Okay, let's go ahead and get started. Welcome everyone. This is the Fireside Chat with Axsome Therapeutics. My name is Vikram Purohit. I'm one of the biotech analysts with the Morgan Stanley research team. Happy to have with me on the stage, Herriot Tabuteau, CEO of Axsome. Herriot, thanks for joining us.
Thanks for having us, Vikram.
Yeah, of course. Before we get started, let me just read a quick disclaimer statement. "For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative." So with that, let's get started. Herriot, for those in the audience that may not have checked in on Axsome recently, maybe it's helpful if we just start with some brief opening remarks from your side on areas of the business you've been focused on, and what you kind of see as the next couple of key milestones heading into the end of the year.
Sure. We are a CNS-focused company, so for those of you who are not familiar with Axsome, we currently have two marketed products. One is Auvelity, which is a treatment for major depressive disorder. We are in our second year of launch, and the other marketed product is Sunosi, which is marketed for the treatment of excessive daytime sleepiness in patients with narcolepsy, as well as obstructive sleep apnea, and in addition to the marketed products, we have a portfolio of late-stage CNS product candidates, a total of five, which are in clinical development for ten different indications. It will bring us to ten different indications for our entire portfolio, and as I mentioned, these are late-stage CNS assets, and we've been pushing forward and advancing clinical trials and NDA filings.
And so this morning we announced that we resubmitted the NDA for one of those product candidates, which is the AXS-07 for the treatment of migraine. And between now and the end of the year, we have a number of catalysts related to this pipeline, including one additional NDA filing for AXS-14 in fibromyalgia, as well as pivotal trial readouts for AXS-05 in Alzheimer's disease agitation. We have two potential studies which could read out. And the FOCUS phase III trial of solriamfetol, which is the active ingredient in Sunosi in ADHD. So you know a lot of potential news flow and an important milestones between now and the end of the year.
Got it. Great. Excuse me. Helpful overview. Let's start with Auvelity. I guess first off, how is the launch going at this time point versus your initial expectations? You know, when you launched a while ago, if you would've thought two years from now, we're gonna be doing this much in quarterly sales and this much in annualized sales, how are you tracking versus those initial expectations? And related to that, I know you recently enacted a sales force expansion. How is that helping you kind of expand your reach?
So we are in our second year or second full year of launch, and, you know, thus far, we're pleased with the way that the launch is going. In the latest quarter, for example, we're happy to have seen that prescriptions were written for more than 120,000 patients. Prescriptions grew 29% sequentially, so we're pretty happy, you know, with that. We get $65 billion in sales for just Auvelity, so... And we're still in the very early stages of launch. We think that there's a lot of potential for the product. And in terms of the sales force expansion, that certainly played into the recent performance that we have seen, but it made sense.
You know, we saw a lot of demand in the marketplace, and we wanted to make sure that we had enough folks who could educate clinicians and provide them the data that they were requesting and the information that they were requesting with regards to Auvelity. So we like the performance of the sales force expansion. And we also like the way that you know, other aspects of the business have supported the sales force expansion. For example, our medical affairs folks.
Understood. Okay. Are there specific sets of prescribers and patients that have been driving the recent sales growth and the recent prescription growth, or are you seeing kind of more broad-based uptake?
Initially, we focused on psychiatrists and psychiatrist-like primary care providers, so. That was the initial focus, and we've seen continued growth from that market segment. But in addition to that, our additional sales force has allowed us to go more broadly to primary care providers. So, lower decile, but still highly productive primary care providers. And so, we've seen growth from new prescribers. So both, an increase in depth of existing prescribers, as well as an increase in breadth with new prescribers.
Understood. Got it. And then looking, I guess, towards the balance of the year, do you expect, I guess, Auvelity sales growth to be driven more by volume or by kind of reimbursement improvements, or kind of a mix of both?
They kind of go hand in hand. So we do expect growth to continue, and we expect growth to continue because we expect our sales force to continue to be productive. So that's one, and we expect clinicians to continue to demand more information on our products. So that's what we're seeing, and that's why we initially expanded the sales force. In addition to that, you know, we did recently increase the number of covered lives, so we added 22 million covered lives as of the beginning of August. So we would expect to see some benefits from that also.
Mm-hmm.
We would also expect to see continued growth or expansion of payer coverage over the balance of the year.
Got it. Got it. Okay. I guess when you think about annual duration, are you seeing patients kind of get refills in line with your expectations and in kind of in line with what you saw in the clinical trial setting for AXS-05 and MDD?
What we've seen thus far in the marketplace does line up pretty nicely with what we saw in our controlled trials. So one of the things that we have looked at is persistency, and we like what we're seeing. So persistency compared to, for example, SSRIs. The data thus far shows greater persistency than what has been seen with SSRIs.
Got it. Got it. And since you mentioned that the sales force expansion did lead to, from what it sounds like you're saying, a pretty notable sales benefit, do you have plans to enact another sales force expansion? Do you think that'd be valuable to do in the near term, or do you feel like you're kind of right-sized in the field as you are right now?
We are right-sized as we are for right now. And so we think that there's still a lot more benefit to be seen from the most recent sales force expansion. So right now, we are right-sized, but you know, as the product grows, always we will look to reevaluate the sizing of our field force, especially in light of potential future product launches.
Got it. Got it. Okay, and we'll touch on that for sure, through some more questions later on. I guess, in terms of line of uptake, where are you seeing Auvelity currently used across first line, second line, later lines, and how has that trended since the launch?
So when the product was first launched, the bulk of the prescriptions were coming from very late-stage patients, so third line plus. And we've seen that change, you know, pretty significantly in the more recent quarters. So right now, approximately 50% of the usage is coming from first and second line use. So that's good to see. So what we've seen is a steady decrease in the proportion of patients who are being treated third line or later. And, you know, as it relates to, you know, what that breakdown is between first and second line, you know, it's roughly, you know, around 15% first line and 35% second line.
Got it. Okay, great. That's helpful. Maybe now that's a good point to pivot on to additional indications for AXS-05. We can start with Alzheimer's disease agitation. You have the data for the ADVANCE-2 trial you've guided to by year end. We'd just love an update from you on how that trial is progressing, enrollment and kind of what the mix of patients is that you're enrolling into that trial. And as a follow-up question, how the availability of Rexulti commercially for ADA might have impacted the profile of patients coming into the study? Sure.
So, as it relates to trial enrollment, it's going well. As you can imagine, we have to be pretty far along in order to guide to an end-of-year data readout. So right now, we like the way that the study is enrolling. It is tracking for a readout by the end of the year. And with regards to the patient mix, the profile of the patients who are being enrolled into ADVANCE-2 mirrors, by design, the profile of patients who were enrolled into ADVANCE-1. Even with the launch of the recent launch of brexpiprazole in Alzheimer's disease agitation, we have not seen a dramatic shift in terms of the patient profile.
The potential impact of that launch on our trial, and I think all trials on Alzheimer's disease agitation, is that now there is an alternative for patients, whereas before there was no approved product. And so it does change, I think, the dynamics somewhat, maybe on the margins, in terms of whether or not a patient would choose to enroll in a clinical trial versus get treated with this new approved agent. Having said that, you know, the study continues to enroll. We're not seeing any change right now, any appreciable change in terms of whether or not a patient is naive or not enrolling into ADVANCE-2.
Got it. Okay, it sounds like maybe there may have been a little bit of an impact on pace enrollment for some time, but not on the actual nature of patients coming into the study.
Correct.
Got it. Okay, great. And you also mentioned a couple of quarters ago that you're running the ACCORD-2 study. Could you just kind of unpack the rationale for running this study and what purpose you think it's gonna serve from a regulatory perspective and then also from a commercial perspective?
Sure. ACCORD-2 is a pivotal phase III randomized double-blind placebo-controlled trial. So what that means is, we now have four pivotal trials either completed or ongoing that could inform, that will inform the potential NDA or sNDA filing for AXS-05 in Alzheimer's disease agitation. The rationale behind running this study is that in launching the study we were able to do so, and it also mirrors the design of the ACCORD-1 trial. So the ACCORD-1 trial was a randomized, double-blind, placebo-controlled trial, which was a randomized withdrawal design.
Mm-hmm.
That study, although we stopped it early, was a positive trial. So ACCORD-2 is designed to essentially replicate that study design, but now with the knowledge that we have from the ACCORD-1 trial. So, it made sense that we to do that because we had the patients, and we're set up to be able to do that. So. And what it does now provide us with is a fourth pivotal trial, and that study is on track to read out by the end of the year.
Got it. ADVANCE to ACCORD-2, is it possible those read out together, or should we not hold that expectation?
The way that we've read out studies in the past is, you know, we've read out studies as soon as they were ready to be read out. So now it's very possible to accurately predict more or less when a parallel group study is going to read out based upon when you complete enrollment in that trial by design. For randomized withdrawal study, once the study actually completes randomization, which ACCORD-2 has, you still have to wait for the required number of relapses for the study to read out, and so, you know, that last relapse is kind of a wild card. So it becomes a little bit difficult to predict the exact timing.
But based on what we're seeing in terms of completion of enrollment in the trial, we feel comfortable with a readout by the end of the year.
For ACCORD-2?
For ACCORD-2.
Got it. Okay, that's helpful, and then on ADVANCE-2, there's quite a bit of focus on what's going to be a clinical, clinically meaningful outcome, excuse me, on CMAI. What is your perspective on that?
Well, you know, what we've seen is in ADVANCE-1, we saw roughly a 15-point reduction in the CMAI. You know, that is highly clinically meaningful. If you look at the literature, probably a reduction of around 5 points intrapatient is considered clinically meaningful, and that determination is based on correlating that to more global measures, which we're seeing. So we'll see what the ADVANCE-2 trial shows in terms of an improvement in CMAI. But if we were to see replication of the ADVANCE-1 results, this is, you know, based on the AXS-05 arm-
Mm-hmm.
We would be pleased with that. And now the other aspect of any kind of randomized controlled trial is what happens with placebo. That's a little bit harder to predict, but so far we've seen an improvement in CMAI of that magnitude, not just in ADVANCE-1, but also in the open label portion of the ACCORD-1 trial.
Right. Right. Okay, that's helpful. And, remind us, what have you disclosed on powering and stats for ADVANCE-2?
What we've disclosed is that the study is 90% powered to demonstrate a treatment difference. And we have not said exactly, you know, what that treatment difference is or what that effect size is, but it is 90% powered. And what we have said also is that it is powered similarly to the way that the ADVANCE-1 study was powered.
Got it. Helpful. Okay. You know, assuming ADVANCE-2 hits, assuming ACCORD-2 is successful, assuming you get approval in ADA, where do you expect Auvelity or AXS-05 for ADA to kind of fit in the treatment paradigm across atypical antipsychotics, including Rexulti, and some other therapies that are on the market?
There's a lot of clinical need in Alzheimer's disease agitation, so up until recently, there was no product that was approved, and now there is one product which is approved, and AXS-05 has a different mechanism of action, so we think that should the clinical profile hold, in other words, if it's we replicate what we've seen thus far, that there is no reason why this should not be a first-line treatment.
Got it. Okay. If ADVANCE-2 is successful, if ADA's a successful indication for AXS-05, you know, would that tell you something novel and something kind of new and exciting about the mechanism that might make you think about more indications for AXS-05? I know you're looking at it in smoking cessation, but outside of that, would success with ADA unlock more indication expansion opportunities for AXS-05, do you think?
We like the pharmacology of AXS-05, and we think that it is potentially applicable to a number of disorders in psychiatry. Right, I don't think that anything that would happen in terms of the clinical trials that are ongoing for Alzheimer's disease agitation would necessarily change that. In other words, already in Alzheimer's disease agitation, we've seen positive results from two pivotal trials. That does validate the fact that this is a mechanism of action, which is applicable to more than just MDD. Our team is definitely looking and evaluating other potential indications and stay tuned, you know. I think, you know, we wanna make sure that whatever thoughts that we have are fully baked.
Mm-hmm.
Before we share them. But we do think that this is a product candidate, which has a lot of potential indications.
Got it. Got it. Okay, good to know. Switching back over then to commercial considerations for ADA, what do you think the launch curve here could look like versus MDD? So if someone was to superimpose launch curve for year one for Auvelity and MDD versus AXS-05 and ADA, assuming approval and launch, what are some of the key similarities and differences you think could kinda come through based on your understanding of both markets now?
It's hard to predict, but there are, I think, two main indicators-
Mm-hmm.
So and considerations. So one is that, when we launched Auvelity in major depressive disorder, this was the first time that the product had been launched. And there was a lot of education that needed to be. A lot of investment in education that needed to be made, to educate physicians on the MOA. So that's one, and it was a totally new product, and we were a new company commercializing a product. So assuming that Alzheimer's disease agitation is successful and that the product is approved for that, well, they will have been, when we launch it for that indication, some familiarity already with regards to the product and the MOA and Axsome as a company.
Having said that, MDD was a, an indication that clinicians were very familiar with and, and that they were used to writing prescriptions for. So with Alzheimer's disease agitation, there will be a lot of work also in terms of educating clinicians-
Mm-hmm.
-about a treatment that is on label for this indication. So, that's the push and the pull as it relates to launching in an Alzheimer's disease agitation. But it's exciting. It's an area of high unmet clinical need, so it's always satisfying to be able to provide clinicians and patients a drug which will actually benefit them. And it's also brand new. It's a brand-new indication, so there's a lot of education that needs to be made. And that is exciting because it means that we are educating clinicians in terms of how to change their clinical practice and benefit patients who currently are not being benefited.
Got it. Got it. So on the point of education, you know, again, assuming ADA approval and launch, how much do you think your sales force and your sales infrastructure would need to be increased to be able to accommodate an ADA launch?
There will need to be some increase in the sales force, but probably not as much as one might think. In other words, you know, typically you think about a new indication, and so therefore maybe a new set of physicians. In this case, there is overlap. Alzheimer's disease agitation. The behavioral symptoms of Alzheimer's disease are treated primarily by psychiatrists, and we currently have a sales force which targets and has relationships with psychiatrists. From that perspective, there definitely will be overlap, and I think it will allow us to leverage our current sales infrastructure.
Got it. Okay. I'll ask you one final question on ADA, and then we should switch to other parts of the pipeline in the last 10 minutes here. In an adverse situation where ADVANCE-2 and/or ACCORD-2 were not to show success on the primary endpoints and not show treatment outperformance versus placebo, do you still think you'd have a filable package just based on the successful efficacy data from ADVANCE-1 and ACCORD-1 with supplemental safety data from the other two trials? Or do you need ADVANCE-2 to definitely hit on efficacy to be able to file?
What we can say is that we have now four pivotal trials. Two are completed, and two are ongoing. The two studies which have read out have both yielded positive results. We think that puts us in a very good position going into the readouts of the next two studies. Typically, what you need are two positive studies. We have two positive studies currently. One of those studies, the ACCORD-2 study, was read out early, so that was stopped early. That's one potential critique of that study. But now we have two other studies, too, which we'll read out. The other part of the filing package, which we'll need apart from demonstration of efficacy-
Mm-hmm.
is a safety database in elderly patients with Alzheimer's disease agitation, and so you know, we are tracking that, and we are on track also to meet that patient database requirement. So that would be 300 patients treated for six months and 100 patients treated for 12 months.
Got it. Okay. Very helpful. All right, with that, maybe we should switch over to other programs. Let's start with AXS-07, since that was in the news recently. So you announced the PDUFA date, I believe, in January of twenty twenty-five.
Correct.
So assuming an approval here, where do you think AXS-07 fits in the kind of migraine treatment paradigm across the other agents that are currently out there?
The way that AXS-07 was designed, it was to address the unmet need for agents that are more efficacious. And there's still a lot of clinical need out there for agents that are more efficacious than the current agents, and that's the way also that our studies were designed. So we designed the pivotal trials to look at patients who had a history of inadequate response to prior treatments. So, and we did demonstrate positive results in that patient population. And so that's where it would fit in. Now, there's been a lot of excitement in the space with the new agents oral CGRPs-
Mm-hmm.
For example, which is great. So it has brought a lot of attention to the fact that migraine is a highly debilitating disease, and it has provided patients another treatment option. But what we're hearing from clinicians is that there's still a need for patients for agents that are more efficacious. So that's where AXS-07 fits in, and the way that we are thinking about making sure that it's available is by targeting clinicians who are headache specialists and who treat patients with migraine. So those clinicians tell us that even with the newer agents-
Mm-hmm.
There's still a lot of churn, because our patients are not getting the relief that they need.
Got it. Got it. So based on what you're saying, it seems like this could be a good option for CGRP failures or inadequate responders to CGRP agents.
It, we think that that could be the case.
Mm-hmm.
We are running the EMERGE study.
Yep.
-which is an open-label phase III trial, and that study is slated to read out also in the fourth quarter. And that study is looking at patients who have failed to respond to oral CGRPs and then are being switched over to AXS-07.
Got it.
Mm-hmm.
Okay. I guess a similar question to what I asked you for, for ADA. In terms of the commercial infrastructure you'd need for a migraine launch, what could that look like?
Migraine is treated by a variety of clinicians, but headache specialists are primarily neurologists, and we certainly right now already target neurologists on the sleep medicine side of things. Our approach will be to make sure that we target the headache specialists as well as maybe other clinicians who see primarily patients, or see high volumes of patients with migraines. It will not be a broad market type of approach. It'll be a very rational approach, and we think that it's one that will be effective in making sure that we target the patients who are most in need for this treatment.
Got it. Got it. Okay, that is helpful. Switching gears then to solriamfetol, another phase III data readout expected by the end of the year for that asset. The FOCUS trial in ADHD, just kind of orient us to the to the design of this trial, what you're hoping to see from this readout, and what do you think, a win looks like here?
So the FOCUS phase III trial in ADHD, it's a parallel group study. It's three arms, so it's placebo versus solriamfetol, so two doses of solriamfetol. So it's a standard design for ADHD. So what we're hoping to see is the effect of solriamfetol in this indication in a pivotal trial. There's been one single center study, which was a controlled trial with solriamfetol in ADHD, and so that was positive. And so we think that that definitely provides more clinical rationale for studying it in this indication. However, this will be the first multicenter study. And so we're very much looking forward to seeing what the profile looks like.
That study is enrolling well, is on track to be read out by the end of the year. And in terms of what we would look for, I think the first thing is to see if there is an effect. Then we would also look to see the magnitude of the effect, and always, you know, we wanna look at the tolerability profile.
Got it. Got it. Okay. Would you be able to file an ADHD with the results from the FOCUS readout, or would you need an additional study?
We would need another study in pediatric patients.
Okay.
This is the adult study.
Mm-hmm.
And then we think that a study in pediatric patients alongside that would allow us to file.
Got it. So, to be clear then, if this study is successful, then you'd run a pediatric study, and then you'd use data from both studies to file for kind of a broad ADHD label?
Correct.
Got it. Okay, great. What's your sense on the peak sales opportunity for solriamfetol in ADHD?
We think that the peak sales opportunity for solriamfetol in ADHD is north of $1 billion.
North of a billion?
Yeah.
Okay. Across, adults and pediatrics?
Correct. Mm-hmm.
Got it.... Great, and you're also looking at solriamfetol in MDD as well?
That's right.
Right. How do you expect it if the development plan here works out? How do you expect solriamfetol and Auvelity to kind of coexist in the market?
MDD is a heterogeneous disease.
Sure.
So, so we think that the different agents that work and agents that work differently will be useful to clinicians. And so what we like about solriamfetol from a mechanistic perspective is that it is a DNRI, so it's a dopamine and norepinephrine reuptake inhibitor, but it is also a TAAR1 receptor agonist. So that is a new mechanism of action. If you look at the patients who suffer from excessive daytime sleepiness, for example, there is a lot of overlap in terms of comorbidities between patients with OSA, who have EDS or excessive daytime sleepiness, and patients who have EDS, let's say, in MDD. So in fact, sometimes it's difficult to differentiate whether or not a patient has excessive daytime sleepiness because they are depressed-
Mm-hmm.
or whether they have another underlying condition. So there definitely is a lot of comorbidity. And so, you know, we think that providing clinicians a way to treat patients, let's say, who have both of those disorders, at the very least, that would provide a benefit to those patients. And then but let's wait to see what the data show, because I think the clinical profile will tell us how it's likely to be used.
Got it. Got it. Okay. So assuming this first study is successful, what do you think is the, the filing package you'd need to accumulate for solriamfetol and MDD? Would it be similar to what you had to do for AXS-05?
Yeah. I mean, typically, you need two positive studies. So, this is. This will be the first study that we will have conducted with solriamfetol in MDD. So there's a lot to be learned from that study, so we're looking forward to the readout.
Got it. Okay. A couple seconds left. There's a lot in your pipeline we weren't able to get to, but in closing, anything you'd mention in terms of milestones, catalysts that people should keep on their calendars for, call it the next 12 months that we didn't talk about?
Yeah. I think, you know, going through them in order, we do have an NDA for AXS-14 in fibromyalgia, which we're looking to file in the third quarter. And then, that'll be followed by the pivotal trial readouts, for AXS-05 in Alzheimer's disease agitation and solriamfetol in ADHD, all by the end of this year, is what we're targeting. In addition to that, you know, we do have the EMERGE trial of AXS-07, in patients who have failed oral CGRPs. That's also slated to read out by the end of the year, as well as the AXS-12 for the treatment of narcolepsy, which we did not talk a lot about. And, the long-term safety extension trial for that is due to read out by the end of the year.
If you think about, you know, those readouts by the end of the year and then project forward, then that will lead to new milestones in the coming year, which would include NDA filings for Alzheimer's disease agitation, assuming that things continue to progress there, as well as for AXS-12 in narcolepsy.
Great. Great. All right. On that, we'll close out. Herriot, thank you for your time. Really appreciate it. Thanks, everyone, for joining.
Thank you.