Axsome expects U.S. FDA to decline approval for migraine drug, shares fall

[April 26, 2022]  (Reuters) - Axsome Therapeutics said on Monday it expects the U.S. health regulator to decline approval for its treatment of acute migraine over unresolved issues of its quality control processes, sending shares of the drug developer down 20%.

The U.S. Food and Drug Administration is expected to make its decision on the drug, AXS-07, by Saturday.

Axsome's submission, accepted by the FDA in September, was based on two late-stage clinical trials that showed usage of the drug led to significant elimination of migraine pain compared with placebo and active controls.

The company said https://www.sec.gov/ix?doc=/Archives/edgar/data/0001579428/
000095017022006038/axsm-20220422.htm on Monday that chemistry, manufacturing and controls issues were identified during the FDA's review of the drug.

Axsome set the expectation for the FDA's so-called "complete response letter" as it did not have enough time to respond to the regulator's questions, said Cowen and Co analyst Joseph Thome.

Thome added he is "optimistic" that the drug would eventually be approved and expects $200 million in peak U.S. sales in 2030.

Shares, trading at $31.15, were set to post their biggest percentage fall in eight months.

 Signage is seen outside of the Food and Drug Administration (FDA) headquarters in White Oak, Maryland, U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo

"We are surprised that the stock is trading down about 20% especially given the more muted excitement that most investors have always had for this asset," said SVB Leerink analyst Marc Goodman.

The therapy consists of two compounds, meloxicam and rizatriptanx, which help in reducing symptoms such as headache and nausea.

An FDA decision against approval will mark another setback for the company, which has a drug to treat major depressive disorder awaiting approval.

The U.S. regulator notified the company of certain deficiencies in its application for depression drug AXS-05 ahead of its earlier target action date of Aug. 22 last year. The company provided its response in January.

(Reporting by Leroy Leo in Bengaluru; Editing by Amy Caren Daniel)

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