AXSM's Progressing Migraine Drug NDA: Stock Sees Immediate Boost

Axsome Therapeutics Secures FDA NDA Acceptance for Migraine Treatment

Axsome Therapeutics, Inc. (NASDAQ: AXSM) has achieved a significant milestone as the FDA accepted its resubmitted new drug application (NDA) for the innovative treatment AXS-07, aimed at providing relief for acute migraine episodes. This move opens the door for potential approval, sparking renewed interest in the company's stock.

The FDA has set a timeline for a final decision, anticipated by January 31, 2025, and has categorized this NDA resubmission as a Class 2 resubmission, indicating a more rigorous review process.

In response to the announcement, shares of AXSM experienced a notable uptick of 6.6% on September 4, reflecting market optimism. Year to date, Axsome’s stock price has increased by 20.1%, contrasting with a slight decline in the broader industry, which showcased a decrease of 0.9%.

Addressing Prior Concerns: The Journey to Resubmission

Initially, the FDA had issued a complete response letter regarding the first NDA for AXS-07 in April 2022, citing issues related to its chemistry, manufacturing, and controls. Following this, Axsome diligently worked to address these concerns, completing the NDA resubmission in the second quarter of 2024. Encouragingly, the FDA did not request additional data regarding safety or efficacy in this latest round, further strengthening the prospects of gaining approval for AXS-07.

Diversifying Axsome's Product Lineup

If approved, AXS-07 will complement Axsome's existing commercial products, which currently include Auvelity (AXS-05) for major depressive disorder and Sunosi (solriamfetol) for narcolepsy. The approval of AXS-07 would significantly diversify Axsome’s therapeutic offerings.

Auvelity, launched in 2022, has already demonstrated a positive sales trajectory, generating an impressive $118.4 million in revenue during the first half of 2024, marking an increase of 172.8% compared to the previous year. This growth underscores the strong demand for the medication in the market.

On the other hand, Sunosi, acquired from Jazz Pharmaceuticals (NASDAQ: JAZZ), received FDA approval in 2019 as a treatment for narcolepsy. After its commercial launch in May 2022, Sunosi’s sales also showed positive growth, contributing $42.2 million in net product sales during the first half of 2024, which represents a year-over-year increase of 35.2%.

Current Stock Position and Market Comparisons

As it stands, Axsome holds a Zacks Rank of #3 (Hold), suggesting a neutral outlook based on market analyses. However, investors looking for more robust opportunities may want to consider other well-ranked biotech stocks.

Companies like Krystal Biotech, Inc. (NASDAQ: KRYS) and Fulcrum Therapeutics, Inc. (NASDAQ: FULC) currently possess Zacks Rank #1 (Strong Buy), indicating favorable market conditions and investor confidence. Recent performance indicates that Krystal Biotech's earnings estimates for 2024 have increased significantly, showcasing a rise from $1.98 to $2.38. Meanwhile, shares have surged by 50.6% this year.

Similarly, Fulcrum Therapeutics has narrowed its projected losses for 2024 and witnessed its share prices grow by 22.2% year to date, reflecting positive growth trends that have piqued investor interest.

Looking Ahead: Future Prospects for AXSM

As Axsome Therapeutics proceeds with its potential milestones concerning AXS-07, the company’s trajectory promises interesting developments in the pharmaceutical landscape. With two marketed products already contributing to revenue and the possibility of a third, Axsome is positioning itself for continued growth and innovation within the treatment of neurological disorders.

Frequently Asked Questions

What is AXS-07, and what does it treat?

AXS-07 is a medication developed by Axsome Therapeutics intended for the acute treatment of migraine episodes.

When is the FDA expected to make a decision on AXS-07?

The FDA is expected to provide a final decision regarding AXS-07 by January 31, 2025.

How has AXSM's stock performed recently?

AXSM's stock increased by 6.6% following the FDA's acceptance of the NDA resubmission, and it has rallied 20.1% year to date.

What other products does Axsome Therapeutics have on the market?

Axsome currently markets Auvelity for major depressive disorder and Sunosi for narcolepsy.

What are the other biotech stocks to watch?

Investors may look at Krystal Biotech (KRYS) and Fulcrum Therapeutics (FULC), both currently holding strong rankings and positive growth forecasts.

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