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

Yes. So a bit about -- in more detail on the numbers for Q2. As I mentioned, ability led Axle with $180 million. We've estimated that currently, we expect peak sales potential to be $8 billion plus, and that's roughly split between MDD and ADA One of the things to think about is where we are currently. We mentioned $180 million in Q2. And that was really the effect of, as I mentioned, less than 300 reps. We've now doubled down, more than doubled down. We -- additionally, we have market access that is conducive to being first line or for a switch in MDD as well as ADA and access in the ADA channel being -- every participant in Medicare Part D has access to Avelity with north of 85%, not requiring a PA and also being unrestricted to first line. So we feel really great about the $8 billion-plus number. And 1 of the things to also maybe just taking a step back, we're less than 4 years in, we annualized based on Q2's numbers around $0.75 billion and that was only with 0.25, that's less -- that's 1/4 of 1% of the entire antidepressant market with, as I mentioned, less than half of the team that we currently have now. So we feel like this is the new chapter for Axle. I think the first chapter was really successful, but now we're going into more of an overdrive, doubling the team, having the market access making patients aware through direct-to-consumer advertising and expect to see accelerated growth in the coming years. SP999 So maybe just a minute on Sunosi 2. So no 36 million in Q2 revenue, peak sales $300 million to $500 million. And then SebraVO doing $2.3 million, but did have a strong growth in Q2 versus Q1, 30% growth. The story there is just getting payer access. Anecdotally, we've heard nothing but positive feedback on SYNBRAVO. And the demand is showing that positive feedback, but it's just about getting payer access in this space. and we believe peak sales there for $0.5 billion to $1 billion. And then financial performance. For the quarter, as you can see, the $218 million, 14% sequential growth, 46% year-over-year, very robust growth year-over-year. Importantly, the OpEx of $46 million and $208 million for SG&A. We anticipate that number has essentially plateaued going into the back half of the year. That's meaningful as we are approaching cash flow positivity and then profitability shortly thereafter. But the SG&A number fully encompasses the expansion that I mentioned for the sales team for Avelity, we do anticipate R&D to increase marginally from the $46 million number as we continue to develop the Phase III assets that Mark mentioned earlier. The balance sheet is super strong, $320 million as of the end of Q2, strongest and healthiest position that we've been in since inception. And we also put on here the shares outstanding, $52 million, which I think compared to some of our peers that are in that $10 billion to $12 billion market cap and where we are with the current commercial products as well as our pipeline products, we only have 52 million shares outstanding. We've been very sensitive to solution. Even with the dilutive shares, you're at 60 million total share count of roughly $60 million if you include the employee stock option plan. And 1 other note maybe to think about is the cumulative -- the cumulative deficit for the company is $1.2 billion or $1.3 billion. That is from inception. That was from 2012, again, a small fraction just how we think financially about investments and how we deploy capital.

So if we look at the commercial products we'll -- just to be mindful of time, we'll be somewhat a bridge here, but a valid. Obviously, this is what all eyes are focused on and the feedback we receive from from folks like yourselves, but or an MDA receptor antagonist. This is the first and only oral NMDA receptor antagonist and Sigma-1 agonist, for both major depressive disorder and Alzheimer's disease agitation. In MDDA, it demonstrates a rapid onset of action, robust and durable efficacy and a distinct safety and tolerability profile. And so that's the clinical program we saw now it's 4 years on the market, that's the feedback we get from patients and prescribers that that the drug works really well. It's differentiated from an outcomes perspective or an overall profile perspective and that we see when patients and prescribers try the product, it leads to very robust adoption. And Nick touched on that, we've expanded the sales team, 2 reasons for that, and we'll look at growth in prescriptions on the next slide, but that's to drive continued growth in major depressive disorder and then also our new indicator in Alzheimer's as education, which was approved earlier this year. We've launched it in the summer. The launch really got up and running in June. The field force expansion really completed in June for the community team. And we also added new team, a smaller portion of sales team members that are fully dedicated on long-term care, which we were not engaging with prior to the approval of Alzheimer's disease agitation. From an advocacy perspective, highly distinct again, that ties to the mechanistic differentiation. And so it is -- has a very important efficacy and tolerability balance. And adverse reaction profile is distinct from other products that are used on or off label. So we're incredibly excited about the ability for Avelity to meet a very substantial need in the market and treatment landscape. And when we look at rates of adoption and adoption since launch, just very robust growth. We expect that growth to further continue and in fact, we do expect inflection as a result of Nick touched on Access, the state of affairs and positive development and evolution of access, the field force expansion and then the new indication. So we expect a lot of growth. And what we've shared is we expect to see that growth begin essentially now, so 1 to 2 quarters following the completion of the expansion and the launch in Alzheimer's agitation. We're starting to see that in new prescribers, new unique prescribers who are starting to see that in new-to-brand scripts in NMDA, especially tying to the second quarter. And now we're seeing it in the 65-plus age group, which really corresponds closely and as a good proxy for prescribing in Alzheimer's ease agitation. We expect to see those trends continue. So nosy, this is our product for excessive daytime sleepiness and narcolepsy and OSA very differentiated from what's available and what we'll just share is feedback from prescribers and some data that we have, we mentioned improvements in cognitive functioning. We have the SHARP trial data demonstrating that improvement and the feedback from prescribers is such that overall global changes that patients experience are very compelling and distinct, and that's led us to that multifaceted clinical program for salramfetol, which we'll cover. And as we touched on, the product has been growing since we acquired the product. It's been growing very steadily the business is very healthy, and we expect that to continue. And then we're incredibly excited about additional potential label expansion possibilities. SIM BRAVO, that's our product candidate for the acute treatment of migraine, highly differentiated. We undertook that from a rational development perspective. Many products approved high, high rates of dissatisfaction with patients and prescribers from an efficacy perspective. And that's what we demonstrated in the clinical setting that the product works very, very well. It works quickly in terms of boarding specific attack, but then it has a very long halfway where we see very durable efficacy and tolerability profile that is compelling for set efficacy, products growing. And in particular, we'd like to call attention to the growth in volume. We are navigating Nick touched on this, the very regimented and dense access barriers and hurdles and friction. There's nothing new here for this market, but migraine is a heavily managed market from a payer side. So we're navigating that. And most importantly, this stage of launch, we're about a year in we really like the demand growth that we're seeing and the feedback that we're seeing at the product profile is very compelling. We're seeing, as I mentioned, we saw a 30% sequential growth and that was with a team of roughly 100 reps. Based on this demand, we decided to increase that team by another 50 reps to 150, and that's that additional 50 reps is not shown. Their effect is not shown in this graph. And then -- so those are the 3 commercial products, and we're very excited for the rest of this year and 2027 for continued substantial growth across the programs. And then if we quickly turn our attention to the pipeline, and we'll have to be efficient here's the snapshot of all the programs. I touched on these earlier with the current state of affairs. So one NDA under review. And I think the way if we zoom out what we'd like to share is that we potentially have 1 NDA filing per year for the foreseeable future into 2021. So we expect that to -- the pipeline gears to turn. We've had a very very effective clinical trial at conducting clinical trials. We expect that to continue. We've done a good job navigating regulatory processes and reviews and we'll keep at that. If you look at psychiatry and neurology, the potential impact to patients in the U.S. is significant. And as mentioned, we're looking at 10 areas of need. And that can either be no zero to, say, one approved product or indications with multiple approved products with some type of treatment gap as the area of unmet need.

Here, you can just see the total breakout of the $18 billion plus in annual peak sales potential. This doesn't include the most recent assets that we brought into our BD team of for ASS1 in epilepsy and Axsome and schizophrenia and Tourette's syndrome. But really, the main focus right now is in the near term is a valid with the MDD further expansion and growth there along with the ADA indication and then some Brava and Sunosi being our other 2 commercial assets. The intellectual property position of the company, the approved products and those in development is very strong. And I would just like to highlight for Ovelity, the -- we have completed the -- and have determined the exclusivity period, which runs into the end of 2038 or early 2039, and we expect it to be early 2039 upon receipt of pediatric exclusivity. So no, that has now -- that runway has also now been established, and that goes into 2040. And so both of those programs have defined and established life cycles that are incredibly long, and that ties to our expectations with being able to impact medical practice as distinct treatment options versus available therapy and therapy and development. So we're incredibly excited for both of those programs. And then SYMBRAVO, the work to establish the period of potential exclusivity is underway. So we'll have updates there with the patents go out to at least 2045, AXS-12 orphan indication for narcolepsy. And then there is a patent portfolio behind that. And same for AXS-14, with a robust patent portfolio. So that's always been a focus for us. That will continue to be a focus. And the commercial business right now is in credit has a fantastic longevity, which we're excited, very excited about.

And finally, we would just like to touch on the innovation that's occurring at Axle. And that's in the commercial portfolio, distinction of the products for their respective approved indications and then the other programs that are underway. So we're -- we're very excited about the state of affairs for the business. It's never been better. And we're right on the precipice of our next our next phase of what we expect to be incredibly robust growth, especially with respect to the prior growth to date. So we look forward to keeping you all posted and thanks for having us today.