Earnings call transcript: Axsome Therapeutics beats EPS forecast in Q1 2025

Axsome Therapeutics Inc. (AXSM) reported its first-quarter 2025 earnings, surpassing EPS expectations with a loss of $1.22 per share against a forecasted loss of $1.30. The company’s revenue totaled $121.46 million, slightly below the forecast of $121.58 million. This performance comes amid impressive revenue growth of 42.5% over the last twelve months. In pre-market trading, Axsome’s stock rose by 3.82%, reflecting investor optimism following the earnings call.

Key Takeaways

• Axsome’s EPS beat expectations, reporting a loss of $1.22 per share.
• Total product revenues increased by 62% year-over-year.
• Stock price increased by 3.82% in pre-market trading.
• FDA approval of Cymbravo for migraine could drive future growth.
• The company is expanding its sales force and preparing for a new marketing campaign.

Company Performance

Axsome Therapeutics demonstrated robust performance in the first quarter of 2025, with total product revenues rising by 62% compared to the previous year. The company maintains an impressive gross profit margin of 91.4%, among the highest in its peer group. The company’s strategic focus on innovation and expansion in key therapeutic areas appears to be paying off, as evidenced by the strong sales of AVELITY and Sunosi. Axsome’s leadership in the treatment of migraine and other conditions positions it favorably against competitors in the pharmaceutical industry. InvestingPro analysis reveals several positive indicators, including strong operational efficiency and market performance, with 12 additional ProTips available to subscribers.

Financial Highlights

• Revenue: $121.46 million (+62% YoY)
• Earnings per share: -$1.22 (beat forecast of -$1.30)
• Net loss: $59.4 million
• Cash and cash equivalents: $300.9 million

Earnings vs. Forecast

Axsome’s earnings per share exceeded expectations, reporting a loss of $1.22 compared to the forecasted loss of $1.30. The revenue was slightly below the forecast, reaching $121.46 million against the expected $121.58 million. The EPS beat marks a positive deviation from the trend of previous quarters, where forecasts were often met but not exceeded.

Market Reaction

Following the earnings announcement, Axsome’s stock price increased by 3.82% in pre-market trading, reaching $116.50. This positive movement suggests investor confidence in the company’s strategic direction and future growth potential. Analyst targets range from $143 to $210, indicating potential upside, while InvestingPro’s Fair Value analysis suggests the stock is currently undervalued. The stock remains below its 52-week high of $139.13 but significantly above the 52-week low of $64.11, reflecting a recovery trend and a strong one-year return of 50%.

Outlook & Guidance

Looking ahead, Axsome anticipates the launch of additional products and expanded indications, which could potentially increase revenue streams. The company’s strong financial health is evidenced by a healthy current ratio of 2.11 and moderate debt levels. The company projects reaching cash flow positivity by 2026, supported by a diversified portfolio and ongoing payer coverage negotiations. Future guidance indicates a continued focus on innovation and market expansion. For detailed analysis and comprehensive insights, investors can access the full Pro Research Report available on InvestingPro, which provides in-depth coverage of Axsome’s financial health, market position, and growth prospects.

Executive Commentary

CEO Ario Cabuto expressed confidence in Axsome’s position, stating, "We are in a strong position to continue delivering innovation to patients and significant value to shareholders." CFO Nick Pizzi highlighted financial stability, noting, "We believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity."

Risks and Challenges

• Regulatory hurdles in drug approvals could impact timelines.
• Market competition in the pharmaceutical sector remains fierce.
• Economic uncertainties may affect healthcare spending.
• Dependence on successful product launches for revenue growth.
• Potential supply chain disruptions could affect production.

Q&A

During the earnings call, analysts inquired about the company’s payer coverage strategies and the anticipated impact of new product launches. Management emphasized ongoing negotiations for improved AVELITY coverage and expressed optimism about the potential for AXS-twelve in the narcolepsy market.

Full transcript - Axsome Therapeutics Inc (AXSM) Q1 2025:

Conference Operator: Greetings and welcome to the Axon Therapeutics First Quarter twenty twenty five Conference Call and Webcast. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to your host, Darren Oplin, Director of Corporate Communications at Axon Therapeutics.

Darren, please go ahead.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics: Thank you. Good morning and thank you all for joining us on today’s conference call. This morning, we issued our earnings press release providing a business update and details of the company’s financial results for the first quarter of twenty twenty five. The release crossed the wire a short time ago and is available on the Investors section of our website, along with the earnings presentation accompanying today’s call. Those joining via webcast may advance through the slides at any time during the discussion.

During today’s call, we will be making certain forward looking statements regarding, among other things, the efficacy, safety and intended utilization of our investigational agents our clinical and nonclinical plans our plans to present or report additional data the anticipated conduct and the source of future clinical trials regulatory plans future research and development plans, commercial plans and possible intended use of cash and investments. These forward looking statements are based on current information, assumptions and expectations of future events that are subject to change and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements. These and other risks are described in our periodic filings made with Securities and Exchange Commission, including our quarterly and annual reports. You are cautioned not to rely on these forward looking statements, which are made only as of today’s date, and the company disclaims any obligation to update such statements. Turning to today’s agenda.

Doctor. Ario Cabuto, our CEO, will open today’s discussion with an overview of our performance and key upcoming catalysts. Nick Pizzi, our Chief Financial Officer, will review our financial results for the quarter Ari Maisel, our Chief Commercial Officer, will then provide a commercial update Mark Jacobsen, our Chief Operating Officer and Hunter Murdoch, our General Counsel, will be joining us for Q and A. And with that, I’ll turn the call over to Ario.

Ario Cabuto, CEO, Axon Therapeutics: Thank you, Darren, and good morning, everyone. Axsome entered twenty twenty five with strong momentum across the business. In the first quarter, we delivered year over year total revenue growth of 62%, driven by robust underlying demand for VELITY and Sunosi. In addition, the recent FDA approval of Cymbravo, our second internally developed product reflects Axsome’s commitment to delivering innovative medicines with the potential to meaningfully improve upon the standards of care for patients living with serious CNS conditions. Our portfolio today is distinctively diversified and strategically positioned to drive durable growth.

Earlier this year, I outlined key priorities related to our pipeline. The first was to advance our three novel NDA stage product candidates toward regulatory filings. These include AXS-fourteen for the management of fibromyalgia, AXS-five in Alzheimer’s disease agitation and AXS-twelve for the treatment of cataplexy and narcolepsy. The second was to successfully execute across our multiple Phase three clinical programs that broaden the potential of our current products and product candidates including AXS-five, solriamfetol and Simbravo. Since just the beginning of this year, we’ve made significant progress on both fronts, which underscores the agility and operational excellence of our organization.

Starting with AXS-fourteen for the treatment of fibromyalgia, we have submitted our NDA to the FDA for AXS-fourteen and anticipate a decision on the acceptance of the filing in the second quarter. Fibromyalgia is a chronic and often debilitating condition characterized by widespread pain, fatigue, sleep disturbance and cognitive impairment. Recent research suggests that there are over seventeen million people in The U. S. Who are living with fibromyalgia.

Despite this prevalence, there has been no meaningful therapeutic innovation in more than fifteen years. While currently available treatment options offer variable efficacy and do not address all key symptoms of this condition. AXS-fourteen has the potential to address this unmet medical need in the treatment of fibromyalgia if approved. Turning now to AXS-five for the treatment of Alzheimer’s disease agitation. In March, we announced a positive FDA pre NDA meeting minutes regarding our planned supplemental NDA submission for AXS-five in this indication, which reinforced our key assumptions related to our data package and filing timeline.

We continue to make steady progress here and anticipate submitting the sNDA to the FDA in the third quarter of this year with a potential FDA decision in launch in 2026 if approved. AXS-five has been granted breakthrough therapy designation by the FDA. If approved, it would address the serious and debilitating unmet medical need, which is estimated to impact over four million people in The U. S. Alone.

Separately, we are also making progress on our development plans for AXS-five for the treatment of smoking cessation and anticipate initiating a Phase twothree trial of AXS-five in this indication this year. Moving on to AXS-twelve, our novel product candidate for the treatment of narcolepsy with cataplexy. We previously announced the completion of our registration program, which consists of three controlled Phase two and Phase three efficacy trials in a long term safety trial. We continue to work toward our plan NDA submission, which we anticipate in the second half of this year. Despite the currently available treatment options, many patients with narcolepsy remain inadequately managed due to the heterogeneity of the condition and variable response and tolerability to currently approved agents.

Based on the clinical data to date, AXS-twelve has the potential to deliver rapid and durable improvements in cataplexy, while also demonstrating potential across other key symptom areas. Shifting now to our ongoing Phase three clinical development programs for solriamfetol, which is being evaluated in ADHD, MDD, binge eating disorder and excessive sleepiness associated with shift work disorder. In the first quarter, we announced positive top line results from the FOCUS Phase three trial of solriamfetol in adults with ADHD. With these promising results in hand, we plan to initiate a Phase three pediatric trial for solriamfetol in ADHD later this year. We also reported top line results for the PARADIGN study, which was a Phase three proof of concept trial evaluating the efficacy and safety of solriamfetol in MDD with and without excessive daytime sleepiness or EDS.

In the pre specified subgroup of patients with severe EDS treatment with sawriamfetol resulted in numerically greater improvements in depressive symptoms. Based on these results, we plan to initiate a Phase three trial for riampatol in MDD patients with EDS later this year. In parallel, we remain focused on advancing our additional Phase three trials of solriampatol in binge eating disorder and excessive sleepiness associated with shift work disorder with top line results from both studies anticipated in 2026. Lastly, in February, we announced positive top line results from the EMERGE Phase three trial of CINBRVO in migraine patients experiencing inadequate response to oral CGRP inhibitors. Results of this study reinforced the unique clinical profile and potential of SINBRAVO to provide meaningful efficacy to patients living with migraine.

As demonstrated by these important milestones, we have achieved across our commercial and pipeline programs. Axsome continues to execute with discipline and focus. While we are closely monitoring trade policy developments, including proposed pharmaceutical tariffs, we believe that any potential impact to our business would be immaterial. In particular, the vast majority of our commercial manufacturing takes place in The U. S.

And Canada, our primary production facilities for VELITY and Sun Bravo and we do not commercialize these products outside The U. S. Additionally, all intellectual property related to Ovelity, AXS-five and Sun Bravo are film styled in The U. S. We appreciate that this is a key focus area for investors and it is challenging environments like today’s that truly underscore the depth, resilience and adaptability of our business.

We look forward to providing more updates on our progress as we expect 2025 to be another catalyst rich year. With potentially five marketed products across six indications by 2026, we are in a strong position to continue delivering innovation to patients and significant value to shareholders. With that, I’ll hand the call over to Nick, who will provide details of our financial performance.

Nick Pizzi, Chief Financial Officer, Axon Therapeutics: Thank you, Herriot, and good morning, everyone. Today, I will discuss our first quarter results and provide some financial guidance. Total product revenues were $121,500,000 for the first quarter, representing year over year growth of 62%. This consisted of net product sales of $120,400,000 and royalty revenue of $1,100,000 Total product revenue for the comparable period in 2024 was 75,000,000 AVELITY net product sales were $96,200,000 for the first quarter of twenty twenty five, representing 80% year over year growth. AVELITY net product sales for the comparable period in 2024 were 53,400,000.0 Sunosi net product revenues were $25,200,000 for the first quarter of twenty twenty five, representing 17% year over year growth and consisting of $24,100,000 in net product sales and $1,100,000 in royalty revenue associated with Sunosi sales in out licensed territories.

Sunosi net product revenue for the comparable period in 2024 was $21,600,000 consisting of net sales of $20,700,000 and 900,000 in royalty revenue. Avelity and Sunosi GTN discount for

Speaker 4: the first quarter were both in the mid-fifty percent range, and we anticipate GTN to remain in this range for the balance of the year.

Nick Pizzi, Chief Financial Officer, Axon Therapeutics: Total cost of revenue were $9,800,000 for the first quarter of twenty twenty five and $6,300,000 for the comparable period in 2024. Research and development expenses were $44,800,000 for the first quarter of twenty twenty five compared to $36,800,000 for the comparable period in ’twenty four. The increase was primarily related to the company’s four Phase III trials in solriamfetol, CMC costs for the planned launch of ZENBRAVO and higher personnel costs including non cash stock based compensation associated with organizational growth. Selling, general and administrative expenses were $120,800,000 for the first quarter of twenty twenty five compared to $99,000,000 for the comparable period in 2024. The increase was primarily related to commercialization activities for AVELITY, including the expansions of sales force and higher marketing expenses, prelaunch activities for Cymbravo and higher personnel costs, including non cash stock based compensation associated with organizational growth.

Net loss for the first quarter of twenty twenty five was $59,400,000 or $1.22 per share compared to a net loss of $68,400,000 or $1.44 per share for the comparable period in 2024. The net loss in the first quarter of twenty twenty five includes $26,200,000 in non cash charges comprised primarily of $23,300,000 in stock based compensation expense, dollars 1,500,000.0 in acquisition related contingent consideration expense and $1,600,000 in intangible asset amortization. We ended Q1 twenty twenty five with $300,900,000 in cash and cash equivalents compared to $315,400,000 as of year end. We believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan. I’ll now turn the call over to Ari, who will provide a commercial update.

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Thank you, Mick. Axsome delivered solid commercial performance for AUVELITY and Sunosi in the first quarter of twenty twenty five despite market seasonality headwinds at the beginning of the calendar year. AUVELITY led the market in TRx growth in Q1 with approximately 167,000 prescriptions representing 76% year over year growth compared to the first quarter of twenty twenty four and five percent sequential quarter over quarter growth. Avelity was one of only two branded MDD agents with sequential brand growth in Q1. By comparison, the antidepressant market was flat compared to the first quarter of twenty twenty four and declined by 2% sequentially.

Nearly 26,000 new patients were prescribed Auvelity in the quarter, bringing the total number of new patients started on Auvelity since launch to more than 190,000. Auvelity use in the first line or first fit setting is approximately 50% in the quarter, reflecting balanced utilization of VELDY for patients regardless of prior treatment experience. Our sales team successfully activated 4,100 new prescribers in Q1, with continued growth across both psychiatry and primary care settings. We’re beginning to see the initial impact of our most recent sales force expansion on overall scripts and new patient starts, and we expect continued impact from the expanded sales team throughout the year. AVELITY coverage remained stable in Q1 with 78% of all lives covered across channels and 63% of lives in the commercial segment.

Based on ongoing negotiations, we expect coverage for AVELITY to expand and improve in 2025. Turning to Sunosi. Total prescriptions were over 46,000, representing 12% growth versus Q1 twenty twenty four and a decline of 4.8% sequentially. By comparison, the weight promoting agent market increased by 4% compared to the first quarter of twenty twenty four and declined 5% sequentially. Approximately 3,800 new patients started Sunosi in the quarter, bringing the total number of new patients started on Sunosi to approximately 85,000 since launch.

Nearly four forty writers were activated in Q1, resulting in a total cumulative prescriber base of more than 14,000 healthcare providers since launch. Payer coverage for Sunosi in Q1 was stable with eighty three percent of lives covered across channels. Finally, our launch preparations for Cymbravo are progressing as planned, including the build out of our sales team and the development of marketing messages, materials and programs. Feedback from healthcare providers since approval has been very positive due to the large unmet need that still exists in the acute migraine space. There has been a strong positive reaction to CINBRAVO’s clinical profile with rapid and durable migraine pain relief that is safe and tolerable.

It’s multi mechanistic approach that attacks migraine pain in a unique way relative to other approved agents and Cymbravo’s novel MOSAIC technology. We look forward to sharing additional details of our commercial launch soon. In closing, Q1 was a solid quarter that sets up Axsome for another successful year. Continued advancement of our commercial execution capabilities will support ongoing performance for AUVELITY and CINOZY, while enabling a potentially strong launch for CINBRAVO next month. I will now turn the call back to Darren for Q and A.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics: Thanks, Ari. Operator, may we please open the line for questions.

Conference Operator: Certainly. We’ll now be conducting a question and answer session. Our first question today is coming from Leon Tatevichev from RBC Capital Markets. Your line is now live.

Speaker 4: Hey guys, thanks for taking my question and congratulations on the quarter. So maybe a multi part one. You’ve got a number of developmental agents in front of the FDA right now. So I wanted to focus on that. I guess what has your sense been from the FDA on recent interactions?

There have been any changes to the review teams or agency responsiveness? Or I guess, in particular, any evolution on the messaging of what may be required for approval, especially for AXS-five in Alzheimer’s agitation? And then I guess, given that you have breakthrough designation for that agent, I guess, confident are you that you’ll be able to get a priority review here? Thanks, and I’ll hop back in queue.

Mark Jacobsen, Chief Operating Officer, Axon Therapeutics: Leo, it’s Mark. Good morning. So right now, dialogue with FDA is status quo for us, remains status quo. And then with respect to AXS-five and ADA agitation, no changes there versus what we’ve discussed and the feedback we’ve received from FDA with respect to our planned sNDA submission. And I think you did mention that it does have breakthrough therapy designation and it is eligible for prior review, and that’s something that that determination is made by the agency at the time of filing.

Conference Operator: Next question is coming from Marc Goodman from Leerink Partners. Your line is now live.

Hunter Murdoch, General Counsel, Axon Therapeutics: Yes. Two questions really. One is, can you just give us a sense of when you’re going to kick in the DTC advertising for Avelity? I know that’s supposed to happen sometime this year. And then second, the question is really about just the orexins coming in to the narcolepsy class and just how you think about your products getting in as the orexins come in?

Thank you.

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Hey, Mark, it’s Ari. Thanks for the question. Regarding DTC, we expect to launch a national campaign later this year. If you visit our website, you’ll see that we have a new creative national campaign launch will be a little bit later this year. Regarding orexins and AXS-twelve, we’re very optimistic about AXS-twelve.

The feedback we got in particular, most recently at AAN when we shared the Symphony data in an oral presentation that it’s a compelling option, daytime dosing, strong impact, not just on cataplexy, but other symptoms of interest. And the orexins, I think as enthusiastic as folks are, there’s still questions just about the safety tolerability and it remains to be seen how those drugs will perform in sort of their late stage products. We’re keeping an eye on it, but we think that there’s a real market for AXS-twelve in the short term and we look forward to getting it into the hands of providers and patients.

Conference Operator: You. Next question is coming from Andrew Tsai from Jefferies. Your line is now live.

Speaker 8: Hey, good morning. Congrats on the execution and thanks for taking my question. It’s around Avelity with your recent settlement with Teva for 02/1938 to 02/1939 timeframe. Can you confirm if this is the absolute earliest that any generic out there can enter at this juncture? And does this settlement embolden you to pursue other opportunities outside of smoking cessation and agitation, assuming that you do have guaranteed run rate for at least thirteen years?

Can we expect more follow on indications soon?

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Thanks for the question. This is Hunter. I’ll answer the first part, then I’ll turn it over to Iriel for the second part. For the first part, so Teva has one hundred and eighty day regulatory exclusivity. So regardless of what happens, Teva will be the first generic to launch.

So other generics in file, but they would come in after Teva. And now I’ll turn it over to Eriel.

Ario Cabuto, CEO, Axon Therapeutics: Yes. And in terms of whether it emboldens us to pursue other indications, we have always planned to pursue other indications with AXS-five given the pharmacology. So the nearest term new opportunity is Alzheimer’s disease agitation and we’re on track to file the sNDA for that in the third quarter. And following that, we also have spoken cessation and we are on track to initiate a Phase three trial in spoken cessation this year.

Speaker 9: Thanks.

Conference Operator: Thank you. Next question today is coming from Ash Berman from UBS. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics0: Hi, great. Thanks for taking my question. For AD agitation, so thanks for providing the clarity that it will be an sNDA. Just curious, how does that impact the commercial potential here? I would imagine that you would have been more favorably positioned on GTN if it was its own NDA as opposed to getting lumped into depression, which now you’re run rating at like 55 mid-fifty five mid-fifty gross to net?

Conference Operator: Thanks.

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Thanks, Ash, for the question. I think the sNDA does provide some clarity regarding promotion of AXS-five. It will share the AUVELITY name as it relates to your question on GTN. I think that that’s one way of thinking about it. The other is that we expect based on our existing payer contracts and the ongoing negotiations, their familiarity with the product and sort of the clinical profile overall has been very positive.

So we think of this as being ultimately beneficial to helping secure access for the new indication. And so the GTN component, I’m not sure that we see it necessarily the same way, but ultimately we need to get an approval for this indication and expand our existing contracts in order to secure access for the new patients. We’re feeling pretty good about the sNDA. We think there’s some really nice advantages from a commercial standpoint and we look forward to sharing some more in the future.

Conference Operator: Thank you. Next question is coming from Ram Selvaraju from H. C. Wainwright. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics1: Thanks very much for taking my questions. Firstly, I was wondering if you could comment on your expected cadence of coverage for CINBRAVO following the launch rollout next month in terms of how quickly you expect CINBRAVO to reach qualitatively the same level of access that you currently have secured for AUVELITY and CINOVI? And then secondly, I was wondering with respect to the additional indications for solriamfetol, would you say that at this point, given the information you currently have that binge eating disorder represents the most attractive opportunity from a competitive positioning standpoint? Or is one of the other indications still likely to be more attractive in terms of overall commercial value? Thank you.

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Thanks, Ram, for the question. Regarding coverage for CINBRAVO and the cadence, obviously, we’re focused right now on negotiations for CINBRAVO. I think it’s premature to say exactly what the cadence would be, but we are focused on securing access as quickly as we can understand this is a highly competitive market, but there’s still significant unmet need and Cymbravo’s unique clinical profile, we believe has significant advantages for patients and payers are seeing that clinical value. So I would say stay tuned for additional updates regarding market access on SEBravo.

Ario Cabuto, CEO, Axon Therapeutics: Great. Hi, everyone. This is Iriel. With regards to the second question on solriamfetol and the additional indications and how we see the product positioned versus competitors, We really like the profile thus far of losorvastatin. We’ve announced positive results in ADHD and while you can’t make cross trial comparisons and should always be careful about that because different trials are run-in different patient populations.

It was encouraging that the improvement from baseline in terms of the primary endpoint the AISRS was on par with what is seen with currently approved stimulant agents. So we really like that and obviously there’ll be further characterization of the clinical profile in ADHD. And as it relates to binge eating disorder, it’s too early to make any pronouncements there. Obviously, there’s only one of the product which is approved for binge eating disorder. So if solriptol were to be successful, it would be the second product.

So from a competitive perspective, that is a very nice dynamic to have. However, we have to wait to see what the results of the Phase three trial are.

Hunter Murdoch, General Counsel, Axon Therapeutics: You.

Conference Operator: Thank you. Our next question today is coming from Charles Duncan from Cantor Fitzgerald. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics2: Hey, good morning, Herriot and team. Congrats on a good quarter. Thanks for taking our question. My first question is on Cymbravo. I think Ari mentioned Cymbravo launch coming up here in terms of building out the sales team.

Could you give us any idea of kind of what that means in terms of number of persons or focus? Would you perhaps focus on sites that are treating migraine and therefore helpful to the rest of the portfolio? And then when do you anticipate being able to present some of the recent data on CINBRAVO including responsive CGRPs? Could that be at the American Headache Society meeting later in June?

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Hey, Charles. Thanks for the question. So regarding some Bravo selling efforts, we are close to completion of the build out of that sales team. We expect to have approximately 100 sales representatives focused primarily on highly concentrated group of acute migraine treaters and headache centers and large neurology practices. Your point about synergy with the existing portfolio is something that we are taking a close look at.

There is some utilization in the psychiatry space. I’d say the synergy is more pronounced than the primary care space. That’s something that we’ll continue to evaluate for future promotional efforts.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics2: Then data from last So

Ario Cabuto, CEO, Axon Therapeutics: as you can imagine, HS, will be a very important scientific meeting for us and, we do expect to have

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: a presence there.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics2: Great. Thanks.

Conference Operator: Thank you. Next question is coming from David Amsellem from Piper Sandler. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics3: Hey, thanks. Wanted to drill down more on esterboxetine and fibromyalgia. I know you talked about it. I’m wondering, number one, how

Darren Oplin, Director of Corporate Communications, Axon Therapeutics4: are

Darren Oplin, Director of Corporate Communications, Axon Therapeutics3: you thinking about the sales opportunity? At one point, over a decade ago, Pfizer was prioritizing Lyrica on fibro, Lilly was prioritizing Cymbalta and fibro saw it as a big opportunity, lots of DTC, of course, those products are generic now. So how do you think about the underlying opportunity given on one hand the size of the market and on the other hand the fact that there are generics of these products? So that’s number one. And then number two, what’s the extent to which you’re going to expand the sales force to support Esterboxetine?

Thanks.

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Yes. Thanks, David. We’re very enthusiastic about AXS-fourteen potential impact fibromyalgia. As you mentioned, it’s a large market. There are about seventeen million people in The U.

S. Diagnosed with fibromyalgia. And so when you think about promotional efforts, the indication is treated by a diverse group of ACTs in rheumatology, primary care, pain, neurology and psychiatry. When we look at the key focus is the concentration specifically in rheumatology and primary care markets. We’re continually evaluating the appropriate size and structure for the AXS-fourteen sales team, but we do believe there’ll be likely be a mix of utilizing existing sales team as well as adding additional sales efforts, particularly for the rheumatology space.

And as it relates to consumer advertising, stay tuned for more information. We’re evaluating the most effective way of engaging with patients. As you know, this is a long dormant market from a promotional standpoint. So we’re looking at novel ways of engaging with patients in the future.

Mark Jacobsen, Chief Operating Officer, Axon Therapeutics: Okay, thanks.

Conference Operator: Thank you. Next question today is coming from David Hong from Deutsche Bank. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics5: Hi, there. Good morning. Congrats on the quarter and thanks for taking my questions. So first, I wanted to ask on OVELODI. Could you just give a little bit more color on your expectations for how payer coverage might evolve for the product over the course of this year?

I think you have two major TPOs under contract. And so just wondering if getting the third one would be key in your efforts to get the coverage you want? And then on Sunosi, could you give a little bit just any color you might have on how you’re seeing the growth in the EDS for narcolepsy versus OSA indications? Thanks a lot.

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Yes. Thanks, David. So regarding AUVELITY, our team is focused on two primary objectives, increase the number of covered lives and reduce utilization management such as prior authorizations and step edits. We’re pleased with the progress the team has made in negotiations across channels, and we do expect access to further expand and evolve this year and beyond. As it relates to SNOCY, we’ve seen really nice growth in both indications, but faster growth in the OSA indication.

This is obviously a larger patient population. And based on our interactions with HCPs, we’ve seen significant unmet need, particularly in this area where the majority of our growth is coming from.

Conference Operator: Thank you. Next question is coming from Joon Lee from Truist Securities. Your line is now live.

Speaker 9: Congrats on the strong quarter

Darren Oplin, Director of Corporate Communications, Axon Therapeutics6: and thanks for taking our questions. It’s great to hear that you had the meeting minutes from the ADA pre NDA meeting. Any color you can share on how the meeting went and any notable surprises, if any? And do you plan to have any other meeting before the actual submission in 3Q? And just a quick follow-up.

You’re now in your third year of AVELILE launch. When do you think you’ll be in a position to provide guidance on the AVELILE for MDD? Thank you.

Mark Jacobsen, Chief Operating Officer, Axon Therapeutics: Hey, June. I don’t know that we have any additional color with respect to the engagements with FDA besides what we disclosed and that we’re excited about the data we have and our progress towards an sNDA submission. That remains on track. In terms of additional meetings and things like that, right now the gating steps between today and the submission are completing build out of the package. And so that’s writing and compiling the modules.

So we feel good about the work ahead of us. We’ll keep you posted.

Nick Pizzi, Chief Financial Officer, Axon Therapeutics: Yes. And June, it’s Nick. As it relates to sales guidance, yes, we are in our third year. I would say it’s still a pretty fluid situation as Ari spoke about earlier about payer coverage continuing to evolve. We just launched the field force expansion in Q1.

We have the DTC campaign that’s going to be occurring later this year. So all of these items will have material impact. So understood the question on sales guidance, but still think it’s a bit premature, but we’ll direct you to our corporate website where we speak to the range of 1,000,000,000 to $3,000,000,000 for peak sales for MDD alone and then larger than that for ADA.

Conference Operator: Thank you. Next question today is coming from Serena Chen from Wells Fargo. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics7: Hi, thanks for taking my question and congrats on all the positive readout so far. I wanted to ask more about the strategic direction of the pipeline. As you have several assets pending regulatory review, how are you thinking about next steps? Would you say the focus is more on expansion opportunities? Or are there any plans for new molecular entities?

Thanks.

Ario Cabuto, CEO, Axon Therapeutics: Thanks for the question. Right now, given the breadth of the pipeline and the number of assets that we have that are in late stage development in any stage products, Our focus is to make sure that we execute crisply. So

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: we want to

Ario Cabuto, CEO, Axon Therapeutics: make sure that we execute on these opportunities, which if you look at all the opportunities, given the stage of development and the patient populations has the potential to deliver peak sales of north of $16,000,000,000 So we want to make sure that we execute and take those over the finish line. Having said that, there are other opportunities which are always being presented to us as well as other opportunities currently internally which we have not disclosed. Stay tuned for those and we will disclose them as they mature or as they become appropriate.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics7: Thank you.

Conference Operator: Thank you. Our next question is coming from Vikram Purohit from Morgan Stanley. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics8: Hi guys. Thanks for taking our question. This is Parth on for Vikram. Could you comment on your intended design of the Phase three study plan to initiate later this year for solrameptol in MDD with EDS? Like how large of a study population do you anticipate and what do you see as the key endpoints here?

And lastly, would this be the only additional trial required for potential approval?

Ario Cabuto, CEO, Axon Therapeutics: Thank you for the question. What we’ve done historically is disclose the exact design of the studies once we’ve launched them. Now we really like what we saw in TRULIPA signal in this patient population that is patients with MDD and excessive sleepiness. As a reminder that represents probably around fifty percent of patients who have MDD. We would take all the learnings from the study which we’ve completed as well as the learnings from other depression trials which we’ve conducted with our other products as we think about the design of this next study.

Conference Operator: Thank you. Our next question today is coming from Jason Gerberry from Bank of America. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics9: Hey, good morning. Thanks for taking my questions.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics4: Just to

Darren Oplin, Director of Corporate Communications, Axon Therapeutics9: follow-up on the MDD EDS opportunity. Just trying to get a sense of how confident you are that that really is half the MDD population, given the subgroup was only fifteen percent of the study population. Was there anything specific in the enrollment criteria that maybe restricted the enrollment of EDS comorbid patients? And then with respect to your MDD peak sales 1,000,000,000 to $3,000,000,000 when do think you’ll be in a position to narrow that guide? I’m just kind of wondering as you guys think about where you sit today, maybe what are some of the key variables that push you to the high end of three versus maybe the $1,000,000,000 peak sales range?

Thanks.

Ario Cabuto, CEO, Axon Therapeutics: Sure. As it relates to the MDD in EDS indication, In the study which we completed, we wanted to see if there was a signal and to ensure that we had great sensitivity as well as specificity, but importantly specificity. We define the subgroup as patients with severe EDS. Now if you look at patients who have EDS with NDD, it is about fifty percent of the population. And in terms of the MDD peak sales potential of 1,000,000,000 to $3,000,000,000 that does incorporate a lot of different variables.

One of the things to watch is what the trajectory is of our current sales. And as we continue the launch and as other aspects evolve, we might be in a position to narrow guidance. But right now we feel that that is a very achievable range and certainly the low end of that is very achievable.

Conference Operator: Thank you. Our next question today is coming from Joel Beatty from Baird. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics9: This is Chris on for Joel. Just a couple of questions on Zimbravo. How are you thinking about that CGRP data in February in terms of are you going to pursue that in a new indication or a label expansion? And then, is the plan still, to pursue CIMBRAVO, expand the label as well in adolescents? Thanks.

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Yes. Thanks, Chris, for the question. From the CGRP data in the EMERGE study, which we read out earlier this year, obviously, it’s very compelling data. We’ve been able to share it in the market since we received it. And it is very clear that clinicians are motivated by that data that gives them an additional place to try SENBRAVO once it’s commercially available.

At this time, we are not seeking to add it to the label as a new indication, but we’ll look to promote it through CFL guidance that the FDA puts forth and obviously through our medical affairs team and medical education.

Mark Jacobsen, Chief Operating Officer, Axon Therapeutics: I can take that the last part on pediatric development that That work is underway as agreed to with the FDA. So stay tuned for updates there.

Conference Operator: Our next question today is coming from Greg Suvannavez from Mizuho Securities. Your line is now live.

Speaker 9: Hey, morning. Congrats on the progress. Thanks for taking my question. Maybe just a bigger picture question on profitability or tantalizingly close to being a profitable company, given where you are in cash and kind of where cash has evolved over the last several quarters. Just any comments on whether you do think that profitability can be achieved in 2025 at least on a quarter basis?

Thanks.

Nick Pizzi, Chief Financial Officer, Axon Therapeutics: Sure. Thanks, Greg. As you know, we haven’t provided any guidance around timing, but we do remain confident that we’ll get the cash flow positivity with our current cash that is on hand. Expect to see in 2025 leverage in our P and L, so a bit in Q1 already as sales growth is outpacing our operating expenses. And I think it’s important we build Axle on a very disciplined approach in how we’re investing in our operations and how we allocate across our portfolio.

On the R and D side, the vast majority of our investment today is in our late stage pipeline, late stage programs and where we expect a higher rate of return on that investment. And on the SG and A side, we’ve built a significant infrastructure over the past three years, initially supports Adosi and NetEvality and now providing operating leverage as we launch the Bravo and will support future product launches. So we believe that we kind of summarize that the current cash will take us to cash flow positivity. We haven’t given any specific guidance around profitability, but we feel like we’re on the right course.

Speaker 9: And then maybe just as a quick follow-up, Nick, just on the evolution of your R and D and SG and A. R and D did come down relative to the fourth quarter. I don’t know if you expect that to be sustained in terms of where R and D is right now. I would assume SG and A would tend to tick up higher, but just if you could provide your comments there would be appreciated. Thanks.

Nick Pizzi, Chief Financial Officer, Axon Therapeutics: Sure, Greg. Yes, sure. Yes, you’re right. R and D did tick down a bit from Q4. ’3 ADA trials were completed in Q4 and then the ADHD and MDD trials were completed mid quarter in Q1.

We would anticipate R and D spend to increase from the Q1 level as we initiate our second Phase 3s for solriamfetol in ped ADHD and MDD with EDS. Additionally, as a reminder, we did file the NDA for AXS-fourteen in Q2, so we will have that filing fee in Q2. And then as for SG and A, we do expect to see an increase versus Q1 as we complete our hiring for the Bravo team, the Subravo field team. We did have in Q1 a partial quarter of leadership team hired and Q2 will also include a partial quarter of the sales team for Subravo. So we would anticipate that to tick higher in Q2.

And then as Ari talked about the DTC campaign later in the year that will further increase SG and A.

Conference Operator: You. Our next question today is coming from Yatin Suneja from Guggenheim Partners. Your line is now live.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics4: Hey, guys. Thank you for taking my question. Question is on the ADHD study that you had recently announced. Could you just talk about the path forward there? And also, think at that time when you announced the data, there were some questions around the three hundred milligram dose that was used.

If you can just talk a little bit about why was that used, you had earnings from that three hundred milligram dose going forward? So that’s one. And then the second one is on OVALITY in terms of the coverage there. I think it seems like there is some plateau in terms of the coverage, at least on the commercial side. Could you just talk about what is an idle number to reach right now?

Seems like you’re at about 63%, sixty five %. Thank you.

Ario Cabuto, CEO, Axon Therapeutics: You take the last one?

Ari Maisel, Chief Commercial Officer, Axon Therapeutics: Yes. We’ll start with the second question. We were having some difficulty hearing you on the first one. So we may need to just clarify. But the regarding coverage, obviously, we’ve had this coverage has been stable over the last couple of quarters, but we have been actively negotiating and in communication with payers.

And so we expect the access to expand and evolve this year. In terms of ideal percent of covered lives, obviously, want to secure as many covered lives as possible. There’s not a specific number that we have in mind, just ultimately really focused on improving access for patients so that more patients have the opportunity for coverage with their health insurance plans.

Ario Cabuto, CEO, Axon Therapeutics: Great. Jan, as it relates to the first question for ADHD, the path forward is to initiate and complete the Phase three trial in pediatric patients. With regards to the adult study and the three hundred milligram dose, as a reminder, the top dose which is approved for solriamfetol is one hundred and fifty milligrams per day. Given that this was the first study that we’re conducting in ADHD, we did want to look at a higher dose just to make sure that we define what the dose response was. Now the one hundred and fifty milligram dose that was primary dose of focus since that was the highest approved dose and we’re very happy with the results of the study, which showed a very clear treatment effect for that dose.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics4: Thank you. You addressed both my questions. Thanks.

Conference Operator: Thank you. Next question is coming from Myles Minter from William Blair. Your line is now live.

Ario Cabuto, CEO, Axon Therapeutics0: Hi. Thanks for the questions. Congrats on the quarter. I think on May 24, we’re expecting the Make America Healthy Again Commission to release an initial report on prevalence and threat of SSRIs, antipsychotic mood stabilizers, stimulants, kind of a catch all. And I think it’s actually maybe focused on childhood disease.

But question is, have you had sort of any interaction with the commission on that report as it pertains to a VALIDI or Sunosi? And I think they’re going to finalize it in August. So do you expect to be able to comment on that one? The first question. The second is just on narcolepsy.

I think a few of the KOLs we’ve talked to are like, look, the efficacy for AXS-twelve looks great on cataplexy. There’s some other symptoms that it looks interesting on as well. But in terms of the stimulant effects, they’re looking for like maintenance of wakefulness tests. I’m wondering whether you’re going to have that data in the open label extension. Thanks very much.

Ario Cabuto, CEO, Axon Therapeutics: With regards to the first question, we have not had any interactions with the commission and we’re going to stay tuned just like everybody else to see what the outcomes are as we state as we make sure that we keep an eye out and keep an ear out for anything that comes out that might affect the sector. As it relates to AXS-twelve, so with regards to the BMW T, we have not incorporated BMW T in our open label trial. So however, we have looked at excessive sleepiness, as you know, using other measures, including the clinical global impression of severity.

Darren Oplin, Director of Corporate Communications, Axon Therapeutics9: Great. Thank you.

Conference Operator: Thank you. Next question today is coming from Troy Langford from TD Cowen. Your line is now live.

Ario Cabuto, CEO, Axon Therapeutics1: Hi, guys. Thanks for taking our questions and congrats on all the progress this quarter. Just one on Sunosi and ADHD. Just given the level of efficacy that we saw in the Phase III ADHD study not too long ago, do you have any reason to believe that the Phase III pediatric study will show a substantially different level of benefit? And then just to follow on to that, do you all have any expectations for approximately how long that pediatric study could take?

Ario Cabuto, CEO, Axon Therapeutics: What we know is that historically there’s been a correlation between efficacy for ADHD in adults as well as ADHD in pediatric subjects. So we like the fact that we have now seen a clear effect in the

Speaker 8: adult

Ario Cabuto, CEO, Axon Therapeutics: population. However, we need to conduct the study in pediatric patients. And then in terms of the how long it would take to enroll that study and conduct it is premature. So what we’ll do is we’ll provide some guidance generally speaking once we launch the study and talk about the exact design of it.

Conference Operator: Thank you. Our final question today is coming from Ami Fabia from Needham and Company. Your line is now live.

Ario Cabuto, CEO, Axon Therapeutics2: Hi, thanks for taking my question. Just maybe stepping back with a lot of your assets in late stage or in market. Can you talk about how you’re managing the business in terms of operating margins and investing across these various assets relative to also exploring potentially bringing in any additional assets? And how do we think about what would be sort of that return on investment decision that you make and then driving you to kind of that path to profitability? Thank you.

Nick Pizzi, Chief Financial Officer, Axon Therapeutics: Sure. Thanks, Ami. As I mentioned earlier in my comments, a lot of our focus, a lot of the R and D spend is on late stage programs and that has a high POS and a high rate of return. So we continue to invest in that. As I mentioned, R and D was slightly down for the quarter versus Q4, but continue to invest in developing those late stage programs.

And the infrastructure that we have built over the last three years, specifically starting with Sunosi and then with the launch of AVELITY, we’re able to leverage that infrastructure on all of our future programs. So we believe that from that perspective that those programs will have a higher ROI.

Conference Operator: Thank you. We’ve reached the end of our question and answer session. I’d like to turn the floor back over for any further or closing comments.

Ario Cabuto, CEO, Axon Therapeutics: Okay. Well, thank you all for taking the time to join today’s call. As you’ve heard today, Axsome has accomplished a great deal in the first quarter. We are poised to deliver another impactful year driven by strong commercial execution, a rapidly expanding portfolio and multiple upcoming milestones. We appreciate your continued interest and support as we continue our work to bring innovative new treatment options to patients and create long term value for our shareholders.

Thank you very much.

Conference Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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