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

Zacks Equity Research

Axsome Therapeutics, Inc. 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 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 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. 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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