Axsome says it remains on track to submit a new drug application for AXS-05 for the treatment of major depressive disorder
Shares of Axsome Therapeutics (AXSM) are on the rise on Monday after the company said its AXS-05 "significantly" improved agitation in patients with Alzheimer's disease in a 366-person Phase 2/3 trial. Commenting on the news, SunTrust analyst Joon Lee said he wouldn't be surprised if AXS-05 is studied in other neurocognitive diseases.
ALZHEIMER STUDY MEETS ENDPOINT: Axsome Therapeutics announced that its AXS-05 "significantly" improved agitation in patients with Alzheimer's disease in a 366-person Phase 2/3 trial. AXS-05 met the primary endpoint by demonstrating a statistically significant mean reduction in the Cohen Mansfield Agitation Inventory total score compared to placebo at week five, with mean reductions from baseline of 15.4 points for AXS-05 and 11.5 points for placebo. These results represent a mean percentage reduction from baseline of 48% for AXS-05 versus 38% for placebo, Axsome said. The CMAI is a 29-item caregiver-rated scale that assesses the frequency of agitation-related behaviors in patients with dementia, including excessive motor activity such as pacing and restlessness, verbal aggression such as screaming and shouting, and physical aggression such as grabbing, pushing, and hitting.
AXS-05 was also superior to bupropion on the CMAI total score, establishing component contribution, the company added. "We look forward to discussing these data with the FDA. These results underscore the potentially broad applicability of the pharmacology of AXS-05, which has also resulted in positive pivotal trial results in major depressive disorder. We remain on track to submit an NDA for AXS-05 for the treatment of major depressive disorder, as well as for our AXS-07 product candidate for the acute treatment of migraine, both in the fourth quarter of this year," said Herriot Tabuteau, Chief Executive Officer of Axsome.
AXS-05 LOOKS TO BE 'TRUE PIPELINE DRUG': After the company reported positive topline data from the pivotal Phase 2/3 AD agitation study, ADVANCE-1, SunTrust analyst Joon Lee raised his price target for Axsome Therapeutics to $200 from $145. Lee told investors that he is impressed by the topline AD agitation data reported and wouldn't be surprised if AXS-05 is studied in other neurocognitive diseases not only in agitation but also potentially as a disease modifying therapy. The analyst views AXS-05 as a true pipeline in a drug with now positive study results in MDD and AD agitation, both high value indications. Lee anticipates a second confirmatory Phase 3 to start after meeting with the Food and Drug Administration, likely in the second half of 2020. Based on the significant efficacy reported and greater powering in subsequent study without the need to include a bupropion-only arm, he thinks the probability of repeating the success in ADVANCE-1 is high. The analyst has a Buy rating on the shares.
MIGHT HAVE 'A BETTER ABILIFY' WITH AXS-05: Following the news, William Blair analyst Myles Minter raised his view on the odds of success for AXS-05 in Alzheimer's disease agitation to 75% from 60% given the "clinically meaningful efficacy and sound safety" demonstrated in the ADVANCE-1 trial. The analyst, who views the drug as "a $1 billion-plus peak sales product," now expects Axsome to initiate a pivotal trial of AXS-05 in treatment-resistant depression in the third quarter of 2020 and file NDAs for AXS-05 in major depressive disorder and AXS-07 for acute episodic migraine therapy by year-end. AXS-05 is "shaping up to have efficacy in a broad range of indications but with a superior risk/benefit to atypical antipsychotics like Abilify," argued Minter, who keeps an Outperform rating on Axsome shares and continues to identify it as his 2020 top pick.
PRICE ACTION: In morning trading, shares of Axsome have gained over 22% to $93.40.