Axsome Therapeutics (AXSM) said Tuesday it had approved Food and Drug Administration requirements for approval of its depression drug, and AXSM stock soared.
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With the FDA negotiations in the background, Axsome is now one step closer to approval for its treatment of major depressive disorder, said Vamil Divan, an analyst at Mizuho Securities. The company expects the FDA to make its decision on the drug, called AXS-05, later this quarter.
“While we question what the requirements/obligations will actually entail, we view today’s update as a positive step towards the FDA finally becoming comfortable with approving AXS-05,” said Divan in a report to customers.
In today’s stock market, AXSM stock is up 25.1% to close at 40.92.
AXSM Stock: Trio of updates
Axsome treatment works by blocking a certain receptor in the brain. The company is also studying the effects of AXS-05 in patients with Alzheimer’s disease and those trying to quit smoking.
The company also recently made headlines for its purchase of Sunosi, a drug for narcolepsy Jazz Pharma (JAZZ). In addition, Mizuho’s Divan notes that the FDA is likely to make a decision approving Axsome’s migraine treatment, AXS-07, before the end of the month.
“The trio of potentially positive upcoming updates keeps us bullish on Axsome stock,” he said.
Divan has a Buy rating and a price target of 51 on AXSM stock.
Equities recently under pressure
Axsome’s stock was on a losing streak for most of April. After hitting its highest level since August on April 5, AXSM stock has since closed in the red eight times.
The stock fell below its 50-day moving average on Monday, according to MarketSmith.com. Tuesday’s move helped stocks retake both this line and its 200-day moving average.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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