stock, but investors will have to wait a few months -- the FDA's decision is expected by Aug. 22. In the meantime, Axsome plans to submit an NDA in the near future for another candidate, AXS-07, for treating migraine.
