Axsome sees depression drug decision delayed as FDA kicks expected CRL can down the road

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(FDA)

A new depression therapy out from Axsome was expected to be handed a final FDA decision over the weekend, but the agency has nixed that, for now.

This delays comes two weeks after the FDA found “deficiencies” in Axsome's submission for approval of AXS-05 in major depressive disorder (MDD). Axsome said at the time that it was yet to learn the nature of the deficiencies or their implications for the filing. We still don’t know.  

What we have instead is uncertainty and an unusual situation: The FDA had set Sunday, Aug. 22, as its PDUFA date to approve or reject AXS-05; those deficiencies meant analysts read a complete response letter in the tea leaves, but what we have instead is a delay to a decision.

“The informed the company in a teleconference on August 20, 2021, that its review of the new drug application (NDA) for AXS-05 for the treatment of major depressive disorder would not be completed by the Prescription Drug User Fee Act (PDUFA) target action date of August 22, 2021,” the biotech said in a brief update Monday morning.

“The FDA did not request additional information from the Company, and the review of the application is ongoing.” The drug has the FDA’s priority-review and breakthrough tags, usually reserved for drugs that may meet an unmet medical need.

RELATED: FDA finds fault with Axsome's depression filing, sinking stock

You might think this would drag its shares down, but no: In what some analysts and clearly many investors saw as a glimmer of hope (i.e., that a CRL wasn’t simply handed down immediately), shares in the biotech actually jumped 20% premarket Monday morning, but opened up lower, at 12%.

“Today's update may be a positive sign that the review will be completed soon and the drug may receive a near-term approval,” said Mizuho analysts in a note to clients, echoing these sentiments.

The analysts add that the FDA, under pressure to be speedy under its priority review label, may have “potentially just ran out of time in getting everything completed ahead of the Action Date.”

But the firm cautioned that, on the other hand, “there are obviously some deficiencies in the application that the FDA has been concerned about.”

It suggested one scenario could be that the review will “continue indefinitely” and then still lead to a CRL, suggesting today's update is “just delaying the inevitable and further pushing out the time to approval.”

Axsome based its submission on phase 2 and phase 3 clinical trials that linked AXS-05, a combination of the active ingredient in GlaxoSmithKline’s Wellbutrin and a cough medicine, to improvements in depressive symptoms in patients with MDD.

The bupropion/dextromethorphan combination failed a phase 3 trial in treatment-resistant depression but looked well placed to win approval before the deficiency problems.