Axsome Therapeutics said its Alzheimer's treatment met the goals of a Phase 3 study, sending AXSM stock into the stratosphere.
The biotech company is working on a treatment for Alzheimer's patients who experience agitation. In the final-phase study, the drug called AXS-05 outperformed a placebo, delaying or preventing relapse in patients with agitation.
Mizuho Securities analyst Graig Suvannavejh noted the study, called Accord, had faced some setbacks earlier in the year. Axsome ended the study early and, instead, began another final-phase study known as Advance-2, he said in a note to clients. He is bullish on AXSM stock.
"Given the early discontinuation of Accord and that 100% patient enrollment was not achieved, Accord was, as a result, viewed as not being adequately powered to demonstrate statistical significance," he said. "In our view, this makes the morning's robust Phase 3 topline data even more impressive."
On today's stock market, AXSM stock skyrocketed 31.5% to 74.74.
AXSM Stock: Improvement In Agitation
In Axsome's Accord study, the Alzheimer's treatment showed a statistically significant improvement over the placebo in delaying the time to relapse of agitation. It also had a statistically significant effect on preventing relapse of agitation vs. the placebo.
Researchers also looked at symptoms of Alzheimer's agitation. Patients who received AXS-05 showed statistically significant improvements starting as soon as a week after treatment. On a scale measuring cooperation, patients showed a 66% improvement after two weeks, and 86% at five weeks.
"By all accounts, we found the data to be quite impressive, especially in light of our relatively modest expectations," Mizuho's Suvannavejh said. He kept his buy rating and 80 price target on AXSM stock.
Importantly, side effects were relatively equal between patients who received AXS-05 and recipients of the placebo. Roughly 28% of patients in the treatment group experienced side effects vs. about 22% of the placebo group.
The news helped AXSM stock break out of a cup-with-handle base and a buy point at 66.25, according to MarketSmith.com.
Biogen Stock Dips On Report Of Patient Death
While AXSM stock catapulted higher, Biogen stock skidded 4.3% to 291.90 on a report out of its Alzheimer's treatment study.
According to the journal Science, a 65-year-old woman receiving infusions of the Eisai-partnered drug, lecanemab, died of a brain hemorrhage. This is reportedly the second patient to die in the lecanemab studies. Lecanemab works to remove beta amyloid, a built-up protein associated with Alzheimer's disease. Eisai stock lost 4.4% and closed at 65.10.
Representatives of Biogen referred comment to Eisai, which is running the test. Eisai spokeswoman Libby Holman said she couldn't comment on specific patients or information provided by other sources.
"It can be difficult to determine what contributed to the death in any given patient, in particular when they are elderly, have multiple medical problems or may have recently received (an additional) treatment or intervention for an acute condition," she said in an email to Investor's Business Daily. "The well-being of the patients enrolled in our clinical studies is always Eisai's top priority."
Blood Thinner Use Could Be Key
RBC Capital Markets analyst Brian Abrahams notes the patient was receiving a blood thinner on top of lecanemab. This specific medicine causes brain hemorrhage in about 6% of patients who receive it, and close to half of those are fatal.
"A neuropathologist cited in the article believes the patient's receipt of lecanemab had contributed to the outcome," he said in a report.
Still, he kept his outperform rating on Biogen stock.
"Importantly, this does not change our expectation for how the drug would be used as, based on our discussions with clinicians over the years, we believe physicians are already aware of the risks of beta-amyloid antibodies for certain patients and would already be relegating use of lecanemab to about 50% of patients who have fewer risk factors."
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
