On Monday, Axsome Therapeutics, Inc. (NASDAQ:AXSM) released data from ACCORD-2, ADVANCE-2, and long-term safety trials AXS-05 (dextromethorphan-bupropion) in Alzheimer's disease agitation.

The ACCORD-2 Phase 3 trial achieved the primary endpoint with AXS-05 statistically significantly delaying the time to relapse of agitation, demonstrating a 3.6-fold lower risk of relapse compared to placebo.

AXS-05 also met the key secondary endpoint (relapse prevention, p=0.001). Further, AXS-05 reduced the worsening of overall Alzheimer's disease severity compared to the placebo.

The ADVANCE-2 Phase 3 trial did not demonstrate statistical significance for the primary endpoint in delaying the time to relapse of agitation from baseline to Week 5, with reductions of 13.8 and 12.6 points for AXS-05 and placebo, respectively.

However, results for the primary and nearly all secondary endpoints numerically favored AXS-05 over placebo.

AXS-05 was safe and well tolerated in both controlled studies.

The long-term safety and tolerability of AXS-05 were also evaluated in more than 300 subjects treated for at least 6 months and more than 100 treated for at least 12 months.

In the controlled and long-term studies in subjects with Alzheimer's disease, AXS-05 was not associated with an increased risk of falls, cognitive decline, or sedation.

In the clinical program for AXS-05 in Alzheimer's disease agitation, there have been no deaths in subjects receiving AXS-05.

Axsome plans to submit an NDA for AXS-05 in Alzheimer's disease agitation to the FDA in the second half of 2025.

William Blair writes that the data from the trials represent a mixed scenario for investors to digest how regulators will interpret the total pivotal data package for AXS-05 in Alzheimer's disease agitation.

The analyst notes that neuropsychiatry drugs have been approved based on their overall data, even if they faced setbacks in key trials.

Examples include Intra-Cellular Therapies Inc's (NASDAQ:ITCI) Caplyta and Johnson & Johnson's (NYSE:JNJ) esketamine.

William Blair notes the approval of Otsuka Holdings Co Ltd (OTC:OTSKY) (OTC:OTSKF) Rexulti for Alzheimer's-related agitation, despite mixed trial results, is a strong comparison for Axsome's AXS-05.

However, a key difference is that Rexulti's approval relied on placebo-controlled parallel group studies, while Axsome is expected to depend on results from the ADVANCE-1 and ACCORD-1/2 trials to meet the FDA's requirement for two well-controlled studies.

The analyst remains optimistic about AXS-05's approval, highlighting that the FDA's continued designation of AXS-05 as a breakthrough therapy reflects the high unmet need in this area, which could work in Axsome's favor.

Price Action: AXSM stock is up 2.62% to $87.00 premarket at the last check on Tuesday.