Axsome Therapeutics, Inc. (AXSM) Made Misleading Statements in Connection with its New Drug Application for AXS-07 for the Acute Treatment of Migraine
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Axsome Therapeutics, Inc. (NASDAQ: AXSM) securities between December 20, 2019 and April 22, 2022, for violations of the Securities Exchange Act of 1934. Axsome is a biopharmaceutical company that develops novel therapies for central nervous system (“CNS”) disorders in the U.S. The Company is developing AXS-07 for the acute treatment of migraine.
According to the complaint, defendants touted AXS-07’s regulatory and commercial prospects in anticipation of the Company submitting a New Drug Application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) for AXS-07 for the acute treatment of migraine (the “AXS-07 NDA”) based on the drug’s positive results in two Phase 3 trials. However, unbeknownst to investors, the Company’s preparation and eventual submission of the AXS-07 NDA was plagued with chemistry, manufacturing, and control (“CMC”) issues.
On November 5, 2020, Axsome reported the Company’s third quarter 2020 results, disclosing that the Company “plans to submit the [AXS-07] NDA to the FDA in the first quarter of 2021, versus previous guidance of the fourth quarter of 2020, to allow for inclusion of supplemental manufacturing information to ensure a robust submission package.” On this news, Axsome’s stock price fell $5.22 per share, or 6.99%, to close at $69.51 per share on November 5, 2020.
Then, on April 25, 2022, Axsome disclosed in an SEC filing that, “[o]n April 22, 2022, Axsome . . . was informed by the [FDA] that [CMC] issues identified during the FDA’s review of the Company’s [NDA] for its AXS-07 product candidate for the acute treatment of migraine are unresolved.” That filing also disclosed that “[b]ased upon the time remaining in the NDA review cycle, the Company expects to receive a Complete Response Letter [(‘CRL’)] with respect to this NDA on or about the Prescription Drug User Fee Act [(‘PDUFA’)] target action date of April 30, 2022.” On this news, Axsome’s stock price fell $8.60 per share, or 21.99%, to close at $30.50 per share on April 25, 2022.
Finally, on May 2, 2022, Axsome announced that it received a CRL from the FDA regarding the AXS-07 NDA for the acute treatment of migraine. According to the Company, “[t]he principal reasons given in the CRL relate to [CMC] considerations” including “the need for additional CMC data pertaining to the drug product and manufacturing process.”
Next Steps: If you acquired shares of Axsome Therapeutics, Inc. (AXSM) between December 20, 2019 and April 22, 2022, you have until July 12, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
