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Axsome Expedites Development Plan for Narcolepsy Candidate

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Axsome Therapeutics, Inc. (AXSM - Free Report) announced that it has expedited the development plan for its pipeline candidate AXS-12, which is being evaluated for the treatment of narcolepsy, a sleep disorder characterized by excessive sleepiness, following a Breakthrough Therapy meeting with the FDA.

Notably, in December 2019, AXS-12 met the pre-specified primary endpoint in the phase II CONCERT study, which evaluated it as a treatment of narcolepsy patients with cataplexy. The company recently completed the CONCERT study.

The accelerated development plan will have one phase III efficacy study, which will evaluate AXS-12. The study will be initiated in the first quarter of 2021. Data from this study along with the completed phase II CONCERT study will support the new drug application (NDA) for AXS-12 to treat cataplexy in narcolepsy.

Shares of Axsome were down 3.5% following the above-mentioned news on Monday. In fact, the stock has declined 23.7% so far this year against the industry’s increase of 3%.


Along with the earnings results announced in August, management had confirmed that a phase III study on AXS-12 for narcolepsy is expected to begin in the second half of 2020. However, the study is now expected to start in first-quarter 2021. This postponement might have hurt investors’ sentiment, which induced the stock price depreciation.

We note that in January 2020, Axsome entered into an exclusive license agreement with Pfizer (PFE - Free Report) for getting the non-clinical and clinical data on the latter’s reboxetine, the active pharmaceutical ingredient in AXS-12. Data from a full range of completed nonclinical studies obtained from Pfizer along with results from numerous short-term and long-term clinical studies is likely to support the filing of an NDA for AXS-12 to treat narcolepsy.

If approved, Pfizer is entitled to receive regulatory/sales milestones and royalties on the future sales of AXS-12 from Axsome.

Notably, AXS-12 was granted a Breakthrough Therapy designation for the treatment of cataplexy in narcolepsy by the FDA in August 2020. The candidate also enjoys an Orphan Drug status for the given indication.

Zacks Rank & Stocks to Consider

Axsome currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Emergent BioSolutions Inc. (EBS - Free Report) and Horizon Therapeutics Public Limited Company , both presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Emergent’s earnings estimates have been revised 55.5% upward for 2020 and 37.3% for 2021 over the past 60 days. The stock has soared 85.3% year to date.

Horizon Therapeutics’ earnings estimates have moved 56.3% north for 2020 and 55.1% for 2021 over the past 60 days. The stock has surged 117.8% year to date.

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