(Reuters) -Axsome Therapeutics Inc said on Monday the U.S. Food and Drug Administration did not ask for additional information on the company’s drug to treat depression as the agency continues to review it, sending shares of the drug developer surging 44% before the bell.
The regulator had set an action date of Aug. 22 to decide on the drug, but notified Axsome earlier this month of some deficiencies with its marketing application that could lead to a delay in deciding the fate of the oral pill.
Analysts had expected the FDA to decline Axsome’s application, with Truist Securities analyst Joon Lee saying the lack of a “complete response letter” from the FDA was positive as it implied previously identified deficiencies can be remedied.
Shares in Axsome are down 74% this year through Friday’s close.
AXS-05 had succeeded in reducing symptoms of major depressive disorder (MDD) in a late-stage trial in December 2019 and also showed benefits for treatment-resistant patients in a mid-stage study in 2020.
Depression affects about 16 million American adults every year, and existing antidepressants including Eli Lilly’s Prozac and Pfizer Inc’s Zoloft are designed to increase the availability of a mood-regulating neurotransmitter called serotonin.
But a large number of patients do not respond to those therapies, which could take up to six weeks to show any effect. Companies are developing new drugs that target the treatment-resistant population, which could reach 2.5 million in the United States by 2025, according to SMBC Nikko Securities America analyst David Hoang.
Axsome’s AXS-05 targets several neurotransmitters including serotonin and is designed to reduce symptoms of depression in one week.
Rival Sage Therapeutics in June reported data from its late-stage study showing its drug candidate, zuranolone, improved symptoms of depression, but there were concerns about durability.
(Reporting by Amruta Khandekar and Dania Nadeem in Bengaluru; Editing by Devika Syamnath and Ramakrishnan M.)