Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Axsome Therapeutics Inc (AXSM, Financial) reported strong commercial performance with significant growth in product sales, particularly for ABILITY, which saw a 135% year-over-year increase.
- The company made substantial progress in its late-stage development pipeline, with pivotal trial readouts expected later this year for multiple indications.
- Axsome Therapeutics Inc (AXSM) successfully expanded payer coverage for ABILITY, increasing the percentage of covered commercial lives from 48% to 60%.
- The company has a robust cash position, ending the second quarter with $315.7 million in cash and cash equivalents, which is sufficient to fund anticipated operations into cash flow positivity.
- Axsome Therapeutics Inc (AXSM) is advancing its NDA submissions for AXS-07 for acute migraine treatment and AXS-14 for fibromyalgia, with expected updates on FDA reviews and submissions in the near term.
Negative Points
- The company reported a net loss of $79.3 million for the second quarter of 2024, an increase from the $67.2 million net loss in the same period in 2023.
- Research and development expenses significantly increased to $49.9 million, primarily due to the initiation and continuation of multiple Phase 3 trials.
- Selling, general, and administrative expenses rose to $103.6 million, driven by commercialization expenses and field force expansion.
- Gross-to-net discounts for both ABILITY and Sunosi were in the low to mid-50s, indicating substantial deductions from gross sales.
- The company faces challenges in the competitive landscape for its products, particularly in the crowded migraine treatment market and the payer dynamics for new product launches.
Q & A Highlights
Q: Can you provide more context on the specific kinds of prescribers and quantify the benefit seen from the sales force expansion for ABILITY?
A: We saw a clear inflection in weekly new patient starts and growth in the primary care segment. Although psychiatrists still account for the majority of volume, primary care utilization increased over the quarter, indicating a positive impact from the sales force expansion. β Herriot Tabuteau, CEO
Q: Can you discuss the progress and dynamics of the ADVANCE-2 trial for Alzheimer's disease agitation, especially considering the presence of an approved agent?
A: Enrollment is progressing steadily, and we are confident in reporting results in the second half of 2024. The launch of Rexulti, an approved agent, was anticipated to provide an alternative treatment, but our enrollment progress remains strong. β Herriot Tabuteau, CEO
Q: Are there plans for a direct-to-consumer (DTC) advertising campaign in the second half of the year?
A: We currently focus on digital media for DTC advertising and are evaluating the potential for a broad-based media campaign. The decision will consider factors like the anticipated noise level from the election season. β Darren Opland, Director of Corporate Communications
Q: What is the rate-limiting step to filing an NDA for AXS-05, and when would you anticipate that if the studies are positive?
A: The major gating factor is the completion of ongoing studies, including the long-term open-label portion. Typically, it takes about six months to put together an NDA filing once the studies are completed. β Herriot Tabuteau, CEO
Q: Can you remind us of the duration of the open-label run-in period for the ACCORD-2 study and the typical time to relapse in ACCORD-1?
A: The run-in period is long enough to enable patients to respond, similar to the five-week duration in the ADVANCE studies. The time to relapse in ACCORD-1 was not estimable due to low relapse rates on AXS-05, but the results were highly statistically significant. β Herriot Tabuteau, CEO
Q: Can you provide additional color on the competitive landscape and peak market opportunity for solriamfetol in the new indications being studied?
A: All four indications (ADHD, MDD, binge eating disorder, and shift work disorder) represent large patient populations. Solriamfetol's mechanism of action and efficacy could provide superior benefits, particularly in ADHD and binge eating disorder. We look forward to the results of the studies. β Herriot Tabuteau, CEO
Q: What are your latest thoughts on filing a unique NDA versus a supplemental NDA for AXS-05 in AD agitation, considering the payer mix and pricing strategy?
A: We are evaluating various considerations, including marketing elements, patient safety, and the potential halo effect of the drug. We will provide further updates as we get closer to a decision. β Ari Maizel, EVP - Head of Commercial
Q: Can you talk about the pull-through from the expansion of commercial coverage and how you anticipate gross-to-net to evolve for the remainder of the year?
A: The additional 22 million lives covered started on August 1st, so it's premature to discuss pull-through. We expect gross-to-net for ABILITY to remain in the low to mid-50s range for the second half of the year. β Nick Pizzie, CFO
Q: Can you clarify the primary study for the NDA submission for AXS-05 in AD agitation and how the various trials will be utilized?
A: We have four Phase 3 trials, including ADVANCE-1, ADVANCE-2, ACCORD-1, and ACCORD-2. Typically, one to two positive trials are required for regulatory considerations, and our development program provides a robust data set for the NDA submission. β Herriot Tabuteau, CEO
Q: Can you elaborate on your go-to-market strategy for AXS-07 in acute migraine, considering the crowded market and payer landscape?
A: Despite the crowded market, 70% of migraine patients are dissatisfied with current treatments. We believe AXS-07 has a meaningful opportunity based on its clinical profile. We are working on our pricing strategy and will provide updates as we get closer to launch. β Darren Opland, Director of Corporate Communications
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
