Shares of biopharmaceutical company Axsome Therapeutics (AXSM -6.29%) had declined 6% at 11 a.m. ET today. The slump comes after the company announced the results of a phase 3 trial of solriamfetol (brand name Sunosi) in major depressive disorder (MDD).

What the results mean

The trial was somewhat complicated, so bear with me. It was a six-week proof-of-concept phase 3 trial for MDD "with and without severe excess daytime sleepiness (EDS)."

The primary aim of the trial was to demonstrate significant improvement in the overall population (consisting of 51 patients with severe EDS and 295 without severe EDS) using solriamfetol. The degree of severity of EDS was assessed with the Epworth Sleepiness Scale (ESS), and the trial used the Montgomery-Asberg Depression Rating Scale (MADRS).

The details:

• The trial did not demonstrate a statistical improvement in the overall population when comparing patients on solriamfetol to those on a placebo.
• In the MDD patients with severe EDS, the use of solriamfetol "resulted in clinically meaningful and numerically greater improvements compared to placebo on multiple efficacy measures including MADRS total score" according to the press release.

The second point encouraged the pharmaceutical company's management enough to prompt a phase 3 trial in MDD patients with EDS in 2025.

Image source: Getty Images.

What it means to investors

It's mixed news. The proof-of-concept trial did not meet its primary aim, and that's enough to take the stock lower. Still, there's data to indicate a positive response in severe EDS cases. If those results are replicated in the forthcoming phase 3 trial, Axsome can claim success, but if solriamfetol is approved only for use in severe EDS, it will mean fewer sales than if the drug is approved for the total population of EDS patients.