Axsome Therapeutics, Inc. (AXSM) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining us at the UBS Virtual Healthcare Conference Day 1. I am excited to have Axsome management team here with us for a presentation. And I would love to turn the mic over to Herriot Tabuteau, CEO of Axsome.

Well, thank you so much for having us present at your conference. This is our first year at the UBS conference. And this is an exciting time for Axsome. So this is a great time for us to be presenting. Now while Axsome is a CNS-focused company. And before I get into that, I just want to go to Slide 2. So I will be making forward-looking statements, and I do encourage you to read our SEC filings for a full description of uncertainties associated with our business. So as I mentioned, Axsome is CNS-focused. When the company was founded, the point of choosing this therapeutic area was that it was underserved at the time, and it still remains highly underserved. So we're really committed to our mission of developing novel products to treat CNS disorders since these are very difficult to treat. And often, there are limited treatment options and in some cases, no treatment options at all that are approved by the FDA. So the team at Axsome has been working diligently on this mission. And to that point, we are now at a stage where we have 4 clinical-stage product candidates. Now our lead product candidate is the AXS-05, which we're developing for the treatment of major depressive disorder, Alzheimer's disease agitation and also smoking cessation. We're very excited to have submitted AXS-05 to the FDA to be reviewed for, potentially, approval as early as August 22 of this year, which is the PDUFA date. So the NDA has been filed and we'll discuss. We did receive priority review for AXS-05 for the treatment of major depressive disorders. Our second lead product candidate is AXS-07, which we're developing for the acute treatment of migraine. And we are getting ready to file an NDA this quarter in order to get this product approved, potentially, for the treatment of migraine. So this would be our second NDA filing this year. And what that means is Axsome would be on the verge of becoming not just an R&D company, but also a commercial company. So that's a very exciting time for us. And also, we think, for patients should these products successfully navigate the NDA review process. Now we have a deep pipeline. So not only do we have these NDA-state product candidates, AXS-05 and AXS-07, but we also have AXS-12, which we are developing for the treatment of narcolepsy. And that product candidate has been granted breakthrough therapy designation by the FDA based on positive results from a Phase II trial. And we are, right now, getting ready to launch a Phase III trial, pivotal trial for AXS-12 in the treatment of narcolepsy. And that our fourth product candidate is AXS-14, which we're developing for the treatment of fibromyalgia. And this product candidate has already completed a Phase III trial and a Phase II trial, both of which were positive. And we recently had a meeting with the FDA to discuss the development path forward for AXS-14, and we look forward to providing you updates on that front in the future. Now all of our product candidates enjoy patent protection. And so these patents go out to 2040 in terms of expiration dates, and we have worldwide rights. So the one interesting aspect of Axsome's pipeline is that our pipeline line has generated positive control data in each of the indications that we are targeting. So major depressive disorder, migraine, Alzheimer's disease agitation, narcolepsy and fibromyalgia. That is an enviable position to be in. So it means that should we successfully continue the development of these product candidates, they have the potential to address a very significant proportion of the U.S. population. So overall, in total, more than 60 million U.S. patients. Now let me talk a little bit about AXS-05 in greater detail. As I mentioned, this is our lead product candidate. So AXS-05 is a novel, oral, NMDA receptor antagonist with multimodal activity. So the first indication that we are developing in AXS-05 for is major depressive disorder. Now MDD is a very prevalent disorder. And it was already prevalent prior to the pandemic. However, recent studies have shown that in 2020, almost 1/3 of U.S. adults experienced depressive symptoms, and that's a more than a fourfold increase versus 2009. So if approved, the AXS-05 would be an important new treatment option for the millions of patients who are currently living with depression risk. And we're committed to bringing this meaningful innovation to patients by commercializing AXS-05 in a timely manner. So the NDA for AXS-05 in major depressive disorder is supported by positive results of the GEMINI trial as well as positive results from ASCEND trial. This is just a snapshot of the clinical data, which gives you a sense of the product profile. So this is the GEMINI trial in which AXS-05 was compared to placebo. What we're seeing was a rapid reduction in depressive symptoms. Statistical significance versus placebo was reached at one week, which was the earliest time point assessed. And the benefit versus placebo continued to increase over time. The magnitude of effect is significant compared to the magnitude of effect of currently marketing antidepressants. So we're happy to see that. And on the right-hand side of the slide, this is an important data point. It looks at remission rates. This is a very key goal in depression treatments. And what we're seeing was remission was achieved early and was substantial, over time. So as I mentioned, we have filed our NDA for AXS-05 in the treatment of major depressive disorder. We recently announced that the NDA had been accepted by the FDA and have been granted prior to review. And so what that means is that we have a PDUFA date of August 22 of this year. Now what this means is that we could be potentially a commercial entity in the fourth quarter. So what are we doing to make sure that we are ready to launch? Obviously, there's a lot of work that's been happening on the commercial front at Axsome. Some of that -- some of it is not necessarily visible or easily assessed by The Street. For example, our digital centric commercialization platform, which we've been working on for a while. There's a ton of work going on at Axsome, which is very exciting with regards to that platform. Functional leadership. Functional senior leadership across marketing, market access, commercial operations and sales are all in place. The launch activities are focused on a potential launch in the fourth quarter if AXS-05 is approved. But preparations are also in place to include a launch of AXS-07 shortly thereafter. Our marketing team is focused on disease education and post PDUFA launch promotional planning. Market access team continues to engage in ongoing permitted discussions with payers, ensuring that the awareness of AXS-05 and AXS-05's product profile is known, along with actively setting up comprehensive patient support services. And lastly, our sales team has determined the optimal size and structure and design of our sales force, and we are now concentrating with field force preparedness and hiring of both the field force leadership as well as the field force reps themselves, has commenced. Finally, outside of commercial, our medical affairs team continues to focus on presenting data at upcoming scientific conferences and our medical science liaisons continue to engage with KOLs. Now AXS-05 is a very interesting product candidate when you look at the pharmacology of the product candidate. And the pharmacology is broadly applicable, it seems, to numerous CNS conditions. And one very important one is Alzheimer's disease agitation. We are currently in a Phase III trial in Alzheimer's disease agitation. This is the ACCORD study. And that ACCORD study follows positive results from our first pivotal trial, the advanced trial, which I'll talk about in a second. But let's just talk about the disease itself. So Alzheimer's disease, as we all know, is a very prevalent disorder and which is growing in prevalence with the aging population. So there are currently 6 million patients in the U.S., or 6 million individuals who have Alzheimer's disease, and that's expected to grow to 14 million by 2050. Now while cognitive decline is the hallmark of the disease, the most struggling symptom for patients and for caregivers are actually the neuro-behavioral symptoms, one of which is agitation. So 70% of patients actually experience agitation. It is the number one reason for early nursing home placement. It is also not just the bothersome condition, but it is also a serious one because it accelerates cognitive decline and is associated with increased mortality. Now managing the symptom for these reasons is a key goal of treatment. However, clinicians are hampered by the fact that there are no products approved to treat Alzheimer's disease agitation. So with no approved treatments, this is a high unmet medical need. Now we, last year, announced positive results from our advanced trial in Alzheimer's disease agitation. This was a pivotal study, in which patients were randomized to treatment with AXS-05 placebo, or bupropion, which is one of the components of AXS-05. And what study showed was a highly statistically significant improvement in symptoms of agitation as compared to both of the control arms. We were granted breakthrough therapy designation by the FDA for AXS-05 in Alzheimer's disease agitation. And earlier this year, we launched our -- a second pivotal trial, this is our Phase III trial, the ACCORD study. So enrollment in that study is ongoing, and we will, of course, keep you updated as we go along with that study. Now I'd like to switch gears and talk about our second lead product candidate, AXS-07. This is a multi mechanistic treatment for migraine. And it consists of MoSEIC meloxicam, and we use our MoSEIC technology to speed the absorption of meloxicam and enable its use in the treatment of migraine, and it combines that with rizatriptan, which is a triptan drug, which is considered to be one of the most potent triptans. So the way that AXS-07 was designed was to focus on improving efficacy. So we wanted to maximize efficacy. And we think that we've accomplished that goal. We studied the AXS-07 in the MOMENTUM trial in patients with a history of inadequate response. And the results of that study showed that AXS-07 was superior, not only to placebo but it was also superior with regards to rizatriptan, the active comparator. So we're pretty excited by the results of that trial. And we launched the INTERCEPT trial. In the INTERCEPT study, the results of the INTERCEPT study are shown here on this slide. The INTERCEPT study, the goal of that study was to treat migraine the way that we think that clinicians will instruct patients to treat it, which is at the early sign of pain. And what we're seeing with AXS-07 in the INTERCEPT trial, which is a Phase III trial, was that it resulted in rapid improvement in migraine symptoms. And not only that, it prevented progression of symptoms. So we are in the final stages of preparing our NDA for submission. And so we're on track to get that done this quarter. Now moving on to AXS-12. This is our product candidate for the treatment of narcolepsy. So a few words about narcolepsy. So narcolepsy is a highly debilitating neurological condition, which is characterized by excessive daytime sleepiness; cataplexy, which is a sudden loss of muscle tone. Also, patients who have narcolepsy complain of cognitive dysfunction. This is called, sometimes, a fog, a brain fog or a narco fog by patients. And that symptom is considered to be just as distressing as cataplexy. It is an orphan indication, but it is a large orphan indication. There are roughly 200,000 patients in the U.S. who currently live and struggle with narcolepsy. So we've been granted the orphan drug designation for AXS-12 in the treatment of narcolepsy. And we also announced positive results from Phase II trial, our CONCERT trial, which demonstrated a rapid improvement in not only cataplexy symptoms, but also in symptoms of excessive daytime sleepiness in patients who were treated with AXS-12 as compared to placebo. In addition, we also measured cognitive dysfunctions. We measured the ability to concentrate, and what we're seeing was also a rapid improvement in the ability to concentrate with AXS-12, which was highly statistically significant. So we have been granted breakthrough therapy designation for AXS-12 in the treatment of cataplexy. And right now, we are getting ready to launch our Phase III trial with AXS-12, and we believe that this study will enable us, if positive, to file NDA. And so our fourth product candidate is the AXS-14, which we're developing for the treatment of fibromyalgia. This is esreboxetine, the SS-enantiomer of reboxetine. And fibromyalgia is a very prevalent disorder. It affects 5 million U.S. adults. It affects primarily women. So 90% of women are affected. And the symptoms are debilitating. They include chronic fatigue, but also disturbed sleep and depression, as well as cognitive impairment. This is in addition to what is often considered the hallmark symptom, which is widespread pain. So fibromyalgia is this condition whereby there are numerous symptoms. It's a symptom complex, which make life very difficult for individuals and call this very serious sequelae. And what is interesting about AXS-14 is that it may have the ability to address many of these symptoms. And that would be a good thing because currently, treatment options are very limited for fibromyalgia. There are only 3 agents that are currently approved. So as I mentioned, we -- one of the interesting aspects of AXS-14 is that we have generated -- or I should say, data has already been generated in control trials showing the efficacy of AXS-14 in 2 studies. So one was a positive Phase III trial, and the other one is a positive Phase II trial. Now we have -- we did announce that we did meet with the FDA to discuss the clinical development of the AXS-14 and we're waiting for the written minutes from the FDA prior to providing an update to The Street on the status of this program. So just a few words about intellectual property. So our AXS-05 product candidate is covered by 50 issued U.S. patents, actually more than 50 issued U.S. patents. We also have more than 40 issued patents outside of the U.S. So for a total of close to 100 now issued patents. And the patent term extends out to 2040 for the claims. In addition to that, there's proprietary manufacturing, which we think provides another barrier to entry. For our second lead product candidate, which is the AXS-07 for migraine. Similarly, we have more than 50 issued patents in the U.S. and more than 40 patents issued outside of the U.S. and the claims for these patents extend out to 2036, and there's also proprietary manufacturing. For AXS-12, we do have pending U.S. patents as well as pending U.S. patents for AXS-14. And in addition, we have we have orphan designation for AXS-12, which provides us with orphan exclusivity. So we -- we're privileged to have not just a great management team, so very excited every day to come to work and work with our colleagues. But we also have a strong Board of Directors with Roger Jeffs, Mark Saad and Dr. Mark Coleman. So just to wrap up. This is a very exciting time for Axsome. We have a number of important pivotal events and milestones, which we are expecting throughout the course of the year. We expect to file our second NDA for AXS-07 for the treatment of migraine this quarter. We then would look forward to the PDUFA date for our first NDA for AXS-05 in the treatment of MDD in late August. And we are looking forward to launching our Phase III trial with AXS-12 in the treatment of narcolepsy. And also, we are continuing to advance our ongoing clinical trial with AXS-05 in the treatment of Alzheimer's disease agitation. And finally, we look forward to being able to speak to you more about our AXS-14 product candidate and the plans for moving that forward. Thank you so much, and as always, we look forward to keeping you updated as we move along throughout the year.