Axsome Therapeutics, Inc. ($AXSM)

Thanks, everybody, for joining. Sorry we're a little late. logistical issues, but we're good. I'm Marc Goodman, one of the biopharma analysts at Leerink, and we're lucky enough to have Axsome Therapeutics with us. And we have Mark Jacobson, who's the COO; and Nick Pizzie, who's the CFO. Thanks, guys, for joining us.

So why don't we just start with Auvelity and just give us kind of a little bit of a load down on what's happening with Auvelity right now, just from a marketing strategy perspective, how you're thinking about things this year relative to what you were doing last year and the year before? What's changing?

Sure. Yes. Maybe I'll start. Thanks for having us, Marc. So Auvelity ended the year last year, annualizing just north of $600 million, and it is the third full year since launch in 2022. So really pleased with the performance. We're outpacing some of the peers in the space. So very pleased with that. And that was with, I'll say, a smaller field force. We started with 160, did an expansion in '24 to 260 and then got to the most recent levels of 300 in 2025. And also with market access, that has evolved and improved over time. And currently, we're at 86% coverage. So been pleased with the performance from a revenue perspective and script growth. One of the things that we are doing in 2026 is expanding the team from 300 reps to 600 reps. So real meaningful expansion, really doubling down on Auvelity, specifically in MDD, but also in ADA, which we have a PDUFA date of April 30. So in preparation for an approval in ADA, we will have a 600 field team detailing Auvelity. And then also, we do plan to have a small dedicated team, tactical team, specifically around ADA for LTC from long-term care centers. So Auvelity is doing its thing. We're really pleased with it on blockbuster status. Currently, we've shared that peak sales are in that $1 billion to $3 billion range only in MDD, and we've also shared $1.5 billion to $3 billion in ADA.

And that -- yes, all that aligns with some of the dynamics and investments and just strategy for the year. It corresponds to what we're seeing clinically and which matches the clinical data we've generated in the label, right? Different mechanistically, that different mechanistic profile results in a different clinical profile. So it's working rapidly. It's durable, a distinct safety and tolerability profile. And so then we're seeing that translate into -- from the start, later line scripts, but it's being pulled up in the treatment paradigm to first and second line account for over 50% of the scripts now, and it's gradually increasing quarter-over-quarter. But first line, it's around 15%, and that's ticking up. And so that put it about 35% for second line. That corresponds to our investment in the sales force for the outlook for this year, about more than 50% is monotherapy use, and we're seeing more and more uptake in primary care. So latest numbers are about 1/3 of the scripts are coming from primary care. So that's increasing. So the trend, it's all tracking very nicely. when you zoom out from launch to date, and we expect that to continue, and then we're investing in it to drive it further.

So the increased sales force will hit primary care a lot more.

Yes.

And that also includes the new indication. You're not changing if you get the new indication.

Correct. Correct. Yes. So it's complementary and anticipatory to that, but not contingent upon the new indication.

And maybe just lastly on the expansion. So market access getting to 86% of the total covered lives, we feel that now is the right time to essentially double down to be able to -- that we know that if a patient gets prescribed Auvelity that they'll be able to get it through their insurance coverage. And going to the primary care, one of the things that we've been sharing is $600 million -- annualized $600 million in revenue, we're only at 0.2% of 1%, so 20 bps of the total antidepressant market right now, and we're annualizing at $620 million. So our goal is to really drive penetration from that perspective.

Yes. And DTC advertising has started?

DTC advertising from a mass media television, you're defining it that way, yes, we did that in September, and we ran that all through Q4. So we had a lot of learnings from our DTC spend. And January, February, we're actually off the air. And essentially, the way we're thinking about it is with this field force expansion, we are reallocating our resources from DTC to expanding the sales team. We will have DTC, and we're back on the air now in March, and we'll continue to be on the air. But what I can say is we've learned a tremendous amount on what channel between linear and connected TV and how best to appropriate those funds and how to actually be more efficient in DTC as well through those 4 months. But ultimately, we feel let's expand the field force. We can add DTC back further on, and that will actually complement DTC's ROI by having more boots on the ground, you'll see more pull-through from the DTC campaign.

How much extra gross to net did you have to give up as you've really increased this coverage?

Not much. I think we've -- if any, I think we've been mindful as we've negotiated and thought about the value of Auvelity, right? And we have exclusivity if we have pediatric indication through -- or into 2039. So we never thought about the short term. We always thought about the long term. And from a GTN perspective, we've been somewhere on average, let's call it, around 50%. Last year, if we think about it, we were in the mid-50s in Q1 and Q2. We were in the high 40s in Q3 and Q4. So overall, roughly 50%. And we -- as Mark shared, we are -- 50% of our scripts right now are either first line or first switch. So not only have we gotten quantity of coverage and getting to 86% covered lives, importantly, 100% in the government channel, and that comes into play specifically around ADA. So 100% of Medicare Part D lives are covered, which is great formulary coverage for those individuals, but 78% on the commercial side, so total 86% with good formulary access.

The AD agitation indication, obviously, a major focus, very important for everyone to get this. How is that looking? How is it feeling? Have we -- is labeling looking like it started discussions? Like where are we?

Sure. The -- I mean, as you know, as a matter of practice for us, we don't comment on play by play. But if you step back, so breakthrough therapy designated program filed and accepted with priority review. PDUFA date is April 30. And so labeling generally begins approximately 30 days ahead of PDUFA. So we're outside of that. And what we've shared is, for us, things are where you would expect them to be at this point in the review. And that comment is made based on our -- it's a generalized comment, right? It's general, but it's informed by our vantage point of how the review is going. And the other element we've shared is typically sponsors, you interact with the project manager. And so we haven't seen within the psychiatry division. So from our vantage point, things are status quo with respect to the division, and it's going on. So it's coming up. And then in a way, Nick's already previewed some of the commentary, the work that is underway in anticipation of potential FDA action that would allow us then to launch the program. So...

And the other indication potentially for the drug is smoking cessation, which probably you don't get a lot of questions about. But maybe just give us a quick update on that and how fast we can get this indication.

The -- so that's always been an area of interest to us just due to the mechanistic rationale and high overlap with prior available therapy in terms of -- I'm not going to repeat myself, but we think the mechanistic rationale is strong. And so we've been working on that. The clinical operations setup and getting those gears turning is well underway. And that's -- we'll be starting that study soon. And our expectation is we'll run the first study that will share details on the study design very soon and offer guidance then about time lines. But we're excited about getting that program off the ground finally. It's -- we've been really focused on AD agitation as all in on that as the next potential program for Auvelity AXS-05. And then as we work through that, we'll have more to say about other areas such as smoking cessation that we think are really interesting for the mechanism.

Yes. Yes. Let's talk SYMBRAVO, new drug launched. Just give us a sense of what's happening out there. What are you hearing? How is the product doing?

We -- what we're hearing is that the product is doing well and that it matches the clinical data that we've generated, which is that it's efficacious, it's working well. The efficacy is durable and that the safety and tolerability profile is commensurate or positive for that efficacy profile, meaning you're seeing patients try the medicine and then continue to use it. And...

So where is it being used in the migraine space?

Sure. I mean, initially, it's later line, right? And the migraine space, in particular, is heavily managed by payers and for branded entrants. And so you see that and also just with any new branded product, even in areas of unmet need, they tend to be used later line first because clinicians have kind of their standard of care approach and...

But are you post CGRP or you can be...

Well, you can see -- I mean, we haven't shared, say, quantitative how many are coming from each line or post -- pre or post CGRP. But you can see utilization. And if you're segmenting the market like that, you can see utilization across segments. in both segments. That makes sense based on the clinical data we generated, right? We've studied the product in patients with inadequate response to prior acute migraine treatment. That includes oral CGRPs that includes triptans. And then we've also looked at -- we generated data in kind of a less inadequate responder patient population. So it makes sense how we're seeing it used, and we like the early trends. Now to touch on how launch is going. We wanted to have a very discrete tight launch. So sales force, it's approximately 100 reps that's by design. So that's pretty tight. And it's because we wanted to focus on early utilization to see how it performs in a real-world setting in, say, headache centers and with headache specialists, those patients, by the way, also tend to be later line. So we're understanding the product profile, how it's getting written, how it can be written and then how our kind of patient support and patient savings infrastructure aligns with that, and then we'll continue to calibrate and refine as we invest further in the brand. So we like where it is right now.

We're still in the limited launch phase.

Yes, absolutely. I think you take a look at what we did with Auvelity with 160 reps in a mass market. We're taking a similar approach with 100 reps or so with SYMBRAVO. And then ultimately, market access is what we're -- what our focus is and trying to get coverage. We're roughly around 50% covered lives right now. And one of the things that we noted in our most recent earnings is we signed our last contract. So now we have 3 GPO contracts signed to pave a way to be able to get access and have negotiations with those payers to improve those covered lives.

Got it. Got it. Sunosi, what's happening with Sunosi? Anything new? I mean have been around a long time and still growing.

We're very pleased with Sunosi. I mean it grew 40% year-over-year. So we have a very discrete team with that. There's roughly 70 reps for Sunosi, very moderate sort of investment as it relates to Sunosi. So taking a look at, it's a very healthy business. So we're pleased with that, continue to grow. And with the 4 indications that we have behind it, that will hopefully further accelerate Sunosi revenue.

Which one of those do you think has the best chance of working?

I mean we like all the indications. I...

Binge eating...

Mechanistically. Yes.

Shift work disorder, MDD. And is there -- what's the other one?

Shift work, binge eating disorder, ADHD.

ADHD, sorry.

That small thing. The -- yes, we tend not to offer kind of like stack probability of success for those programs. But what's one thing? So shift work, it's adjacent or immediately related to the current indication, right? And because of that, actually, we previously obtained FDA feedback that we need one trial there to support label expansion, and that's because the current body of data on label, if the study is positive, could be considered supportive. So that's one way to think about it, whereas the other indications, we're planning 2 studies. MDD, maybe that's a little more speculative versus ADHD and binge eating disorder, which correspond to impulse control and some of the neuropsychopharmacology around those indications and then the molecule. MDD, though, we were excited about. So we ran a proof-of-concept study in MDD, and we looked at individuals with. And so it's kind of a precision approach to individuals with symptoms of excessive daytime sleepiness and those without. And so we just announced the start of a study in individuals with major depressive disorder with symptoms of excessive daytime sleepiness. So that's going on. And then the other 2 binge eating. That study is underway. We expect top line results. That's the ENGAGE trial. We expect top line results in the second half of this year. That would be the first Phase III trial we're conducting. And then ADHD, we're starting 2 studies in pediatrics, one in children, one in adolescents to complement the study in adults that we have the Phase III trial that we've completed in adults, which was positive. So there are the -- and all of it, if you back up, it's coming from clinicians that when they talk about how patients do who are prescribed the product for sleep, they talk about its benefits for sleep, but also just global changes that patients experience. So we're -- that was the impetus behind doing a full clinical development suite of trials in a number of indications, and those will -- we've had success in some of the initial trials for those already. So we'll keep it moving. And...

Positive ADHD, one positive Phase III ADHD trial in adults and now we're doing the peds and the adolescents.

You need one for adults, you need 2 for peds.

Well, we -- yes, we're -- I mean, we're conducting 2 of in each segment for pediatrics, children and adolescents. We'll run them in parallel. And so -- and those are needed. The FDA has asked and asked all sponsors that if you're developing a product for ADHD that you have the pediatric assessments of pediatric clinical trials as part of the initial submission, right? It's dissimilar for other indications where you have a pediatric clinical plan that can often be done as a post-marketing commitment or requirement. Here, it's got to be part of the initial package.

And so how do you think the -- what's the hook of your product? How does it fit in? I mean we have ADHD stimulants that seem to work pretty well so...

Yes. The -- I mean, if you look at the adult data, so absolute change in line with the stimulants and a distinct tolerability profile, distinct scheduling profile. So you'd want to be somewhere in terms of highly efficacious stimulant like efficacy, right? Stimulants are used because they work really well, but then there are challenges from a tolerability and, say, scheduling perspective. So if you're able to show any type of differentiation or complement that available kind of treatment option with a new one, that I think, would be pretty exciting. So early data so far are more than warrant the additional investment that we're doing, and we're excited about them. So we've got these 2 studies to run, and then we'll see.

So seeing stimulant-like efficacy in a nonstimulant, which is what we saw in the Phase III.

Yes. Yes. That makes sense. AXS-14, let's move to that one. So talk about reason to believe that the data will work. Talk about the fibromyalgia market being a good market to go after.

The -- so fibromyalgia, it is an underserved market, right? There's only one recent entrant. There were products that have been available, but underserved in terms of innovation. And AXS-14, as a reminder, we obtained that product from Pfizer. It's esreboxetine. So it's the SS-enantiomer of reboxetine. And Pfizer had run 2 studies, highly positive studies, a Phase II and a Phase III in the indication and then it was shelved for various reasons on Pfizer's part. So we obtained the product and we worked on the tech transfer and recapitulating all of the manufacturing and waiting for all the data there that we would drop back into module 3. And so we submitted an NDA. This was last year, and we obtained -- we received a refuse to file. This is the pain division. And the reason for the refuse to file was simply that there was an objection to the design or the type of the Phase II trial, which the Phase II trial was an 8-week flexible dosing paradigm. And the feedback was they wanted a second trial that was analogous to the Phase III, which was 12-week fixed dose. So that was the only comment. The rest of the package was -- went through the preliminary filing review assessment. And that was the comment that led to the RTF. So we feel really good about what we need to do, which is run another trial. We feel really good about the product and its activity on pain, on fatigue, the tolerability profile. And so we launched the FORWARD Phase III trial. We did that a few weeks ago. That's going to be a randomized withdrawal design trial. And the reason for that, right, is we already have 2 positive studies and placebo response rates are increasing significantly. So we like randomized withdrawal design studies with respect to signal detection. And so now it's elbow grease in terms of recruiting and enrolling and conducting the trial. But then once that's done, we'll be able to turn around right away and resubmit. And so we...

And is pain one of the endpoints?

Yes. Yes.

So you'll have that on the label to kind of differentiate.

Yes. Yes. I mean highly statistically significant in the 2 prior studies. So it's clinical development, so that's -- you're always mindful of that, but we like the product profile and the data that we've generated. So we have high conviction in it and the study design we like, but then we've got to run the study and see what happens.

Talk about the newest product that you just brought in, the one you actually licensed, which is a little unusual you guys haven't done that in a while. So you've named it 17, AXS-17.

17, yes.

Yes. What data do we have? Why did you do it?

It's a subtype selective GABAA PAM, and we'll develop it for epilepsy. There's a ton of clinical experience actually in generalized anxiety disorder. There's solid anticonvulsant data that we've been looking at that more than substantiates investment in a clinical program in epilepsy. So this was sitting -- this really interesting molecule was sitting in essentially a defunct structure that had multiple parties involved. And so it crossed our radar and why we do it. It crossed our radar, looked really interesting, and we figured if we could kind of undo the Gordian knot that we'd move forward with it, very low risk from an investment perspective. And so that worked out, and now we've got to do the tech transfer, and then we're going through indication selection process right now. So 2026 for AXS-17 is all about Phase II enabling work. So you can expect to hear from us updates there and updates on indication selection. Pretty excited. There are lots of different avenues. There's a lot of activity in the space now in epilepsy, which is fantastic for patients. And -- but it's many -- the majority of the epilepsy space is -- there are unmet needs, they abound, right? And so we're going through that now, and we're excited to have updates there. But yes, it's new, but -- so I kind of talked about the economic rationale for why we did it, but it also fits very nicely with how our portfolio and pipeline is right now, which is very kind of top heavy. It's lopsided to NDA or late-stage Phase III programs. There's a ton of them, but the earlier work -- earlier-stage programs, we can attend to that, and we'll do that if there are programs that fit in CNS that leverage our internal experience or just...

Yes, I think our pipeline is really deep for launches into the late 2020s. So this is like next-gen for, let's say, early 2030s.

So the GAD data is what the other company was collecting...

Correct. Yes, yes, exactly.

And you're not going to pursue GAD.

Yes, yes. That's not the plan.

You're thinking of epilepsy.

Yes. Yes. The data -- and there are pretty robust and extensive models in epilepsy and just...

Yes. No, for sure.

Yes. So there's -- the data we have in hand for the molecule definitely establishes its anticonvulsant activity. So we're moving forward. But GAD, those data are going to be highly informative, and they'll have utility, especially with respect to the safety and tolerability profile. But GAD as an indication that's for AXS-17, that's not our immediate focus.

So what have we not talked about that we should talk about in the last minute?

12? Talk about 12.

We didn't talk about 12. I forgot about that one. Please.

The next thing.

One minute of 12.

Yes, all right. So AXS-12, that's NDA stage. So we're about to hit the button with the submission that is reboxetine for narcolepsy. We're focusing -- we've focused on cataplexy for the clinical program. And so we're about to submit the psychiatry division. It's orphan indicated. We'd expect standard review. And so we'll have updates as we go and make progress there.

And it fits right into our current Sunosi team, our sleep team. So it could be accretive very quickly.

Yes. Excellent.