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

All right, great. Hi. Thanks for joining us today. My name is Mark Jacobson. I'm the Chief Operating Officer at Axsome Therapeutics. And thank you to Goldman Sachs for hosting us today. So I may be making forward-looking statements. And we'd invite you to review our disclosures and summary of risks and uncertainties, which you can find in our filings with the Securities and Exchange Commission. So Axsome Therapeutics. Our mission is to develop and deliver transformative, innovative medicines for the hundreds of millions of people living and impacted with or by central nervous system disorders. There are more than 150 million people in the United States who are impacted by 10 serious CNS conditions that we're focused on within neuroscience. And neuroscience conditions have historically been underserved by the biopharma industry, and that is in psychiatry and neurology. And within those categories, underserved unmet needs are -- they're twofold. One is areas of unmet need where there are none to only a few treatments approved. Think Alzheimer's disease agitation; in this case, 2 areas where there are multiple products approved, but patient outcomes are still lacking in particular with respect to efficacy. So in that case, think migraine. Think depression. So we are focused on a number of indications within psychiatry, major depressive disorder, MDD; Alzheimer's disease agitation; smoking cessation; ADHD; and binge eating disorder. And we'll talk about the updates for those programs here. And then within neurology, that's obstructive sleep apnea, migraine, narcolepsy, fibromyalgia and shift work disorder. The way we think about delivering innovation to these areas, to patients, to HCPs, there are 5 pillars. One is novel mechanisms of action. So within the areas where there are multiple products approved, we think about approaching those areas with novel mechanisms of action that deliver distinct and differentiated treatment outcomes. We think about multi-mechanistic modes of treatment. And that would be, for example, Auvelity, SYMBRAVO and some of the other programs in the pipeline. Through that -- some of those multi-mechanistic approaches, we focus on metabolic pharmacokinetic modulation. So utilizing products or product candidates that are active in the central nervous system to also modulate the metabolism of other drug substances. Clinical trial innovation. In CNS, clinical trials have historically had difficulty separating from placebo due to high placebo response rates. And we work on designing trials that can detect signals if you have an active molecule. And then the final pillar is innovation with respect to molecular drug delivery, so determining ways to deliver molecules that are active in the central nervous system in a way that they can result in distinct pharmacodynamic impacts. Snapshot of the company. We think we have a singular neuroscience pipeline in the industry. And when you think about that, we're diversified commercially. We have 3 commercial products, 2 of which we developed in house. We have 2 NDA-stage programs, 5 late-stage programs in ongoing Phase III development. And all of those lead to potentially 7 additional new products or indications through 2027. And then we've covered what we're focused on, but 10 highly prevalent or difficult-to-treat areas of unmet need in CNS. Here is the pipeline broken out in psychiatry and neurology, and we'll run through the updates for each program. The pipeline is such that in totality there are $16.5 billion of potential peak sales. Just taking Auvelity, Sunosi and SYMBRAVO, the potential peak -- our approved products, potential peak sales are $2 billion to $4.5 billion. Quick snapshot of the year-to-date and the balance of the year and what's up for 2026. SYMBRAVO, that was approved earlier this year. And then we've had a number of positive Phase III clinical trial readouts. I will cover those. And then looking ahead, regulatory and commercial side, launch of SYMBRAVO, that is imminent. And we'll look forward to sharing updates there. sNDA submission for Alzheimer's disease agitation, that is on track for the third quarter. And then we have an NDA submission plan for AXS-12 in narcolepsy in the second half of the year. Clinical trial readouts. Right now we have the ENGAGE Phase III trial of solriamfetol in binge eating disorder. That top line is on track for 2026. So that's enrolling through the balance of the year, same thing with the SUSTAIN Phase III trial of solriamfetol in excessive sleepiness in shift work disorder. That -- enrollment is ongoing -- and expect top line next year. And then we have a number of trials that we expect to start between now and the end of the year, and I'll cover those. So commercial highlights quickly. Again, 3 approved products: Auvelity in rapid growth phase; annualizing, as of the end of the first quarter, at a $400 million run rate; dramatic growth. We expect that to continue. Sunosi, growing steadily. That is approved for excessive daytime sleepiness in narcolepsy or obstructive sleep apnea, again growing steadily. And we're pleased with how that business is going. And then finally, SYMBRAVO, as I mentioned, that is our new product for the acute treatment of migraine. That was approved in January and that will be launching this month. Auvelity, oral NMDA receptor antagonist. So this is a dramatically new way of treating depression with oral treatment. And the key thing here is it's fast and it lasts. So a quick snapshot of growth in terms of scripts since launch and a couple callouts as we're here: Right now as of today or end of the first quarter, just north of 50% of the prescriptions are in first or second line. So first line or first switch in patients. We're very pleased with that, especially at this stage of launch. And about 55% of patients start Auvelity as monotherapy, and we're very pleased with that as well. Snapshot of quarterly net sales. Again I mentioned the annualized run rate, and we expect growth to continue at a nice clip. And that will be in the near term driven by, I think, 3 key drivers of growth. One is the field force expansion. We completed an expansion of 40 additional sales reps at the end of the first quarter. They're in the field. We're seeing the [ start of that productivity ] in terms of pull-through to new-to-brand scripts. We expect continued evolution in terms of covered lives in the commercial channel. That is both improvements in utilization management and increased number of lives covered. And then finally, we will potentially roll out a national DTC campaign in the second half of the year. Turning to Sunosi. As I mentioned, this is our product for excessive sleepiness in OSA and narcolepsy. And steady growth here. And just a real quick snapshot: moving nicely. It's a very healthy component of the business. And we'd expect that growth to continue here, but in particular, we're very excited about potential -- efforts on the R&D side for potential label expansion. Annualizing at about $100 million run rate, which is great. And we're pleased with how that business has been performing since we acquired the product. SYMBRAVO. This is a novel -- again, one of our pillars of growth, multi-mechanistic treatment options for oral for acute treatment of migraine. And what's very interesting about SYMBRAVO is the clinical data that we generated in a variety of migraine severities. So these studies position it and allow HCPs to use this in a variety of patient profiles: early line or mild migraine pain, to significant migraine pain, say, in individuals who have had inadequate response to prior oral acute treatments. It uses our MoSEIC technology. This is a technology that we developed in house to deliver meloxicam and rizatriptan. [Audio Gap] off-line briefly. All right, great. Sorry for those joining online. And we should now be back on [ Slide 19 ]. So SYMBRAVO launch readiness. The field force has been hired. They've gone through training. It's 100 reps. And they will be in the field imminently, and we'll have an update for you all soon. And the key thing about migraine is there are a number of treatment options, but greater than 80% of patients discontinue their acute migraine treatment within the first year. And that's due -- if you survey patients and clinicians, that is due to inadequate treatment on the efficacy side. So turning to the development pipeline. We have AXS-05 for Alzheimer's disease agitation. We completed that clinical program at the end of this past year. And we are building an NDA submission, as I mentioned. The work is underway now. No patients are being treated. And that submission is on track for the third quarter [ of this year ]. We have high unmet medical need and currently about 7 million adults in the U.S. and about 70% of them have agitation. So about 7 million adults with Alzheimer's or the dementia type, okay? And this is the key symptom that leads to placement in long-term care facilities. For the clinical data that we've generated, we have 3 positive studies. So ADVANCE-1 here, that is a parallel-group study of AXS-05 versus placebo and bupropion. And then we show here ACCORD-2. This is a randomized withdrawal designed study versus placebo. Very consistent results across the studies that we generated. And we met with FDA and announced the -- we've been interacting with FDA throughout the development program. And the most recent update was in March -- the pre-NDA FDA meeting minutes, which are our alignment to proceed with submission of the sNDA. The other program we're working on for AXS-05 is smoking cessation. And we plan to start a study in this indication this year, so we'll have more to say soon. Turning to solriamfetol. We are working on a number of additional indications for potential label expansion. And this is based on KOL feedback about the activity of the molecule in a number of psychiatric conditions. And we've started by prioritizing ADHD, major depressive disorder, binge eating disorder and excessive sleepiness in shift work disorder. Starting with ADHD. We have completed one positive trial in adults, so far. This is the FOCUS trial. We've read out the results earlier this year, and those are shown here, on AISRS. And we -- the next step for the program here is initiating a pediatric trial, and we plan to do that later this year. And that is what we've discussed with FDA. We would need to complete a package for the indication [Audio Gap] focused on major depressive disorder. We think this is very interesting mechanistically. Solriamfetol is a DNRI, so dopamine and norepinephrine reuptake inhibitor; and mechanistically very interesting with respect to depression, so we wanted to look at this in adults. And in particular, we were interested if from a precision perspective there are a subset of adults wherein the mechanism could be highly relevant. And that, we looked at excessive sleepiness. So about half of patients with major depressive disorder have excessive daytime sleepiness. And we -- with the PARADIGM trial that we conducted, we saw a signal in that patient population. So the next steps here are to launch a study, a second study, in major depressive disorder with excessive sleepiness. And we'll be doing that this year, starting that trial this year. Binge eating disorder, also very interesting with respect to the mechanism of solriamfetol. And we are currently conducting the ENGAGE Phase III trial, as I mentioned. That's enrolling. So that's a parallel-group trial looking at solriamfetol 150 mg and 300 mg versus placebo, and we expect top line results next year. Rounding out the development work for solriamfetol, shift work disorder. There are about 15 million individuals in the U.S. that may have shift work disorder. And just to give a sense of the impact: About 1/3 of individuals working in the U.S. work on an alternate shift, so highly impactful and prevalent condition. We're conducting the SUSTAIN trial, again parallel-group trial of solriamfetol 150 milligrams and -- versus placebo -- 300 milligrams versus placebo. And we expect results next year. Okay, turning to AXS-12. So this is reboxetine in narcolepsy. And reboxetine is a highly selective norepinephrine reuptake inhibitor. So narcolepsy orphan indication, we are focused -- so it's characterized by cataplexy and excessive daytime sleepiness; a number of other symptoms, including hypnagogic hallucinations. And we are starting to focus on cataplexy. So NT1. That's in about 70% of individuals living with narcolepsy. So we have completed the clinical program for AXS-12. There are 3 trials. The results from 2 of those are shown here, the CONCERT trial and the SYMPHONY trial. We also have results from randomized withdrawal trial. That's the ENCORE study. And we plan -- as a result or based on this clinical program, we're planning a new drug application submission in the second half of this year. Finally, there's AXS-14. This is esreboxetine. So this is a SS-enantiomer of reboxetine and also obviously a norepinephrine reuptake inhibitor. This is a more potent and selective enantiomer of racemic reboxetine. So we have -- it's highly prevalent. And we're very excited about this program. About 17 million people in the U.S. have fibromyalgia, and it's highly underserved. So there are only a few products approved. And there's been very little innovation in the space and no new novel therapies in -- or therapeutics in over 15 years. So here are the study results. We submitted an NDA based on 2 studies, 2 placebo-controlled studies. And we heard back from FDA that we received a "refusal to file" letter from them, and we announced that this morning. It is based on the second study, which was an 8-week flexible-dose design trial. What they have asked us for is a second trial of 12 weeks in duration, and that is fixed dose. So the results here are the Phase III trial that we -- that was previously conducted, 12 weeks, fixed dose, highly statistically significant. Both studies were positive. No comments on the prior positive results, so we need to, as a next step, conduct a second 12-week fixed-dose trial. We're on track to do that and start that study this -- by this year in the fourth quarter. So we're excited about that and the potential for AXS-14 to offer a new treatment option to patients. And I'll summarize quickly on and comment on IP. So IP has been a focus of the company, and each program that we've launched and just a very broad patent portfolio covering our pipeline. So we've got robust protection, depending on the program, from 2039, 2040 to 2043. And a key update, I think, for our folks is with respect to Auvelity. We settled earlier this year. We announced the settlement earlier this year with the only, the first and only, first filer. And Sunosi, there were -- there are multiple first filers, which we've -- and we have settled or resolved 4 of those. And there are 2 first filers outstanding. So we're very pleased with the state of the intellectual property portfolio. Financials of company are strong. And the key thing to take away is that we have cash resources on hand that take us to cash flow positivity. So $300 million as of the end of the first quarter and very pleased with the financial foundation of the organization. Again, that takes us to cash flow positivity. So the leadership team. We have a strong leadership team across the organization backed by a very strong Board of Directors. And with that, I want to thank you all for joining us today. And we'll look forward to providing updates through the balance of the year. Thank you.