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Why Is Axsome Therapeutics Shares Down 40%?

Shares of Axsome Therapeutics, Inc. (AXSM) tanked nearly 40% on Monday morning despite the biopharmaceutical company announcing that its depression treatment achieved primary and secondary goals in a mid-stage trial.

AXSM is currently trading at $30.87, down $20.29 or 39.65%, on the Nasdaq, on a volume of 2.8 million shares, far above the three-month average volume of 354 thousand shares. The stock has traded between $30.85 and $90.00 in the 52-week period. In the year-to-date period, the stock has lost over 60% in its value.

The company's lead drug candidate AXS-05 is being developed for major depressive disorder (MDD), Alzheimer's disease (AD) agitation, and smoking cessation.

AXS-05 met the primary and key secondary endpoints in the MERIT (Mechanistic Evaluation of Response in TRD) Phase 2 trial, and substantially and statistically significantly prevented relapse of depressive symptoms compared to placebo in patients with treatment resistant depression.

AXS-05 proposed for the treatment of major depressive disorder is under Priority Review by the FDA, with a decision expected on August 22, 2021.

Separately, the company reported second-quarter net loss of $32.3 million or $0.86 per share, wider than last year's loss of $18.3 million or $0.49 per share. Loss per share increased due to increase in expenses.

Research and development expenses rose to $14.5 million from $10.5 million, driven by costs to support the NDA filings and personnel expense. General and administrative expenses rose to $16.3 million from $7.2 million last year due to pre-commercial activities and personnel expense.

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