Everyone, I think we're gonna go ahead and get started. Thank you for joining us in the room and online for TD Cowen's 46th Annual Healthcare Conference. I'm Joe Thome, one of the senior biotech analysts here on the team at TD Cowen, and it is my pleasure to have with me today the team from Axsome Therapeutics. We have COO Mark Jacobson and CFO Nick Pizzie. Thank you both for joining us. Maybe before we dive into the specific programs, you know, if you guys wanna start off at a high level, what's sort of the current state of the business and maybe the key catalysts that investors should be looking for or moving parts throughout 2026?
Sure. Thanks for having us. Happy to be here today. Nick, do you wanna start with maybe commercial performance run rate?
Sure. Sure. Yeah, maybe, a little bit. We reported earnings a bit ago now. Mainly the focus is on AUVELITY. AUVELITY did for the quarter $155 million. Basically, 13 quarters from launch, we are already annualizing north of $600 million. One of the major announcements we had on earnings is that we're looking to further expand our field force from 300- 600 reps, in recognition of what we've seen on previous expansions and the ROI from those expansions. Also in anticipation of Alzheimer's disease agitation. A bit on that.
Further on the P&L, we saw great operating leverage in 2025, with revenues outpacing OpEx three to one , so 3x, look to see further operating leverage even with our expansion and our launch, potential pending launch upon FDA approval in 2026. We would expect to continue to see operating leverage in our P&L.
R&D side, right now, the pipeline has never been more robust or as far along. Five product candidates, nine indications, and as Nick mentioned, you may be familiar with one of those, that is AXS-05 for Alzheimer's disease agitation, Breakthrough Therapy designated, priority review, sNDA review is underway. We're just about two months out from PDUFA, the PDUFA date is April thirtieth. As Nick touched on, pre-launch activities are underway. Behind that, a whole host of programs, NDA stage, phase III stage, and earlier. We're happy to get into all those, but right now the business is humming. It's never been better, and we're really excited for 2026.
Awesome. Maybe we'll start off with AUVELITY and MDD and kinda tie in the expansion. Maybe what are you seeing in terms of kinda current patients on AUVELITY? Are these, you know, late-line patients? Are they earlier in their treatment journey? I know you've talked about before as some of your others that PCPs are starting to write more neuropsychiatric drugs, was that sort of behind a lot of the expansion here, or what drove that?
Sure. real quick snapshot, it, the current snapshot, this has kinda been for the past few months, north of 50% of the scripts are monotherapy, about 50% are first-line or first-switch. In first line, it's around 15%, about 35% first switch, that's great. Primary care clinicians, they're about 30% or a third of the writers currently. That's all very good. When you think about the expansion, if you step back, Nick mentioned the run rate. We're not even at half a percent of the market.
The opportunity, from a patient impact perspective or, is quite significant and a lot of that is coming from primary care, or the opportunity in primary care is substantial. We saw that. You know, we invested in the business last year, marketing, sales, and, you know, there were other investments that we made. As we stepped back and did the analysis for ROI in those investments, still the highest ROI is the sales force. That's really what's driving the expansion plus prep for, you know, for a potential additional indication in Alzheimer's disease agitation.
Yeah. Maybe just to further what Mark said, we are at a 0.2% of the total antidepressant market, so that's, you know, 20% of 1%, is where we're currently at. That's with a field force. You know, on average, since we launched, somewhere in the neighborhood of on average 200 reps, which is a small fraction of some of what our peers are launching their products or have commercialized their products with. We feel, you know, really compelled with, I'll call it the case studies that we've done in our previous launches and seeing the ROI on those launches, and this being a obviously a meaningful launch going from 300-600 reps and just getting more into the primary market.
Can you talk a little bit about the DTC campaign that you launched, maybe some early trends that you're seeing out of that that's increasing sort of adoption? I know you indicated that there's some, you know, cost Checks and balances.
Sure
That you can do from the DTC to the expansion. How are you thinking about that?
Yeah, maybe I'll start and if Mark wants to add anything. We did launch for the first time since we launched AUVELITY, we launched a national direct-to-consumer campaign that started in September, early September, and we ran that through the end of the year. We will anticipate to continue to have some DTC programming through 2026. When I say DTC program, I'm talking about cable TV, connected TV, and so forth. We had a lot of learnings from the first four months. Q4 was, I think, Joe, maybe that's what you're chatting about. Q4, we were pretty heavy in DTC, and our SG&A showed that. We went from $150 million in SG&A in Q3 to close to $170 million in Q4.
We don't anticipate to have that as a baseline in 2026. Again, we were on every day, every week in Q4. In 2026, we'll have something in between what we saw in Q3 versus Q4 from a DTC effort. Like I said, we have actually, you know, learned a lot between how we wanna spend dollar for dollar between linear and connected TV. I think even more importantly is we would see a higher ROI once we actually add the field force and have, you know, go into 600 reps and then doing the DTC, you'll see higher ROI on the DTC with the reps being able to pull through the that campaign.
Awesome. Maybe we'll jump over to Alzheimer's agitation. Obviously, we have the upcoming PDUFA date. I guess any commentary on how interactions are progressing with the FDA into that? Is everything as planned? Obviously, this audience wants as much as you can give them. How are you thinking about that?
Sure. No, that's great, and we appreciate that. You know, as you know with us, as a matter of practice, we don't comment on the day-to-day or the play-by-play for reviews. What we have shared is, you know, for a priority review, two months out, activities are, you know, where you would expect them to be. You know, unfortunately, we can't share much else than that. Just as a reminder, in case it's helpful for folks, you know, oftentimes timelines or labeling discussions or, you know, within, you know, it tends to be T-minus 30 days, give or take. Then, post-marketing commitments and requirements, they tend to be 45 days out from PDUFA, give or take.
You know, we're beyond both of those kind of timelines or demarcations. you know, again, activities are where you would expect them to be at this point in the review.
Great. Obviously, the clinical data package consists of randomized withdrawal studies and also head-to-head placebo control, you know, kind of randomized parallel design studies. I guess, what does each tell you about the therapy in Alzheimer's agitation, and what's been the feedback from KOLs on that point?
Sure. The so the parallel group, that allows you to observe longitudinal change. You know, we saw that with ADVANCE-1 and ADVANCE-2 as well, but ADVANCE-1 separated stat sig both for versus placebo, and as a reminder that that was active control two, for regulatory reasons. There we saw separation at two weeks, which was stat sig at three weeks. We saw onset of action and then primary endpoint at five weeks. That gives us a sense of longitudinal change. They're also very important for controlled safety. This patient population is elderly population, which is at risk. FDA is concerned about that. This is an sNDA, and oftentimes with sNDAs, your one can utilize the initial approval safety database.
And in this case, FDA asked us to generate a standalone safety database in this patient population, which we did. We have that with the long-term exposures. You know, it's approximately 100 at 12 months. It's approximately 300 at six months. The two parallel group trials, they also provide very important data on safety, controlled safety. We have that. Those are the parallel group. Then the randomized withdrawal trials, we have two of those as well. That allows you to look at duration of treatment effect and, you know, those are relapse prevention trials. Those, those give a sense of a longer term, how patients do from an efficacy perspective. They, they don't allow you to track longitudinal change.
You know, I touched on this already. We have those four studies, and then we also have the long-term studies. You know, we're happy with the package we have. Of course, we put that in last year and, you know, this is, we already talked about it, but it was, you know, filed with priority review.
Obviously, the priority review is a good, a good sign. You have the three positive pivotal studies. I guess maybe the only, you know, kind of slight blemish is the ADvance II study didn't end up hitting stats. I guess, is there a good reason for that outside of just sometimes neuropsych trials don't work? I guess, did you uncover anything in that that, you know, around the patient population or any hypothesis as to why that didn't look the same?
Sure. The, so it did separate, you know, numerically, which is good. So it performed in line. One observation that when the studies read out, we had a call with Dr. Cummings, and he talked about. That, you know, there's placebo response, but in this patient population in particular, you also have a trial response. Regardless of which arm they're on, their baseline quality of medical attention and care is much better than without. So these patients simply do better by being in the study. You have that effect regardless of the arm, again, because of the medical care, and that's something we've always been aware of and mindful of.
Trial response, placebo response, and, you know, as you alluded to, neuropsych indications, placebo response is growing and growing, right? You even see it in patient populations where you never used to see it, you know, schizophrenia. It's growing across the board, and that's something why from the very beginning, once we had ADVANCE-1, we were mindful of this and we discussed that with the FDA and about different strategies or paths to generate data sets with that in mind. That's, that's a key driver for why we pursued the randomized trial or why we conducted randomized withdrawal trials because they tend to be better for signal detection purposes.
Great. What's your latest expectation for what proportion of patients with Alzheimer's have agitation symptoms that would get to the level of therapeutic intervention? When you think about AUVELITY's opportunity in ADA versus MDD, how do you kinda see those panning out?
There's 7 million or so Alzheimer's disease patients in the United States, which we anticipate 70%+ actually have agitation, so that could be treated for therapy. Roughly, I believe there's 20 million+ scripts that are currently written majority off label for Alzheimer's disease agitation.
Okay, great. Of that sales force expansion we talked about earlier, I guess, what proportion of that will also hit on the Alzheimer's agitation market versus would you need to do any sort of targeted expansion in other kind of audiences that don't call on these patients at this point?
Yes. It's expanding. It's to 600, and we talked about the potential impact in depression alone. You have high overlap with prescribers with depression and also Alzheimer's disease agitation. The plan is if the product is also approved in Alzheimer's disease agitation, that the Avalide sales team would call on both targets for depression and AD agitation. Depending on where they are in the country, some may have a heavier mix of AD agitation targets, some may have a heavier mix of MDD targets, we see high overlap there. What we're also doing is building a discrete, a much smaller sales team that if the product's approved, would target long-term care settings.
We haven't talked a lot about that yet, but it's in the works for a potential approval. You know, we'll have more to say, but they would be exclusively focused in, on, in long-term care facilities, which we do not have that component of the sales team right now.
Yeah. just to further what Mark's comment on that is we're not calling on LTCs. currently, there is a significant comorbidity between ADA and MDD, we do believe that's a halo impact that we would anticipate to see in the MDD indication.
When you think about the eventual label, I guess how much of a benefit do you think a potential lack of a black box would be versus Rexulti? When investors are thinking about the potential launch cadence, what are some things they can learn from Rexulti's launch, and what are some things they maybe shouldn't be applying, if that makes sense?
Sure. You know, as a matter of process, because the review is underway, we don't comment on the label. That's difficult to do. If the product is approved, the clinical trials would be described, you know, the rates of adverse events would be described, you know, exactly how that shows up would be to be determined, but that would give us what we need to educate clinicians, drive trial, and, you know, and then that, you know, we'd get a sense of how the product performs in a real-world setting, and then you would see from trial to it, you'd try trial to adoption. I'm sorry, the second part of your question was, is how Rexulti might impact our-
Yeah.
Yeah.
What are some good learnings from that launch?
Sure.
What are some things that should stop people from using that as a comp if they can?
Sure. Maybe Mark can talk about the comp. I mean, if you just take a look at what their scripts are, I believe Rexulti scripts are 15%-20% are coming from ADA in Part D and maybe even north up to 25%. So you could take a look at that in the Part D, and the vast majority, I think what they've shared, the vast majority of their entire growth is now coming from that indication. Maybe Mark, just on comp.
The it's the only analog that's there, right? It's the only product that's approved for Alzheimer's disease agitation, which is fantastic, but it does make modeling or tethering to that a bit precarious. You know, again, we don't have their data sets, but if you look secondhand at products doing well, it is similar because, of course, the target indication. There are differences, right? Different mechanism, different product profile. That product was already being used off-label in the indication, right, as many atypical antidepressants and atypical antipsychotics are. It's a different tactically, maybe, you know, sales tactic or maybe sales strategy and tactics are different. You know, it's helpful.
You know, we don't for our modeling, we don't tether to that. We'll see.
Maybe so you could look at Rexulti if you wanted to. I mean, we could just look at AUVELITY and how we launched that from a trajectory from launch to, you know, within one year or three years, however you want to model it. One differentiation that we would have from MDD and AUVELITY is the market access. That was a pretty large hurdle that we had to get over. Currently, we're at 86% total covered lives out of the gate for MDD. We were well below that. We did have 100% in the commercial lives because it was a protected class MDD.
That being said, ADA, if approved, will also have that same coverage where we'll be 100% covered in the government channel, and we believe that the vast majority of the scripts will be written in Medicare Part D. We would expect north of 70% of those scripts to be written in Part D, which again, 100% coverage and I would say, overall favorable formulary access.
Great. Maybe we'll shift away from AUVELITY onto Simbravo. Maybe what's been the launch progress so far with Simbravo? What are you seeing that kinda gives you confidence in the launch and, you know, where is it slotting into the treatment paradigm?
We've, you know, you know this from the beginning, we're taking a very targeted approach to the launch there. The sales team is approximately 100 reps and we've been focused on headache centers and certain high prescribing, so branded, acute migraine treatment high prescribers and to drive trial and have clinicians and patients learn about the product and then to have those learnings inform our approach as we go broader. You know, it's the early days, but we like what we're seeing and there are important elements that are, I say maybe back office or complementary or adjacent commercial execution activities that are underway that are important because this space is so crowded and so heavily managed by payers.
One of the things that we've been waiting for is to or working on is access. We just announced that we signed with a third GPO, so the three major GPOs we've contracted with, and now a key activity is to pull that through to actual coverage and placement with plans. That work is underway, and that'll be another key component for us, you know, for this year and beyond to drive towards our steady-state goals. The feedback we're getting for how patients are doing is the product's differentiated. You know, it's leading to important efficacy early on, and that's durable for a given attack and with the safety profile that is with a healthy safety profile that's associated with those benefits.
So far so good, but we still have a lot of work to do and, you know, that's a key focus. You know, we know all our eyes are on AUVELITY, but for us, they're, you know, that's a totally different team, the Simbravo team and we like what we're seeing so far.
Great. Then the next program to be filed is AXS-12 for narcolepsy with an NDA submission set for the first quarter. I guess what remains to be completed ahead of the submission, and where do you see AXS-12 fitting in? How can this be differentiated from available options in narcolepsy?
AXS-12, the most recent item was we had a pre-NDA meeting at the end of the year that, you know, was a gating for us for green light to submission. We have that. The final activity are just the final build. It's going in imminently, so we're about to hit the button, sort of, you know, proverbially, which we're excited about, and pre-launch activities are underway.
What we're really excited about for 12, in addition to the clinical profile and that it's distinct from what's available and also what's in the clinic or may become available soon, is, you know, the total profile in terms of daytime dosing, how it's dosed, the tolerability profile associated with the efficacy, in particular cataplexy, which is what we're focusing on for the indication is cataplexy in narcolepsy, so type one. The other benefits that we saw in the patient population on sleep and so work is underway and that's the clinical profile. When you think about how it fits is we already have a sleep field force and commercial infrastructure that are detailing SUNOSI right now.
It is a near perfect fit for the team that's already in place. Very little additional investment that's needed to launch AXS-12 should it be approved. That's one program that we're very excited about and will soon, you know, the clock will be ticking for that soon.
I feel like this program maybe has been flying a little bit under the radar for investors. I guess, what do you see as sort of the peak commercial opportunity for AXS-12? Obviously, the focus on Orexins recently from, you know, the field has kind of illustrated that this is an underserved population. What proportion of that do you think you can hit with AXS-12, and how big of a drug can this be?
Yeah, maybe just a minute on the financials. We would think peak sales for 12 would be somewhere in the neighborhood of $500 million-$1 billion. You know, we feel pretty optimistic on that. As Mark alluded to, it's by definition plug and play. We have a sleep team that's out there that's educating doctors on a day-by-day basis and able to just kinda put this in their bag as a, you know, P one, P two, product one, product two, in their bag and ultimately be accretive to the organization very quickly.
Great. Maybe we'll move on to some of the Sunosi expansion opportunities. The company reported some solid phase III data in adult ADHD patients. I guess maybe can you hit the highlights of that data set? Kinda what gets you excited about Sunosi and ADHD? Obviously, you indicated you're taking this forward into the pediatric, and young adult studies. I guess what gave you confidence to move the program forward?
Sure. As you said, the phase III data in adults were very compelling. You know, the change, the delta in line with what you see with stimulants. You know, we saw over almost an 18-point change, which is, you know, very compelling with the tolerability profile that Sunosi has. There's that. There's the mechanistic info. There's the feedback from KOLs about their assessment and analysis of its potential utility in the indication. That's what's leading us to move it forward. Then to further to that, we had a recent, you know, meeting with FDA, and we've aligned on that, the plan, the clinical plan for studies in pediatric patients.
We'll be running two studies in parallel, one in children and one in adolescents, and that's the rate-limiting step to a potential submission there. Those, we said both of those would start in the first half of this year.
Maybe can you decide or can you elaborate a little bit on the decision to run the two studies across these age groups? I think that was a little bit of a new update versus prior guidance. I guess Are these the same studies, just different patient ages or anything we should be thinking about there?
Essentially that. Yeah. No. That's the biggest item and so then you'll be running a full study in each population as opposed to one study that you capture both age groups. The, you know, we'll have more to say about the study designs, but that's the material change is that we'll be doing two in parallel, so no impact to the total timeline, and, you know, at this point in time, it's not a material impact to the overall program investment. It, you know, we think it makes sense, and it's, again, it factors in the feedback we have from FDA. We're, you know, we'll be saying more very soon.
Around the same time, I think the company also reported some MDD data from patients with severe EDS, and you decided to move that forward as well. I guess what proportion of MDD patients do you think have, you know, signs of excessive daytime sleepiness that Sunosi could be appropriate for? What are the next clinical steps here, 'cause you updated that as well?
You're right. That was the PARADIGM trial that read out about this time last year. Based on those data, we're taking a precision approach to MDD. It's not all comers. It's individuals with major depressive disorder who have symptoms of excessive daytime sleepiness. That's the patient population. It would be targeted, we've kicked that off, that's enrolling patients now. You know, we'll have more to say as it goes along, but we're excited about it. Again, you know, similar to ADHD, there's KOL feedback, mechanistic rationale, and we have preliminary, you know, proof of concept data in the indication itself, which we generated. We're excited about that one too.
We really like Sunosi, and its potential to be, you know, kind of like a CNS Swiss Army knife to. We'll see. We've got to run the studies, and we're doing that.
You also have studies ongoing for binge eating disorder and shift work disorder. Obviously, when you in-license Sunosi, you unveiled a broad pipeline. I guess where do you think, if you can pick, I guess investors should be doing the most work between these four indications? Like, where do you think you can unlock the most value?
All of them.
If you had to just look at peak sales, it's ADHD, right? ADHD, we're saying $1 billion-$3 billion. You know, Vyvanse is probably a good peer to take a good analog to take a look at, which I think that did north of $3 billion, $3.5 billion. That had a binge eating disorder indication as well. You have a stimulant-like, stimulant effect with a, in a non-stimulant in Sunosi, that's the real key differentiator. With the positive phase III, just need the adolescent and the peds to, you know, be positive, we'll be able to submit.
Great. Then the last asset in the pipeline that you're developing right now is AXS-14 for fibromyalgia. I guess can you walk us through a little bit of the FDA change there in terms of maybe, you know, not sticking to that the prior program was sufficient and having to run this additional study? When do you think we could see data from the phase III fibromyalgia study?
We had submitted an NDA for AXS-14. This is for the management of fibromyalgia based on a phase II and a phase III trial that were previously conducted. The feedback from the FDA, there was a refuse to file. The feedback from the FDA that the sole reason for the RTF was that the phase II study, although it was highly statistically significant, that it was a fixed-dose study, which was not 12 weeks in length. You know, the rest of the package, right, was reviewed, and that was the one sticking point. We'll run another study, and we've started that, and, you know, that is the FORWARD trial.
That's the only study that we plan to conduct and that we expect is needed, you know, based on our alignment with FDA after the RTF. We haven't given guidance yet. The reason for that is this will be the first study we're conducting in fibromyalgia ourselves, so we wanna see how enrollment goes, but it's enrolling, once we have, you know, some amount of experience where we think, and we can extrapolate based on the enrollment trends, then we'll give guidance. You know, we've seen these studies don't take forever to run, so we're really excited about 14. There's a new recent entrant.
We think that's very informative, the data are very compelling in fibromyalgia from a pain perspective, but also from a fatigue perspective, the tolerability profile is good. There's been very little innovation in the space. It's an area of unmet need. There are only a few products that have ever been approved for it. We're excited about conducting this study, then we'll see what we have and go from there.
Awesome. With that, I think we're at time. Thank you very much for a good discussion.
Thanks for having us.
Thanks, Joe.
Thank you. Yeah.