Shares of Axsome Therapeutics (AXSM -0.07%), a clinical-stage biopharmaceutical company, are rising sharply in response to a brief submission the company sent to the U.S. Securities and Exchange Commission (SEC) this morning. Investors anticipating an upcoming approval for the company's depression drug, AXS-05, pushed the stock 22.7% higher as of 10:21 a.m. ET on Tuesday.
Last August, Axsome Therapeutics' stock price tanked after the company admitted the Food and Drug Administration (FDA) found deficiencies in an application to treat people with major depressive disorder with AXS-05. This experimental drug is a combination of bupropion, an antidepressant currently used by millions of Americans, and dextromethorphan, an over-the-counter cough suppressant.
In a pivotal study underpinning AXS-05's New Drug Application, the treatment scored high marks. The FDA didn't approve it as expected last year due to unspecified deficiencies in the application. Axsome's stock price is way up today because the SEC filing submitted this morning says the company has received and agreed to postmarketing requirements proposed by the FDA with respect to AXS-05.
Since postmarketing requirements aren't something the FDA spends a lot of time putting together for drugs it doesn't intend to approve, there's a good chance AXS-05 will get a green light. Based on the interaction with the agency, the company anticipates an approval decision in the second quarter of 2022.
AXS-05 could be the first drug developed by Axsome Therapeutics to reach commercialization, but it probably won't become the company's first commercial-stage product. In March, the company hatched a plan to acquire Sunosi from Jazz Pharmaceuticals (JAZZ 0.73%).
Sunosi is an antidepressant that works the same way as bupropion. Its association with insomnia led to its development as a treatment for narcolepsy instead of depression. I won't be surprised if Axsome Therapeutics tries combining Sunosi with dextromethorphan and aims the combination at patients with treatment-resistant depression.