Axsome Therapeutics Inc. won U.S. FDA approval for Auvelity, also referred to as AXS-05, to treat Alzheimer’s disease agitation (ADA), a condition that affects up to three-quarters of patients, gaining access to a $1 billion-plus market and a clean label that counters the boxed warning of a competitor.

The agency accepted the supplemental NDA under priority review on Dec. 31, 2025, and the approval, specifically for agitation associated with dementia due to Alzheimer’s disease, came on the April 30, 2026, PDUFA date. Auvelity (dextromethorphan HBr and bupropion HCl) also had breakthrough therapy designation for ADA. The oral N-methyl-D-aspartate (NMDA) receptor antagonist, sigma-1 agonist and aminoketone CYPD2D6 inhibitor first gained FDA approval in 2022 for major depressive disorder (MDD) in adults.

“We think the label comes in clean, with no boxed warning for the risk of death in the elderly, and no additional warning for falls – reflecting what we think will be a best-in-class safety profile for this patient population,” said RBC Capital Markets analyst Leonid Timashev, adding that his team sees about a $1.6 billion out-year opportunity in ADA, which is in line with consensus.

ADA is a large market, including more than 7 million Americans, and the condition can significantly impact the quality of life for patients and caregivers. Agitation in Alzheimer’s disease dementia is characterized by excessive motor activity or verbal or physical aggression. It affects about 76% of Alzheimer’s patients at some point during the disease.

“Most importantly, the label is clean with no black box warning for increased risk of death in elderly patients with dementia, unlike the only other approved drug for ADA, Lundbeck/Ostuka's Rexulti,” said TD Securities analyst Joseph Thome. “Our KOLs [key opinion leaders] have indicated that a clean label would be seen as an improvement over Rexulti and other atypical antipsychotics that are used off-label, thus we expect that Auvelity will quickly take market share and could become the treatment of choice for ADA.”

Thome previously noted that Rexulti (brexpiprazole) is an atypical antipsychotic that has been constrained by a boxed warning for increased mortality risk in elderly patients with dementia, despite being an effective drug. His team modeled peak ADA sales in the U.S. of about $1 billion at a 3% penetration. “Our sensitivity analysis and physician survey results suggest that the overall ADA [total addressable market] approaches $15 [billion], thus there is substantial upside from our current estimates. The approval is a key de-risking event for the company and attention will now be paid on the cadence of launch, and access,” he said.

A serotonin-dopamine modulator from Otsuka Pharmaceutical Co. Ltd. and H. Lundbeck A/S, Rexulti gained FDA approval in May 2023 as the first drug for ADA, following its approval in 2015 for schizophrenia and MDD. Lundbeck reported revenues of about $820 million in 2024 and about $970 million in 2025.

The sNDA is based on four studies, Advance-1, Advance-2, Accord-1 and Accord-2, with the first readout in 2020 from the phase II/III trial Advance-1 showing Auvelity met the primary endpoint with a statistically significant mean reduction in the Cohen Mansfield Agitation Inventory (CMAI) total score compared to placebo at the fifth week (15.4 points vs. 11.5 points [p=0.010]). Accord-1 data reported in 2022 also showed that Auvelity hit the primary endpoint by delaying time to relapse of ADA vs. placebo (p=0.014), and hit a key secondary endpoint by preventing ADA relapse vs. placebo (p=0.018). Data from the Accord-2 and Advance-2 trials were reported in December 2024, with Accord-2 hitting the CMAI total score primary endpoint (p=0.001), as well as the ADA prevention of relapse secondary endpoint (p=0.001). Advance-2, however failed to show statistical significance on the CMAI total score primary endpoint (13.8 points vs. 12.6 points placebo), although there were numerically greater improvements with AXS-05 over placebo for the primary and most secondary endpoints.

RBC’s Timashev said that despite investor concern over the randomized withdrawal study design and the one trial miss, “we felt that the company hitting their endpoints in three out of four trials would suffice in the context of an FDA that had shown meaningful flexibility in neuro-psychiatric data filings.”

The safety profile was clean in all four trials, too, with a long-term evaluation of 456 subjects treated for up to 12 months showing Auvelity was well-tolerated. Headache was the only adverse event occurring in at least 5% of patients. There were no deaths and Auvelity was not associated with sedation or cognitive decline. The label for Auvelity in ADA, however, does include a boxed warning about an increased risk of suicidal thoughts and behaviors in adolescents and young adults taking antidepressants.

New York-based Axsome’s shares (NASDAQ:AXSM) rose nearly 23% on the last day of 2025 upon the FDA’s acceptance of the sNDA, as well as the granting of priority review with no scheduled advisory committee meeting. They ended the day April 30, following the FDA’s announcement of the approval, at $207.75, up $23.80, or 12.9%.

The company plans to soon start a pivotal phase II/III trial of Auvelity in smoking cessation, and to continue to develop solriamfetol for attention deficit hyperactivity disorder (ADHD), MDD with excessive daytime sleepiness (EDS), binge-eating disorder (BED) and excessive sleepiness associated with shift work disorder (SWD). Top-line data in BED, SWD and MDD are expected later this year and in early 2027.