GH Research Stock Soars 33% as FDA Lifts Hold on Depression Drug
The decision removes a two-year clinical hold on the company's lead candidate, GH001, clearing the path for pivotal Phase 3 trials in 2026.
Shares of GH Research (NASDAQ: GHRS) surged more than 33% on Tuesday after the U.S. Food and Drug Administration (FDA) lifted a clinical hold on the biopharmaceutical company's lead drug candidate, GH001, for treatment-resistant depression (TRD).
The stock climbed as high as $17.54 in morning trading, pushing the company's market capitalization to over $820 million. The regulatory green light removes a significant obstacle that had clouded the drug's development for over two years, clearing the way for GH Research to proceed with a global Phase 3 program.
"The FDA clearance is a major milestone and positions us to advance GH001 as a potential ultra-rapid and durable treatment option for TRD patients," said Dr. Velichka Valcheva, Chief Executive Officer of GH Research, in a statement released Tuesday. "We continue to expect initiation of our global pivotal program in 2026."
The FDA had placed the hold on the company's Investigational New Drug (IND) application in September 2023, citing the need for more information to assess potential risks to human subjects. The decision effectively halted the enrollment of U.S. participants in trials for GH001, which utilizes the inhalable psychedelic compound 5-MeO-DMT.
Analysts viewed the protracted hold as a major headwind for the Dublin-based company. The removal of this uncertainty prompted a positive reassessment from the market. In a note to clients, analysts at Stifel, who maintain a $32 price target on the stock, said the FDA's decision removes a "significant overhang" on the company. Stifel reiterated its "Buy" rating, highlighting that the drug's efficacy was already considered "derisked" by strong mid-stage trial results.
Investor optimism is rooted in the promising data from GH Research's Phase 2b trial. The study showed that a single dose of GH001 led to an ultra-rapid remission in a significant portion of patients with TRD, a condition where standard antidepressant therapies have failed. According to the company's findings, 57.5% of patients in the trial achieved remission by the eighth day.
The potential of the treatment was underscored by outside experts. "The large and rapid antidepressant effect observed with GH001 in the Phase 2b trial, combined with sustained remission through infrequent, short clinic visits, has the potential to be practice-changing for patients with treatment-resistant depression," commented Michael E. Thase, MD, a Professor of Psychiatry at the University of Pennsylvania's Perelman School of Medicine.
With the clinical hold lifted, GH Research plans to meet with the FDA to align on the final design of its Phase 3 program. The company appears well-capitalized to pursue these expensive late-stage trials, reporting cash and marketable securities of $293.9 million at the end of the third quarter of 2025.
While the journey to potential commercialization remains long and contingent on a successful Phase 3 outcome, the FDA's new clearance marks a critical turning point for GH Research and a significant de-risking event for its investors, solidifying its position among a new class of companies developing psychedelic-based therapies for mental health disorders.