A year after finding flaws in the biotech’s application, the regulator cleared a treatment some analysts view as a blockbuster-to-be.

The Food and Drug Administration on Friday approved a new depression drug from Axsome Therapeutics, one year after putting the treatment in regulatory limbo.

The regulator cleared Axsome’s treatment, an oral drug to be sold as Auvelity, for adults with major depressive disorder. Axsome expects to begin selling the drug in the U.S. in the fourth quarter.

Auvelity consists of bupropion, the active ingredient in GSK’s depression drug Wellbutrin, and dextromethorphan, which is best known for its use as cough medicine. The dextromethorphan acts on a neurotransmitter, NMDA, that controls mood, while bupropion boosts the amount of dextromethorphan available in the body.

Together, the two components are meant to produce an antidepressant effect faster than standard treatments, which can take weeks or months to show an impact.

Securing approval in depression has proved difficult, however. Axsome first reported positive results from a Phase 3 trial in 2019 and later filed an application based on those data as well as the findings from a mid-stage study.

Last August, however, Axsome said the FDA had found “deficiencies” in its filing. A review deadline set by the agency elapsed without a decision, leaving the treatment’s fate unclear.

The agency’s issues with Auvelity were later revealed to be related to drug manufacturing — the same type of problems that led regulators last week to reject an Axsome treatment for migraine. (They were resolved in Auvelity’s case.)

News of the decision sent Axsome shares higher by as much as nearly 40% on Friday morning. The stock had jumped by a similar percentage in June when the company disclosed it was discussing the drug’s labelling with the FDA.

Results from the Phase 3 study of Auvelity were published in The Journal of Clinical Psychiatry in May. Patients treated with the drug had a roughly 16-point change on a test of their depression symptoms after six weeks, versus a 12-point difference for those who received a placebo.

There was a significant difference between the two groups at all time points, including the first two weeks. Results from a separate trial have shown treatment effects can hold up for one year afterwards. The most common side effects reported in testing were dizziness, headache, diarrhoea, drowsiness and dry mouth.

“Given the debilitating nature of depression, the efficacy of Auvelity observed at one week and sustained thereafter may have a significant impact on the current treatment paradigm for this condition,” said Maurizio Fava, executive vice chair of psychiatry at Massachusetts General Hospital and a top depression researcher, in Axsome’s statement.

Chris Howerton, an analyst at Jefferies, has predicted the drug could generate as much as $1.8 billion in peak yearly sales.

Axsome has also been developing Auvelity for other conditions, among them smoking cessation and Alzheimer’s disease agitation. Phase 3 results in the latter condition are expected later this year, while Axsome is planning late-stage tests in smoking cessation.