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

Okay. Good afternoon, everyone. So continuing on day 2 of the Piper Sandler Healthcare Conference. This is David Amsellem from the Piper Biopharma Research team. So we're delighted to have Axsome with us. We have Mark Jacobson, COO; and Nick Pizzie, CFO. So thanks, gentlemen, for joining us. So we got a lot to talk about. So let's dive right in.

So -- yes, a couple of things, exactly. So I want to start with the filing for Auvelity and AD agitation. It's such a key topic. So just to start with any updates here? And just remind us for those who aren't as well versed on this particular topic, anything we should read into the absence of a priority review here in AD agitation?

Sure. So we're -- right now, we're waiting for an important decision. And that is the next update that we'd anticipate sharing. We had confirmed on our Q3 call in early November that the sNDA was submitted. That's good. So now we're waiting to provide an update there. The package is such that three positive trials has breakthrough therapy designation. And our base case expectation is if it's accepted, it would be a standard review. And that's simply just due to kind of our read of baseline assumptions with happenings at FDA, right, resource constraints, bandwidth considerations. It's agnostic to our package. So that's our base case. And look, we'll be pleased if it's being reviewed. We like the package we have. We think it from an efficacy, safety. I see it in a safety database perspective, it's a full package. So we feel good about that, and we'll have an answer soon.

So there's been a lot of handwringing over the last couple of years over one single study that didn't work, but you do have one randomized parallel group study that did work. You have two randomized withdrawal studies that also did work. So I wanted to get your thoughts on how this division views randomized withdrawal studies because it seems that every now and then it comes up is that enough, two randomized withdrawal studies plus the one successful randomized parallel group study. So why are randomized withdrawal studies perfectly appropriate for this development program?

Sure. There are -- first of all, from the very beginning, we've always needed two controlled trials. So we have three positive controlled trials. And feedback we have directly from the division is those trials can be a different paradigm. Okay, parallel group randomized withdrawal. So we have the direct feedback. There are also a variety of written guidance documents from FDA on trial designs and when trial designs such as randomized withdrawals can be appropriate for demonstration of substantial evidence of effectiveness. And then you have the written guidance on substantial evidence of effectiveness where in that guidance, it states that different trial designs are better at controlling type 1 error than 2 studies of the same design. So you can sample direct feedback, written guidance, other written guidance, and it's all consistent in terms of different trial designs being acceptable. And what we feel good about is we have more than that, right? So we have three positive studies. We have long-term data. We have a stand-alone ICH safety database and now that's getting into safety and tolerability, but the package itself is robust, and we feel good about that.

Yes. Let's turn to the commercialization plans. In AD agitation. So I don't know if you can tell us how many reps you plan to launch with and how that label expansion synergizes with your current commercial infrastructure. But just if you can talk about that. And also the size of the target prescriber audience, that would be helpful.

Sure. Maybe I can take a little bit of that first question. So currently, we have 300 reps -- roughly 300 reps that are detailing for MDD. Upon an approval, if an approval, we will have those reps detailing both MDD and in ADA. Additionally, we're planning to do an expansion upon an approval. That expansion, we're not looking to double the size of the field force, but we will have a meaningful size expansion, recognizing the peak sales opportunity of $1.5 billion to $3 billion in ADA alone. As a reminder, MDD, we've shared $1 billion to $3 billion in MDD alone. So $2.5 billion to $6 billion in totality. So we would look to further expand the team in the general practitioners as well as in psyches. Additionally, what we do plan to have is a long-term center discrete field force team. The reason why it's discrete is it's more -- it's a different type of approach. It's more of an account management approach. So we would have a dedicated team that would also call in detail on ADA as well as MDD. As a reminder, we're currently not even in LTCs. There is a significant comorbidity between MDD and ADA. So we would expect in the MDD indication, it would have a, let's call it, a halo effect as it -- as we get the indication for ADA, we'll see a further acceleration of scripts as it relates to MDD because -- it's an untapped market for us...

How much -- yes, sorry, go ahead, Mark.

Yes, I was just going to touch on your question about targets.

Yes.

That work is being done right now. There is high overlap with the clinicians, where HCPs that we're calling on right now, which is great. The final kind of analysis, rounding out that analysis is still underway. The primary focus will be in a community dwelling setting and that final analysis will then inform the numbers we're targeting for expansion.

And David, maybe just one last point on commercialization because market access plays a key point in commercialization. So for Auvelity currently, we have 100% access, 100% covered lives in the government channel, 75% in the commercial, so overall 85% total covered lives. We expect the majority of the scripts to be in the government channel. So we would be going in with a launch with 100% access for covered lives. And that access, we feel is high quality.

How much of the AD agitation opportunity is bound up in the LTC setting? I mean is it 10% of the market, 20% of the market? I mean how do you think about that?

It's probably around there. We haven't -- I mean there are different considerations. We think the majority of the market is in community dwelling setting, and that's the ballpark that we see in terms of relevant or meaningful opportunity for AXS-05 should it be approved for the indication. And because of that, that Nick alluded to or touched on that we plan to expand or that the expansion -- the field force expansion would have a discrete kind of arm or unit that's solely focused on long-term care facilities. We'll have more to say in the months ahead if the product is approved.

Can you talk through the kinds of patients who would profile as early adopters of Auvelity and agitation with Alzheimer's. I mean there's a lot of off-label usage of reuptake inhibitors. So are these -- are you going to mainly target patients who are not seeing adequate benefit frontline usage of reuptake inhibitors? Or is it really just -- look, there's only Rexulti, and that's it in terms of what's approved. So you could cast a wider net.

Definitely, that's from the access perspective, right, in terms of coverage and coverage considerations. So there's really only one product approved. In terms of patient profiles or maybe prescribing decisions, the feedback we have from KOLs is that they anticipate this being a potential first-line agent, which makes sense to us, right? So the different tolerability profile, we did not see a mortality signal. We did not see a false signal. We did not see cognitive decline. Those are all great elements of a product profile or very meaningful and differentiated. The -- so we'll see, but there's the clinical considerations and the access considerations. And they, in this case, line up very well from an opportunity perspective. So we are not -- the strategy is not to focus on, say, a certain type of inadequate responder.

Yes. And let's move over to MDD for Auvelity. So you did launch a DTC campaign. Walk us through the scale of that campaign and how that could move the needle for the product in MDD next year?

Yes, sure. So we launched the DTC campaign, national TV campaign in the beginning of September. So it's now been live for roughly 3 months. I'm pleased with the performance. I think the best indicator that the Street can see and that we're also looking at is NBRxs. So maybe taking a step back to the beginning of the year, where we saw NBRxs was right around 2,000 NBRxs per week. We then expanded the team by roughly 40 reps from 260 to 300. We saw the NBRxs expand from 2,000 to 2,500 NBRxs per week. So that was really in Q2 and Q3. As I said, we launched a DTC campaign in September. And now we're seeing NBRxs ramp up further to roughly around 2,750. We've hit north of 2,800 on some weeks. So we've been pleased with the performance. We would expect that to continue to grow. I think we're probably in the early to mid-innings as it relates to seeing that from an NBRx perspective. And we're looking to run the campaign. What we've shared to the Street is through the end of this year. We will have some type of DTC campaign continuing through 2026. But when you launch a DTC campaign, it's really heavy in the first few months to get that brand awareness out there, and then there will be a maintenance throughout 2026 for that campaign.

Is there going to be DTC targeted to Alzheimer's agitation, caregivers, particularly?

At the appropriate time, we think it's -- we'll have the space, and we'll be able to utilize that accordingly and transition as we see fit between MDD and ADA.

Yes. I think you know us, we prefer a very data-driven, disciplined but optimistic investment approach, and that will carry through to what we're doing. And for us, it's an ROI analysis. And we still see a ton of meaningful ways to invest in addition to DTC.

Yes. When I think of DTC, particularly in major depressive disorder, I tend to look at it as kind of a permanent fixture of patient activation and just something you just kind of have to do throughout the commercial -- is that how you look at it for Auvelity? And I know you've taken a different approach than big pharma when it comes to a psychiatry launch. But do you look at DTC for Auvelity as sort of, okay, this is a permanent fixture of commercial support?

The commercial teams often talk about this as surround sound, right? And what we're mindful of is you don't want surround sound to turn into background noise where people tune it out. So you want to be very -- we want to calibrate that. And so you'll see adjustments there. But I think ultimately, yes, the answer is we're investing in that arena now. So you could expect continued investment, which could fluctuate depending on where we see the opportunity.

Okay. So let's talk about the role that Auvelity has in MDD. Maybe talk to the split between second and later line usage versus potentially first-line usage in MDD. And also, do you have a good read on the split between monotherapy and adjunctive usage?

Sure. Just the numbers real quick. Monotherapy, it's now tracking over 50%, which is great, and that makes sense to us. We can talk about that in terms of more prescribing or increased prescribing in primary care setting. And then in terms of line of therapy, we're seeing now north of 15% first line, so in the episode and it's about 35% for switch, so second line, which is great. And we expect those numbers to continue to grow in line with the expanded sales force, DTC, market access wins.

Yes. And then I can't get through a fireside without asking about gross to net. So...

I was hoping you were going to ask...

No, I was going to lead it, but...

Return of favor.

You want me to run through it?

Sure.

Yes, great. So we were in the mid-50s for Auvelity in Q1 and Q2. We improved in Q3 to the high 40s. And not only do we improve to the high 40s, but we also added 28 million additional lives and those lives were high-quality coverage, so mostly first line and first switch. So basically a hatrick of adding lives, quality of lives and net price improvement. So really pleased with that. We shared Q4, potentially a slight uptick into the low 50s from the high 40s. That's just around the last two weeks of sales that we have. Those sales are in our pipeline as of year-end. They would get adjudicated in Q1 -- first 2 weeks of Q1. So we just have to accrue for that. That's where we're just guiding that there may be a slight pickup in GTN in Q1 from Q4.

Yes. And when ADA gets into the label, I mean, that's exclusively -- almost exclusively Medicare population. So how does layering in that impact the overall blended gross to net of Auvelity?

Sure. So again, 100% coverage in the government channel, ADA indication would inherit the current access that MDD has, which is high-quality coverage in the Medicare Part D channel. That potentially could further improve our GTN if and when it is approved.

Yes. So I want to switch gears to SYMBRAVO. Just talk qualitatively how you feel about the launch. I know it's early days.

Early days, what we look for, first and foremost, is feedback from clinicians. And we like what we're hearing and -- or we like the feedback we're getting, which is the product profile is differentiated from an efficacy perspective. The need is increased efficacy versus available therapy and clinicians are reporting patients are having that experience. And also that the tolerability profile is good with respect to that, meaning that oftentimes, the classic AEs that you see with standard of care triptans that patients are not reporting those same types of AEs, rebound headache, migraine or medicine overuse headache. And so that's great. So we want to keep driving trial. And that's the team's job. We're calibrating it. We're focused on headache centers. additional learnings there are being pulled through into other targets as well as calibrating patient support and patient savings.

Yes. So this is kind of another gross to net question. But really, this is more about access with SYMBRAVO I mean the migraine space is -- acute migraine it's crowded. It's fairly tightly controlled by payers. So with all that in mind, how do you think about access? What do you think that's going to look like steady state? What do you think the gross to net is going to look like steady state for SYMBRAVO?

Sure. The team is working on that, you know. We've improved from Q2 to Q3, we're around 50%, I think 52% total covered lives. We would anticipate that number to continue to grow. From a GTN perspective, what we've shared publicly is that we would expect it to be somewhere between Auvelity and where the Gepants are, the Gepants being somewhere in that 70% range. We shared, I think, that in Q3 that we were in the 70s. So we're being mindful. We have a long runway here with exclusivity. So again, similar playbook that we took with Auvelity that we're -- we want to obviously improve lives, but we also want to be mindful of what our total net price is further down the road.

So I want to talk about commercial support of SYMBRAVO. Just give us a lay of the land in terms of the target physician audience, the mix between migraine specialists, general neurologists, maybe other practitioners. And then just help us understand the kind of investment you're putting behind the commercial team for SYMBRAVO.

The primary focus is headache centers. There are about 100 to 150 in the U.S. and those are, of course, the primary HCPs there, are headache specialists. So that's the focus in the early days and for the foreseeable future that will expand as additional lives come online, as we hit the grooves that we're looking for with respect to patient support and patient savings dynamics. We had -- go ahead.

I was just going to say we went out of the gate as a reminder, with 100 reps. A number of our peers have launched with 550, 600 reps, specifically in the Gepant space. So being mindful that we have a discrete team focused on headache centers, as Mark was sharing. And I think it's been a bit of a binary with those headache centers the success. So we've had success with certain headache centers, and we're seeing great traction and great qualitative and quantitative feedback from those headache centers. And others, we're continuing to knock on the doors and work through those institutions. So it's -- we're playing the long-term game here with those institutions.

Okay. Let's switch gears and talk about pipeline. So solriamfetol, you have a number of studies. So there's pediatric adolescent ADHD, there's MDD with EDS, there's binge-eating disorder, there's shift work disorder. So lot of deliverables. So just help level set for us, can you say when these studies will or initiate if they haven't done so? And just talk through data time lines across these various studies.

Sure. Solriamfetol, we're really excited about the potential of that product candidate in a number of settings and CNS setting, psychiatry in particular. That's based on KOL feedback for how patients do globally. So it's approved for excessive daytime sleepiness in narcolepsy or associated with obstructive sleep apnea. And we've launched, as you mentioned, a very broad development program in one related indication that FDA considers related, that shift work disorder. And because of that, if that -- if the current study is positive, then we'd anticipate being able to file with that one study because the current data could serve as potential supportive evidence. So we're excited there, and that makes sense in terms of what the drug is currently approved for. That study is underway, and we've guided to top line next year. There are -- is the ADHD program. Very excited about that from mechanistically, and we have one positive Phase III trial in adults. We need to run FDA, the psychiatry division requires pediatric adolescent data in any submission because they assume any product approved for ADHD would be used in peds adolescents. So that study needs to read out and be positive for us to submit, and we guided to starting that study this quarter. Other programs, MDD with symptoms of excessive daytime sleepiness. We have one proof-of-concept study in MDD that we ran. We reported that earlier this year, saw the signal in this patient population. So this is a precision-based approach to depression -- treating depression. And this would be for the treatment of depression. So it would not be for the treatment of excessive daytime sleepiness in individuals with depression be the other way around. That study we guided to starting this quarter. And so that's ADHD, shift work, MDD and then there's binge-eating disorder, which is -- that study is underway now. We like that, again, mechanistically, feedback from KOLs. And you can see that related to ADHD, there's pathways related to impulse control that we think are relevant and of interest here. And we've guided to top line for that trial next year as well. So you can expect to start to -- I think you'll have continued updates from us as we typically do on a quarterly basis. And then as things crystallize or occur, we'll provide stand-alone update. So it's a very, very busy time. We're really excited about the business, in particular, solriamfetol as the overall potential of that product candidate.

Just to be clear with solriamfetol, to the extent you have the adult study and the adolescent ADHD studies, and it's already approved, you could just file on those two studies, you don't need any additional longer-term data?

Oh, I see. Yes. No, that's our expectation. And so there will, of course, as we're running studies, be safety data that will go into it, but we're not planning, say, as we did for AD agitation, a stand-alone a full ICH safety database, -- that's not planned.

So you did in-license a selective GABAA Alpha 2/3. That's a positive allosteric modulator that's from AZN. So how are you thinking about the value proposition in epilepsy. But I think of an agent like that, and I think, well, you certainly can explore it in psychiatric indications. So how are you thinking about it?

We're thinking deeply about it right now. The -- it's pretty exciting in terms of -- for the business, we have three commercial products in various stages of launch, which is excellent. We're executing there. There are two NDA stage programs, which is great. And then multiple Phase III programs, some of which have at least one positive trial to date. What -- and that's fantastic. The business has never been stronger. The earlier-stage pipeline, we are taking an opportunistic approach to adding to that when there are things that come across our radar that we think fit. In this case, GABAA PAM, we think it's a really interesting mechanism. And the preclinical work it's already underway at Axsome in terms of looking at anticonsultsant activity. We see that. Some prior work was already done with the molecule. So next steps here are Phase II enabling work, indication selection. So we'll get that done. And then beyond that, I think we'll start there. And -- but you're right, mechanistically, it's very interesting. And another reason we move forward with that is there are -- some of the development team has deep expertise in epilepsy already. So that's kind of an underused part of our collective brain, which we're excited to use, and we can use it because it's earlier, it doesn't distract from other elements of the business and executing. So we're excited to provide updates there.

All right. More to come. Well thanks, Mark. Thanks, Nick. Thanks everyone in the audience.

Okay. Thanks David.