(Reuters) – Axsome Therapeutics Inc said on Monday its drug succeeded in reducing symptoms of major depressive disorder in a late-stage trial, taking the company a step closer to entering a multi-billion dollar market for depression treatments.
The company’s shares were up 75% at $81, before the bell.
Major depressive disorder (MDD) is a chronic condition that makes patients feel low, experience guilt and worthlessness and, in some cases, may lead to suicide.
There are few treatments available to people suffering from depression and some of these carry significant side effects. A large number of patients do not respond to the existing treatments.
According to the National Institutes of Health, an estimated 7.1% of U.S. adults, or approximately 17 million, experience MDD each year.
Drugmakers have tried breaking into the huge market for depression treatments but with little success. For instance, Sage Therapeutics Inc’s experimental fast-acting drug failed a closely-watched study earlier this month.
Axsome said its oral tablet, AXS-05, improves the communication between brain cells and increases levels of serotonin, noradrenaline and dopamine, all of which help regulate mood.
The company said patients on AXS-05, which has been granted a breakthrough therapy designation by the FDA, showed statistically significant improvement as compared to the placebo on several goals after one week.
Suntrust Robinson Humphrey analyst Joon Lee said the drug’s magnitude and rapidity of effect as well as the breadth of positive effects across several secondary goals was impressive.
“We believe AXS-05 is well positioned for commercial success in MDD and likely be the go to drug for those who don’t respond to first-line antidepressants,” Lee said in a note.
Axsome said it would file marketing application for AXS-05 in the second half of 2020.
The treatment’s efficacy was tested on the Montgomery-Åsberg Depression Rating Scale (MADRS), a 10-point questionnaire used to check if patients showed a significant change in symptoms of depression including sadness, tension, poor sleep and appetite.
Apart from major depressive disorder, AXS-05 is being tested for treatment-resistant depression and agitation, associated with Alzheimer’s disease. It is also being developed to help people quit smoking.
Axsome shares had risen to $73.14 in early trading.
Reporting by Vishwadha Chander in Bengaluru; Editing by Vinay Dwivedi