Good afternoon. Welcome to our next session. It is my pleasure to be hosting Axsome Therapeutics with Nick and Mark, CFO and COO of the company. Nick and Mark, welcome. Great to host you guys.
Thanks, Richard.
This is the first time that I'm hosting you guys at-
Yeah
the GS Conference, very excited to-
Really appreciate it
have this conversation with you.
Thanks, Richard.
Before we go through all the questions, I'm going to turn it to you guys for opening remarks.
Sure. No, great. Thanks for having us, Richard. It's really good to be here, and it's so far a really productive day for us. Appreciate the opportunity to chat with you. Just to get things started, Axsome, we are a CNS-focused biopharma. We have three products that are currently on market with a recent approval for AUVELITY. This is our product. It targets NMDA and sigma-1. It was previously approved for major depressive disorder. It's been on the market for about four years and was recently approved for Alzheimer's disease agitation. We're very excited about this as a treatment option for patients, substantial area of unmet need, and we're launching that this month, so we're really excited to be here and talk about that.
We have two other products, one SYMBRAVO for migraine, and the other is SUNOSI for excessive daytime sleepiness and obstructive sleep apnea and narcolepsy. We have a very broad and deep pipeline from early stage to multiple late stage programs, multiple positive phase III trials, NDA stage submission programs. We can run through all that, but it's great to be here and happy to be chatting with you.
Fantastic. When you think about the company 10 years into the future, okay, with the ambition to build a large cap company, is it realistic to only focus in neuroscience given the high risk associated in development or should you also expand into other areas besides neuroscience?
It's a great question, and obviously, we have our annual planning process and quarterly and tactical planning process, and then our long-term strategy process. The company was started to focus on CNS, and the reason for that was the industry had really moved away, and this is 14 years ago, right? The industry had really moved away from neuroscience, psychiatry, neurology, and you alluded to a key reason for that, which is studying do you have an active molecule, and can you detect a signal, and can you design a study to detect a signal? Are there accepted instruments from a regulatory perspective that you can use to develop products for areas of unmet need? At that point in time, those are a few of the considerations, industry had moved away, and that's why the company was started.
Herriot Tabuteau, our CEO, he founded the company to work on some of those challenges. Since then, we've gotten really good at building a pipeline of active molecules, designing studies to detect signal, taking those programs, engaging with FDA, and developing viable regulatory pathways, and launching them. That's our sweet spot now, and there are still numerous areas that are underserved in CNS, so that will continue to be our North Star. At the same time, we're very much data-driven and value-driven. If there are programs or opportunities that in the future, for some reason or another, make sense or are synergistic with our future commercial infrastructure, whatever it may be, I don't think that should be so surprising. I think as we look ahead, the North Star for our-
Yeah. I think maybe just one thing this growth over the last five years, right? Since five years ago, we looked completely different than where we are today, but I would venture to say five years from today into 2031, we will look even that much more different than where we were five years ago. Five years ago, we were roughly probably less than 100 employees. We're north of 1,000 now. No revenue clinical stage company back then. Obviously tracking really well now with the growth that we've had with the three products that we have and now four indications.
You look five years ahead, and you take a look at the story right now is all about AUVELITY and in ADA as well as MDD, but there is a robust pipeline behind AUVELITY with up to 10 indications that we've disclosed already, upwards of close to $20 billion in total peak sales. We're super excited about it. As Mark was saying, I think the DNA within the Axsome team is an ownership mentality and really focusing on what makes sense from an investment perspective.
I see. Okay, got it. First of all, congratulations on that recent approval in ADA for AUVELITY. Can you talk about just based on the label, what you think are the advantages in that label that you want to draw out that lead you to increase that peak sale guidance to $8 billion? I think previously it was lower for the two different indications. Even when you combine it was still lower.
Yeah.
What drove that rationale, and anything that you want to trial from the label?
Sure. Yeah. I'll start with the label, and then maybe Nick can talk about how that percolated into the data and our calculations. The label, if you start with the product itself, I touched on very quickly the mechanism of action. It targets NMDA and sigma-1. Mechanistically, it's differentiated from In the indication, the products are primarily used off-label. 99% of products that are prescribed for AD agitation are used off-label. There's one approved product, of course. Mechanistically, it's distinct from what's been used historically, and then that flows into efficacy and tolerability, so the risk-benefit profile. From an efficacy perspective, we have different trial paradigms that are in the label in the clinical trials section. You have a "typical longitudinal study" where we see very rapid separation and onset of action.
Starting at week two, stats peak at week three, carrying through to the endpoint. That's differentiating is the rapidity of treatment effect. Then we have a long-term efficacy trial in the label, and that speaks to the duration of treatment. Right? We actually treated patients for up to a year, and in certain cases, some patients were treated longer. You saw a very durable treatment effect. You did not see increasing rates of adverse reactions over time. Very low dropout rates. That shows up in the label in a nutshell from an efficacy perspective. Then with that strong efficacy is a very tolerable or very clean safety profile. The only two most common adverse reactions were dizziness and dyspepsia. Just very clean. We didn't see sedation. We didn't see a false signal. We didn't see a mortality signal.
We didn't see a tardive dyskinesia signal. That, of course, all makes sense mechanistically. It's very clean with that strong efficacy, which makes for a very important treatment option for patients and caregivers and potential prescribers. That has then translated into, okay, with that approval, it's time to reassess our expectations for the product.
Some of the things that went into the $8 billion was first and foremost, the current trajectory that we've seen with MDD. We're at 22 basis points of the entire antidepressant market. Less than one-quarter of the total antidepressant market. However, we are seeing early signs as it relates to the NBRx. We're at 0.4%. Essentially doubling in market share on the NBRx versus the NTRx. What does that mean? That's just a leading indicator where we expect NTRxs to go. Very nice trajectory, one thing that we've also seen, secondly, is with our expansion. We expanded from just under 300 reps to just north of 600 reps most recently.
If you just take a look at since May, when these reps have been on board, since May 1st through today, we've seen a significant increase in our NBRxs going from roughly 2,700 to upwards of 3,200 NBRxs per week. Another way to look at that is just 14% growth over that time versus some of our branded competitors at 4%. 3x the growth of what our brands are with the expansion solely on MDD by itself. The other thing, one of the reasons why we've also increased the peak sales is our payer coverage is now at 86% total covered lives, 100% in the government channel and 78% in the commercial channel. Robust covered lives with good formulary access and seeing where our net price is currently, we're very pleased with how that product is doing in total in MDD.
What I'd maybe add to that is you layer in what we're seeing from an uptake perspective over the past year, uptake from a trialist to, say, adopter. What we're seeing is when clinicians try the product in a handful of patients, there is noteworthy and substantial adoption of the brand, and that lines up with the different elements that Nick Pizzie was talking about, us going further into primary care, coverage being at a point that if it's being written, kind of regardless of the line of therapy it's being written for, it will generally be filled, and there's room for even additional improvements in the quality of coverage. It's kind of all the different elements when you think of market access, sales, marketing, clinical activity. It's all very consistent, robust growth.
Yeah, maybe one last thing, Richard. Even in MDD, we've invested very minimally in marketing and advertising. We just started investing in Q4 and a bit in Q1. What we've been able to achieve with north of $600 million in annualized sales is with very minimal DTC, with a scaled, small compared to our peers, field force, and with market access coverage that has come in over line. We haven't spoken about ADA necessarily, but there is 21 million scripts written annually for Alzheimer's disease agitation. When we looked at our model, we looked at very conservative market share for Alzheimer's disease agitation, as well as we took conservative views of what compliance and persistence would look like. We felt very comfortable sharing that $8 billion peak sales.
I see. Got it. I want to dive deeper into some of these details, and I think you guys mentioned payers and so forth. Based on some of the discussion that you guys have been having with payers, I think you guys mentioned AUVELITY would be mostly covered under Medicare Part D, and I assume the rest is split between commercial and Medicaid. Maybe just talk a little bit about for that Medicare Part D, what's the effect of the PBM reform in that segment of patients? What is the GTN expectation for now AUVELITY compared to before ADA?
Sure.
Is that going to change the GTN?
Understood. Yeah. Currently for MDD, the original indication for our scripts was 70% commercial, 15% Medicare, 15% Medicaid. We're assuming that for ADA, that we would have north of 80% in Medicare Part D, and the remaining would be mostly commercial and some Medicaid. Again, 100% total covered lives. We would anticipate that our GTN for this year to be in the same trajectory as we had in previous years. Worse in Q1, but slightly improving throughout the year. This year, we actually started off at a better starting point. We were in the low 50s versus mid 50s in the previous year, and we would expect a similar trajectory for 2026. Yeah.
I see. Does it imply that the rebates that you give to payers would not change the amount of rebate?
The main-
With the addition of ADA.
Sure. The main difference between Medicare Part D and commercial coverage is there's no co-pay assistance, but there's additional rebates as well. It remains to be seen where GTN is, but we don't think it will have a negative impact. At a minimum, we believe that it will further strengthen the improvement in GTN.
in the next couple of years.
I see. Got it. You mentioned that the commercial launch is on track for this month, the expansion with the sales force with that as well. Can you just go over that commercial strategy? How do you expect to get that updated peak sales? What sort of activities that you have to, or investing you had to put into the commercial launch?
Sure. Yeah, the commercial strategy overall is the product is highly distinct and an important treatment option for both indications. The strategy is to attend to both indications and ensure both continue to grow robustly. When you think about pulling that through to, say, different commercial functions, sales, you touched on the expansion. The expansion to 630 sales reps, that's substantially complete and has been substantially complete for a few weeks now. Those folks, those team members, have been in the field for the past few weeks and actively detailing depression. We're starting to see some of that translate into new-to-brand scripts. We've seen new-to-brand scripts start to tick up. Usually, that takes one to two quarters, but we're seeing that already. That's just detailing efforts around depression.
Since the approval at the end of April, we have been working on ensuring the sales team is adequately trained and robustly trained on AD agitation. When we say the launch is on track, that's primarily what we're talking about, is sales reps in the field educating and detailing. That is commencing or beginning to commence, field now starting to talk about both indications. That's underway. From an access perspective, I think the strategy at a high level is secure as many lives as possible with your kind of guiding objective as unrestricted access. Of course, it's heterogeneous what you have, but the quality of coverage, we want it to be such that if a clinician wants to write it first line, that it should generally be filled.
That's in a very good place, but the strategy is to get that in an even better place depending on the payer or GPO or PBM or regional plan, however you want to do that assessment. Market access strategy remains the same. Facilitate writing for both brands, and you want that to line up with how the team is detailing. I talked about how the sales team is detailing and feel free to jump in.
Maybe, Richard, a little more around our expansion, how we're thinking about deploying the team or how the team is deployed is, as we mentioned, we have north of 600 reps. Essentially, taking a step back, we started with 160 reps back in 2022. We had these huge geographies for reps where they spent a lot of windshield time going from doctor to doctor.
We're able to do now is make these territories smaller, and we're actually duplicating effort there. We essentially have two reps that are focused on one geo. The geo is actually smaller, now we're actually able to see higher decile doctors. Call it decile 6, 7 doctors up to 10, where we're able to see them more frequently, once or twice a week. The team also has individual HCPs that they can reach out to. Essentially, we're getting better breadth, we're getting better depth with each of these doctors. From a target list perspective, the team goes out and is prepared to either speak as a first call point or second call point, depending on what that doctor typically writes for us.
If they have a patient base that maybe is more elderly, perhaps they'll speak more on the ADA indication and then support it with MDD and vice versa. We also have a smaller team that is focused solely on long-term care facilities. That's more of a key account manager. These are facilities that it's not a you go in and spend 30 minutes and go out the door. It's more of an investment in time and understanding all the key players within the long-term care facility. That team is also going to be deployed. We're expecting from a long-term care facility later this month. They will be detailing specifically on those facilities. I think one last key point, we've never called on long-term care.
This is the first time that the Axsome team has called on long-term care, and it's not just going to be for Alzheimer's disease agitation, but it will also be for MDD. There is a significant comorbidity between ADA and MDD and a significant prevalence just in MDD alone. The team will be calling on LTC for both indications.
I see.
Yeah.
Got it. When you look at MDD and ADA, these are two very different conditions. The patients, there's some overlap in patients. There are patients who don't overlap. Maybe just kind of looking at that, what are some synergies in that launch that you can apply from MDD into ADA? I think you guys mentioned earlier that you just kicked off the DTC for MDD. Is that necessary for ADA? Maybe just a little bit about the learning that you can use-
Sure
across these two very different indications, and where are the areas that are very different-
Yeah, maybe I'll-
that you have to learn as you go?
Sure, maybe I'll take that second question first. We, as I said earlier, from an MDD perspective, we did just start doing DTC in Q4 of last year. We did do a bit also in Q1, but not to the level in Q4. I think there's a lot of learnings that we had as it relates to DTC. When I say DTC, I'm speaking mass media, TV commercials. We've always done DTC since launch, more digitally, more social media, more direct-to potential target populations. From a DTC in a mass audience or from a TV perspective, our focus was both linear TV and connected TV. There's been some learnings there where we think that maybe spending more investment in connected TV, your YouTubes, your Hulus and so forth of the world, that there's more of an ROI from that perspective.
As we think about ADA, probably not going to see a TV ad this year. The idea is to educate doctors first. You don't want a patient going into a doctor and the doctor not being aware of the product or the indication. The thinking is, let's have the reps go out in the field, educate the reps, and then potentially think about DTC in 2027, 2028, where patients can come in, the doctors are already aware of it.
To work backwards to the first question, just when you think about from a marketing perspective and targeting potential consumers, the MDD and AD agitation, it's very different, right? MDD, you're working to educate the potential patients themselves or provide access to information for them. For AD agitation, it's the caregiver that you're looking to educate and provide information for. Those are different. However, that's maybe one of the areas where it's very distinct in terms of the patient populations. There are synergies or high overlap in a variety of elements of the two indications. Prescribers, you have high overlap from a prescriber perspective, upwards of three-quarters or even higher of potential prescribers or HCPs that we're targeting write scripts for both MDD and AD agitation in the community setting.
In a long-term care setting, there are very high rates of major depressive disorder, not just comorbid with Alzheimer's disease agitation, but just in general. Nick touched on that we had intentionally and historically not had efforts to long-term care facilities, that's changing. There's synergy for just for example, by going into long-term care, where we can begin to educate for both indications. In the community setting, as we go further into primary care, again, Nick touched on that, we're increasing our breadth and also depth to target HCPs. That allows us to see new targets or engage with existing targets more frequently, who may write scripts for both indications. That translates into the sales team. Nick talked about the mirroring that we have in the territories, how we're matching reps up within a territory.
There will be a waiting for each team member who may skew a little more heavily towards MDD potential targets or AD agitation potential targets, or those who are potential targets for both. Those are a couple examples of the synergy between the indications.
I see. Okay, got it. When you think about, I think for MDD, you guys gave the split between primary care and neurologists in the past. How are you guys thinking about here in terms of primary care versus neurologists? From an effort perspective, how much are you guys putting into that long-term care facility? Because that's a whole different targeting, too.
You want to touch on long-term care, or you want me to? From a targeting perspective, we're increasing more and more the efforts in primary care. Historically, the primary targets and writers have been component for both MDD early psychiatrists and primary care. The writers to primary care today makes up a bit north of one-third of the writers. Another way to think about that is a little bit adjacent, but as of today, it's about 56% of scripts are first line or second line, and that lets you know they're earlier in their treatment journey, right? They're starting with primary care or, say, the next potential specialist. That lines up with primary care and psychiatry. It's true for both indications. It can depend geographically, right? In urban centers, there are specialists, psychiatry, neurologists, geriatrics, psychiatrists.
They're more ubiquitous, say, than in rural areas where your primary care doctor is all of the above. It does depend, that all translates, the sales operations team does all of that work, those analyses, then pulls it through to how the folks actually approach their territories tactically. That is the main focus in terms of from targets.
Okay, got it. I think for MDD use, there's a lot more shift toward earlier line.
Yeah.
In terms of the first line, the first line switch to AUVELITY, how do you guys expect that? What's the peak that you guys would expect in that first-line use for MDD, how do you think about that lines of therapy used for ADA?
Yeah, it's been trending nicely. As Mark mentioned, first line, first switch is 56%. That number has grown in sequential quarters, really since launch. It's roughly 15% first line. Payer coverage and our strategy. Our strategy is primary care. Our focus early on was high-decile psychs. We're now pivoting to primary care because there's a huge unmet need there for both indications. What is nice about it is our payer access allows for primary care to be able to write for it and for it to essentially be a covered script. What do I mean by that? The PAs that were originally embedded within a lot of the formularies have been removed, or the formulary coverage has improved to that first line or first switch.
Essentially, primary care does not necessarily have the infrastructure to be creating, to be starting these PAs, initiating and then submitting and getting these PAs approved. Without the PAs, primary care is more likely to be able to write that script for a patient that they find that has an indication of MDD or ADA. As it relates to, hey, where do we expect first line, first switch to go to? We haven't necessarily guided to that, I think, as Mark mentioned, unrestricted and getting to 100% is the ideal solution. The team's working to continue to improve formulary coverage and total covered lives.
I see. Okay. The ex-US, what are the plans there? Is it time to find a partner? How do you guys think about ex-US?
We say that's outside the U.S. That's an area of interest for us, or the programs, obviously, there's a high need outside the U.S. from just prevalence perspective for all these indications that we're working on. We've been focused on the U.S. historically, and we're mindful and consider different avenues to getting the products to other geographies and patients. Historically, we've considered potential partnerships, if it makes sense. We've done that. There's a partner for SUNOSI outside the U.S., we can talk about that and the way we approach the programs, though, is we work on some of the development activities kind of in the background behind the scenes, because there are different regulatory requirements in different geographies. We kind of chip away or whittle away at those over time while we consider potential partnerships.
In the meantime, we focus on the U.S. business.
I see. Got it. We're almost out of time. I have so many more questions.
Yeah
on your other products that we haven't.
We can go another hour, if you like.
Yeah. Maybe I'll just leave it to you guys for final remarks on any other key products that I know we didn't talk about, the migraine that was another launch.
Sure.
Anything that you want to draw from some of the products that we haven't talked about that you think could be worth mentioning?
Sure. I mean, you touched on migraine, that product is launching. We're almost on the first anniversary of that launch, that's going well. We continue to invest in that, we continue to expect to see growth with SYMBRAVO. SUNOSI, that business is growing very steadily. It's a very healthy business. We continue to expect healthy growth moving forward. The next potential commercial asset is AXS-12 in narcolepsy. We've submitted an NDA for that program, we're waiting to hear back from FDA on their potential acceptance decision, stay tuned for that. Behind that, there's a whole host and choreography of upcoming clinical trial initiations and readouts, starting with solriamfetol in binge eating disorder later this year. We'll keep it going. We'll be starting trials in ADHD shortly. We have ongoing studies in MDD, precision MDD with symptoms of excessive sleepiness.
There's a ton going on at the company. It's an incredibly exciting time, we'll look forward to keeping you updated.
Fantastic.
Cool.
Well, Mark.
Thanks, Richard.
Nick, I appreciate it.
It's been a pleasure hosting you guys.
Thanks for having us. Thank you. Yeah. Thank you so much for a very insightful discussion.
Thank you.
Thank you.