Axsome's AXS-05 Meets Goal In Phase II Study, Shares Up

Axsome Therapeutics, Inc. (NASDAQ:AXSM) announced that a phase II study, evaluating its pipeline candidate — AXS-05 — for smoking cessation treatment, met the prespecified primary endpoint of significantly curbing the habit of daily smoking as compared to GlaxoSmithKline’s (NYSE:GSK) active comparator, Wellbutrin (bupropion).

Shares of Axsome were up 6.3% following this news on Monday. In fact, the stock has skyrocketed 407.5% so far this year, outperforming its industry’s increase of 8.6%.

This study was conducted at the Duke Center for Smoking Cessation under a research collaboration between Axsome and Duke University.

This double-blind phase II program evaluated 58 adult smokers, who were treated with AXS-05 (45 mg) or Wellbutrin (105 mg) over a 3-week period. Data from the study showed that patients who received AXS-05, demonstrated 25% greater reduction in the average number of cigarettes smoked per day in comparison to Wellbutrin.

Axsome is focused on developing AXS-05 as a smoking cessation treatment as smoking is widely considered the leading cause for preventable deaths and affects about 40 million adults in the United States. The candidate is a novel, oral, investigational N-methyl-D-aspartate (NMDA) receptor antagonist with multimodal activity.

This apart, Axsome is evaluating AXS-05 in a phase III study for treating resistant depression (TRD) and in a phase II/III investigation for addressing agitation associated with Alzheimer’s disease. The candidate is also developed for major depressive disorder (MDD).

Notably, late last month, the FDA granted a Breakthrough Therapy designation to AXS-05 for the treatment of MDD. This status was supported by positive results from the phase II ASCEND probe, in which 80 patients with a confirmed moderate-to-severe MDD were treated with AXS-05 or the active comparator, Wellbutrin.

We would like to remind investors that in March 2019, the FDA approved Johnson & Johnson’s (NYSE:JNJ) nasal spray, Spravato (esketamine), for treatment-resistant depression (TRD) in adults but with a boxed warning. This nasal spray has been approved for use in conjunction with an oral antidepressant in patients suffering MDD, who have not benefited from multiple standard treatments.

Zacks Rank & Key Pick

Axsome currently carries a Zacks Rank #4 (Sell).

A better-ranked stock in the healthcare sector is PDL BioPharma, Inc. (NASDAQ:PDLI) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PDL BioPharma’s earnings estimates have been revised 100% upward for 2019 and 30% for 2020 over the past 60 days. The stock has surged 31% year to date.

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