Axsome Therapeutics, Inc. Q3 FY2024 earnings call

• Herriot Tabuteau highlighted that the third quarter was a strong one with quarterly product revenue exceeding $100 million for the first time, translating to an annual revenue runrate of approximately $420 million. • The pipeline includes five late-stage product candidates in development across psychiatry and neurology. Key pipeline updates: AXS-07's new drug application was resubmitted and designated as a Class 2 resubmission with a PDUFA action goal date of January 31, 2025; AXS-02's NDA submission for fibromyalgia management is expected this month; AXS-05's ADVANCE-2 and ACCORD-2 trials are on track to report topline results this quarter; solriamfetol's Phase 3 trials in various indications are ongoing with expected top-line results in different quarters. • Ari Maizel discussed Auvelity's strong commercial performance with over 144,000 prescriptions in Q3, 108% y-o-y growth, and expansion of covered lives; Sunosi had ~47,000 prescriptions, 15% y-o-y growth, with continued new patient starts and prescriber activations.

In the third quarter, Axsome Therapeutics achieved total net product revenue of $104.8 million. Auvelity contributed the majority of this revenue with net product sales of $80.4 million, representing an 113% year-over-year growth and 24% sequential growth. Auvelity's revenue contribution was approximately 76.7% of the total net product revenue. Sunosi generated net product revenue of $24.4 million in the quarter, marking a 21% increase year-over-year, and accounted for around 23.3% of the total net product revenue. Gross to net was approximately 50% for Auvelity and in the low 50s for Sunosi.

• Nick Pizzie stated that the current cash balance of $327.3 million as of September 30, 2024, is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan. • The PDUFA action goal date for AXS-07 is January 31, 2025. • AXS-05's ADVANCE-2 and ACCORD-2 trials are expected to report topline results this quarter. • Solriamfetol's Phase 3 trials have expected top-line results in different quarters, such as FOCUS study top-line results expected in Q1 2025 and PARADIGM trial top-line results expected in Q1 2025.

• Uncertainties in clinical trial outcomes, including the potential for trial results not meeting expectations. • Regulatory risks related to obtaining approvals for pipeline candidates. • Market competition in the neurological and psychiatry drug markets, which could impact product adoption and sales.

Q: Vikram Purohit with Morgan Stanley asked about the Auvelity sales force expansion, how long it would take and expected sales lift.

A: Ari Maizel responded that the expansion is expected to be completed in the first quarter of 2025 and similar to previous expansions, the ramp would build over the year and have a positive impact on sales.

Q: Jason Gerberry with Bank of America inquired about new atypical antipsychotics as competitors to Auvelity and overcoming high out-of-pocket costs in the ADA marketplace.

A: Herriot Tabuteau noted adjunctive MDD is different from monotherapy MDD, and Auvelity's key competitive set is with monotherapy SSRI, SINRIs; for ADA, part of the strategy is developing strong relationships with payers and expanding coverage to mitigate out-of-pocket expenses.

Q: Leonid Timashev with RBC Capital Markets asked about AXS-05's target enrollment and event rates.

A: Herriot Tabuteau said target enrollment in ADVANCE-2 and ACCORD-2 has been reached, patient populations are similar to previous trials, and event rates are as expected, with topline results expected this quarter.

Q: Charles Duncan with Cantor Fitzgerald asked about Auvelity traction with PCPs and AXS-05 trial sample size.

A: Ari Maizel said Auvelity is doing well in both psychiatry and primary care with primary care being the fastest growing segment; regarding AXS-05, sample sizes are target numbers and slight variations are normal, and high enrollment in the open label extension study is positive.

Q: Cerena Chen with Wells Fargo inquired about solriamfetol in ADHD FOCUS study timing and pediatric study plans.

A: Mark Jacobson stated the FOCUS study's timing is due to final screening funnel, and pediatric study plans are in the works but not predicated on the FOCUS study.

Q: David Amsellem with Leerink asked about R&D and SG&A spend and how they'll expand.

A: Herriot Tabuteau and Nick Pizzie mentioned intense focus on return on invested capital, current strong capital position, and slight increases in R&D and SG&A in Q4 related to PDUFA and migraine launch preparation.

Q: Marc Goodman with Leerink asked about Auvelity usage evolution, sales force expansion for migraine, and Reboxetine update.

A: Ari Maizel said Auvelity utilization has incremental increase in first and second line use; sales force expansion is for Auvelity with potential leverage for migraine launch; Herriot Tabuteau noted Reboxetine's ENCORE trial is designed with a double-blind phase and is needed for filing but can be done with or without a positive study.

Q: Joseph Thome with TD Cowen & Company asked about solriamfetol in MDD differentiation and AXS-05 patient recruitment.

A: Herriot Tabuteau said solriamfetol's novel mechanism of action is a differentiation in MDD; AXS-05 patients are recruited from clinical trial centers specializing in psychiatry, focusing on community dwelling patients.

Q: Unidentified Analyst with Truist Securities asked about ADVANCE 2 effect size and Auvelity coverage inflection.

A: Herriot Tabuteau said ADVANCE 2 is powered similarly to ADVANCE 1; Ari Maizel noted Auvelity has seen meaningful growth post-market access expansion with reduced rejection rates and expects continued growth despite seasonality.

Q: Myles Minter with William Blair asked about sales force expansion tie to market access and AXS-14 payer engagement.

A: Ari Maizel said sales force expansion is to capitalize on current market access and growth in primary care; Herriot Tabuteau mentioned talking to payers about pipeline, with payers impressed by the portfolio's breadth.

Q: Unidentified Analyst with Guggenheim Partners asked about Auvelity discontinuation rate and coverage hurdles.

A: Ari Maizel said no significant discontinuation observed, and coverage hurdles are aligning rebates and utilization management criteria with payers.

Q: Poorna Kannan with Needham & Co. asked about Q4 prescription transferability seasonality and data readouts for Alzheimer's and migraine.

A: Ari Maizel expected seasonality impact in Q4; Herriot Tabuteau said data readouts for Alzheimer's and migraine are near and to stay tuned, and EMERGE study results inform medical and commercial communications but are not needed for regulatory submission.

Q: Joel Beatty with Baird asked about sales force expansion reach and ADA filing timing.

A: Ari Maizel said sales force expansion increases reach to more providers; Herriot Tabuteau said ADA filing would take 6-9 months after completing studies.

Q: Graig Suvannavejh with Mizuho Securities asked about AXS-05 trial outcomes and Auvelity gross to net.

A: Herriot Tabuteau said positive outcomes from AXS-05 trials provide strong support for NDA filings; Nick Pizzie said Auvelity's gross to net would remain in the ~50% range with seasonality impacts in Q4 and 2025.

Q: Unidentified Analyst with H.C. Wainwright asked about fibromyalgia sales force and binge eating disorder landscape.

A: Herriot Tabuteau said fibromyalgia market has broad prescribers and potential synergy with existing sales force; Ari Maizel noted the binge eating disorder market has 7 million patients and one approved product, with solriamfetol having potential.

Q: Eduardo with Ram Selvaraju asked about fibromyalgia sales force and binge eating disorder competition.

A: Herriot Tabuteau discussed fibromyalgia prescribers and potential sales force; Ari Maizel highlighted the binge eating disorder market's size and solriamfetol's potential.

Q: Matt Kaplan with Ladenburg Thalmann asked about ADA launch plans for AXS-05.

A: Herriot Tabuteau said they are still exploring the approach for filing AXS-05 in the ADA market, with a well-thought-out decision to come.