The Food and Drug Administration approved a new treatment for depression Axsome Therapeutics (AXSM), causing AXSM stock to be catapulted higher on Friday.
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On today’s exchange, shares are up 40.4% to 59.55.
Axsome will sell the drug under the Auvelity brand name. Auvelity works by blocking a neurotransmitter called NMDA, or N-methyl-D-aspartate for short. Experts believe that NMDA dysregulation plays a role in depression. Auvelity is the only oral drug that blocks NMDA. It is the first oral depression treatment with a new mechanism to be approved in over 60 years, Axsome said in a press release.
The approval comes during a major shift in the treatment of depression. According to some reports, rates of depression and anxiety tripled during the pandemic. Michael Pollock, executive director of the Depression and Bipolar Support Alliance, says the mental health crisis is one of the most pressing issues in the US today.
“Over 20 million American adults suffered from major depressive disorder each year prior to the Covid-19 pandemic,” he said in a written statement. “These numbers increased dramatically during the pandemic, with approximately 30% of US adults, or more than 80 million Americans, experiencing increased symptoms of depression.”
AXSM stock rises on approval of depression treatments
The long-awaited approval sent AXSM stock to its highest level since July 2021.
Axsome expects Auvelity to launch in the US in the fourth quarter. In tests, patients receiving the depression treatment showed an improvement in symptoms after a week compared to placebo recipients. The most common side effects were dizziness, headache, diarrhea, drowsiness, dry mouth, sexual dysfunction and excessive sweating.
Axsome stock has a high Relative Strength Rating of 97, which places the stock in the top 3% of all stocks in terms of 12-month performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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