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Investing.com -- Shares of Axsome Therapeutics (NASDAQ:AXSM) tumbled 5.7% today following the announcement of their latest clinical trial results. The biopharmaceutical company reported that its PARADIGM Phase 3 trial of solriamfetol for major depressive disorder (MDD) did not meet the primary endpoint of a statistically significant change on the Montgomery-Åsberg Depression Rating Scale (MADRS) total score compared to placebo.
The trial, which aimed to address the treatment of central nervous system disorders, specifically targeted MDD patients with and without severe excessive daytime sleepiness (EDS). While the subgroup of patients with severe EDS showed greater improvements in depressive symptoms when treated with solriamfetol, the study was not powered to demonstrate statistical significance in these subgroups. As a result, the overall patient population did not show meaningful difference compared to placebo, leading to today’s decline in stock value.
In light of these findings, Axsome has announced plans to initiate a Phase 3 trial focusing exclusively on MDD patients with EDS in 2025. This decision comes after observing clinically meaningful and numerically greater improvements in several efficacy measures for the severe EDS subgroup at the 6-week mark of the trial. Despite the setback in the overall population, solriamfetol was reported to be safe and well-tolerated, with side effects aligning with its established safety profile.
EDS is a symptom prevalent in about 50% of MDD patients, characterized by difficulty maintaining wakefulness and an increased likelihood of falling asleep during the day, which can severely impact daily activities and safety. Currently, there are no approved therapies to treat MDD with EDS, highlighting the potential significance of Axsome’s continued pursuit of solriamfetol’s approval for this indication.
BofA Securities analyst Jason Gerberry provided a broader perspective on Axsome’s position, reiterating a Buy stock rating and a $174.00 price target despite the trial results. "We see Axsome as an execution story with limited high impact clinical/regulatory events in the next 12-months. Our focus remains on launch execution of both Auvelity-MDD and Symbravo-migraine (new launch; 2Q25) and post IP resolution we expect Axsome shares to benefit from scarcity value of high growth (clinically de-risked psychiatry assets; large cap pharma M&A pickup in this space)," Gerberry commented.
Guggenheim analyst Yatin Suneja also reiterated a Buy stock rating and a $195.00 price target of Axsome, saying, "This does not come as a surprise to us, as the proof of concept for this mechanism had yet to been established and MDD studies have been historically difficult."
Investors and stakeholders will be watching closely as Axsome continues to navigate the challenges of clinical development and seeks to capitalize on the unmet needs within the treatment of CNS disorders.
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