Why Axsome Therapeutics Stock Rocketed Higher to End 2025
Key Points
Axsome just received priority review designation for its most important drug.
Auvelity is an oral medication already approved for adults with major depressive disorder (MDD).
Auvelity sales soared 69% in Q3.
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Axsome Therapeutics (NASDAQ: AXSM) shares soared to close out the year. The company released two items of news today. Investors see one in particular as a meaningful catalyst for the biopharmaceutical company that specializes in developing therapies for the management of depression and other neurological conditions.
Axsome shares rocketed more than 20% higher, and remained up by 19.4% as of 12:10 p.m. ET.
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Potential treatment for Alzheimer's disease agitation
Axsome announced today that the U.S. Food and Drug Administration (FDA) granted priority review designation for its AXS-05 drug for the treatment of Alzheimer's disease agitation. Axsome already has approval for the medicine to treat adults with major depressive disorder (MDD). Branded as Auvelity, sales of the drug grew 69% year-over-year in Q3 and accounted for 80% of Axsome's revenue for the quarter.
The FDA has set a target action date of April 30, 2026, giving investors a shortened timeline to see a big potential catalyst for Axsome. CEO Herriot Tabuteau, MD, stated, "up to 76% of people with Alzheimer's disease experience agitation, representing a significant unmet medical need for patients and their caregivers, and currently there is a dearth of approved treatments."
AXS-05 was previously granted U.S. FDA Breakthrough Therapy designation for the treatment of Alzheimer's disease agitation in June 2020. That gave investors a clue that it could be a promising medicine, based on preliminary clinical evidence.
Now AXS-05 is starting to realize that potential. Another drug in Axsome's pipeline is AXS-12 for treating narcolepsy. Further positive news was released today with the publication of FDA meeting minutes, indicating that Axsome's regulatory data package would be acceptable for submission of a new drug application (NDA) for AXS-12.
That submission is expected to occur next month, providing investors with another potential catalyst for stock growth. Both items of good news have investors piling into Axsome stock on the year's final day of trading.
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Howard Smith has positions in Axsome Therapeutics. The Motley Fool has positions in and recommends Axsome Therapeutics. The Motley Fool has a disclosure policy.
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