Axsome Therapeutics Shares Slide as FDA Rejection of AXS-07 Looms >AXSM

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By Colin Kellaher

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Shares of Axsome Therapeutics Inc. fell more than 20% Monday, erasing last week’s gains, after the biopharmaceutical company said it expects the US Food and Drug Administration to reject its application seeking approval of its AXS-07 product candidate for the acute treatment of migraine.

The FDA had set a target action date of April 30 for the application, but Axsome said it was previously notified by the agency on Friday that issues related to the chemistry, manufacturing and controls portion of the AXS-07 application remain unresolved.

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As a result, the New York company said expects the FDA to issue a so-called complete response letter, which indicates the agency won’t approve the application in its current form.

Axsome shares rallied last week after the company said it had agreed to post-marketing requirements and commitments proposed by the FDA on its lead drug candidate, AXS-05, and that it expected the agency could act on its application seeking a green light for the drug for the treatment of major depressive disorder during the current quarter.

The FDA missed its August 2021 target action date for the AXS-05 application after flagging deficiencies with the application that precluded the discussion of labeling and post-marketing requirements and commitments.

Despite the negative development with AXS-07, analysts at said they see no read-through of the issues to AXS-05, which represents a much larger opportunity for Axsome.

Mizuho, ​​which has a buy recommendation and a $51 price target on Axsome shares, said it expects AXS-05 to receive FDA approval in the coming weeks or months, with estimated probability-adjusted sales of topping $1.6 billion in 2030, compared with estimated 2030 sales of $375 million for AXS-07.

Truist analysts, who have a buy stance and $100 target price, said they have become more positive on AXS-05 and would use Monday’s weakness as a buying opportunity.

Axsome shares were recently changing hands at $31.21, down 20%.

Write to Colin Kellaher at [email protected]


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