Earnings call transcript: Axsome Therapeutics Q3 2025 reveals revenue beat, stock dips

Axsome Therapeutics Inc. (AXSM) reported its third-quarter 2025 earnings, highlighting a notable revenue beat but a slight miss on earnings per share (EPS) expectations. The company achieved total revenues of $171 million, surpassing forecasts of $162.45 million by 5.26%. However, its EPS came in at -$0.95, slightly below the projected -$0.85, marking an EPS surprise of 11.76%. Despite the revenue beat, Axsome’s stock fell 4.06% in premarket trading, reflecting investor concerns over the EPS miss and broader market conditions.

Key Takeaways

• Axsome’s revenue surpassed expectations by $8.55 million, driven by strong product sales.
• EPS fell short of forecasts, contributing to a negative market reaction.
• The stock declined 4.06% in premarket trading, indicating investor caution.
• Product sales, particularly Auvelity, showed significant year-over-year growth.
• The company maintains a strong cash position with $325.3 million in cash and equivalents.

Company Performance

Axsome Therapeutics demonstrated robust performance in Q3 2025, with a 63% year-over-year increase in total product revenues. The company’s flagship product, Auvelity, led the charge with a 69% growth in net product sales, reaching $136.1 million. Sunosi and Sembravo also contributed positively, with Sunosi achieving a 35% increase in net product revenues. The company continues to expand its presence in the central nervous system (CNS) market, bolstered by a diverse product portfolio and significant pipeline developments.

Financial Highlights

• Revenue: $171 million, up 63% YoY
• EPS: -$0.95, compared to -$1.34 YoY
• Net loss: $47.2 million, improved from $64.6 million YoY
• Cash and cash equivalents: $325.3 million

Earnings vs. Forecast

Axsome’s actual revenue of $171 million exceeded the forecast of $162.45 million, reflecting a positive surprise of 5.26%. However, the EPS of -$0.95 was below the expected -$0.85, marking an 11.76% negative surprise. This mixed performance, with a revenue beat but an EPS miss, contributed to the stock’s decline.

Market Reaction

In premarket trading, Axsome’s stock dropped by 4.06%, with shares priced at $129.51. This decline follows a recent closing price of $134.99, indicating a cautious investor sentiment despite the revenue beat. The stock remains within its 52-week range of $75.56 to $139.13, suggesting room for recovery as the company addresses EPS concerns.

Outlook & Guidance

Axsome maintains a positive outlook, with plans to achieve cash flow positivity. The company is gearing up for four phase 3 trials in Q4 2025 and anticipates potential new drug application (NDA) submissions across multiple indications. Future revenue forecasts suggest continued growth, with projections reaching $957.2 million by FY2026.

Executive Commentary

"Axsome continues to lead in CNS innovation, driven by disciplined execution and a clear focus on sustained growth and value creation," stated CEO Ari Maizel. He emphasized the company’s robust and diverse portfolio and its commitment to advancing brain health innovation.

Risks and Challenges

• EPS shortfall may impact investor confidence.
• Regulatory hurdles for upcoming NDA submissions.
• Competitive pressure in the CNS market.
• Market volatility affecting stock performance.
• Execution risks in planned phase 3 trials.

Q&A

During the earnings call, analysts inquired about the launch strategy for Sembravo and growth prospects for Auvelity in primary care. The company provided insights into its pipeline expansion plans and addressed regulatory expectations for its Alzheimer’s disease agitation submission.

Full transcript - Axsome Therapeutics Inc (AXSM) Q3 2025:

Operator: Good morning and welcome to the Axsome Therapeutics third quarter 2025 earnings conference call. My name is Darrell, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session, and instructions will be given at that time. Please note that this call is being recorded. I would now like to hand the call over to Darren Opland, Senior Director of Corporate Communications. Please go ahead.

Nick Pizzie, Chief Financial Officer, Axsome Therapeutics: Thank you, Darren. Good morning, everyone. Thank you for joining us for Axsome’s third quarter 2025 earnings conference call. With us today are Dr. Ari Maizel, our Chief Executive Officer; Nick Pizzie, our Chief Financial Officer; and Ari Maizel, our Chief Commercial Officer, who will begin our call with prepared remarks. Marc Jacobson, our Chief Operating Officer, and Hunter Murdock, our General Counsel, will also be available for Q&A. This morning, we issued our press release providing a business update and detailed financial results for the quarter. I encourage everyone to visit the investor section of our website to find the press release and accompanying presentations to today’s call. Please note that today’s discussion includes forward-looking statements regarding our financial performance, commercial strategy, and operational plans, including research, development, and regulatory activities.

These statements are based on current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our SEC filings, including our quarterly and annual reports, for a description of these and other risks. You are cautioned not to rely on these forward-looking statements, which are made only as of today, and the company disclaims any obligation to update such statements. I will turn the call over to Ari.

Ari Maizel, Chief Executive Officer, Axsome Therapeutics: Thank you, Darren, and good morning, everyone. Axsome continues to lead in CNS innovation, driven by disciplined execution and a clear focus on sustained growth and value creation. In the third quarter, we delivered strong revenue growth with total revenue of $171 million across our three marketed products, representing a 63% increase year over year. Auvelity continues to gain traction as a differentiated treatment for major depressive disorder, driven by strong underlying demand. We’re pleased with the pace of Auvelity’s performance, which is tracking well against our long-term expectations and underscores the significant opportunity for continued growth ahead. Sunosi remains on a steady trajectory, with year-to-date sequential growth nearly double that of the same period last year, a testament to the product’s durable performance and expanding adoption. Sembravo completed its first full quarter of commercial launch in Q3.

Our focus now is to continue strengthening the foundation for long-term success by broadening patient access and driving awareness with clinicians. Nick and Ari will speak in more detail about our financial and commercial performance and the strategic execution driving momentum across Axsome’s portfolio. Beyond our continued commercial growth, Axsome’s R&D engine is advancing a robust pipeline of late-stage programs with the potential to deliver transformative therapies for patients and significant value to our shareholders. Over the coming months, we expect meaningful activity across our late-stage programs, including two NDA stage programs and multiple registrational trials underway or initiating. I’d like to start with our top priority areas in psychiatry and neurology: Alzheimer’s disease agitation, narcolepsy, and ADHD. These are areas where we see substantial opportunity to transform patient outcomes, leverage our commercial infrastructure, and unlock significant value.

First, we are pleased to share that we have submitted our supplemental NDA for AXS-05 in Alzheimer’s disease agitation, and we look forward to announcing the FDA’s decision on acceptance of the filing. This submission is an important milestone for AXS-05 and for the millions of patients and caregivers affected by this serious and underserved condition. The addressable market for Alzheimer’s disease agitation is substantial, and the unmet need is high, with currently only one product approved. AXS-05 represents a first-in-class mechanism of action that has the potential to set a new standard in the treatment of AD agitation. Work is already underway to efficiently scale our commercial platform to deliver an impactful launch if approved. As a reminder, we are also developing AXS-05 in smoking cessation, and we are on track to initiate a phase 2/3 trial in this indication this quarter. Our next pipeline priority area is narcolepsy.

We continue to target the submission of our NDA for AXS-12 for the treatment of cataplexy in narcolepsy in the fourth quarter of this year. AXS-12 represents a highly differentiated opportunity to address critical gaps in current treatment. Up to 70% of patients suffer from cataplexy, and many continue to experience inadequate relief or poor tolerability to existing treatment options. We are excited about AXS-12’s potential to make a meaningful difference for patients living with narcolepsy. We also like its strategic fit with our existing sleep franchise, which we anticipate will enable a highly efficient and synergistic launch if approved. For ADHD, sodium amphetol has demonstrated positive results in adults in the FOCUS phase three trial completed earlier this year. The next step is a phase three trial in children and adolescents, which we plan to initiate in the fourth quarter of this year.

If successful, this indication could substantially expand the opportunity for sodium amphetol beyond its currently approved indications. As a reminder, we are also developing sodium amphetol in three additional indications: MDD with excessive daytime sleepiness, binge eating disorder, and shift work disorder. For MDD, we anticipate the initiation of a phase three trial in adults with MDD with excessive daytime sleepiness this quarter. Next year, we expect top-line results from the ongoing ENGAGE phase three trial in binge eating disorder and the SUSTAIN phase three trial in shift work disorder, and we look forward to providing progress updates in the near future. Turning to AXS-14, we are finalizing preparations for our planned phase three trial in fibromyalgia, which we expect to launch before year-end.

These milestones highlight the continued expansion of Axsome’s leading neuroscience pipeline, spanning multiple psychiatry and neurology indications with significant unmet medical needs and substantial long-term growth potential. All in all, our portfolio of novel medicines is robust and diverse, and our late-stage pipeline is deep and rapidly advancing, uniquely positioning Axsome to deliver substantial near and long-term value through multiple highly differentiated paths. With just three years as a fully integrated R&D and commercial organization, Axsome is shaping the frontier of differentiated innovation in brain health. The fundamentals of our business have never been stronger, and we are excited to continue building on this foundation to drive further growth. With that, I’ll hand the call over to Nick to review our financial results for the quarter.

Nick Pizzie, Chief Financial Officer, Axsome Therapeutics: Thank you, Ari, and good morning, everyone. Our third quarter performance underscores the continued momentum of Axsome’s commercial portfolio and the breadth of our capabilities as an organization. We continue to advance multiple innovative therapies addressing diverse and critical needs in brain health, a foundation that is driving meaningful growth across our entire business. As Ari mentioned, total product revenues for the quarter reached $171 million, representing a 63% increase year over year. Auvelity continues to demonstrate impressive growth. Net product sales for the quarter were $136.1 million, up 69% versus last year. Sunosi net product revenues for the quarter were $32.8 million, up 35% versus the prior year. Sunosi revenues consisted of $31.6 million in net product sales and $1.2 million in royalty revenue associated with Sunosi sales in out-licensed territories. Sembravo, in its first full quarter on the market, generated $2.1 million in net sales.

These results reflect our continued top-line growth and focused execution, driving increasing operating leverage across the business. Auvelity and Sunosi gross-to-net discounts for the third quarter were both in the high 40% range. We anticipate that Auvelity and Sunosi gross-to-net discounts will increase in Q4 to the low 50% range. Sembravo gross-to-net discount for the quarter was in the mid-70% range, which we anticipate will remain elevated during the launch phase. Turning now to expenses, total cost of revenue was $11.9 million compared to $8.4 million for the third quarter of 2024. Our research and development expenses of $40.2 million decreased 11% compared to last year, primarily driven by the completion of our clinical trials for sodium amphetol in ADHD and MDD.

Our selling, general, and administrative expenses of $150.2 million increased 57% compared to last year, primarily driven by commercialization activities for Auvelity, including the sales force expansion and our recently launched direct-to-consumer advertising campaign, along with the commercial launch of Sembravo. Our net loss for the quarter was $47.2 million, or $0.94 per share, compared to a net loss of $64.6 million, or $1.34 per share, for the same period last year. The $47.2 million net loss this quarter includes $23.1 million of non-cash stock-based compensation expense and a $13.2 million non-cash charge related to contingent consideration. We ended the third quarter with $325.3 million in cash and cash equivalents compared to $315.4 million at the end of 2024. We continue to believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan.

With that, I’d like to turn the call over to Ari, who will now provide a commercial update.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Thank you, Nick. Q3 represented Axsome’s first full quarter with three products, and our commercial team advanced efforts across multiple fronts of Axsome’s commercial business, highlighted by strong performance for Auvelity, a foundational first full quarter for Sembravo, and steady growth for Sunosi. Auvelity’s momentum in major depressive disorder continues to build, with strong prescription growth, increased new writer activation, and the initiation of strategic commercial investments. For the quarter, approximately 209,000 prescriptions were written for Auvelity, representing 46% year-over-year growth and 9% sequential growth. By comparison, the antidepressant market grew 1% year-over-year and was flat versus the second quarter of 2025. Since our expansion of the psychiatry sales force earlier this year, average weekly new-to-brand prescriptions, or NBRX, have increased by approximately 35%. Our expanded team continues to drive broader and deeper engagement across prescriber segments, and we have made meaningful progress in the primary care setting.

Approximately one-third of Auvelity prescribers are primary care clinicians, and NBRXs from the primary care setting have increased by approximately 50% since the expansion. Approximately 5,000 new prescribers were activated this quarter, bringing the total number of unique prescribers to 46,000 since launch. In addition to strong demand growth, we continue to make progress with market access for Auvelity. Commercial coverage increased from 73% to 75% this quarter, bringing total coverage to 85% of all lives across channels. Importantly, we have also contracted with a third-large commercial group purchasing organization, or GPO, effective August 1st, which will support continued coverage efforts moving forward. Turning now to Sembravo. The third quarter marked Sembravo’s first full quarter on the market, with early progress that is helping to establish a strong foundation for long-term growth. More than 5,000 prescriptions were written, and over 3,300 new patients started Sembravo in the quarter.

Our targeted approach, including focused sales and marketing activity among headache specialists who drive the majority of branded migraine prescriptions, is effectively building awareness and driving trial. Feedback from patients continues to reinforce Sembravo’s robust clinical profile. Sembravo’s Mosaic technology, which enables rapid absorption while maintaining a long half-life, resulting in strong efficacy, is resonating with HCPs. In a recent survey of migraine treaters, key drivers of prescribing include Sembravo’s multi-mechanistic targeting of the CGRP and prostaglandin pathways, fast migraine symptom relief, improvements in patient functioning, and sustained freedom from migraine pain. We continue to make progress with Sembravo market access and coverage, with overall payer coverage at approximately 52% of all lives as of October 1st. The proportion of covered lives in the commercial and government channels is 48% and 56%, respectively. We have also contracted with a second-large GPO effective August 1st for potential coverage of Sembravo.

We anticipate coverage for Sembravo to expand and evolve throughout the balance of the year and into 2026. Finally, Sunosi delivered another quarter of strong and steady performance, with approximately 53,000 prescriptions, representing 12% year-over-year and 5% sequential growth. By comparison, the weight-promoting agent market grew 4% year-over-year and 3% quarter-over-quarter. More than 460 new clinicians prescribed Sunosi in the quarter, bringing the total cumulative prescriber base to approximately 15,100 since launch. Payer coverage for Sunosi remains at approximately 83% of lives covered across channels. Overall, the third quarter represented another period of strong commercial performance across Axsome’s growing portfolio of differentiated CNS products. With continued execution on Auvelity and Sunosi and the establishment of a growth foundation for Sembravo, Axsome is driving increased demand, growing prescriber and patient engagement, and expanding access to our products.

We remain confident in Axsome’s continued growth potential and look forward to sharing future updates on our commercial progress. I will now turn the call back to Darren for Q&A. Thanks, Ari. That concludes our prepared remarks. Daryl, please open the line for Q&A.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, for your first questions. Our first questions come from the line of Leonid Timashev with RBC Capital Markets. Please proceed with your questions.

Hey, congrats on the quarter, and thanks for taking my question. I actually wanted to ask on Sembravo and your ability to extrapolate what you’re seeing in the third quarter out to fourth quarter in 2026. I guess maybe can you talk about the increased depth of prescribing you’re seeing and maybe what you’d like to see on the ground. Before you invest more in the launch and potentially any areas of bottleneck that are stopping additional patients from coming on therapy? Thanks.

Ari Maizel, Chief Executive Officer, Axsome Therapeutics: Hi, Leo. Thanks for the question. This is Ari. Obviously, it’s still very early in the Sembravo launch, and what we’re seeing so far is very positive in terms of HCP and patient response. The drug is performing as well as we expected in the real-world setting. We are, as a reminder, we’ve taken a very targeted and focused approach. Focused on the top 150 headache centers as well as large neurology practices around the country. Our intent is to try to penetrate as many of those providers as possible. As we observe the impact, we’ll make further decisions around expansion or incremental investment for Sembravo. At this time, we’re really pleased with the early response. There’s still a lot of work to do, and we’re in the early days. We are really focused on increasing prescribing in our targeted clinicians.

As we mentioned earlier, we’ve seen improvements in market access, which is also a key area of focus for us. We’ll share additional updates as the brand progresses.

Operator: Thank you. Our next questions come from the line of Mark Goodman with Lyric Partners. Please proceed with your questions.

Good morning. This is Basman from Mark. Thank you for taking our question. We have a question on Auvelity regarding the primary care segment, which seems to be contributing more and more to the scripts right now. Do you see the segment as the key growth driver for Auvelity, and how do you envision growing this segment? Is it mainly through sales force expansion? Thank you. That’s it for us.

Ari Maizel, Chief Executive Officer, Axsome Therapeutics: Yeah, thanks so much for the question. Yes, we believe primary care is a really important specialty area for Auvelity and MDD. It’s largely because most patients in the U.S. present to a primary care office upon diagnosis, and many stay with primary care throughout the course of their depression episodes. As you mentioned, we are seeing very positive response in the primary care setting. It now represents roughly a third of our prescriber base, and we’re seeing strong performance in terms of new patient starts as well as overall prescriptions. In terms of how do we further grow the primary care segment, part of that is just our focused sales force effort. Obviously, we’ve expanded the team several times, and that has enabled us to reach more primary care clinicians on a routine basis.

We believe the expanded market access that we’ve been able to accomplish over the past couple of years is also helping to ease the prescribing path for a primary care treater that may not have as many resources to support PA processing. And then finally, our direct-to-consumer campaign, which launched in the quarter. We’re seeing early positive signals in terms of patient awareness, patient requests for the product, and we expect that to facilitate further growth in the primary care setting along with the psychiatry setting.

Operator: Thank you. Our next question comes from the line of Pete Stavropoulos with Cantor Fitzgerald. Please proceed with your question.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Hello, and congrats on the quarter, and thank you for taking my question. There is a clear distinction in the clinical profile of AXS-05 versus antipsychotics. Given the differences in clinical data for Alzheimer’s agitation and the mechanisms, what are your expectations for Auvelity adoption if approved? How do you plan to drive uptake in the various channels? Have you identified key elements from resulting commercialization and marketing strategy you will do differently to ensure greater uptake and success? Thanks.

Ari Maizel, Chief Executive Officer, Axsome Therapeutics: Yeah, thanks for the question. Obviously, we’re very optimistic about the impact AXS-05 can have on the Alzheimer’s agitation market. In terms of our focus area, what we have seen in our early launch preparation is that there are a mix of specialties that are treating agitation. Primary care is the largest. There are also geriatric psychiatrists, neurologists, and then traditional psychiatrists. Of course, long-term care is an important setting of care for Alzheimer’s patients, and our anticipation is that we’ll cover all of those different specialties and settings of care with our efforts. We see a high degree of overlap between Alzheimer’s agitation and major depressive disorder in terms of prescriber base, and so we’ll be able to leverage our existing sales force. We see high synergies related to promotion there.

Of course, we will need to invest in long-term care promotion, which is something we don’t currently have, but do anticipate bringing online if the drug is approved. In terms of Rexulti’s promotion, we don’t typically comment on other companies and their promotional mix, but we have been following along, and they’re having really nice success with Rexulti, and so there are some learnings that we’ll incorporate into our launch strategy if AXS-05 is approved.

Operator: Thank you. Our next question comes from the line of Sean Lehman with Morgan Stanley. Please proceed with your question.

Good morning, everyone, and hope all is well. I’m just wondering on the sales force expansion. I think you just mentioned on the call you’re up to 46,000 prescribers, added 5,000. Given the bump in SG&A, I’m wondering how much capacity you think you’ve got in the existing sales force and when you might have to go again and how that ties into your thinking about the time-to-cash flow positivity. Thanks.

Ari Maizel, Chief Executive Officer, Axsome Therapeutics: Yeah, I’ll take the first part of the question. We are pleased with the size of our sales force at the moment. It is driving considerable growth in terms of new prescribers as well as new patients. We’ve previously shared that we intend to add some additional representatives in support of the Alzheimer’s agitation approval, and we have started our efforts in terms of laying the groundwork for future expansions, although we haven’t quite settled on a final number. That is something that we’re looking to do early in 2026.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Yeah, maybe just a little bit on the SG&A for the quarter. This is Nick. In Q3, the SG&A increased slightly. That was really driven by our launch of the DTC campaign that we launched in September. Additionally, we had a full quarter of commercialization activity for Sembravo. Even with that, if you take a look at our net loss on a cash basis, we continue to improve quarter over quarter, as well as on a GAAP basis, continue to improve on the net loss. No changes as it relates to our outlook for cash flow positivity.

Operator: Thank you. Our next question comes from the line of Ash Verma with UBS. Please proceed with your question.

Hi, thanks for taking our question. Just on the AD agitation application, can you comment on how many days past you are after the application filing? There’s some investigative discussion going on whether you’re past the 60 days and thus unlikely to get a priority review. Any implications that you can draw from the government shutdown to your filing application process review and how this may play out? Thanks.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Sure. Hey, Ash, good morning. As is our practice, we haven’t disclosed the date of the submission, but the FDA typically lets sponsors know up to 74 days following the submission when on a potential acceptance. We don’t see any potential impact from the shutdown for the timing. As we said, the next update that we expect to share is a potential acceptance decision.

Operator: Thank you. Our next question comes from the line of Andrew Sai with Jefferies. Please proceed with your question.

Hey, good morning. Great execution this quarter. Thanks for the question. Maybe shifting gears to the pipeline, you’ve got two phase 3 readouts with Sunosi for binge eating and shift work disorder. Can you talk a little bit about the study designs, what positive data would entail in order for you guys to file two more supplemental NDAs next year or 2027? Thanks.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Sure. As it relates to binge eating disorder, it’s a standard parallel group study design. That would be the first study that we would need in order to be able to file an SNDA. Based upon the results of that study, we would intend to initiate another trial. We would need two studies for that. Other indications for solriamfetol include ADHD, and we currently have one positive phase 3 trial for that in adults. We’re looking to start our second study, which would be in pediatric subjects or pediatric patients in the fourth quarter.

Operator: Thank you. Our next question comes from the line of Amy Fabio with Needham & Company. Please proceed with your question.

Hi, thanks. Good morning. Thanks for taking my question. My question is just sort of broader, stepping back. You’ve got a couple of products in the market, making your way towards cash flow positivity and several other late-stage assets. Sort of from a long-term strategic perspective, where are you in terms of your thinking around the portfolio? Are you looking to add additional assets to drive sort of operational efficiencies over the next couple of years, or do you think that you’ve got enough in late stage that focuses really more on execution on those assets? Thank you.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Thank you for the question. We’re in a very unique position. From the perspective of, as you mentioned, we do have three marketed products, which are still in relatively early stages of launch. There’s a lot of growth ahead. We’re also very fortunate that the period of exclusivity for these products goes out into the next decade or a couple of decades. That’s a great position to be in. On the back of that, there’s the next wave of products and indications which we would expect to be approved over the next couple of years. We talked about the SNDA filing for Alzheimer’s disease agitation and the planned NDA filing for AXS-12. Then, of course, there’s AXS-14, for which we intend to launch our next phase 3 trial.

All of that means that we really do not need to do anything extra as it relates to the pipeline in the near term. That would be, I think, the standard approach. Our approach is always to make sure that we’re ahead of the curve. As it relates to that, we are taking the opportunity of the position that we’re in to field inbound as it relates to potential additions to the pipeline, which could be complementary. We’re not going to quit while we’re ahead, and we’ll continue to make sure that we make very good strategic decisions as it relates to potentially enhancing the pipeline. We’re in a position whereby we can be very choosy about what we bring on board.

Operator: Thank you. Our next question comes from the line of David M. Sellam with Piper Sandler. Please proceed with your question.

Ari Maizel, Chief Executive Officer, Axsome Therapeutics: Thanks. I had a question on reboxetine. Wanted to get your latest thoughts on how you’re thinking of the commercial opportunity, particularly given that you’ll be entering the market more or less around the same time as ovaparexin, the first orexin 2 receptor agonist. How are you thinking about the competitive dynamics here? How are you thinking about sizing this opportunity? Just wanted to get your latest thoughts on the product. Thank you.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Yeah, I think we’ll all tackle that. One thing which is really interesting about roboxetine is its focus on norepinephrine reuptake inhibition. That is a common pathway for the orexin. The pathophysiology of the disease is orexin neuron loss, which then decreases the production of norepinephrine. This roboxetine works in a very logical, rational way in terms of the pathophysiology of the disease. We’re very excited about the product profile because we know from our experience in the sleep space with Sunosi that there’s still a very high unmet medical need. I’ll just add, when you look at the clinical profile that was observed in the phase 3 trials, great efficacy in cataplexy, non-stimulant, daytime treatment, favorable tolerability profile. There’s a lot to like about it. What we hear from KOLs and sleep experts is that many patients require polypharmacy. There’s a lot of trial and error.

Even with the entry of a new mechanistic approach, we believe that there will still be significant unmet need, which creates opportunity for AXS-12 in those patients. Maybe just one other add is, with respect to sizing, we see incredibly high synergy, almost near perfect synergy with the current sales and marketing infrastructure that we have in place for Sunosi right now. Very, very complementary to what’s already in place. We’re excited about that.

Operator: Thank you. Our next question comes from the line of June Lee with Truist Securities. Please proceed with your question.

Hey, congrats on the strong quarter, and thanks for taking our questions. Your commercial execution on Sunosi is quite impressive. Any idea where the demand for Sunosi is coming from? Is it NT1, NT2, IH, or something else? Given your strength in combining products, any thoughts on combining Sunosi with AXS-12 to address both EDS and cataplexy, or do you think it’s just better to keep them à la carte? Thank you.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Yeah, I’ll take the first part of that question. We’re seeing sort of a. The predominant growth is coming from the OSA segment. There’s significant unmet need in terms of excessive sleepiness with OSA patients. It represents roughly two-thirds or so of the overall prescribing for Sunosi. We are seeing very strong demand for Sunosi with those patients. Norepinephrine, of course, is an important component of the Sunosi sales mix. What we’ve seen, particularly over the past couple of years, is a greater awareness of excessive sleepiness among OSA patients. As a consequence, we’re seeing increased utilization there. Yeah. As it relates to your question about whether it should be an à la carte approach for AXS-12 and Sunosi, given how complementary the planned indications are, our priority is to make sure that we get the product approved. That’s first and foremost. Let’s start with that.

That’s going to accomplish our main goal, which is to provide clinicians extra treatment options. Clearly, given how the patients are treated with narcolepsy, given the varied symptomatology, probably undoubtedly, there would be patients who would receive both Sunosi and AXS-12. Our goal is to provide clinicians the data such that they can treat the patients in the best way that they see fit.

Operator: Thank you. Our next question comes from the line of Ram Savaraju with HC Wainwright. Please proceed with your question.

Thanks so much for taking my questions, and congratulations on all the progress. Just with respect to Sembravo, I was wondering if you could elaborate on the number of centers that you expect to target in the next wave after the initial 150 headache centers. Also, if you could tell us a little bit about the timing with which you expect the DTC campaign for Sembravo to be engaged, if we should be thinking about the timeline as being similar to the timeline with which you initiated the DTC promotional activity in support of Auvelity. Thank you.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Thanks, Ram. So regarding the, I guess, increase in number of centers, the way to think about it is right now we are really focused on the predominant headache centers and headache specialists in the country. A future expansion would enable us to actually expand out more into the primary care market, where you might have a heavy proportion of migraine treaters. And so right now we feel very good about our coverage of headache centers and headache specialists. That next wave would really be more about primary care expansion. As it relates to DTC, I think it’s a little premature to talk about potential timing. If you look at Auvelity and our timing related to our DTC launch, it really was a function of ensuring we had a strong foundation of HCP prescribers, support from a prescriber perspective.

We had reached a critical mass in terms of market access, and we had a sales force size that was big enough to support the increase in patient requests coming from a DTC campaign. When that might happen, obviously, we’re focused on execution across all fronts, and we’ll evaluate as the brand progresses.

Operator: Thank you. Our next question comes from the line of Jason Gerbery with Bank of America. Please proceed with your question.

Hi, good morning. It’s Dina On for Jason. Congrats on the quarter, and thank you so much for taking our question. Just on AXS-05 for Alzheimer’s disease agitation, could you maybe share your understanding of the clinical profile bar that’s necessary for priority review under breakthrough designation? Is there a requirement that AXS-05 shows efficacy benefit relative to Rexulti? How do you think investors should think about that scenario and the read-through to the core trials? A quick follow-up on your comment on AXS-05’s ADA long-term care promotion. Could you just maybe detail what those efforts look like? Are there docs that are affiliated with long-term care facilities? Appreciate any additional color there. Thank you.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Sure. Hi. Just one thing to share. Our base case here is always a standard review for the application. We are eligible for potential priority review, but our understanding is that currently, the default position for the FDA for any application is standard review. With respect to quantitative efficacy bars, that’s not how it works, right? It’s not a specific or, again, quantitative analysis that the agency does. It’s hard to give you anything there for what may or may not go into an analysis like that. Again, our base case has always been standard review. I think, as we said, we’ll keep people posted on a potential acceptance decision as I think the next thing that we’d expect for the course of review. Yeah.

Dina, in terms of your long-term care question, it’s a little different than traditional outpatient facilities where you may be calling on MDs, NPs, PAs, along with office staff. In long-term care facilities, there’s a significant nursing staff, pharmacy directors, medical directors. Of course, there are physicians, NPs, and PAs that will make rounds in long-term care. They also are treating patients in the community, and so there’s a synergistic effect of the community-based promotion for those clinicians that go into long-term care. It is a little bit of a different approach, which is why we feel it’s necessary to have a dedicated team focused on long-term care facilities if the drug’s approved.

Operator: Thank you. Our next question comes from the line of Yeton Sunaja with Guggenheim Partners. Please proceed with your question.

Thanks. One more question on the ADA. How do you think about the Adcom? Is that going to be required, given that we already had one for the space with Rexulti? Just curious to hear your thought and how you are thinking about it.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: In Adcom, that’s something companies find out on potential reception decisions for FDA. Stay tuned on that.

Operator: Thank you. Our next question comes from the line of Greg Savanavich with Mizuho Securities. Please proceed with your question.

Hey, good morning. Thanks for taking my question. And congrats on the continued success across the board, both commercially and on the pipeline. Just wanted to talk about Auvelity commercially. Just wanted to revisit the gross-to-net and its evolution. I think you mentioned that the gross-to-net was in the high 40% in the third quarter. I’m wondering what led to that happening and whether there were any unique one-time events or items that contributed to that. Also, just looking forward on the progress you’ve made with contracting, are there any other significant gains that you’re looking forward to? I mean, it seems like you’re at a pretty good place, but just wondering just in the future how we should think about that dynamic. Thanks.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Sure, Greg. Hey, this is Nick. Thanks for the question. You’re correct. Auvelity discount for the quarter improved from the mid-50% to the high 40% in Q3. Pleased with the net price improvement around Auvelity. Something that did change during the quarter is that we received additional 28 million lives in Q3. We were able to see those lives covered in an improved fashion in first line or first switch. Improved access, improved amount of patients covered, along with improved net price from a GTN perspective. All right. You want to take that second question? Yeah. I think, first and foremost, we’re at 85% total lives covered, which we’re really pleased with. We shared on the opening remarks that we signed the third large GPO. Our expectation is to continue to add additional covered lives. Our goal is to try to get to as close as 100% as we can.

Obviously, with the third GPO signed, that will enable additional covered lives moving forward. As you know, it’s very difficult to predict exactly when those new PBM contracts will come online. We do feel optimistic that there’s great interest, and the team is continuing to focus on driving additional covered lives moving forward.

Operator: Thank you. Our next question comes from the line of David Hong with Deutsche Bank. Please proceed with your question.

Hi. Congrats on the quarter. Thanks for taking my questions. Just wanted to go back to the planned sales force expansion for ADA. Recognize that it’s early days, but could you maybe bookend or at least point us towards maybe a minimum number of reps that you think would be sufficient to execute a successful launch in that indication? Are those numbers already contemplated in your guidance for reaching cash flow positivity? Thank you.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Yeah. Thanks, David. The plan would be to expand the team if the drug is approved. In terms of the overall number, we’re still working through that. There’s obviously two pieces to it. One is, are there clinicians we would like to cover that we don’t currently cover with the current team and what sort of incremental headcount numbers we need to reach them? The long-term care area is something that we’ll need to think through in terms of overall headcount needed to appropriately educate and engage with long-term care settings. A little early to share a specific number, but the goal is to expand the team if the AXS-05 is approved, and we’ll share additional updates in the future. David, would you mind just repeating? I think you had a question about cash flow positivity.

Yeah. Whether the anticipated ADA sales force expansion is already contemplated within the existing guidance for cash flow positivity?

Yeah. David, it’s Nick. Absolutely. It’s contemplated. The way that we forecast our cash is assuming that everything is positive as it relates to clinical and regulatory outlooks and then the additional associated costs with that. Obviously, upon a launch, you would have the, it would be capital-intensive for the first few quarters and then ultimately seeing an ROI. Yes, the answer is we have already included that in our cash flow.

Operator: Thank you. Our next question comes from the line of Troy Langford with TD Cowen. Please proceed with your question.

Hi. Thanks for taking our question and congrats on all the progress in the quarter. Just with respect to Auvelity, approximately how many quarters do you think it will take to see an impact from the recently launched DTC campaign on prescriptions? Do you think we’ll see any sort of inflection in the current trajectory of prescriptions, or do you think we’ll see just more of a continued gradual upward trend?

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Yeah. Thanks, Troy, for the question. In terms of number of quarters, it’s hard to predict exactly when the most significant impact from DTC will hit. One of the things that we’re looking at is changes in our weekly new patient starts. We have begun to see an increase in new patient starts in general. It’s sort of 8-12 weeks is when we’d be looking for anything significant in terms of DTC impact. Right now, we feel like it’s still early days, but we’re pleased with some of the trends that we’ve observed. We’ll continue to provide updates.

Operator: Thank you. Our next question comes from the line of Miles Vinter with William Blair. Please proceed with your question.

Hi. Thanks for the question. Just the first on the third JPI contract and those Pay and T maintenance coming online. Would you expect that commercial covered lives moving from 75% somewhere in the mid-90% to have a similar favorable gross-to-net impact as you saw with the 28 million lives coming online in the third quarter there? Secondly, just given the FDA news this morning with Unicure and then George Tidmarsh, obviously resigning, just anything you can say about the confidence of the FDA as you work through the regulatory process. On the Cedar side. Thank you very much.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Hey, Miles, I’ll take the first one on GTN. I think it’s too early to say where GTN will land with an additional contract now at hand. We are pleased, as we shared, with where we are, with the improvement in GTN as well as the improvement in the amount of lives covered and the formulary access. Stay tuned for where we’ll land. We will continue to negotiate in a similar fashion as we have previously, ensuring that we maintain long-term value and try to have as many patients covered as possible. On the FDA side, right now, things are status quo for us in terms of our dialogue and interactions across the various divisions that we engage with.

Operator: Thank you. Our next question comes from the line of Madison Alsotti with B. Riley Securities. Please proceed with your question.

Hey, good morning. Thanks for taking our question. Congrats on the quarter. On Auvelity and Sunosi as well, but more so Auvelity, are you seeing per prescriber activity trending upward? Just trying to kind of get a sense of how much growth here is sensitivity to promotion versus more organic growth. Obviously, the sensitivity to promotions is great. My sense is that there’s also some organic growth here as well. If you could just comment, and then maybe a follow-up.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: Yeah. Thanks for the question, Madison. I guess the way that I would recommend sort of thinking about the growth is it’s a function of two things: productivity among existing writers, so the number of prescriptions per existing writer, and then our ability to add additional new writers into the prescriber mix. For both brands, we’re seeing those things come to fruition, which I think is a testament to the impact that these medicines are having on patients’ lives, the positive reinforcement that these clinicians are hearing from their patients, and our team’s ability to engage with them and educate them on a routine basis. Those are things that we’ll continue to look to drive moving forward.

Got it. Understood. Secondly, we have four phase 3 trials planned to initiate this quarter. Just wondering on the cadence of those, should we think of these as almost parallel launches, or will these kind of come in a sequence throughout the remaining quarter? Thank you.

Yeah. With four phase 3 trials launching, there are a lot of moving parts from an operational perspective to make sure that that happens. It’s very unlikely that they’re all going to happen on the very same day. Do expect a natural cadence. It’s nothing that we’re pre-planning. However, we are working towards and are on track for the initiation of those studies in the fourth quarter.

Operator: Thank you. Our last questions will come from the line of Benjamin Brant with Wells Fargo. Please proceed with your question.

Hey, guys. This is Craig on for Ben. Just a couple from us here. Given your successful track record of getting products through the finish line, I’m curious, can you provide a little bit of color on how your regulatory interactions in regards to the supplemental NDA for AXS and ADA have maybe differed from some of those past programs? I guess second question in regards to narcolepsy, I feel like we’re seeing a lot of estimates of the epidemiology of those indications kind of expanding and expanding further. Out of curiosity, what do you guys think is driving that? Are you seeing growth in IH, NP1, NT2, any one particular area? Any color there would be helpful. Thank you.

Ari Maizel, Chief Commercial Officer, Axsome Therapeutics: I’ll take the first part. It is ordinary course at the moment based on where we are in the cycle in terms of the submission for AXS-05 and ADA agitation. Yeah. From an epidemiological perspective, for narcolepsy, you have to look at the surveys that are done and the quality of those surveys. However, one aspect of the market that we have always pointed to is the fact that in this orphan indication, there is still a large percentage of patients who, one, have remained undiagnosed in the past, and secondly, who are treated. Certainly, as there is more interest in the space, as more products are being developed and coming to market, one would expect that there would be an increase in awareness, and maybe that is what you are seeing. Anything that you would add, Ari? No. I think you mentioned NT1, NT2, IH.

I think that there is a lot of symptomatology overlap in different formalized diagnoses, which may muddy the waters a little bit. From our perspective, we feel good about our current estimates, which is around 185,000 people in the US suffering from narcolepsy, and that is what we are building our plans around.

Operator: Thank you. There are no further questions at this time. I now would like to hand the call back over to management for any closing comments.

Thank you. Thank you to everyone for joining us this morning. As we’ve highlighted today, Axsome delivered another strong quarter. We continue to drive robust growth across our commercial portfolio, and we are well positioned to deliver significant long-term value through our advancing pipeline. We look forward to sharing our continued progress over the coming months. Thank you.

Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

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