AGM 2020

Jun 5, 2020

Good morning, ladies and gentlemen, and welcome to the Axsome Therapeutics Conference Call. At this time, all participants are in a listen only mode. And as a reminder, today's conference call is being recorded. Question box on the left side of your screen and type your question and hit submit. I would now like to turn the conference over to your host, Herriot Tabuso, Chief Executive Officer. Please go ahead. Good morning. I am Arias Tabuteau, Chairman and Chief Executive Officer of the company. Will the meeting please come to order? Now let me take this opportunity to welcome everyone to the 2020 Annual Meeting of Stockholders of Axsome Therapeutics. Due to the continued public health concerns resulting from the COVID-nineteen pandemic and government recommended and required limits on public gatherings to protect the health and safety of the company's stockholders, directors and employees, this year's annual meeting is being held in a virtual only meeting format. This allows stockholders, regardless of physical location, to participate in today's meeting. Not only can you listen to the meeting, you can also submit questions and build your shares online prior to the closing of the polls in accordance with the instructions you received prior to the meeting. The polls are now open. Now we will get started with the technical phase of the meeting in a few moments. But first, we would like to direct your attention to the rules of conduct, a copy of which has been posted on the online meeting portal. Among other items, the rules of conduct describe the procedures for asking questions at the meeting. We will only respond to questions related to the official business of the meeting. If you wish to ask a question, please type your question in the Ask a Question section on the left hand side of your screen. You may ask questions at any point during the meeting. If your question relates to one of the proposals before the meeting, we will do our best to respond to your question prior to the polls closing. Approximately 15 minutes have been set aside at the end of the meeting for a question and answer session. Please note that Allison Andress, a representative of Ernst and Young LLP, the company's independent auditors is present at the meeting and is available to respond to questions raised by stockholders during the Q and A session. Before proceeding to the business of the meeting, there are also certain legal matters, which we must dispose of in order to make certain that we are conducting a duly authorized meeting. But as soon as these are completed, I would like to introduce you to the officers and directors of the company who are also joining us virtually and also to describe to you the matters proposed for your consideration and action at this meeting. Mark Jacobson, Axsome's Chief Operating Officer, who is present at today's meeting, will act as secretary of the meeting. The company has designated Louis D. Larson, a representative of L2 Elections to serve as the Inspector of Election. A copy of Mr. Larson's vote as Inspector of Election was presented to me prior to the meeting. Therefore, Mr. Larson's appointment as Inspector of Election is valid. Mr. Jacobson, please file a copy of the oath with the minutes of the meeting. Done. Okay. And will the Inspector of Election kindly confirm that a majority of the total number of shares of common stock of the company outstanding and entitled to vote at the meeting or present at the meeting. Ladies and gentlemen, there are represented at this meeting a majority of the total number of shares of common stock of the company outstanding and entitled to vote as of the close of business on April 9, 2020, the record date for this meeting. There is therefore a quorum present and the meeting is competent to transact business. Thank you, Mr. Larsen. Mr. Jacobson is Secretary of the meeting. Would you please report on the mailing of the proxy materials and the availability of a list of stockholders? Mr. Chairman, a copy of the notice of the annual meeting of stockholders dated April 21, 2020, concerning the matters to be considered and acted upon at the meeting and a copy of the proxy statement, proxy card and annual report to stockholders for the fiscal year ended December 31, 2019 have been made available for viewing by the company's stockholders through the virtual meeting portal. Additionally, we have received an affidavit of mailing executed by an employee of Broadridge Financial Solutions Incorporated, the proxy processing service provider for the company, certifying that the mailing of the aforementioned proxy materials to the company's stockholders was initiated on April 21, 2020. The Inspector of Election also has at the meeting a list of holders of record of the outstanding common stock of the company, which list is certified by an officer of the American Stock Transfer and Trust Company, the company's transfer agent and arranged in alphabetical order listing each stockholder of record at the close of business on April 9, 2020, the date fixed by the Board of Directors as the record date for this meeting. The affidavit of mailing will be filed within minutes of this stockholders is available for inspection upon request. Thank you, Mark. Now that the technical organizational phase of the meeting has been completed and before proceeding to the business to be transacted at this meeting, I would like to take this opportunity to introduce you to the officers and directors of the company. Let me first introduce the current directors of the company. In addition to myself, the members of the Board attending today's meeting include Doctor. Roger Jess, Doctor. Mark Coleman and Mr. Mark Saad. Now in addition to Mr. Jacobson, I would also like to introduce you to the following officers of the company. Doctor. Cedric O'Guarman, Senior Vice President, Clinical Development and Medical Affairs Doctor. Amanda Jones, Senior Vice President, Clinical Research Mr. David Merrick, Commercial Officer and Mr. McPheezy, Chief Financial Officer as well as to Mr. Emilio Ragosa and Oliver Newman of DLA Piper, counsels to the company. I'd also like to take this opportunity to introduce Allison Andress of Ernst and Young, the company's independent registered public accounts. Now the Chair will deem the following matters to be properly before this meeting: a, the proposed election of Mark Saad as a Class II Director and b, a proposal to ratify the appointment of Ernst and Young LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. We will be closing the polls shortly. We must ensure you submit your electronic ballot in order for your votes to be counted. Inspector of Election will not accept votes submitted after the closing of the polls. If you've already voted by proxy, you do not need to vote at this meeting. However, if you wish to change your vote or if you are a registered shareholder and have not voted, you may fill out the voting instructions by clicking on the Vote My Shares section on the left hand side of your screen. Please note that any votes submitted via electronic ballot will be subject to final verification by the Inspector of Election. Now the polls have been held open for 5 minutes, and I hereby declare that the polls are now closed for voting on the items of business. Will the Inspector of Election please give his report concerning the votes upon the election of directors and the aforesaid proposals? Ladies and gentlemen, the report of the Inspector of Election indicates that the following numbers of votes cast by the holders of common stock have been voted as follows: number 1, at least 21,668,515 shares have voted for the election of Mark Saad as a Class 2 Director as set forth in the proxy statement and 2, at least 32,438,119 shares have voted for the proposal to ratify the appointment of Ernst and Young LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. Now the report of the Inspector of Election therefore indicates that, 1, Mark Stott has been duly elected a Class 2 Director of the company to serve until the Annual Meeting of Stockholders in fiscal year 2023 and until his respective successor has been duly elected and qualified and 2, the proposal to ratify the appointment of Ernst and Young LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020 has been duly passed by the stockholders of the company. Will the Inspector of Election please execute his report as to the total number of votes cast on each of the matters considered at this meeting? The report shall be filed in the minutes of the meeting. Okay. Now the legal portion of the meeting has now concluded. Before opening the floor to any questions or comments, I would first like to give a brief presentation of the company's business. As a reminder, it is possible that today's meeting, including some of our comments and some of our responses to your questions, in addition to my presentation, may include forward looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties. The risks and uncertainties and assumptions that could affect these forward looking statements include risks that are included in the company's SEC reports, including our Form 10 Q the 1st fiscal quarter of 2020. We qualify all of our forward looking statements by these cautionary statements. And except as required by law, we assume no responsibility for updating any forward looking statements. In addition, with respect to all of our forward looking statements, we claim the protection of the Safe Harbor forward looking statements contained in the Private Securities Litigation Reform Act of 1995. Great. So I'll now give a brief overview and update on the company's status and business. So I'm very happy to say that we've had a very productive past few months. Last year was really productive and we continued that momentum into this year. And we've made a lot of progress advancing what we view as one of the broadest and one of the broadest, deepest and most impressive CNS pipelines for a company of our size and frankly for a company of any size in the CNS space. We currently have 4 clinical stage product candidates, which we're developing, and these are differentiated product candidates. We have patent protection for them, which go out to 2,036 and we have worldwide rights for most of our product candidates. Now as I mentioned, over the past several months, we've announced the clinical trial results for a number of our different product candidates. And what that means is not only are these potential candidates, but these are candidates which now have clinical data behind them, which substantiate potential value to patients of these product candidates. Now if you look at the number of patients that are affected by the diseases that we target, That number now is greater than 60,000,000 patients in the U. S. Alone. The prevalence, seriousness and high unmet medical need represented by these conditions underscores the importance of our investigational medicines and the clinical data we've generated thus far. So the opportunities facing Axsome are therefore significant. On this slide, we present a snapshot of select indications in our late stage pipeline for which we now have positive efficacy data from our controlled trials. For our AXS-five product candidate, we announced positive NDE enabling results in major depressive disorder in December, showing rapid and sustained improvement in depressive symptoms. And last week, we continued to make sure that we advance this product candidate. And there's been a lot of work that has been going on in order to make sure that on the CMC side of things, as well as with regards to potential FDA interactions that we continue to move forward to ensure that we were able to file our NDA by the end of the year. With regards to AXS-five and other indications, we recently announced positive data from our pivotal ADVANCE-one trial of AXS-five in Alzheimer's disease agitation, which similarly demonstrated a rapid and substantial improvement in symptoms in this condition. We also have announced positive NDA enabling results in migraine with our AXS-seven product candidate, which demonstrated superior efficacy as compared not only to placebo, but also to currently approved standard of care. Now we also recently announced positive results from our INTERCEPT trial of AXS-seven in the early treatment of migraine. Now our AXS-twelve product candidate for narcolepsy has demonstrated in our CONCERT trial significant improvement in cataplexy and excessive daytime sleepiness, the key symptoms of narcolepsy. Finally, our AXS-fourteen product candidate for fibromyalgia has demonstrated a differentiated profile and positive results in both a Phase 2 trial and a Phase 3 trial. So overall, these product candidates have the potential to generate total peak sales of up to $9,000,000,000 in just these indications based on clinical data generated thus far. This robust portfolio highlights the potential to improve the lives of millions of patients and significantly increase shareholder value. Now I'll give a brief status update on each of our product candidates. So for AXS-five, which we're developing for depression, As I mentioned, we now have generated positive Phase 3 data from our GEMINI trial. And this complements the positive data from our pivotal ASCEND trial, which we reported on at the beginning of last year. So those 2 clinical trials, we're able to file an NDA in major depressive disorder. Now in order to support the NDA filing in major depressive disorder, we currently have an open label safety extension study ongoing with AXS-five. The point of this open label safety extension study is to build the safety database that is required to file an NDA. We also recently announced results from our trial in treatment resistant depression. And this study met the key secondary endpoints demonstrating rapid antidepressant effect with AXS-five as compared to the active comparator bupropion. Now with regards to our Alzheimer's disease agitation indication, As I mentioned previously, we did announce positive results from our ADVANCE-one pivotal trial in this indication. Now this is a very important indication for the company, but most importantly for patients as there currently is no product that is approved for Alzheimer's disease agitation. Now what we've stated and what we remain on track for is to meet with the FDA in order to discuss these very important clinical results and to reach agreement on the path forward in order to make sure that we can get this therapy to patients as soon as possible. And along those lines, we are planning a second trial, the ADVANCE-two trial as previously announced and disclosed, and we remain on track to initiate that study in the second half of this year. Now we are also developing AXS-five for smoking cessation. We did announce last year positive results from a Phase II trial conducted under collaboration with Duke University of AXS-five in smoking cessation. And the next steps for this program are to meet with the FDA and to discuss the development path forward for this program. So we intend to do that this year. So moving on to AXS-seven for migraine. Now we have announced positive results from our pivotal MOMENTUM trial in patients with a history of inadequate response. We also announced this year positive results from our INTERCEPT trial. This is another Phase 3 trial. And the difference between INTERCEPT and MOMENTUM is that in INTERCEPT patients were treated patients treated their migraine at the earliest sign of migraine pain. And also this was more of an all comers population as compared to MOMENTUM, which enrolled only patients with history of inadequate response. So with these 2 positive Phase 3 trials, we are on track to submit our NDA by the end of this year. Now in order to enable the filing of the NDA, we do have an open label safety extension study ongoing. And the point of this study is to build a safety database of the number of patients that are required in order to file an NDA. Now a couple of words, a few words on our AXIS-twelve product candidate. We're very excited by the data that we generated last year with AXS-twelve in narcolepsy. Narcolepsy is a serious orphan condition. There are approximately 200,000 patients with narcolepsy in the U. S. And the 2 main symptoms of narcolepsy are excessive daytime sleepiness and cataplexy. Cataplexy is a sudden loss of muscle tone. And there currently is only one product currently approved in the U. S. To treat the cataplexy associated with narcolepsy. In our CONCERT trial, AXS-twelve demonstrated a rapid and substantial improvement in symptoms of cataplexy and excessive daytime sleepiness. Now the next steps with this program are to meet with the FDA in order to reach agreement on our next clinical trial and or our next clinical trials and we are on track to initiate our Phase 3 program with AXS-twelve in the second half of this year. Now moving on to AXS-fourteen, which is the SS enantiomer of riboxetine, which we're developing for fibromyalgia. So we with AXS-fourteen, we do have in hand positive results from 2 controlled trials, 1 Phase 3 and 1 Phase 2 trial, demonstrating that AXS-fourteen improves a broad range of symptoms in fibromyalgia. So not only the pain, fibromyalgia, but it also improves function. And importantly, there appears to be an important effect on fatigue, which is very difficult to treat symptom of fibromyalgia. So the next steps for this program are to meet with the FDA and we are on track to do that this year. So overall, we have a very broad, deep late stage portfolio with we are in a unique position in that all of these late stage assets have generated positive efficacy data in either pivotal trials or mid stage trials. We are also in a very strong financial position. We ended the quarter we ended the 1st quarter with approximately $200,000,000 in cash. And our current cash is anticipated to fund our operating requirements for at least 2 years. Now it's great to have good ideas, and but we also want to make sure that those ideas are protected, so that we can make sure that we get these products to patients and benefit them as well as our stakeholders. So for AXS-five, we've turned 36 issued patents in the U. S. And 8 issued patents outside of the U. S. And the claims for these patents extend out to 2,034. So very long runway. AXS-five is also protected by proprietary manufacturing and drug product formulation expertise. With regards to AXS-seven, migraine, we currently have 27 issued patents in the U. S. And outside of the U. S. And these patents go out to 2,036. Similarly, there is a lot of know how on the manufacturing and drug formulation side, which provide another layer of protection and additional barriers to entry. With regards to AXS-twelve for fibromyalgia, we do have orphan drug designation for this product candidate, which provides 7 years of exclusivity. In addition, we have filed 2 pending U. S. Patent applications, which if issued would provide even a longer runway. And finally for AXS-fourteen, as a reminder, this is a new chemical entity. And so there is just because of that 5 years of exclusivity in the U. S. In addition, we have filed 3 pending U. S. Patent applications, which if issued would significantly extend the runway. So looking through to the balance of the year, it's going to be a very busy year for us. Our main focus is to file our 2 NDAs for AXS-five in major depressive disorder and AXS-seven in the acute treatment of migraine. Those NDAs are on track for the Q4 of this year. We're also on track to get feedback from the FDA on our program in Alzheimer's disease agitation. And the goal is to initiate our next Phase 3 trial in Alzheimer's disease agitation in the second half of this year. With regards to smoking cessation, we expect to have a meeting with the FDA to discuss that development path also in the second half of this year. With regards to AXS-twelve, we remain on track to start our Phase 3 program in the second half of the year. And with regards to AXS-fourteen, we remain on track to meet with the FDA in the second half of this year. So that concludes the presentation. And with that, we'll proceed to the Q and A portion of today's meeting. So there are no questions at this time. We'll pause again for another couple of minutes. Great. So the first question is what I'll do is I will read the question and then we will answer it. So the first question is, you mentioned peak sales for all of the drugs. What pricing are you basing this off of? Can you discuss pricing research that was done? Thank you for that question. So the what we so we do mention peak sales and if you notice we provide a range for the peak sales. And that range is meant to reflect various pricing assumptions And the way that it works, of course, is now that we are in front of filing our NDAs and that we've generated late stage data. Not only is there pricing research, which we can do on our side, but there are also discussions with payers. And so we cannot make those discussions public and we're still negotiating and it will be premature to talk about exactly what the pricing for our individual product candidates will be. However, what we've done with the range is we've assumed a range of pricing and that is reflected in the range for the peak sales. And we've also provided assumptions around or research around the number of patients who have these various conditions. And all of that is to give you a sense of the opportunity. The next question has to do with AXS-twelve. Can you give your best estimate for AXS-twelve? How many Phase 3s will you need? And about how long will it take? So for AF S12, our assumption, which is the same assumption that we make for all of our product candidates is that we would need 2 Phase 3 trials. That is the FDA's usual requirement, which is 2 adequate and well controlled Phase 3 trials. So that is our base case. And with regards to how long it would take to complete those studies, We will have a better sense of that once we finalize the protocol for these trials and once we launch them. Right now, it's premature. The levers that go into how long it would take include one size of the clinical trial, so the eventual powering of the studies. And then also the number of clinical trial sites, which we would utilize. So what's good is that we have completed a Phase II trial and which we successfully enrolled. Now that was a small study, but it still gives us a lot of information and a lot of insight into where these patients are and how difficult it is or easy it is to have access to those patients. And we look forward to giving you greater granularity once we finalize the design of those trials. The next question is, can you discuss whether drugs are manufactured? How reliant are you in China? So our product candidates, they're manufactured. So the drug products, meaning the actual tablets themselves are manufactured in North America. We do have some API, which does come from other geographies. And in terms of our reliance on China, I'd say it's minimal. So with regards to what is probably behind this question is your concerns around the potential impact of the COVID-nineteen pandemic on our business. And with regards to manufacturing, that currently has not been impacted. So we do we have secured our API supplies and we did that way in advance and we currently have enough API to manufacture our drug product not only for clinical trials, but for any types of registration batches that may be required for filing our NDAs. So the question the next question is, are there any pre NDA meetings scheduled with the FDA for AXS-five and for AXS-seven for MDD in migraine. So the pre MD meetings are necessary and usual. So once you are ready to file an NDA, a pre INDIA meeting is held in order to make sure that there's agreement in terms of exactly what goes into the NDA, the formatting, a massive document involving tens of thousands of pages. So you want to make sure that you get that right. So pre NDA meetings are a normal part of the process and so and that is incorporated obviously into our plans. Okay. Ladies and gentlemen, so that concludes the annual meeting. And thank you all very much for attending.