The Food and Drug Administration approved a new depression treatment from Axsome Therapeutics, leading AXSM stock to catapult higher on Friday.
On today's stock market, shares soared 40.4% to 59.55.
Axsome will sell the drug under the brand name Auvelity. Auvelity works by blocking a neurotransmitter called NMDA, or N-methyl-D-aspartate for short. Experts believe dysregulation of NMDA plays a role in depression. Auvelity is the only oral medication that blocks NMDA. It's the first oral depression treatment with a new mechanism to gain approval in over 60 years, Axsome said in a news release.
The approval comes during a major shift in depression treatment. By some accounts, rates of depression and anxiety soared threefold during the pandemic. Michael Pollock, chief executive of the Depression and Bipolar Support Alliance says the mental health crisis is one of the most pressing issues in the U.S. today.
"Over 20 million American adults experienced 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 adults in the U.S. or more than 80 million Americans experiencing elevated symptoms of depression."
AXSM Stock Soars On Depression Treatment Approval
The long-anticipated approval sent AXSM stock to its highest point since July 2021.
Axsome expects to launch Auvelity in the U.S. in the fourth quarter. In testing, patients who received the depression treatment showed symptom improvement after one week compared to placebo recipients. The most frequent side effects were dizziness, headache, diarrhea, sleepiness, dry mouth, sexual dysfunction and excessive sweating.
Axsome stock has a high Relative Strength Rating of 97, putting shares 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.
